8-K

                                  UNITED STATES

                       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

                                 AUGUST 16, 1995
                                 ---------------
                                (AUGUST 16, 1995)
                                -----------------

                                 Date of Report
                        (Date of earliest event reported)

                                  HBO & COMPANY
                                  -------------
             (Exact name of registrant as specified in its charter)

                                    DELAWARE
                                    --------
                 (State or other jurisdiction of incorporation)


          0-9900                                       37-0986839
  ------------------------                   ---------------------------------
  (Commission File Number)                   (IRS Employer Identification No.)

     301 PERIMETER CENTER NORTH
             ATLANTA, GA                                                30346
  ----------------------------------------                           ----------
  (Address of principal executive offices)                           (Zip Code)

                                 (404) 393-6000
               --------------------------------------------------
               Registrant's telephone number, including area code






ITEM 5. OTHER EVENTS

In connection with the previously announced proposed acquisition of CliniCom
Incorporated (CliniCom) by HBO & Company (HBOC), the pro forma financial
information described below is hereby filed.  The pro forma financial
information also gives effect to the recent acquisition of the Health Services
Group (HSG) of First Data Corporation (FDC) by HBOC.

ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS

(a)  FINANCIAL STATEMENTS OF BUSINESS PROPOSED TO BE ACQUIRED.

The following financial statements of CliniCom are attached as Exhibits 99(a)
through 99(f):

          CliniCom Incorporated Condensed Balance Sheets, Condensed Statements
of Operations, Condensed Statements of Cash Flows and Notes to Condensed
Financial Statements for the quarters ended June 30, 1995, March 31, 1995,
September 30, 1994, June 30, 1994, and March 31, 1994.

          CliniCom Incorporated Report of Independent Public Accountants;
Balance Sheets as of December 31, 1994 and 1993; Statements of Operations,
Statements of Stockholders' Equity and Statements of Cash Flows for each of the
three years ended December 31, 1994 and Notes to Financial Statements.

(b)  PRO FORMA FINANCIAL INFORMATION.

The following pro forma financial information is attached as Exhibit 99(g):

     HBO & Company Pro Forma Combined Income Statements for the Six Months Ended
June 30, 1995, and the Year Ended December 31, 1994, HBO & Company Pro Forma
Combined Balance Sheets at June 30, 1995 and HBO & Company Notes to Pro Forma
Combined Financial Statements.













(c)  EXHIBITS.

EXHIBIT                                                                    PAGE

2      Agreement of Merger by and among HBO & Company, HBO &               5
Company of Georgia, and CliniCom Incorporated, dated July 14, 1995.

23     Consent of Arthur Andersen LLP.                                     38

99(a)  CliniCom Incorporated Condensed Balance Sheets, Condensed           39
Statements of Operations, Condensed Statements of Cash Flows and
Notes to Condensed Financial Statements for the quarter ended June
30, 1995.

99(b)  CliniCom Incorporated Condensed Balance Sheets, Condensed           47
Statements of Operations, Condensed Statements of Cash Flows and
Notes to Condensed Financial Statements for the quarter ended March
31, 1995.

99(c)  CliniCom Incorporated Report of Independent Public Accountants;     55
Balance Sheets as of December 31, 1994 and 1993; Statements of
Operations, Statements of Stockholders' Equity and Statements of
Cash Flows for each of the three years ended December 31, 1994 and
Notes to Financial Statements.

99(d)  CliniCom Incorporated Condensed Balance Sheets, Condensed           75
Statements of Operations, Condensed Statements of Cash Flows and
Notes to Condensed Financial Statements for the quarter ended
September 30, 1994.

99(e)  CliniCom Incorporated Condensed Balance Sheets, Condensed           84
Statements of Operations, Condensed Statements of Cash Flows and
Notes to Condensed Financial Statements for the quarter ended June
30, 1994.

99(f)  CliniCom Incorporated Condensed Balance Sheets, Condensed           93
Statements of Operations, Condensed Statements of Cash Flows and
Notes to Condensed Financial Statements for the quarter ended March
31, 1994.

99(g)  HBO & Company Pro Forma Combined Income Statements, Pro             102
Forma Combined Balance Sheets and Notes to Pro Forma Combined
Financial Statements.













                                    SIGNATURE

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


                                        HBO & COMPANY
                                        (Registrant)

Date:  August 16, 1995                  /s/ Jay P. Gilbertson
                                        ---------------------------------
                                        Jay P. Gilbertson
                                        Vice President - Finance,
                                        Chief Financial Officer
                                        Treasurer and Assistant Secretary

EX-2

                                                                       EXHIBIT 2
                              AGREEMENT OF MERGER

    THIS AGREEMENT OF MERGER, made this 14th day of July, 1995, by and among HBO
&  COMPANY,  a Delaware  corporation  ("Parent"); HBO  &  COMPANY OF  GEORGIA, a
Delaware  corporation  ("Purchaser");  and  CLINICOM  INCORPORATED,  a  Delaware
corporation ("Acquired Company");

                              W I T N E S S E T H:

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

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

I.  DEFINITIONS.

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

    1.1  "Acquired  Company"  shall  mean  Clinicom  Incorporated,  a   Delaware
corporation.

    1.2  "Acquired  Company Information"  shall have  the  meaning set  forth in
Section 2.3.1.

    1.3 "Acquired Company Reports" shall have  the meaning set forth in  Section
3.21.

    1.4  "Acquired Company Software" shall have the meaning set forth in Section
3.14.2(iii).

    1.5 "Acquired Company Stock" shall mean  the common stock, $0.001 par  value
per share, of the Acquired Company.

    1.6 "Agreement" shall mean this Agreement of Merger.

    1.7  "Certificate of  Merger" shall  have the  meaning set  forth in Section
2.1.2.

    1.8 "Benefit Plans" shall have the meaning set forth in Section 3.16.

    1.9 "Certificates" shall have the meaning set forth in Section 2.2.2 hereof.

   1.10 "Closing" shall have the meaning set forth in Section 2.1.9 hereof.

   1.11 "Closing Date" shall mean the date on which the Closing occurs  pursuant
to Section 8.1 hereof.

   1.12  "Covenants  Not to  Compete" shall  mean the  Covenants Not  to Compete
referred to in Section 6.11.

   1.13 "Current Plan" shall have the meaning set forth in Section 3.16.1.

   1.14 "Customer Contracts" shall have the meaning set forth in Section 3.12.1.

   1.15 "Director  Stock  Option  Plan" shall  mean  the  Clinicom  Incorporated
Nonemployee Director Stock Option Plan.

   1.16 "Delaware Code" shall mean the Delaware General Corporation Law.

   1.17 "DOL" shall mean the United States Department of Labor.

   1.18 "Effective Time" shall have the meaning set forth in Section 2.1.2.


   1.19  "Employee Stock Option Plan" shall  mean the Clinicom Incorporated 1985
Employee Stock Option Plan.

   1.20 "Employee  Stock Purchase  Plan" shall  mean the  Clinicom  Incorporated
Employee Stock Purchase Plan.

   1.21  "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.

   1.22 "ERISA Affiliate" shall mean, with respect to a Person, any other Person
that is  required to  be aggregated  with  such Person  under Tax  Code  Section
414(b), (c), (m) and/or (o) at any time prior to the Closing Date.

   1.23 "ERISA Plan" shall have the meaning set forth in Section 3.16.1.

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

   1.25 "Exchange Agent" shall have the meaning set forth in Section 2.2.1.

   1.26 "Exchange Ratio" shall have the meaning set forth in Section 2.1.6(a).

   1.27 "401(k) Plan" shall mean  the Clinicom Incorporated 401(k) Savings  Plan
and Trust.

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

   1.29 "Hazardous Substance" shall have the meaning set forth in Section 3.18.

   1.30 "IRS" shall mean the United States Internal Revenue Service.

   1.31 "Licensed  Software"  shall  have  the  meaning  set  forth  in  Section
3.14.2(ii).

   1.32  "Material Adverse  Effect" (whether  or not  capitalized) shall  mean a
material adverse  effect  on  the  businesses,  assets  (including  intellectual
property   rights)  or  operations  of  the  corporation  in  question  and  its
subsidiaries, taken as a whole, which results from or is the consequence of  any
claim, loss, damage or occurrence when aggregated with any other claims, losses,
damages  or occurrences arising from the  same or any substantially similar act,
failure to act, event, cause or circumstances. For purposes of this  definition,
all  breaches of representations and warranties  set forth in Section 3.16 shall
be deemed to arise from the same act, event, cause or circumstances.

   1.33 "Material Contracts" shall have the meaning set forth in Section 3.12.

   1.34 "Merger" shall  mean the merger  of the Acquired  Company with and  into
Purchaser, as set forth in Section 2.1.1.

   1.35  "Merger  Consideration" shall  have the  meaning  set forth  in Section
2.1.6(a).

   1.36 "Nasdaq"  shall  mean the  National  Association of  Securities  Dealers
Automated Quotation System.

   1.37 "1933 Act" shall mean the Securities Act of 1933, as amended.

   1.38  "Outside  Closing Date"  shall have  the meaning  set forth  in Section
10.1.3.

   1.39 "Owned Software" shall have the meaning set forth in Section 3.13.

   1.40 "Parent" shall mean HBO & Company, a Delaware corporation, which is  the
sole stockholder of Purchaser.

   1.41 "Parent Reports" shall have the meaning set forth in Section 4.6.

   1.42  "Parent Stock" shall mean the common  stock, $0.05 par value per share,
of Parent.

   1.43 "PBGC" shall mean the  Pension Benefit Guaranty Corporation  established
under Title IV of ERISA.


   1.44  "Person" shall include, but is not  limited to, an individual, a trust,
an estate,  a partnership,  an association,  a company,  a corporation,  a  sole
proprietorship,  a professional corporation, a professional association or other
entity.

   1.45 "Pre-Closing Parent  Stock Price" shall  have the meaning  set forth  in
Section 7.8.

   1.46 "Purchaser" shall mean HBO & Company of Georgia, a Delaware corporation.

   1.47 "Real Property" shall have the meaning set forth in Section 3.18.

   1.48  "Registration Statement"  shall have the  meaning set  forth in Section
2.3.1.

   1.49 "SEC" shall mean the Securities and Exchange Commission.

   1.50 "Stock Plans" shall mean the Director Stock Option Plan, Employee  Stock
Option Plan and Employee Stock Purchase Plan.

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

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

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

II.  COVENANTS AND UNDERTAKINGS.

    2.1  TERMS AND APPROVAL OF MERGER.

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

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

    2.1.3.   CERTIFICATE  OF  INCORPORATION  AND BYLAWS.    The  Certificate  of
Incorporation of Purchaser as in effect immediately preceding the Effective Time
shall  be the  Certificate of  Incorporation of  the Surviving  Corporation. The
Bylaws of Purchaser as in effect immediately preceding the Effective Time  shall
be the Bylaws of the Surviving Corporation.

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

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

    2.1.6.  CONVERSION OF SHARES.   (a) Subject to Section 2.1.6(g) below,  each
outstanding  share  of  Acquired  Company Common  Stock  issued  and outstanding
immediately prior to the Effective Time, shall, at the Effective Time, by virtue
of the Merger  and without  any action  on the part  of the  holder thereof,  be
converted  into the right to receive four-tenths  (4/10ths) of a share of Parent
Stock (the  "Exchange  Ratio"),  deliverable  to  the  holder  thereof,  without
interest on the value thereof, upon the


surrender  of the  certificate(s) formerly representing  such outstanding share.
(The shares of Parent Stock, or cash in lieu of fractions thereof, receivable by
each Acquired Company stockholder as described above are referred to hereinafter
as the "Merger Consideration.")

    (b) Each  share  of Acquired  Company  Stock held  in  the treasury  of  the
Acquired  Company shall,  at the  Effective Time,  by virtue  of the  Merger and
without any action on the part of  the holder thereof, be cancelled and  retired
and cease to exist.

    (c)  Subject to any applicable escheat laws, until surrendered and exchanged
pursuant hereto, each certificate that  immediately prior to the Effective  Time
represented outstanding shares of Acquired Company Stock shall be deemed for all
corporate  purposes of Parent, subject, however, to the other provisions of this
Section 2.1.6, to evidence the ownership of the number of whole shares of Parent
Stock into which the shares of Acquired Company Stock represented thereby  shall
have  been converted, and shall be deemed  to represent the right to receive the
amount of cash in lieu  of fractional shares, if any,  into which the shares  of
Acquired Company Stock represented thereby shall have been converted pursuant to
subsection  (a) of this Section 2.1.6. No interest shall be payable with respect
to any cash  payment in lieu  of fractional  shares. No cash  or stock  dividend
payable,  no  certificate representing  split shares  deliverable, and  no other
distribution payable or deliverable to holders of record of Parent Stock at  any
time  subsequent to the Effective Time shall  be paid or delivered to the holder
of any certificate that at the Effective Time represented Acquired Company Stock
unless and until such certificate is surrendered to the Exchange Agent. However,
subject to any applicable escheat laws, upon such surrender, there shall be paid
or delivered to  the holder  of record of  the certificate  or certificates  for
shares  of  Parent Stock  issued and  exchanged  therefor, the  certificates for
shares and/or other property resulting from any such dividends, splits, or other
distributions, as the case may be, that shall have theretofore become payable or
deliverable with  respect to  such  shares of  Parent  Stock subsequent  to  the
Effective  Time. No interest  shall be payable  with respect to  such payment or
delivery  of  any  dividends  or  other  distributions  upon  the  surrender  of
certificates that represented Acquired Company Stock at the Effective Time.

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

    (e) All shares  of Parent Stock  into which shares  of the Acquired  Company
Stock have been converted pursuant to this Section 2.1.6 shall be deemed to have
been  issued in  full satisfaction  of all  rights pertaining  to such converted
shares and shall, when issued pursuant  to the provisions hereof, be fully  paid
and nonassessable.

    (f)  The stock transfer books of the Acquired Company shall be closed at the
Effective Time, and  thereafter no transfer  of any shares  of Acquired  Company
Stock  shall be recorded thereon. In the event a transfer of ownership of shares
of Acquired Company Stock  is not recorded  on the stock  transfer books of  the
Acquired Company, a certificate or certificates representing the number of whole
shares  of the  Parent Stock  into which such  shares of  Acquired Company Stock
shall have been converted  in connection with  the Merger may  be issued to  the
transferee  of  such shares  of  Acquired Company  Stock  if the  certificate or
certificates representing  such  shares of  Acquired  Company Stock  is  or  are
surrendered  to the Exchange Agent accompanied by all documents deemed necessary
by the  Exchange Agent  to evidence  and effect  such transfer  of ownership  of
shares of Acquired Company


Stock  and by the payment  of any applicable stock  transfer tax with respect to
such transfer,  subject  to  compliance  with  any  restrictions  or  conditions
contained  herein with  respect to  the transfer  of shares  of Acquired Company
Stock.

    (g) In the event that Parent at any time or from time to time after the date
of this Agreement,  but prior to  the Effective Time,  effects a subdivision  or
combination  of the outstanding Parent Stock into  a greater or lesser number of
shares, then and  in each  such event the  Exchange Ratio  described in  Section
2.1.6(a)  shall be  increased or  decreased proportionately.  In the  event that
Parent at any time or  from time to time shall  fix a record date, which  record
date  is after the date  of this Agreement but prior  to the Effective Time, for
the determination of holders of Parent  Stock entitled to receive a dividend  or
other  distribution payable in  additional shares of  Parent Stock, cash (except
Parent's regular quarterly dividend),  or any other property,  then and in  each
such  event, regardless of whether such dividend is to be paid prior to or after
the Effective  Time, the  Merger Consideration  payable hereunder  per share  of
Acquired   Company  Stock  shall  be  increased  to  reflect  such  dividend  or
distribution as though each stockholder of the Acquired Company were, as of such
issuance or record date, a holder of  record of that number of shares of  Parent
Stock  comprising the Merger Consideration otherwise payable to such stockholder
pursuant to Section 2.1.6(a).

    2.1.7.   STOCK OPTIONS.    Options granted  under  the Stock  Option  Plans,
regardless  of whether such options are  currently exercisable, shall be treated
as follows:

        (a) At the Effective  Time, Parent shall  assume the Acquired  Company's
    rights  and  obligations under  each of  the outstanding  options previously
    granted under the Director Stock Option  Plan and the Employee Stock  Option
    Plan  (each such  option existing  immediately prior  to the  Effective Time
    being called an "Existing Option," and each such option so assumed by Parent
    being called an "Assumed  Option"), by which  assumption the optionee  shall
    have  the right to purchase  that number of shares  of Parent Stock (rounded
    down to  the nearest  whole) into  which the  number of  shares of  Acquired
    Company  Stock  the optionee  was entitled  to  purchase under  the Existing
    Option would have  been converted  pursuant to the  terms of  the Merger  as
    described  in Section 2.1.6  hereof. Each Assumed  Option shall constitute a
    continuation of  the  Existing  Option,  substituting  Parent  for  Acquired
    Company  as  issuer and  employment  by Parent,  Purchaser  or one  of their
    respective  subsidiaries  for  employment  by  the  Acquired  Company.   The
    aggregate  price for the total number of shares of Parent Stock at which the
    Assumed Option may be  exercised shall be the  aggregate price at which  the
    Existing  Option was exercisable for the  total number of shares of Acquired
    Company Stock, reduced (as necessary for  purposes of rounding down) to  the
    price  that will buy the number of whole shares for which the Assumed Option
    will be exercisable in accordance with this paragraph (a), and the  purchase
    price  per share  of Parent Stock  thereunder shall be  such aggregate price
    divided by the total number of shares of Parent Stock covered thereby.

        (b) Each participant  in the  Employee Stock  Purchase Plan  on the  day
    prior to the Effective Date shall receive (1) the number of shares of Parent
    Stock  into  which the  shares of  Acquired Company  Stock issuable  to such
    participant in accordance with the  Employee Stock Purchase Plan would  have
    been converted and (2) cash in lieu of any fractional share of Parent Stock,
    together with a cash refund of any excess of the amount collected during the
    purchase  period,  over the  amount of  the purchase  price of  the Acquired
    Company Stock that otherwise would be issuable to such participant.

    2.1.8.  STOCKHOLDERS'  MEETING.   The Acquired Company,  acting through  its
Board of Directors, shall:

        (a)  promptly furnish a copy  of the proxy statement/prospectus included
    in the Registration Statement  (defined in Section 2.3.1  below) to each  of
    its  stockholders after the Registration Statement has become effective with
    the SEC;


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

        (c)  use  its  reasonable best  efforts,  subject to  the  provisions of
    Section 2.11,  to  obtain  the  necessary approval  of  the  Merger  by  its
    stockholders.

    2.1.9.    CLOSING; FILING  OF CERTIFICATE  OF  MERGER.   Upon the  terms and
subject  to  the  conditions  hereof,  as  soon  as  practicable  following  the
satisfaction  or waiver of  the conditions set  forth in Articles  V, VI and VII
hereof,  the  Acquired  Company  and  Purchaser  shall  execute  and  file   the
Certificate of Merger referred to in Section 2.1.2 in the manner required by the
Delaware  Code, and  the parties  hereto shall take  all such  other and further
actions as may be  required by law  to make the Merger  effective. Prior to  the
filing referred to in this Section 2.1.9, a closing (the "Closing") will be held
as  set forth in  Section 8.1 hereof, for  the purpose of  confirming all of the
foregoing.

    2.2  DELIVERY OF MERGER CONSIDERATION.

    2.2.1.   EXCHANGE AGENT.    Prior to  the  Effective Time,  Purchaser  shall
designate  a bank or trust  company to act as  Exchange Agent in connection with
the Merger (the "Exchange  Agent"). At the Effective  Time, Purchaser or  Parent
shall  take all  steps necessary  to enable  and cause  Parent or  the Surviving
Corporation to provide the  Exchange Agent with the  shares of Parent Stock  and
cash   in  respect  of  fractional  shares   necessary  to  deliver  the  Merger
Consideration to  each  holder of  Acquired  Company Stock  as  contemplated  by
Section  2.1.6 hereof prior to the time  that such deliveries are required to be
made by the Exchange Agent as provided in this Section 2.2.

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

    2.3.3.   ESCHEAT LAWS.  Notwithstanding any  provision of this Article II to
the contrary, neither Parent  nor the Surviving Corporation  shall be liable  to
any  holder  of Certificates  formerly representing  shares of  Acquired Company
Stock for any property  properly delivered or amount  paid to a public  official
pursuant to any applicable abandoned property, escheat or similar law.

    2.3  SEC REGISTRATION.

    2.3.1.   The Acquired Company shall furnish to Parent such information about
the  Acquired  Company,  including  without  limitation  information  about  its
stockholders,  as may be necessary to enable Parent to prepare and file with the
SEC a Registration Statement on Form S-4  under the 1933 Act, and the rules  and
regulations  promulgated thereunder, in respect of the Parent Stock to be issued
by reason of the  Merger (such registration  statement, the prospectus  included
therein and the proxy


statement  to be furnished to the holders of the Acquired Company Stock, in each
case together with any amendments thereto,  being referred to in this  Agreement
as  the "Registration Statement"). The  Acquired Company Information (as defined
below) included  in  the Registration  Statement  shall  not, at  the  time  the
Registration  Statement is declared effective, contain any untrue statement of a
material fact or omit to state any  material fact required to be stated  therein
or  necessary in order to make the  statements therein not misleading. If at any
time prior to the Effective  Time any event or  circumstance should come to  the
attention  of  the  Acquired  Company  with  respect  to  the  Acquired  Company
Information that is required to  be set forth in  an amendment or supplement  to
the Registration Statement, the Acquired Company shall immediately notify Parent
and   shall  assist  Parent  in  appropriately  amending  or  supplementing  the
Registration Statement in the  manner contemplated in  Section 2.3.4 below.  The
Registration  Statement  insofar as  it  relates to  information  concerning the
Acquired Company, or its business, assets, directors, officers, or  stockholders
or  other matters  pertaining to  the Acquired Company  that is  supplied by the
Acquired Company  for inclusion  in the  Registration Statement  (the  "Acquired
Company  Information") shall  comply as  to form  and substance  in all material
respects with the  applicable requirements  of the 1933  Act and  the rules  and
regulations  thereunder  and  the Exchange  Act  and the  rules  and regulations
thereunder; except  that  the  Acquired  Company  shall  have  no  liability  or
obligation for any information other than the Acquired Company Information.

    2.3.2.   The Acquired Company shall use its reasonable best efforts to cause
its accountants, Arthur Andersen, LLP, to deliver to Parent letters dated at the
time the Registration Statement  becomes effective and as  of the Closing  Date,
addressed  to Parent, both (i) to the effect that the Acquired Company satisfies
the tests  applicable to  it such  that the  Merger can  be accounted  for as  a
"pooling  of interests";  and (ii)  containing such  matters as  are customarily
contained in auditors' letters regarding information about the Acquired  Company
furnished  expressly for inclusion in the  Registration Statement, and in a form
and substance  reasonably  satisfactory to  Parent.  The Parent  shall  use  its
reasonable  best  efforts  to cause  its  accountants, Arthur  Andersen,  LLP to
deliver to the Acquired  Company letters at  such times to  the effect that  the
Parent  satisfies  the  applicable tests  for  accounting  for the  Merger  as a
"pooling of interests."

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

    2.3.4.  Parent covenants that the  Registration Statement shall not, at  the
time  it is declared effective, contain any  untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein  not misleading; except that such  covenant
of Parent is made, as to those portions of the Registration Statement containing
or  required to  contain Acquired Company  Information, assuming  and relying on
timely and full compliance with Sections 2.3.1  and 2.3.2. If at any time  prior
to  the Effective Time any event or circumstance should come to the attention of
Parent that is required  to be set  forth in an amendment  or supplement to  the
Registration Statement, Parent shall use its reasonable best efforts to amend or
supplement  appropriately the Registration Statement. An amendment or supplement
may be accomplished,  to the  extent permitted by  law, rule  or regulation,  by
including  such  information  in  a  filing  under  the  Exchange  Act  that  is
incorporated by reference into the Registration Statement.

    2.3.5.   Parent covenants  that  the Registration  Statement and  all  other
documents  required to be  filed by Parent  with the SEC  in connection with the
transactions contemplated herein shall  comply as to form  and substance in  all
material  respects  with  the  applicable  requirements  of  the  1933  Act  and


the rules and  regulations thereunder  and the Exchange  Act and  the rules  and
regulations thereunder; except that Parent shall have no liability or obligation
for  any failure to  comply with such  requirements arising out  of the Acquired
Company Information.

    2.3.6.  Parent shall use all its reasonable best efforts to file all reports
required to be filed by it on a timely basis under the 1933 Act or the  Exchange
Act  and the rules and regulations adopted by the SEC thereunder. Parent and the
Acquired Company shall use  their reasonable best efforts  to take such  further
action  as may be necessary to ensure that the requirements of Rule 144(c) under
the 1933 Act  are satisfied so  as to  enable any "affiliates"  of the  Acquired
Company  (as that term is used in Rule 145  under the 1933 Act) to offer or sell
the Parent Stock received  by them in  the Merger pursuant  to paragraph (d)  of
Rule  145 (subject to compliance with the  provisions of paragraphs (e), (f) and
(g) of Rule 144).

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

    2.4  AFFILIATES.

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

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

    2.5   TRADING PROHIBITIONS.  The parties hereto hereby acknowledge that as a
result of disclosures by the Acquired Company, Parent and Purchaser contemplated
under this Agreement, each of the parties and their affiliates may, from time to
time, have  material, non-public  information concerning  the Acquired  Company,
Parent, Purchaser and their respective subsidiaries or affiliated companies. The
parties confirm that they and their affiliates are aware, and have advised their
directors,  officers, employees and representatives  that, (i) the United States
securities laws may prohibit a  person who has material, non-public  information
from  purchasing or selling securities of  any company to which such information
relates, and (ii) material non-public  information shall not be communicated  to
any other person except as permitted herein.

    2.6  CONDUCT OF THE BUSINESS OF THE ACQUIRED COMPANY PRIOR TO CLOSING.

    2.6.1.   Except (i)  with the prior  consent in writing  of Purchaser (which
consent may not be unreasonably withheld in respect of subparagraph (e)  below),
(ii)  as  may  be  required  to effect  the  transactions  contemplated  by this
Agreement, or  (iii)  as provided  otherwise  in this  Agreement,  the  Acquired
Company  covenants that,  between the date  of this Agreement  and the Effective
Time, the Acquired Company will conduct its business in the ordinary course, and
that it will:

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

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

        (c) not effect  any sale, assignment  or transfer of  any of its  assets
    except  in the ordinary  course of business  and except for  the transfer of
    funds described on  EXHIBIT 2.6.1(c)  a trust under  the Acquired  Company's
    Executive Retention Plan;


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

        (e)  not  enter into  or  renew any  Material  Contract, enter  into any
    material amendment to any Material Contract  or suffer, permit or incur  any
    of  the transactions or events described in Section 3.9 hereof to the extent
    such events or transactions are within  the control of the Acquired  Company
    (except  that the Acquired Company may  enter into Customer Contracts in the
    ordinary course of business consistent with historical practices);

        (f) not make or permit any change in the Acquired Company's  Certificate
    of Incorporation or Bylaws, or in its authorized securities;

        (g)  other than  pursuant to  the existing  terms of  the Employee Stock
    Purchase Plan, not grant any stock option or right to purchase any  security
    of   the  Acquired  Company,  issue   any  security  convertible  into  such
    securities, purchase,  redeem,  retire  or otherwise  acquire  any  of  such
    securities, or agree to do any of the foregoing or declare, set aside or pay
    any dividend, make any other distribution or declare any split in respect of
    such securities;

        (h)  not adopt any new Benefit Plan  or amend any existing Benefit Plan,
    and not make any contribution to  or distribution from any employee  benefit
    plan,  pension plan,  stock bonus plan,  401(k) plan or  profit sharing plan
    (except for  the  payment  of  any health,  disability  and  life  insurance
    premiums  that may become due and  except for contributions or distributions
    required to be  made or as  consistently made  in the past  pursuant to  the
    terms of any Benefit Plans);

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

        (j)   not issue any note, bond or other debt security, or create, incur,
    assume or guarantee any indebtedness for borrowed money;

        (k) not issue  any shares of  Acquired Company Stock  other than  shares
    issuable  upon exercise of  presently exercisable options  granted under the
    Employee Stock Option  Plan and the  Director Stock Option  Plan and  shares
    purchased prior to the Closing under the Employee Stock Purchase Plan;

        (l)  not alter in any manner  not permitted herein the terms, conditions
    or dates of  vesting or exercise  of any  of the options  granted under  the
    Stock Option Plans; and

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

    2.6.2.   Except after  prior notification  to, and  with the  prior  written
consent  of, Purchaser,  which consent shall  not be  unreasonably withheld, the
Acquired Company shall  not make,  between the date  of this  Agreement and  the
Effective  Time, any change in its banking or safe deposit arrangements or grant
any powers of attorney.

    2.7  FILING OF  TAX RETURNS.   The Acquired Company shall  cause all of  the
Acquired  Company's material federal, state and local tax returns required to be
timely filed before the  Effective Time to be  timely and accurately filed  with
the  appropriate  taxing authorities.  For purposes  of  this Section  2.7, such
returns shall be  deemed timely filed  if the Acquired  Company has obtained  an
extension  from the appropriate taxing authority as  to the time in which it may
file such tax returns. The Acquired Company shall submit all such tax returns to
Purchaser at least fifteen (15) days prior  to the date they must be filed,  and
Purchaser  shall have the  opportunity to comment on  such returns. The Acquired
Company shall give  reasonable and  due consideration  to any  comments on  such
returns made by Purchaser in light of the circumstances in which they are made.


    2.8  EXAMINATION OF PROPERTY AND RECORDS; CONFIDENTIALITY OF INFORMATION.

    2.8.1.   Between  the date  of this  Agreement and  the Effective  Time, the
Acquired Company shall  allow Purchaser, its  counsel and other  representatives
full  access  to  its  books,  records,  files,  documents,  assets, properties,
contracts and  agreements  as may  be  reasonably requested,  and  the  Acquired
Company  shall furnish  the Purchaser,  its officers  and representatives during
such period with  all information concerning  its affairs as  may be  reasonably
requested.  Between the  date of this  Agreement and the  Effective Time, Parent
shall provide  to the  Acquired Company  such information  about Parent  as  the
executive  officers of the Acquired Company reasonably request in the context of
the transactions provided for herein. All such requests shall be directed to the
Chief Financial Officer of Parent. Each party shall conduct any investigation in
a manner that will not unreasonably  interfere with the businesses of the  other
party.

    2.8.2.   All  non-public information  acquired by  a party  pursuant to this
Section 2.8 or otherwise  in connection with this  Agreement, whether or not  in
writing,  concerning the business, operations and affairs of another party, will
be kept confidential  and will not  be disclosed  to any Person  other than  the
parties  hereto or their authorized representatives (who shall be subject to the
same obligations)  and  will  not  be  used  for  any  purpose  other  than  the
consummation  of  the  Merger  and the  related  transactions  described herein,
provided that any party may,  upon advice of counsel,  and upon prior notice  to
the  party whose information is sought to be disclosed, comply with any order of
any court or governmental body. Promptly upon termination of this Agreement, and
at the request  of a disclosing  party, all written  materials thus obtained  by
another  party or any of its representatives and all copies and extracts of such
materials will be delivered to the disclosing party.

    2.9  CONSENTS AND APPROVALS.  As  and to the extent requested by  Purchaser,
the Acquired Company shall use its reasonable best efforts to obtain the waiver,
consent and approval of all persons (other than customers) whose waiver, consent
or approval (i) is required in order to consummate the transactions contemplated
by  this  Agreement or  (ii) is  required by  any agreement,  lease, instrument,
arrangement, judgment, decree, order or license to which the Acquired Company is
a party or subject on the Effective Time and (a) that would prohibit or  require
the  waiver, consent or approval of any  party to such transactions or (b) under
which, without  such  waiver,  consent  or  approval,  such  transactions  would
constitute  an occurrence of default under the provisions thereof, result in the
acceleration of any obligation thereunder or give  rise to a right of any  party
thereto  to terminate  its obligations thereunder.  The failure  of the Acquired
Party to obtain any such waiver, consent or approval (after using its reasonable
best efforts to do so) shall not constitute a breach of, or default under,  this
Agreement.

    2.10   SUPPLYING OF  FINANCIAL STATEMENTS.  Parent  and the Acquired Company
shall each  deliver to  the other  all  of its  regularly prepared  audited  and
unaudited consolidated and consolidating financial statements prepared after the
date  of this Agreement, in format historically published or utilized internally
(as applicable), and any financial statements prepared for filing with the  SEC,
as soon as each is available.

    2.11   NO SOLICITATION.   The Acquired  Company shall not,  and the Acquired
Company shall not authorize or permit  any officer, director or employee of,  or
any  financial advisor, attorney, accountant  or other advisor or representative
retained by, the Acquired Company to, solicit, initiate, encourage (including by
way of furnishing information), endorse or enter into any agreement with respect
to, or take any other action to  facilitate, any inquiries or the making of  any
proposal  that  constitutes,  or may  reasonably  be  expected to  lead  to, any
Takeover Proposal (as hereafter defined). Neither the Board of Directors of  the
Acquired  Company nor  any committee  thereof shall  (a) withdraw  or modify, or
propose to withdraw or modify, in a manner adverse to Purchaser the approval  or
recommendation  by the Board of Directors of  the Acquired Company of the Merger
or this  Agreement  or  (b) approve  or  recommend,  or propose  to  approve  or
recommend,  any Takeover Proposal or any other acquisition of outstanding shares
of Acquired Company Stock other than  pursuant to the Merger or this  Agreement.
Notwithstanding the foregoing, nothing contained in this Agreement shall prevent
the Board of


Directors  of the  Acquired Company from  furnishing information  to or entering
into discussions  or negotiations  with any  unsolicited Person,  or taking  any
action  described in clauses (a) and (b)  of the preceding sentence, if and only
to the extent that  the Board of  Directors of the  Acquired Company shall  have
determined in good faith, after receiving written advice of its outside counsel,
that  such action would be required under  applicable law in the exercise of its
fiduciary duties. The Acquired Company will immediately notify the Purchaser  if
any  such  inquiries  or proposals  are  received  by, any  such  information is
requested from,  or  any such  negotiations  or  discussions are  sought  to  be
initiated  or continued  with the Acquired  Company. As used  in this Agreement,
"Takeover Proposal" shall  mean any  tender or exchange  offer, proposal,  other
than  a proposal  by Purchaser  or any  of its  affiliates, for  a merger, share
exchange or other  business combination  involving the Acquired  Company or  any
proposal  or offer to acquire in any manner a substantial equity interest in the
Acquired Company or a substantial portion of the assets of the Acquired Company.

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

    2.13   TAX  REPORTING.   For federal and  state tax  purposes, Purchaser and
Parent shall  report  the  transactions  contemplated by  this  Agreement  as  a
reorganization  within the meaning of  Sections 368(a)(1)(A) and 368(a)(2)(D) of
the Tax Code and similar state laws.  Prior to the Effective Time, the  Acquired
Company  will  deliver  to  Purchaser  and  Parent  letters  to  the  reasonable
satisfaction of Purchaser and  Parent from the Acquired  Company and certain  of
its stockholders that when read together provide assurance that there is no plan
or  intention  on the  part  of the  stockholders  of the  Acquired  Company (or
knowledge of such plan or intent to  the extent the Acquired Company provides  a
representation  with respect to  holders of less  than five percent  (5%) of the
Acquired Company Stock) to  sell, exchange or otherwise  dispose of a number  of
shares  of Parent Stock  received in the  Merger that would  reduce the Acquired
Company's stockholders' ownership of  Parent Stock received in  the Merger to  a
number  of shares having a  value, as of the Effective  Time, of less than fifty
percent (50%) of the value of all  of the outstanding stock of Acquired  Company
immediately  prior to  the Effective  Time. Purchaser,  Parent and  the Acquired
Company agree  that satisfaction  of the  representations described  above  will
constitute   satisfaction  of  the  "continuity  of  interest"  requirement  for
reorganizations under Section 368(a) of the Tax Code. Each of Purchaser,  Parent
and  the Acquired Company shall use their  reasonable best efforts to obtain the
tax opinions described in 6.6 and 7.6 hereof.

    2.14   INDEMNIFICATION OF  ACQUIRED  COMPANY OFFICERS  AND DIRECTORS.    The
Purchaser  agrees that  it will  provide to  the directors  and officers  of the
Acquired Company indemnification  in accordance with  the current provisions  of
the  Certificate  of  Incorporation and  By-Laws  of the  Acquired  Company with
respect to matters  occurring prior  to the Effective  Time, including,  without
limitation,  this  Agreement and  the  transactions contemplated  hereby,  for a
period of  five years  from  the Effective  Time (or,  in  the case  of  matters
occurring  prior to the Effective Time which have not been resolved prior to the
fifth anniversary  of  the  Effective  Time,  until  such  matters  are  finally
resolved).  To the  fullest extent  permitted by  applicable law,  the Purchaser
shall advance expenses  in connection  with the  foregoing indemnification.  The
Parent  shall cause to be maintained in  effect for twelve (12) months following
the Closing the current policies of directors' and officers' liability insurance
currently maintained by the  Acquired Company, which  policies are described  on
EXHIBIT 3.19, at no


greater than one hundred percent (100%) of the annual premiums for such coverage
as  of the date  hereof (as reflected  on such EXHIBIT  3.19), provided that the
Parent may substitute therefor policies of at least the same coverage containing
terms and  conditions that  are no  less  advantageous. In  the event  that  the
premiums for the continued coverage exceed 100% of the premiums for the coverage
as  of the  date hereof (the  "100% Amount"), Purchaser  shall either substitute
coverage meeting the requirements  of the proviso in  the preceding sentence  or
continue  the existing  insurance but reduce  the maximum amount  of coverage to
that available for premiums equal to the 100% Amount.

    2.15   PUBLICATION OF  OPERATIONAL RESULTS.   Purchaser  agrees to  use  its
reasonable  best efforts to make publicly  available joint results of operations
of Parent and the Acquired Company in  respect of the first full calendar  month
subsequent  to Closing no later than twenty  (20) days following the end of such
calendar month.

    2.16  CONTINGENT REGISTRATION RIGHTS.  In the event that the average  weekly
reported  volume  of  trading  of  the Parent  Stock,  as  reported  through the
automated quotation system of  the Nasdaq Stock  Market National Market  System,
during  any four (4) calendar  week period ending on  any date within six months
following the Closing Date constitutes less than two percent (2%) of the  number
of shares of Parent Stock outstanding as of such date, Parent shall use its best
efforts  to  file  promptly  and  make effective  with  the  SEC  a Registration
Statement covering the Parent  Stock owned by Wind  Point Partners II, L.P.  (or
its  partners), Marshall D. Miller, his children, Phileona Foundation and Dorado
Investment Company (the "Selling  Stockholders") on the basis  set forth on  the
attached EXHIBIT 2.16. Parent acknowledges and agrees that this covenant is made
for the express benefit of the Selling Stockholders.

III.  REPRESENTATIONS AND WARRANTIES OF THE ACQUIRED COMPANY.

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

    3.1  ORGANIZATION, STANDING AND FOREIGN QUALIFICATION.

    3.1.1.   The  Acquired Company  is  a corporation  duly  organized,  validly
existing  and in good standing  under the laws of the  State of Delaware and has
the requisite corporate  power and  authority to carry  on its  business in  the
places  and as it is now being conducted and to own and lease the properties and
assets that it now owns or leases.

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

    3.2  AUTHORITY AND STATUS.

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

    3.2.2.  The Acquired Company has  the capacity and authority to execute  and
deliver  this  Agreement,  to  perform  hereunder,  and,  upon  approval  of the
transactions  provided  for  herein  by  its  stockholders,  to  consummate  the
transactions  contemplated  hereby without  any  other corporate  or stockholder
approval. The execution,  delivery and  performance by the  Acquired Company  of
this  Agreement  and each  and every  other  agreement, document  and instrument
provided for  herein have  been duly  authorized and  approved by  the Board  of
Directors  of the Acquired  Company. Assuming this Agreement  and each and every
agreement, document or instrument to be executed, delivered and performed by the
Acquired  Company  in  connection  herewith   are  valid  and  legally   binding
obligations  of  Purchaser  and  Parent,  this  Agreement  and  each  and  every
agreement, document and instrument  to be executed,  delivered and performed  by
the Acquired Company in connection herewith constitute or


will,  when executed  and delivered,  constitute the  valid and  legally binding
obligation of the  Acquired Company  enforceable against it  in accordance  with
their  respective terms, except  as enforceability may  be limited by applicable
equitable principles or by  bankruptcy, insolvency, reorganization,  moratorium,
or  similar  laws from  time  to time  in  effect affecting  the  enforcement of
creditors' rights generally. Attached  hereto as EXHIBIT  3.2 are true,  correct
and  complete  copies of  the  Certificate of  Incorporation  and Bylaws  of the
Acquired Company.

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

    3.3  CAPITALIZATION.   The entire authorized capital  stock of the  Acquired
Company  consists of thirty-five million (35,000,000)  shares of stock, of which
thirty million (30,000,000) shares are designated Common Stock, par value $0.001
per share, and five million  (5,000,000) shares are designated Preferred  Stock,
par  value $.001 per share. Of the total authorized Common Stock, as of June 30,
1995, eight million  six hundred  sixty thousand eight  hundred one  (8,660,801)
shares  were issued  and outstanding  and no  shares were  held in  the Acquired
Company's treasury.  Of the  total  authorized Preferred  Stock, no  shares  are
issued.  As of June 30, 1995, there  were options outstanding under the Director
Stock Option Plan  and the Employee  Stock Option Plan  entitling the  optionees
thereunder,  upon valid  exercise, to acquire  in the aggregate  one million two
hundred ninety-two thousand two hundred fifty-eight (1,292,258) shares of Common
Stock. All of the outstanding shares  of Acquired Company Stock (and any  shares
issuable  pursuant to presently outstanding  options, if exercised and purchased
at the applicable exercise price) were duly authorized and will be, when  issued
and the option price paid, validly issued, fully paid and nonassessable. None of
the  capital  stock  of  the  Acquired Company  is  entitled  to  or  subject to
preemptive rights. Other than the  requisite stockholder vote to consummate  the
Merger,  the authorization or consent of no other Person is required in order to
consummate the transactions  contemplated herein  by virtue of  any such  Person
having  an equitable or beneficial interest in the capital stock of the Acquired
Company. Except as set forth on  EXHIBIT 3.3, there are no outstanding  options,
warrants,  calls, commitments or plans by the Acquired Company or any Subsidiary
to issue any additional  shares of its  capital stock, to  pay any dividends  on
such  shares or  to purchase,  redeem, or retire  any outstanding  shares of its
capital stock, nor are there outstanding any securities or obligations that  are
convertible into or exchangeable for any shares of capital stock of the Acquired
Company.  Other than as disclosed on EXHIBIT 3.3,  there are not now, and at the
Effective Time  there will  not be,  any voting  trusts or  other agreements  or
understandings to which the Acquired Company is a party or is bound with respect
to the voting of the capital stock of the Acquired Company.

    3.4   ABSENCE  OF EQUITY  INVESTMENTS.  Except  as described  in EXHIBIT 3.4
hereto, the Acquired  Company does not,  either directly or  indirectly, own  of
record  or beneficially any shares or other equity interests in any corporation,
partnership, limited partnership, joint venture, trust or other business entity.

    3.5  LIABILITIES AND OBLIGATIONS OF THE ACQUIRED COMPANY.

    3.5.1.  Attached hereto as EXHIBIT 3.5.1 are true and complete copies of the
Acquired Company's audited balance sheets as of December 31, 1992, December  31,
1993   and  December  31,  1994  and   the  related  statements  of  operations,
stockholders' equity and cash flows for the years then ended, together with  the
reports  of Arthur Andersen, LLP  thereon, and an unaudited  balance sheet as of
March 31, 1995 and  the related statements  of operations, stockholders'  equity
and  cash flows for the three-month  period then ended (respectively, the "1992,
1993, 1994 and Interim 1995  Acquired Company Financial Statements"). The  1992,
1993,  1994 and  Interim 1995  Acquired Company  Financial Statements  have been
prepared  in   accordance  with   generally  accepted   accounting   principles,
consistently  applied, and fairly present in all material respects the financial
condition of the Acquired Company as  of the respective dates thereof  (subject,
in the case of the Interim 1995 Acquired


Company Financial Statements, to the absence of footnotes and to normal year-end
adjustments).  Except as set forth on EXHIBIT 3.5.1, the Acquired Company has no
liabilities, whether absolute, contingent, accrued or otherwise ("Liabilities"),
except for (i) any Liability  to the extent accrued  or reserved against in  the
balance sheet included in the Interim 1995 Acquired Company Financial Statements
or  disclosed in  the notes to  the 1994 Acquired  Company Financial Statements;
(ii) any  Liability which  was incurred  after March  31, 1995  in the  ordinary
course  of business, which Liabilities have not individually or in the aggregate
had and would not have a Material  Adverse Effect; (iii) any Liabilities to  the
extent  disclosed in the Acquired Company Reports and (iv) any other Liabilities
which would  not  have a  Material  Adverse  Effect. The  Acquired  Company  has
delivered  to Purchaser true and  complete copies of interim management-prepared
financial statements for the  two months ending May  31, 1995 with schedules  in
respect of accrued expenses attached thereto.

    3.6  TAX RETURNS.

    3.6.1.   The Acquired Company has, as of  the date hereof, and will prior to
the Effective Time have, timely and accurately filed all federal, state, foreign
and local income,  franchise, sales, real  and personal property  and other  tax
returns  and reports  required to be  filed by it  prior to such  dates and have
timely paid, or will prior to the Effective Time timely pay, all taxes shown  on
such  returns as owed for the periods of such returns, including all withholding
or other payroll related taxes shown  on such returns, except where the  failure
to  so file any such  return or report would not  have a Material Adverse Effect
upon the Acquired Company. The tax basis  of all assets of the Acquired  Company
as  reflected on its books  and records is correct  and accurate in all material
aspects.  No   material  assessments   or  notices   of  deficiency   or   other
communications  have been  received by the  Acquired Company, nor  have any been
threatened, with  respect  to  any such  tax  return  that has  not  been  paid,
discharged  or fully  reserved in  the Interim  1995 Acquired  Company Financial
Statements or EXHIBIT 3.6 hereto, and  no amendments or applications for  refund
have  been filed or are  planned with respect to any  such return. Except as set
forth on EXHIBIT 3.6, there are  no agreements between the Acquired Company  and
any  taxing  authority,  including,  without  limitation,  the  IRS,  waiving or
extending any statute  of limitations with  respect to any  tax return, and  the
Acquired  Company has  not filed  any consent  or election  under the  Tax Code,
including, without  limitation, any  election under  Section 341(f)  of the  Tax
Code.

    3.6.2.   The Acquired  Company has not  made any parachute  payments as such
term is defined in Section  280G of the Tax Code,  is not obligated to make  any
parachute  payments, and  is not  a party  to any  agreement that  under certain
circumstances could  obligate it,  or any  successor in  interest, to  make  any
parachute  payments that will  not be deductible  under Section 280G  of the Tax
Code.

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

    3.6.4  The income tax returns of  the Acquired Company have been audited  by
the  IRS or  the statute of  limitations for  assessment has closed  for all tax
years through the  year ended December  31, 1990, and  all taxes,  deficiencies,
penalties  and interest  relating to  such tax  years have  been fully  paid and
satisfied by the Acquired Company.

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


    3.6.6  The  1992, 1993,  1994 and  Interim 1995  Acquired Company  Financial
Statements  include, and the accounts of  the Acquired Company will include, for
all periods  up to  and including  the Closing  Date, adequate  provision  under
generally  accepted  accounting  principles  for  all  unpaid  applicable taxes,
assessments, fees and charges relating to the Acquired Company.

    3.6.7  The Acquired  Company is not a  "United States real property  holding
corporation" as defined in Section 897(c)(2) of the Tax Code.

    3.7   OWNERSHIP OF ASSETS AND LEASES.  The Acquired Company has title to all
of its property and assets used or useful in its business, other than leased  or
licensed  property and immaterial items of  personal property, free and clear of
any liens, security interests,  claims, charges, options,  rights of tenants  or
other  encumbrances, except as  disclosed in EXHIBIT 3.7  or reserved against in
the Interim 1995 Acquired Company Financial Statements (to the extent and in the
amounts so disclosed  or reserved  against) and  except for  liens arising  from
current  taxes not yet due and payable  and other immaterial liens. The Acquired
Company has not  received any payment  from a lessor  or licensee in  connection
with or as inducement for entering into a lease or license in which the Acquired
Company  is a lessee or  licensee, except licenses, fees  and similar payment in
the ordinary course of business. All  buildings and material items of  machinery
and  equipment owned  or leased  by the Acquired  Company are  in good operating
condition and reasonable  state of  repair, subject  only to  ordinary wear  and
tear.  Except as reserved against in the Interim 1995 Acquired Company Financial
Statements, or disclosed on EXHIBIT 3.7, the inventories of the Acquired Company
consist only of items  of supplies and computer-related  equipment of a  quality
and  quantity  usable in  the normal  course of  their businesses.  The Acquired
Company has received no written notice of a material violation of any applicable
zoning regulation, ordinance or other law, regulation or requirement relating to
its operations and  properties, whether  owned or  leased. All  of the  accounts
receivable  of the Acquired Company as of the Effective Time will reflect actual
transactions and will have arisen in the ordinary course of business.

    3.8  AGREEMENT DOES NOT VIOLATE OTHER  INSTRUMENTS.  Except as set forth  on
EXHIBIT 3.8 hereto, the execution and delivery of this Agreement by the Acquired
Company  does not, and the consummation  of the transactions contemplated hereby
will not, violate any provision of the Certificate of Incorporation, as amended,
or Bylaws, as amended, of the Acquired Company or violate, breach or  constitute
an  occurrence of default under  any provision of, or  result in acceleration of
any obligation under,  or give rise  to a right  by any party  to terminate  its
obligations  under any  Material Contract, or  any order, judgment  or decree to
which the Acquired  Company is  a party  or is bound  or by  which the  Acquired
Company's assets are affected. Except for the applicable requirements of the HSR
Act,  the 1933 Act, the  Exchange Act and applicable  Blue Sky laws, no consent,
approval, order  or authorization  of, or  registration, declaration  or  filing
with,  any governmental  entity is required  to be  obtained or made  by or with
respect to the Acquired Company, or any assets, properties or operations of  the
Acquired  Company in connection with the  execution and delivery by the Acquired
Company of this Agreement or  the consummation of the transactions  contemplated
hereby.

    3.9   ABSENCE OF CERTAIN CHANGES OR  EVENTS.  Except as disclosed on EXHIBIT
3.9, since March  31, 1995, the  Acquired Company has  operated in the  ordinary
course  of business and there has not  been (i) any material damage, destruction
or other casualty loss with respect to property owned or leased by the  Acquired
Company,  whether or not covered by insurance; (ii) any increase in dividends or
employee compensation or benefits  payable by the  Acquired Company, except  for
increases  in compensation  in the ordinary  course of  business consistent with
historical practices; (iii) any material  change in accounting methods; or  (iv)
any other event or condition that has resulted in any Material Adverse Effect.

    3.10   LITIGATION.   Except as otherwise  set forth in  EXHIBIT 3.10 hereto,
there is  no  suit,  action, arbitration,  proceeding,  claim  or  investigation
pending  or, to  the knowledge  of the  Acquired Company,  threatened against or
affecting the  Acquired  Company that  would  have a  Material  Adverse  Effect,


and,  to the knowledge of the Acquired Company, there exists no reasonable basis
or grounds  for  any  such  suit,  action,  arbitration,  proceeding,  claim  or
investigation that would have a Material Adverse Effect.

    3.11  LICENSES AND PERMITS; COMPLIANCE WITH LAW.  The Acquired Company holds
all  licenses, certificates, permits, franchises and rights from all appropriate
federal, state or  other public  authorities necessary  for the  conduct of  its
business  and  the use  of its  assets except  for such  licenses, certificates,
permits franchises and  rights the absence  of which would  not have a  Material
Adverse  Effect in respect of  the Acquired Company. Except  as noted in EXHIBIT
3.11, and except for any matters which  will not have a Material Adverse  Effect
in respect of the Acquired Company, the Acquired Company presently is conducting
its  business so as  to comply with all  applicable statutes, ordinances, rules,
regulations and  orders of  any governmental  authority. Further,  the  Acquired
Company  is not presently charged with, or under governmental investigation with
respect to, any actual or alleged  violation of any statute, ordinance, rule  or
regulation,  or presently the subject of any pending or, to the knowledge of the
Acquired Company,  threatened adverse  proceeding  by any  regulatory  authority
having jurisdiction over its business, properties or operations.

    3.12   CONTRACTS, AGREEMENTS AND INSTRUMENTS GENERALLY.  EXHIBIT 3.12 hereto
consists of a  true and  complete list  as of  the date  hereof (identifying  by
title,  date and  parties) of all  contracts, agreements,  commitments and other
instruments (whether oral or written) to  which the Acquired Company is a  party
(excluding all contracts between the Acquired Company and Purchaser) as follows:

        3.12.1.   any contracts, agreements, commitments or other instruments in
    effect with any  customer of  the Acquired Company  (excluding any  customer
    that  has purchased products or services of the Acquired Company through the
    Purchaser), including without limitation any consulting services agreements,
    software  license   agreements,  software   development  agreements,   other
    licenses, purchase commitments or installation agreements and maintenance or
    service agreements in excess of $75,000 per year (hereinafter referred to as
    the  "Customer Contracts,"  and identified as  such on  EXHIBIT 3.12), other
    than purchase  orders  for  software  modules  in  the  ordinary  course  of
    business;

        3.12.2.   any  lease, rental agreement  or other  contract or commitment
    affecting the ownership or leasing  of, title to or  use of any interest  in
    real  or personal property with payments equal to or greater than $5,000 per
    month and any  maintenance or  service agreements  relating to  any real  or
    personal property with payments equal to or greater than $5,000 per month;

        3.12.3.   any contract or commitment providing for payments based in any
    manner upon  the  sales,  purchases,  receipts, income  or  profits  of  the
    Acquired Company, other than Customer Contracts;

        3.12.4.   any employment contract, any plan or arrangement providing for
    continuing payment of any  type or nature  after termination of  employment,
    including,  without  limitation, any  severance, termination,  parachute, or
    other  payments  (whether  due  to  a  change  in  control,  termination  or
    otherwise) and bonuses and vested commissions;

        3.12.5.     any   contract,  agreement,   understanding  or  arrangement
    restricting the Acquired Company from  carrying on its business anywhere  in
    the world;

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

        3.12.7.   any joint  product development agreement  with any party other
    than the Purchaser, other than Customer Contracts;


        3.12.8.  any contract  or agreement with  vendors of material  equipment
    purchased  by the Acquired  Company or appointing the  Acquired Company as a
    reseller of equipment, other than purchase orders in the ordinary course  of
    business; and

        3.12.9.   any other contract,  agreement, commitment or other instrument
    that involves  a receipt  of  or requires  an  expenditure by  the  Acquired
    Company or requires the performance of services or delivery of goods to, by,
    through,  on behalf of or for the benefit of the Acquired Company, in excess
    of $100,000.00 during the remainder of its term.

    The contracts,  agreements,  commitments  and other  instruments  listed  or
required to be listed on EXHIBITS 3.12 AND 3.14(a)(ii) are herein referred to as
the "Material Contracts."

    All  of  the Material  Contracts  are valid  and  binding upon  the Acquired
Company and the  other parties  thereto and  are in  full force  and effect  and
enforceable  in accordance  with their  terms, except  as enforceability  may be
affected  by  bankruptcy,  insolvency,  moratorium  or  similar  laws  affecting
creditors  rights generally  and general  principles of  equity relating  to the
availability of equitable  remedies. Except  as listed on  EXHIBIT 3.12(a),  the
Acquired  Company has  not, and,  to the knowledge  of the  Acquired Company, no
other party to any  Material Contract has breached  in any material respect  any
provision of, or is in default in any material respect under, the terms thereof.
Except  as  listed  on  EXHIBIT  3.12(a) and  except  with  respect  to Customer
Contracts to  which  Purchaser  is a  party,  there  are no  existing  facts  or
circumstances  that  would prevent  the  Customer Contracts  from  maturing upon
performance thereunder by  the Acquired Company  into valid accounts  receivable
which  are payable to  the Acquired Company consistent  in all material respects
with historical  experience. Except  as  listed on  EXHIBIT 3.12(a)  and  except
accounts  receivable from the Purchaser, the  Acquired Company has performed all
work and other obligations in respect  of receivables outstanding for more  than
ninety  (90) days  to fully  recognize and  be entitled  to collect  same in all
material respects. Except for terms specifically described in EXHIBIT 3.12,  the
Acquired  Company has  not received  any payment  from any  contracting party in
connection with or as an inducement  for entering into any contract,  agreement,
policy  or instrument except for  payment for actual services  rendered or to be
rendered by the Acquired Company consistent with amount historically charged for
such services.

    3.13    CUSTOMER  CONTRACTS.    Except  as  set  forth  on  EXHIBIT   3.13A,
substantially  all of the Customer  Contracts (other than development contracts)
conform in all material respects to one of the forms attached hereto as  EXHIBIT
3.13B  (the "Customer Contract  Forms"), except where  such deviations would not
have a Material Adverse  Effect in respect of  the following terms:  acceptance,
limitation  of remedies, warranty limitations,  commitments relative to hardware
upgrades  for  breach  of  any  response  time  warranty,  confidentiality,  and
modification  to comply  with governmental  regulation. Except  as set  forth on
EXHIBIT 3.13A,  the Acquired  Company  has no  material commitments  to  provide
existing  customers products  developed in  the future  at a  credit to existing
payment obligations  or for  less than  normal prices.  Except as  set forth  on
EXHIBIT  3.13A, with  respect to  each Customer  Contract, (i)  each customer to
which computer software owned by the Acquired Company (the "Owned Software") has
been licensed and delivered pursuant to such Customer Contract and certified  as
operational by the Acquired Company has accepted such software to the extent and
on  the terms and conditions  provided for in such  Customer Contract except for
immaterial items of  Owned Software;  (ii) in each  case in  which the  Customer
Contract  pursuant to which Owned  Software is licensed incorporates response(s)
by the Acquired Company to a Request for Proposal by the customer, such software
has met all material requirements set  forth in such response(s); and (iii)  all
performance  warranties  with respect  to Owned  Software  made by  the Acquired
Company in any Customer Contract, including warranties with respect to capacity,
availability, downtime and response  time, have been  satisfied in all  material
respects  upon the terms and  conditions and to the  extent provided for in such
Customer Contract.

    3.14  INTELLECTUAL PROPERTY; COMPUTER SOFTWARE.

    3.14.1.  Except  as listed on  EXHIBIT 3.14.1, the  Acquired Company is  the
owner,  free and  clear of  all material  liens, claims,  security interests and
encumbrances, or has the right to use without


material restriction pursuant to a  valid license, all trademarks, trade  names,
service  marks, service names, and  brand names (whether or  not any of the same
are registered), and all copyrights and patents, together with all registrations
and applications for registrations  of the foregoing, if  any, applicable to  or
used  in the  businesses of  the Acquired Company.  Except as  listed on EXHIBIT
3.14.1, the Acquired Company is  not currently in receipt  of any notice of  any
violation  of, and the Acquired Company  is not violating (other than immaterial
violations), the rights of  others in any trademark,  trade name, service  mark,
copyright, patent, trade secret, know-how or other intangible asset.

    3.14.2.(i)   EXHIBIT 3.14.2(i) contains a  complete and accurate list of all
Owned Software, other than immaterial  Owned Software. The Acquired Company  has
title  to the Owned Software, free and  clear of all claims, including claims or
rights of employees, agents, consultants, customers, licensees or other  parties
involved  in the  development, creation, marketing,  maintenance, enhancement or
licensing of such computer  software. Except as  indicated on EXHIBIT  3.14.2(i)
and  for  commercially available,  over-the-counter "shrink-wrap"  software, the
Owned Software  is  not  dependent  on any  Licensed  Software  (as  defined  in
subsection  (ii) below) in order  to fully operate in the  manner in which it is
intended. No  Owned  Software has  been  published  or disclosed  to  any  other
parties,  except pursuant to contracts requiring  such other parties to keep the
Owned Software confidential and where such disclosure would not have a  Material
Adverse  Effect. To the knowledge  of the Acquired Company,  no such other party
has breached any such obligation of confidentiality.

    3.14.2(ii)  EXHIBIT 3.14.2(ii) contains a complete and accurate list of  all
software  (other  than  commercially  available  over-the-counter  "shrink-wrap"
software) under which the  Acquired Company is a  licensee, lessee or  otherwise
has  obtained the right to use  (the "Licensed Software"), other than immaterial
Licensed Software,  and includes  reference to  any agreement  to use,  license,
lease  or other instrument  pursuant to which the  Acquired Company has obtained
such right. The Acquired Company has  the right and license to use,  sublicense,
modify  and copy such Licensed Software as  set forth in the respective license,
lease or similar agreement pursuant to  which the Licensed Software is  licensed
to the Acquired Company, free of any other limitations or encumbrances.

    3.14.2(iii)    The Owned  Software  and Licensed  Software  and commercially
available over-the-counter "shrink-wrap" software  constitute all software  used
in  the businesses of the Acquired  Company (collectively, the "Acquired Company
Software"),  other  than  immaterial  Owned  Software  and  immaterial  Licensed
Software.  The  Acquired  Company  is  not  infringing  (other  than  immaterial
infringements) any intellectual property  rights of any  other person or  entity
with  respect to  the Acquired  Company Software, and,  to the  knowledge of the
Acquired Company,  no other  person  or entity  is infringing  any  intellectual
property  rights of  the Acquired Company  with respect to  the Acquired Company
Software other than immaterial infringements.

    3.14.2(iv)  The  Acquired Company has  not granted marketing  rights in  the
Acquired Company Software to any third party other than Purchaser.

    3.15   LABOR MATTERS.  Within the  last three (3) years the Acquired Company
has not been the subject of any  union activity or labor dispute, nor has  there
been any strike of any kind called or, to the knowledge of the Acquired Company,
threatened to be called against it. The Acquired Company has not violated in any
material  respect any applicable federal or  state law or regulation relating to
labor or  labor  practices. EXHIBIT  3.15(d)  sets  forth a  true,  correct  and
complete  list of employer  loans or advances  from the Acquired  Company to its
employees.  The  Acquired   Company  is  in   compliance  with  all   applicable
requirements  of the Immigration and Nationality Act  of 1952, as amended by the
Immigration Reform  and Control  Act  of 1986  and the  regulations  promulgated
thereunder  (hereinafter collectively  referred to  as the  "Immigration Laws"),
except for any non-compliance that would not have a Material Adverse Effect.

    3.16  BENEFIT PLANS.

    3.16.1.   EXHIBIT  3.16  lists every  pension,  retirement,  profit-sharing,
deferred  compensation, stock  option, employee stock  ownership, severance pay,
vacation, bonus or other incentive plan; any


medical, vision, dental  or other health  plan; any life  insurance plan or  any
other   employee  benefit  plan  or  fringe  benefit  plan;  including,  without
limitation, any "employee benefit plan," as that term is defined in Section 3(3)
of ERISA,  that is  currently maintained,  sponsored  in whole  or in  part,  or
contributed  to by the Acquired  Company or any ERISA  Affiliate of the Acquired
Company, for  the benefit  of, providing  any remuneration  or benefits  to,  or
covering  any current  or former employee,  retiree, dependent,  spouse or other
family member or beneficiary of such employee or retiree, director,  independent
contractor,  stockholder,  officer or  consultant of  the Acquired  Company (the
"Current  Plans").  The  Current  Plans,   together  with  any  such  plans   or
arrangements  previously adopted  or sponsored,  contributed to  by the Acquired
Company or  any  ERISA  Affiliate  of  the Acquired  Company  or  under  (or  in
connection  with)  which  the Acquired  Company  or  an ERISA  Affiliate  of the
Acquired Company  has any  contingent  or noncontingent  liability of  any  kind
(whether or not probable of assertion) that would have a Material Adverse Effect
on  the Company are collectively referred to  herein as the "Benefit Plans". Any
of the Benefit Plans that is an "employee pension benefit plan," or an "employee
welfare benefit plan" as those  terms are defined in  Section 3(1) of ERISA,  is
referred  to  herein as  an  "ERISA Plan."  No  Benefit Plan  is  or has  been a
multiemployer plan within the meaning of Section 3(37) of ERISA.

    3.16.2.  EXHIBIT 3.16 also lists,  with respect to all Benefit Plans  listed
in  EXHIBIT 3.16: (a)  all trust agreements  fidelity bonds, fiduciary liability
policies, investment manager or advisory contracts, and all amendments (if  any)
thereto,  (b)  where  applicable,  with  respect  to  any  such  plans  or  plan
amendments, the most recent determination letters issued by the IRS, and (c) the
most recent summary  plan descriptions and  any material modifications  thereto.
Except as set forth on EXHIBIT 3.16.2, the Acquired Company has delivered a true
and  complete copy of each such Benefit  Plan, agreement, most recent IRS letter
or ruling, opinion,  return, financial  statement and  summary plan  description
described  in Sections  3.16.1 or  3.16.2 hereof,  certified as  such by  a duly
authorized officer  of the  Acquired Company,  together with  the annual  report
(Form  5500 Series)  for the  two most  recent plan  years for  any Benefit Plan
subject to such reporting requirements.

    3.16.3.   Except where  any failure  to  comply would  not have  a  Material
Adverse  Effect on the Acquired  Company, all the Benefit  Plans and any related
trusts subject to ERISA  comply with and have  been administered in  substantial
compliance with the applicable provisions of ERISA, all applicable provisions of
the Tax Code relating to qualification and tax exemption under Tax Code Sections
401(a)  and 501(a) or  otherwise necessary to  secure intended tax consequences,
all applicable state or federal securities  laws and all other applicable  laws,
rules and regulations, and the Acquired Company has not received any notice from
any  governmental  agency  or instrumentality  questioning  or  challenging such
compliance. Any  noncompliance  or  failure properly  to  maintain,  operate  or
administer a Benefit Plan or related trust has not rendered nor will render such
Benefit  Plan  or related  trust or  the Parent,  Purchaser or  Acquired Company
subject to or liable  for any material taxes,  penalties, or liabilities to  any
Person.

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


    3.16.5.   To the  knowledge of the  Acquired Company, all  annual reports or
returns,  audited  or  unaudited  financial  statements,  actuarial  valuations,
summary  annual reports and summary plan descriptions issued with respect to the
Benefit Plans are correct and accurate in all material respects as of the  dates
thereof;  and  there have  been  no amendments  filed  to any  of  such reports,
returns,  statements,  valuations  or  descriptions  or  required  to  make  the
information  therein true  and accurate. All  annual reports  (Form 5500 series)
required to be filed with respect to  any Current Plan for the Plan year  ending
in 1994 have been or will be timely filed prior to Closing.

    3.16.6.    No non-exempt  "prohibited  transaction" (within  the  meaning of
4975(c) of the Tax  Code involving any  Benefit Plan has  occurred. None of  the
assets  of  any ERISA  Plan is  an  "employer security"  (within the  meaning of
Section 407(d)(1) of ERISA) or "employer  real property" (within the meaning  of
Section 407(d)(2) of ERISA).

    3.16.7.   The  only Benefit Plan  that is  or has been  an "employee pension
benefit plan" as defined in Section 3(2) of ERISA is the 401(k) Plan. The 401(k)
Plan is qualified under Section 401(a) of the Tax Code and its related trust  is
exempt  from tax under Section 501(a) of the Tax Code and no circumstances exist
that could result in a disqualification of the 401(k) Plan or loss of tax-exempt
status for its related trust  that would have a  Material Adverse Effect on  the
Acquired Company. Neither the 401(k) Plan nor any predecessor plan has ever been
subject  to  the provisions  of  Title IV  of ERISA  or  to the  minimum funding
standards of Section 412 of the Tax Code.

    3.16.8.  As of March 31, 1995, the Acquired Company had no current or future
liability with respect to any events  or matters occurring, arising or  accruing
on  or prior to such date  under any Benefit Plan that  was not reflected in the
Interim 1995  Acquired  Company  Financial  Statements and  that  would  have  a
Material Adverse Effect on the Acquired Company.

    3.16.9.    Neither  the Acquired  Company  nor  any ERISA  Affiliate  of the
Acquired Company  has maintained,  and  neither now  maintains, a  Benefit  Plan
providing welfare benefits (as defined in ERISA Section 3(1)) to employees after
retirement  or other separation  of service except to  the extent required under
Part 6 of Title I of ERISA and Tax Code Section 4980B.

    3.16.10.  Except as  set forth on EXHIBIT  3.16.10, the consummation of  the
transactions  contemplated by this Agreement will not (i) entitle any current or
former employee  (or  any spouse,  dependent  or  other family  member  of  such
employee) of the Acquired Company to severance pay, unemployment compensation or
any  payment contingent upon  a change in  control or ownership  of the Acquired
Company, or (ii)  accelerate the  time of payment  or vesting,  or increase  the
amount,  of any compensation due to any such employee or former employee (or any
spouse, dependent or other family member of such employee).

    3.17  CUSTOMERS.  Except as set forth in EXHIBIT 3.17, as of the date hereof
the Acquired Company has  not received any  notice from, and  does not have  any
knowledge  that, any current customer of the  Acquired Company has taken or will
take any steps  that could  disrupt the  business relationship  of the  Acquired
Company  with such customer  in any material respect.  The Acquired Company will
not suffer subsequent to the date hereof and prior to the Closing any damage  to
the  business relationship of the Acquired  Company with any current customer or
customers of the Acquired  Company that would have  in the aggregate a  Material
Adverse Effect.

    3.18   ENVIRONMENTAL MATTERS.  Except with respect to chemicals contained in
products used by  the Acquired Company  in the ordinary  course of business  and
except  as set forth in EXHIBIT 3.18,  no real property now or previously owned,
leased or used by the  Acquired Company (the "Real  Property") has been used  by
the  Acquired Company or,  to the knowledge  of the Acquired  Company, any other
party for  the  handling,  treatment,  storage  or  disposal  of  any  Hazardous
Substance.  Except as set forth in EXHIBIT 3.18, no release, discharge, spillage
or disposal  into  the environment  of  any  material quantity  of  a  Hazardous
Substance  and no  material soil,  water or  air contamination  by any Hazardous
Substance has occurred or is occurring in,  from or on the Real Property (a)  by
virtue of the actions or failure to act of any of the Acquired Company or (b) to
the knowledge of the Acquired Company, by


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

    3.19   INSURANCE.   Set forth  in EXHIBIT  3.19 is  a complete  list of  all
material  insurance policies that the Acquired Company maintains with respect to
its businesses, properties or  employees. Except as set  forth in EXHIBIT  3.19,
such  policies are in full force and effect and no event has occurred that would
give any insurance carrier a right  to terminate any such policy. Such  policies
are  adequate to  insure against  risks to  which the  Acquired Company  and its
properties and  assets are  exposed in  the operation  of its  business in  such
amounts  and types of coverage as are commercially reasonable and are consistent
with practices in the industry in which the Acquired Company operates. Except as
set forth in EXHIBIT 3.19, since March  31, 1995, there has not been any  change
in  the Acquired  Company's relationship  with its  insurers or  in the premiums
payable pursuant to such policies.

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

    3.21  INFORMATION.  The Acquired Company has made accessible to Purchaser or
Parent  each  registration  statement,  schedule,  report,  proxy  statement  or
information statement  it  has  filed  with  the  SEC  since  January  1,  1993,
including, without limitation, (a) the Acquired Company's Annual Reports on Form
10-K for the years ended December 31, 1993, and December 31, 1994, including all
documents  incorporated therein and (b)  the Acquired Company's Quarterly Report
on Form 10-Q for  the quarter ended March  31, 1995 and any  Report on Form  8-K
filed since December 31, 1994


(collectively,  the  "Acquired  Company  Reports").  As  of  the  date  of  this
Agreement,  the  Acquired  Company  Reports,  taken  together  with  information
previously  furnished by  the Acquired Company  to Parent or  Purchaser, did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made  therein,
in  light of the circumstances in which  they were made, not misleading. As used
in this  Section 3.21,  "material" means  material to  the financial  condition,
business, properties, rights or operations of the Acquired Company.

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

    3.23   DISCLOSURE AND  ABSENCE  OF UNDISCLOSED  LIABILITIES.   No  statement
contained  herein  or  in  any certificate,  schedule,  list,  exhibit  or other
instrument furnished or required to be furnished to Parent or Purchaser pursuant
to the provisions hereof contains, or will at the time it is furnished  contain,
any  untrue statement of any material fact  or omits to state any fact necessary
to make the statements herein or therein in light of the circumstances in  which
they  were made  or omitted not  false or  misleading. As used  in this Section,
"material" means  material to  the  financial condition,  business,  properties,
rights or operations of the Acquired Company.

    3.24   NO SPECIAL STOCKHOLDER RIGHTS.  Except for the Voting Trust Agreement
and the Registration Rights Agreement  referenced in Section 6.13, the  Acquired
Company  has no agreement with any individual  or entity that grants such person
any rights as a stockholder  of Acquired Company Stock  that are in addition  to
such  holder's rights under the  Acquired Company's Certificate of Incorporation
or  Bylaws  (including,  without  limitation,  registration  rights,  preemptive
rights, put rights, rights of co-sale or rights to Board representation).

IV.  REPRESENTATIONS AND WARRANTIES OF PURCHASER AND PARENT.

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

    4.1  ORGANIZATION  AND STANDING.   Each of  Purchaser and Parent  is a  duly
organized  and validly existing  corporation in good standing  under the laws of
the State of Delaware.

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

    4.3   CAPITALIZATION.   The  entire authorized  capital stock  of the Parent
consists of  sixty-one million  (61,000,000)  shares of  stock, of  which  sixty
million  (60,000,000) shares  are designated  Common Stock,  par value  $.05 per
share, and one million (1,000,000) shares are designated Preferred Stock, no par
value per share ("Parent Preferred Stock"). Of the total authorized Common Stock
as of June 30, 1995, approximately fifty-three million one hundred one  thousand
(53,101,000)  shares were issued, of  which approximately thirty-six million one
hundred ninety-seven thousand (36,197,000)


shares were  outstanding and  approximately sixteen  million nine  hundred  four
thousand  shares were  held in  the Parent's  treasury. Of  the total authorized
Preferred Stock, none were outstanding. On February 12, 1991, Parent declared  a
dividend  distribution of one  Preferred Share Purchase Right  for each share of
Parent Stock. As of June 30, 1995 none of such Rights had been exercised. As  of
June  30,  1995, Parent  had  an aggregate  of  approximately one  million three
hundred  sixteen  thousand  ninety-seven  (1,316,097)  shares  of  Common  Stock
reserved  for issuance under previously approved employee stock option, purchase
or benefit plans. All of the  outstanding shares of Parent Stock (including  any
shares  issued pursuant  to existing  Parent stock  option, purchase  or benefit
plans, if exercised and purchased at  the applicable exercise price) and  Parent
Preferred  Stock were duly authorized (or will  be when issued and the option or
purchase price is paid), validly issued,  fully paid and nonassessable. None  of
the capital stock of the Parent is entitled or subject to preemptive rights. All
of  the outstanding capital stock  of the Purchaser is  owned by the Parent. The
authorization or consent of no  other person or entity  is required in order  to
consummate  the transactions as contemplated herein by virtue of any such person
or entity  having an  equitable or  beneficial  interest in  the Parent  or  the
Purchaser or in the capital stock of the Parent or the Purchaser.

    4.4    AGREEMENT DOES  NOT  VIOLATE OTHER  INSTRUMENTS.   The  execution and
delivery of this Agreement by Purchaser and Parent do not, and the  consummation
of  the transactions contemplated hereby will not, violate any provisions of the
Certificate of Incorporation, as amended, or Bylaws, as amended, of Purchaser or
of Parent, and, except  as set forth  on EXHIBIT 4.4,  violate or constitute  an
occurrence  of  default under  any  provision of,  or  conflict with,  result in
acceleration of any obligation under,  or give rise to a  right by any party  to
terminate  its obligations  under, any  mortgage, deed  of trust,  conveyance to
secure debt,  note, loan,  lien,  lease, agreement,  instrument, or  any  order,
judgment, decree or other arrangement to which Purchaser or Parent is a party or
is bound or by which any of their respective assets are affected. Except for the
applicable  requirements of  the HSR  Act, the  1933 Act,  the Exchange  Act and
applicable Blue Sky laws,  no consent, approval, order  or authorization of,  or
registration, declaration or filing with, any governmental entity is required to
be  obtained or made  by or with respect  to Purchaser or  Parent or any assets,
properties or operations of Purchaser or Parent in connection with the execution
and delivery by Purchaser  and Parent of this  Agreement or the consummation  of
the transactions contemplated hereby.

    4.5    RESERVATION OF  SHARES.   Purchaser  will,  prior to  the  Merger, in
accordance with  the  terms  thereof,  have available  shares  of  Parent  Stock
sufficient  to complete the  Merger. The Parent Stock,  when issued hereunder to
the stockholders  of the  Acquired Company,  shall be  duly authorized,  validly
issued, fully paid and non-assessable.

    4.6    INFORMATION.   Parent  has  delivered  to the  Acquired  Company each
registration  statement,  schedule,  report,  proxy  statement  or   information
statement it has filed with the Securities and Exchange Commission since January
1,  1993, including, without limitation, (a) Parent's Annual Report on Form 10-K
for the years  ended December  31, 1993,  and December  31, 1994,  respectively,
including  all documents incorporated therein,  (b) Parent's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1995 and (c) Parent's Reports on  Form
8-K  since  December 31,  1994 dated  July 10,  1995 (collectively,  the "Parent
Reports"). As of the date of this Agreement, the Parent Reports, taken  together
with information previously furnished by Parent to the Acquired Company, did not
contain any untrue statement of a material fact or omit to state a material fact
required  to be stated therein or necessary to make the statements made therein,
in light of the circumstances in which  they were made, not misleading. As  used
in  this Section, "material" means material  to the financial condition, results
of operations,  business,  assets or  properties  of Parent  together  with  its
subsidiaries (including Purchaser), taken as a whole.

    4.7   LIABILITIES  AND OBLIGATIONS  OF PARENT  AND THE  PURCHASER.  Attached
hereto as EXHIBIT  4.7 are  true, correct and  complete copies  of the  Parent's
audited  consolidated balance sheets as of December 31, 1992, December 31, 1993,
and December 31, 1994  and the related consolidated  statements of earnings  and
retained  earnings and  cash flows  for the years  then ended,  and an unaudited
consolidated balance sheet  as of March  31, 1995 and  the related  consolidated
statement of earnings and


retained earnings and cash flows for the three-month period then ended, together
with  the reports of Arthur  Andersen & Co. on  the financial statements for the
years ended  December  31,  1992,  December  31,  1993  and  December  31,  1994
(respectively,   the  "1992,  1993,  1994  and  Interim  1995  Parent  Financial
Statements"). The 1992, 1993, 1994 and Interim 1995 Parent Financial  Statements
have  been prepared in accordance with generally accepted accounting principles,
consistently  applied,  and  fairly  present   in  all  material  respects   the
consolidated  financial condition and statements of  cash flow of the Parent and
its subsidiaries (including the  Purchaser) as of  the respective dates  thereof
(subject,  in the case of  the Interim 1995 Parent  Financial Statements, to the
absence of footnotes and to normal year-end adjustments).

    4.8  ABSENCE OF CERTAIN CHANGES OR  EVENTS.  Except as disclosed on  EXHIBIT
4.8,  since March 31,  1995, the Parent  has operated in  the ordinary course of
business and there has  not been any transaction,  commitment, dispute or  other
event or condition that would result in any Material Adverse Effect.

    4.9  LITIGATION.  Except as otherwise set forth in EXHIBIT 4.9 hereto, there
is  no suit, action, arbitration, proceeding, claim or investigation pending or,
to the knowledge of the Parent or the Purchaser, threatened against or affecting
the Parent or the Purchaser that would  have a Material Adverse Effect, and,  to
the  knowledge of the Parent or the  Purchaser, there exists no reasonable basis
or  grounds  for   such  suit,   action,  arbitration,   proceeding,  claim   or
investigation that would have a Material Adverse Effect.

    4.10   POOLING OF INTERESTS.  The Parent  and the Purchaser are not aware of
any facts  or  circumstances  respecting  either  thereof  or  their  accounting
procedures  which would have the effect of precluding accounting for transaction
contemplated hereby as a "pooling of interests."

V.  CONDITIONS PRECEDENT TO RESPECTIVE OBLIGATIONS OF THE PARTIES.

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

    5.1   ACTIONS  OF GOVERNMENTAL  AUTHORITIES.    There shall  not  have  been
instituted   or  be  pending  any  action,  proceeding,  application,  claim  or
counterclaim by any government or governmental authority or agency, domestic  or
foreign,  and  Purchaser, Parent  or the  Acquired Company  shall not  have been
notified by  any  such  government,  governmental  authority  or  agency  (or  a
representative  thereof) of its present intention  to commence, or recommend the
commencement  of,  such  an  action  or  proceeding,  that  (i)  challenges  the
acquisition  by  Purchaser  or  Parent of  the  Acquired  Company,  restrains or
prohibits or seeks  to restrain or  prohibit the making  or consummation of  the
Merger  or  restrains  or  prohibits  or  seeks  to  restrain  or  prohibit  the
performance of this Agreement; (ii) prohibits or limits or seeks to prohibit  or
limit  the  ownership  or  operation  by  Purchaser  or  Parent  of  all  or any
substantial portion of  the business  or assets of  the Acquired  Company or  of
Purchaser, Parent or any of their respective subsidiaries or compels or seeks to
compel  Purchaser  or  Parent to  dispose  of or  to  hold separate  all  or any
substantial portion of  the business  or assets of  the Acquired  Company or  of
Purchaser,  Parent or any of their  respective subsidiaries, or imposes or seeks
to impose  any material  limitation on  the ability  of Purchaser  or Parent  to
conduct such business or to own such assets; or (iii) imposes or seeks to impose
limitations  on the ability  of Purchaser or  Parent (or any  other affiliate of
Purchaser) to acquire or  hold or to  exercise full rights  of ownership of  the
Surviving  Corporation, including,  but not limited  to, the right  to vote such
shares on all matters  properly presented to the  stockholders of the  Surviving
Corporation.

    5.2  OTHER LEGAL ACTIONS.  No action, suit or proceeding shall be pending or
threatened before any court of any federal, state, local or foreign jurisdiction
(other than an action, suit or proceeding in


which  no governmental authority is a party)  of the type referred to in clauses
(i) through (iii)  of Section  5.1 above, in  which action,  suit or  proceeding
there is a reasonable possibility of an adverse outcome.

    5.3   LEGAL APPROVALS.  The execution and the delivery of this Agreement and
the consummation  of  the  transactions  contemplated  hereby  shall  have  been
approved  by all regulatory authorities whose  approvals are required by law and
the waiting period under the HSR Act shall have expired or have been terminated.

    5.4  STOCKHOLDER APPROVAL.   This Agreement and  the Merger shall have  been
adopted  and approved by the affirmative vote  or written consent of the holders
of the  outstanding shares  of Acquired  Company Stock  by the  vote or  written
consent required by, and in accordance with, the Delaware Code.

    5.5   EFFECTIVENESS OF  REGISTRATION STATEMENT.   The Registration Statement
shall have been declared effective  by the SEC, and  no stop order with  respect
thereto  shall have been issued. The shares of Parent Stock to be issued or sold
pursuant to the Registration Statement  shall have been registered for  issuance
in  the Merger under all  applicable Blue Sky laws or  shall be exempt from such
registration, and  no stop  order shall  have been  issued with  respect to  the
issuance or sale of such securities by any Blue Sky authority.

    5.6   NASDAQ APPROVAL.   The Parent Stock issuable  in the Merger shall have
been listed or approved for listing upon notice of issuance by the Nasdaq  Stock
Market National Market.

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

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

    6.1    REPRESENTATIONS  OF  ACQUIRED  COMPANY.    All  representations   and
warranties  of  the  Acquired Company  contained  in this  Agreement  (except as
affected by the transactions contemplated by this Agreement), in the  statements
contained in the Exhibits hereto or in any certificate delivered by the Acquired
Company  pursuant to this  Agreement shall be  true and correct  in all material
respects when made, and shall  be true and correct  in all material respects  at
and  as of the Closing  Date as though such  representations and warranties were
made or given on and as of the Closing Date.

    6.2  COVENANTS  OF ACQUIRED COMPANY.   The Acquired  Company shall have,  or
caused  to be,  performed and observed  in all material  respects all covenants,
agreements and conditions hereto  to be performed or  observed at or before  the
Closing Date.

    6.3    NO MATERIAL  ADVERSE  CHANGE IN  BUSINESS.   Since  the date  of this
Agreement there shall not  have been any Material  Adverse Effect in respect  of
the  Acquired Company.  A Material  Adverse Effect shall  not be  deemed to have
occurred for purposes of this Section 6.3 by reason of the inability of Acquired
Company to enter into contracts with those prospective new customers which prior
to the execution of this Agreement have been separately identified in a  writing
by  Acquired  Company to  Purchaser substantially  due to  the reaction  of such
prospective new customers to the  announcement of the transactions  contemplated
by this Agreement. In addition, a Material Adverse Effect shall not be deemed to
have  occurred for purposes of this Section 6.3 as a result of reductions in the
volume of


revenue received by Acquired Company from Purchaser where such reduction is  the
result  of Purchaser's deliberate action. The exceptions to the Material Adverse
Effect condition  set  forth in  the  immediately preceding  two  sentences  are
conditioned  on the Acquired Company using  its reasonable best efforts to enter
into contracts with prospective new customers.

    6.4   CERTIFICATE.   Purchaser  shall have  received  a certificate  of  the
President  of the Acquired Company, dated as  of the Closing Date, certifying as
to the matters set forth in Sections 6.1 through 6.3 above. In addition,  Parent
shall  have received both  a certificate dated  as of the  effective date of the
Registration Statement and a certificate dated as of the Closing Date certifying
that in particular and  without modifying the  certificate indicated above,  the
covenants  set forth in Sections  2.3.1 and 2.3.2 above  have been performed and
that the representations set forth in Sections 3.21 and 3.24 above are true  and
correct  as of such  dates, but that  the agreements referenced  in Section 3.24
have been (or will be) terminated prior to Closing.

    6.5  OPINION OF ACQUIRED COMPANY'S COUNSEL.  Purchaser and Parent shall have
received an opinion of counsel for the Acquired Company, dated as of the Closing
Date, of customary form reasonably acceptable to Purchaser.

    6.6  TAX OPINION.  Purchaser and Parent shall each have received an  opinion
from  their counsel  based upon appropriate  representations of  the parties and
certain stockholders of the Acquired Company dated as of the Closing Date to the
effect that the  Merger will  qualify as  a reorganization  pursuant to  Section
368(a) of the Tax Code.

    6.7  AFFILIATES AND PRINCIPAL STOCKHOLDERS.  Parent and Purchaser shall have
received  the Rule 145 Letters  and the Pooling Letters  from the persons and at
the times specified in Section 2.4 and the letters referenced in Section 2.13.

    6.8  ADDITIONAL INSTRUMENTS; CERTAIN  CONSENTS.  The Acquired Company  shall
have  delivered  to Purchaser  or Parent  certified  copies of  resolutions duly
adopted by the Acquired Company's Board of Directors and stockholders, approving
the Merger and authorizing the transactions contemplated hereby, and such  other
or  additional instruments, endorsements  and documents as  Parent and Purchaser
reasonably deem  to be  necessary to  enable  the Merger  to be  consummated  as
provided  in  this  Agreement.  The Acquired  Company  shall  have  received the
waivers, consents and approvals to  the transactions contemplated herein,  which
are listed on EXHIBIT 6.8.

    6.9   ACCOUNTANT'S POOLING LETTERS.  Parent shall have received letters from
Arthur Andersen,  LLP  dated  as  of the  effective  date  of  the  Registration
Statement  and as of  the Closing Date  addressed to Parent  advising it, as set
forth in Section 2.3.2 hereof, that the Merger may be accounted for as a pooling
of interests  and  otherwise  in  such  form  as  is  customary  and  reasonably
acceptable to Parent.

    6.10    ACCOUNTANT'S  COMFORT  LETTERS.   Purchaser  and  Parent  shall have
received letters from Arthur Andersen, LLP dated as of the effective date of the
Registration Statement and as  of the Closing Date,  addressed to Purchaser  and
Parent,  containing  such  matters  as are  customarily  contained  in auditors'
letters regarding  the  Acquired  Company  Information  provided  expressly  for
inclusion  in such Registration Statement, and  in form and substance reasonably
satisfactory to Parent and Purchaser.

    6.11  COVENANTS  NOT TO  COMPETE.   Purchaser shall  have received  executed
non-competition  agreements from William H. Brehm,  Brian E. Higgins and Michael
E. Myers in  the form attached  hereto as  EXHIBIT 6.11, or  in a  substantially
similar  form reasonably acceptable to Purchaser, further accompanied by letters
from the  Purchaser  regarding  the  applicability  of  the  Acquired  Company's
Executive Retention Plan which have been previously agreed to.

    6.12   FEE LIMITATION.  The only fees and expenses to any investment banking
firm or similar entity that will  be incurred by Acquired Company in  connection
with  the transaction with Parent  and Purchaser will be  in connection with the
delivery   of    a   fairness    opinion   as    required   by    Section    7.7


hereof  and financial advisory services and  such fees shall not exceed $690,000
in the aggregate and  expenses not exceed $25,000,  and Purchaser shall  receive
evidence of compliance with this limitation reasonably satisfactory to it.

    6.13   CONTRACT CANCELLATION.   The Voting  Trust Agreement and Registration
Rights Agreement of the Acquired Company, each referenced on EXHIBIT 3.3,  shall
have been terminated, and of no further force or effect.

    6.14    RESOLUTION OF  CERTAIN  MATTERS.   The  Acquired Company  shall have
obtained a  complete  release  from  liability in  connection  with  the  matter
described  on EXHIBIT 6.14 (the "Matter") at no cost to the Acquired Company and
in form reasonably satisfactory to  Purchaser, or those certain stockholders  of
the Acquired Company listed on EXHIBIT 6.14 shall have agreed to indemnify, on a
joint  and several basis, the Acquired Company, Parent and Purchaser against all
liability and expense in connection with the Matter, such indemnification to  be
on   terms   reasonably  satisfactory   to   Purchaser  and   Parent.   If  such
indemnification is provided, the indemnifying stockholders shall be entitled  to
control the defense of any litigation relating to the Matter.

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

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

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

    7.2  COVENANTS OF PURCHASER AND PARENT.  Purchaser and Parent shall have, or
caused to be,  performed and observed  in all material  respects all  covenants,
agreements  and conditions  hereof to  be performed  or observed  by them  at or
before the Closing Date.

    7.3   NO MATERIAL  ADVERSE CHANGES  IN BUSINESS.   Since  the date  of  this
Agreement  there shall not have  been any Material Adverse  Effect in respect of
the Parent.

    7.4  CERTIFICATE.  The Acquired Company shall have received a certificate of
the President of each  of Parent and  Purchaser, dated as  of the Closing  Date,
certifying as to the matters set forth in Sections 7.1, 7.2 and 7.3 above.

    7.5   OPINION  OF PARENT'S  AND PURCHASER'S  COUNSEL.   The Acquired Company
shall have received an opinion of Jones, Day, Reavis & Pogue, counsel to  Parent
and  Purchaser,  dated as  of  the Closing  Date,  of customary  form reasonably
acceptable to Acquired Company.

    7.6  TAX OPINION.  The Acquired Company shall have received for the  benefit
of  its  stockholders an  opinion from  its tax  counsel based  upon appropriate
representations of the parties and certain stockholders of the Acquired Company,
dated as of the Closing  Date, to the effect that  the Merger will qualify as  a
reorganization pursuant to Section 368(a) of the Tax Code.


    7.7   FAIRNESS OPINION.  The Acquired Company shall have received an opinion
dated as  of the  date  of the  mailing of  the  Registration Statement  to  the
stockholders  of  the  Acquired  Company from  Dean  Witter  Reynolds  Inc., its
financial advisor, confirming the opinion referred to in Section 3.2.3 hereof.

    7.8  PARENT STOCK PRICE.  The average of the per share closing prices on the
Nasdaq Stock Market's National Market as reported in THE WALL STREET JOURNAL  of
the  Parent Stock for the ten (10) consecutive trading days ending on the second
trading day prior  to the Closing  Date (the "Pre-Closing  Parent Stock  Price")
shall be at least $50.00.

    7.9  ACCOUNTANTS' POOLING LETTERS.  The Acquired Company shall have received
letters  from  Arthur  Andersen, LLP  dated  as  of the  effective  date  of the
Registration Statement and  as of the  Closing Date, addressed  to the  Acquired
Company,  advising it,  as set forth  in Section  2.3.2, that the  Merger may be
accounted for  as a  pooling  of interests  and otherwise  in  such form  as  is
customary and reasonably acceptable to the Acquired Company.

VIII.  CLOSING.

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

    8.2    TRANSACTIONS AT  CLOSING.   At  the  Closing, each  of  the following
transactions shall occur:

        8.2.1.   THE  ACQUIRED  COMPANY'S  PERFORMANCE.   At  the  Closing,  the
    Acquired  Company shall deliver to Purchaser  and Parent, in addition to the
    other deliveries required by the terms and conditions of this Agreement, the
    following:

           (a) copies of any consents listed on Exhibit 6.8;

           (b) reasonably satisfactory  evidence of the  approvals described  in
       Sections 5.4 and 5.5;

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

           (d) certificates of  compliance or certificates  of good standing  of
       the  Acquired Company  as of the  most recent practicable  date, from the
       Secretary of the State of Delaware;

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

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

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

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

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

           (j)  the tax opinion described in Section 6.6;

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

           (l) the letters described in Section 2.13;

           (m)  the letters  from Arthur  Andersen, LLP  to be  delivered by the
       Closing Date as described in Section 6.9;


           (n) the Covenants Not to Compete as executed by the employees of  the
       Acquired Company specified in Section 6.11; and

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

        8.2.2.  PERFORMANCE BY PURCHASER AND PARENT.  At the Closing,  Purchaser
    or  Parent,  as  appropriate,  shall deliver  to  the  Acquired  Company, in
    addition to the  other deliveries required  by the terms  and conditions  of
    this Agreement, the following:

           (a) the certificate described in Section 7.4;

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

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

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

           (e) the opinion  of counsel  for Purchaser and  Parent referenced  in
       Section 7.5;

           (f) the tax opinion described in Section 7.6;

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

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

    9.1  Except for the covenants contained in Sections 2.13, 2.14 and 11.5, all
representations,  warranties  and  agreements  in  this  Agreement  or  in   any
instrument  delivered pursuant to this Agreement  shall not survive the Closing,
and thereafter no party hereto and no officer, director or employee of any  such
party   shall  have   any  liability  whatsoever   with  respect   to  any  such
representation, warranty or agreement except for liabilities arising from fraud,
willful misconduct or criminal acts.

X.  TERMINATION.

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

        10.1.1.   by  the mutual  consent  of the  Boards  of Directors  of  the
    Acquired   Company  and  Parent,  notwithstanding   prior  approval  by  the
    stockholders of any or all of such corporations;

        10.1.2.  by the Board of  Directors of Purchaser in accordance with  its
    rights under Section 10.3;

        10.1.3.   by the  Board of Directors  of the Acquired  Company after the
    earlier to occur of November 15, 1995, and the date that is twenty-four (24)
    business days  following the  date on  which the  Registration Statement  is
    declared effective by the SEC (whichever is earlier being referred to herein
    as  the  "Outside Closing  Date"), if  any  of the  conditions set  forth in
    Articles V and VII hereof, to  which the Acquired Company's obligations  are
    subject, have not been fulfilled or waived, unless such fulfillment has been
    frustrated or made impossible by any act or failure to act of it;


        10.1.4.   by  Purchaser after  the Outside Closing  Date, if  any of the
    conditions set forth in Articles V  and VI hereof, to which the  obligations
    of  Purchaser and  Parent are  subject, have  not been  fulfilled or waived,
    unless such fulfillment has been frustrated or made impossible by any act or
    failure to act of Purchaser or Parent;

        10.1.5.  by the  Board of Directors  of the Acquired  Company if in  the
    exercise  of its good faith determination, as  set forth in Section 2.11, as
    to its fiduciary duties  to the Acquired  Company's stockholders imposed  by
    law,  the  Board of  Directors  of the  Acquired  Company decides  that such
    termination is required; or

        10.1.6.   by the  Board of  Directors  of the  Acquired Company  if  the
    average  of the per share  closing prices of the  Parent Stock on the Nasdaq
    Stock Market's National Market  as reported in THE  WALL STREET JOURNAL  for
    any  period of twenty (20) consecutive trading days ending on any date prior
    to the second trading day prior to the Closing Date is less than $50.00.

    10.2  EFFECT OF TERMINATION.

    10.2.1.   In  the event  of  a termination  of  this Agreement  pursuant  to
Sections  10.1, each party  shall pay the  costs and expenses  incurred by it in
connection with this Agreement,  and except as provided  in the next  succeeding
sentence,  no  party  (or any  of  its officers,  directors,  employees, agents,
representatives or stockholders)  shall be  liable to  any other  party for  any
costs,  expenses, damage or loss of  anticipated profits hereunder. In the event
of a  termination of  this Agreement  other than  pursuant to  Sections  10.1.1,
10.1.5,  and 10.1.6, the parties shall retain  any and all rights attendant to a
breach of any covenant, representation  or warranty made hereunder. The  parties
agree  that the failure to  be satisfied of any  condition to Closing shall not,
absent a  breach  of  any  covenant, representation  or  warranty  made  herein,
constitute  a  breach of  this  Agreement; although  a  breach of  any covenant,
representation or warranty  that results in  or constitutes the  failure of  any
condition  to Closing shall nonetheless constitute  a breach for purposes of the
immediately preceding sentence. The parties also agree that Sections 5, 6 and  7
do not in and of themselves constitute representations, warranties or covenants.
Each party further agrees not to take any actions with the intent of frustrating
the satisfaction of the conditions to its obligation to close. In the event of a
termination  of this Agreement pursuant to Section 10.1.5 hereof, Section 10.2.2
shall govern.

    10.2.2.  In the event the Agreement is terminated by the Acquired Company in
accordance with  Section 10.1.5,  the  Acquired Company  shall promptly  pay  to
Purchaser  (i) in  an aggregate  amount not  to exceed  $500,000, all reasonable
costs and  expenses of  Purchaser and  Parent incurred  in connection  with  the
negotiation  and performance of this Agreement including without limitation fees
and expenses of counsel,  fees and expenses  of independent public  accountants,
filing  fees in respect  of compliance with  the HSR Act,  printing expenses and
registration fees and (ii) a fee in the amount of $1,500,000. In the case of any
termination of  this Agreement  under  Section 10.1.5,  payment of  the  amounts
specified  in  the preceding  sentence shall  constitute liquidated  damages and
shall be the sole and exclusive remedy  of Parent and Purchaser for any and  all
damages arising under or in connection with this Agreement, and, upon payment of
the  amounts specified in the preceding sentence, the Acquired Company shall not
have any liability  or further  obligation to Parent  or Purchaser  under or  in
connection with this Agreement or any such termination hereof.

    10.2.3.   Notwithstanding  anything in this  Agreement to  the contrary, the
provisions of  Section 2.8.2  shall survive  any termination  of this  Agreement
prior to Closing.

    10.3   RISK OF LOSS.  The Acquired Company retains all risk of condemnation,
destruction, loss or damage due to fire or other casualty from the date of  this
Agreement  up to the Effective Time.  If the condemnation, destruction, loss, or
damage is such  that the  business of the  Acquired Company,  is interrupted  or
curtailed or the assets of the Acquired Company are adversely affected such that
a  Material  Adverse  Effect Occurs,  then  Purchaser  shall have  the  right to
terminate this Agreement.


XI.  GENERAL PROVISIONS.

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

        11.1.1.  If to the Acquired Company:

                 Clinicom Incorporated
                 4720 Walnut Street
                 Boulder, Colorado 80301-2557
                 Attn: Mr. William H. Brehm

                 and to:

                 Lester R. Woodward, Esq.
                 Davis Graham & Stubbs
                 370 Seventeenth Street
                 Suite 4700
                 Denver, Colorado 80201

        11.1.2.  If to Purchaser or Parent:

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

                 and to:

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

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

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

    11.2  BROKERS.  Purchaser and  Parent, jointly and severally, represent  and
warrant to the Acquired Company that except for Punk, Ziegel & Knoell, no broker
or  finder has acted for them or  any entity controlling, controlled by or under
common control with them in connection with this Agreement. The Acquired Company
represents and warrants to Purchaser and the Parent that, except for Dean Witter
Reynolds Inc. and except as disclosed on  EXHIBIT 11.2, no broker or finder  has
acted  for it or any  entity controlling, controlled by  or under common control
with it in  connection with this  Agreement. Purchaser agrees  to indemnify  and
hold  harmless the Acquired Company against any fee, loss or expense arising out
of  any  claim  by  Punk,  Ziegel  &  Knoell  or  any  other  broker  or  finder


employed  by either of  them, and the  Acquired Company agrees  to indemnify and
hold harmless Purchaser and Parent against any fee, loss, or expense arising out
of any  claim by  Dean  Witter Reynolds  Inc., or  any  other broker  or  finder
employed by it or any of the Acquired Company's stockholders. The fees and other
expenses  of Punk, Ziegel & Knoell shall be paid by Parent and Purchaser and the
fees and expenses of  Dean Witter Reynolds  Inc. shall be  paid by the  Acquired
Company  (subject  to  the  limitations  set  forth  in  Section  6.12)  all  in
conjunction with such other fees as provided for in Section 11.5.

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

    11.4  WAIVER.  Any  failure on the part of  any party hereto to comply  with
any  of its obligations, agreements or conditions hereunder may be waived by any
other party to whom such compliance is owed. No waiver of any provision of  this
Agreement shall be deemed, or shall constitute, a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing waiver.

    11.5   EXPENSES.  Except as provided in 10.2.2, all expenses incurred by the
parties hereto in connection with  or related to the authorization,  preparation
and execution of this Agreement and the Closing of the transactions contemplated
hereby,  including, without limitation  of the generality  of the foregoing, all
fees and expenses of agents,  representatives, counsel and accountants  employed
by  any such  party, shall be  borne solely and  entirely by the  party that has
incurred the same. The Acquired Company represents and warrants that the firm of
Davis Graham &  Stubbs has  served as  its sole  legal counsel,  and Parent  and
Purchaser represent and warrant that the firms of Jones, Day, Reavis & Pogue and
Mazursky  & Hiner have served  as Parent and Purchaser's  sole legal counsel, in
connection with the negotiation, execution  and delivery of this Agreement,  and
each  of such parties acknowledges and  agrees that neither the Acquired Company
nor the Parent or Purchaser shall be required to pay the fees or expenses of any
other legal counsel in such connection.

    11.6   PRESS  RELEASES AND  DISCLOSURE.   In  the  event that  either  party
proposes  to issue, make or distribute any press release, public announcement or
other written publicity or disclosure prior  to the Closing Date that refers  to
the   transactions  contemplated  herein,  the  party  proposing  to  make  such
disclosure shall provide  a copy  of such disclosure  to the  other parties  and
shall  afford the  other parties  reasonable opportunity  (subject to  any legal
obligation of prompt disclosure)  to comment on such  disclosure or the  portion
thereof  which refers  to the transactions  contemplated herein  prior to making
such disclosure.

    11.7  BINDING EFFECT.  This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legal representatives,
executors, administrators, successors and assigns.

    11.8   HEADINGS.   The section  and  other headings  in this  Agreement  are
inserted solely as a matter of convenience and for reference, and are not a part
of this Agreement.

    11.9    ENTIRE  AGREEMENT.   This  Agreement and  all  agreements referenced
specifically in  this  Agreement and  executed  as required  by  this  Agreement
constitute  the  entire agreement  among the  parties  hereto and  supersede and
cancel any  prior agreements,  representations, warranties,  or  communications,
whether  oral or written, among the  parties hereto relating to the transactions
contemplated hereby or the subject matter herein. Neither this Agreement nor any
provision hereof may be  changed, waived, discharged  or terminated orally,  but
only  by an agreement in  writing signed by the party  against whom or which the
enforcement of such change, waiver, discharge or termination is sought.

    11.10  GOVERNING LAW.   Except to the  extent the transactions  contemplated
hereby  are governed by the  Delaware Code, this Agreement  shall be governed by
and construed in accordance with the laws of the State of Delaware.


    11.11   COUNTERPARTS.    This Agreement  may  be  executed in  two  or  more
counterparts,  each  of which  shall be  deemed  an original,  but all  of which
together shall constitute one and the same instrument.

    11.12  NO AGREEMENT UNTIL EXECUTED.  This Agreement shall not constitute  or
be  deemed to evidence a  contract or agreement among  the parties hereto unless
and until executed by all parties hereto, irrespective of negotiations among the
parties or the exchanging of drafts of this Agreement.

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

    11.14   EXHIBITS INCORPORATED.  All Exhibits attached hereto are an integral
part of this Agreement.

    11.15  TIME OF ESSENCE.  Time is of the essence in this Agreement.

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

                                          "PURCHASER":
                                          HBO & COMPANY OF GEORGIA

                                          By:        /s/ JAY P. GILBERTSON
                                              ----------------------------------
                                                     Jay P. Gilbertson,
                                                VICE PRESIDENT -- FINANCE AND
                                                   CHIEF FINANCIAL OFFICER

                                          "PARENT":
                                          HBO & COMPANY

                                          By:        /s/ JAY P. GILBERTSON
                                              ----------------------------------
                                                     Jay P. Gilbertson,
                                                VICE PRESIDENT -- FINANCE AND
                                                   CHIEF FINANCIAL OFFICER

                                          "ACQUIRED COMPANY":
                                          CLINICOM INCORPORATED

                                          By:        /s/ WILLIAM H. BREHM
                                              ----------------------------------
                                                      William H. Brehm,
                                                  CHAIRMAN OF THE BOARD AND
                                                   CHIEF EXECUTIVE OFFICER

EX-23

                                                                      Exhibit 23





                               ARTHUR ANDERSEN LLP



                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

     As independent public accountants, we hereby consent to the incorporation
of our report dated February 10, 1995 included in this Current Report on Form
8-K of HBO and Company into HBO & Company's previously filed Registration
Statements (Forms S-8 No. 2-75987, 33-39034, 2-92030, 33-12051, 33-67300, 33-
82962, 33-82960, 33-84034, 33-59173.



                                             Arthur Anderson LLP

Denver, Colorado
August 15, 1995

EX-99.A

                                                                  Exhibit 99(a)











                             CLINICOM INCORPORATED

                              SECOND QUARTER 1995


                             CLINICOM INCORPORATED
                            CONDENSED BALANCE SHEETS

                                     ASSETS



                                                       JUNE 30      DECEMBER 31
                                                        1995            1994
                                                    -------------  --------------
                                                             
CURRENT ASSETS:
  Cash and cash equivalents.......................  $   7,526,326  $    9,125,593
  Trade accounts receivable, net of allowance for
   doubtful accounts of $1,150,912 and $716,615,
   respectively...................................     18,066,622      16,456,033
  Accrued revenue receivable......................      5,817,788       5,300,541
  Inventories.....................................      3,400,577       2,246,107
  Prepaid expenses and other......................        894,808         593,401
                                                    -------------  --------------
    Total current assets..........................     35,706,121      33,721,675
                                                    -------------  --------------
PROPERTY AND EQUIPMENT, at cost:
  Furniture and equipment.........................        737,430         588,757
  Leasehold improvements..........................        576,646         531,507
  Manufacturing equipment and tooling.............      1,373,925       1,171,961
  Research and development equipment and
   software.......................................      3,024,594       2,804,215
                                                    -------------  --------------
                                                        5,712,595       5,096,440
  Less -- Accumulated depreciation and
   amortization...................................     (3,066,363)     (2,591,867)
                                                    -------------  --------------
    Property and equipment, net...................      2,646,232       2,504,573
                                                    -------------  --------------
SOFTWARE DEVELOPMENT COSTS, net...................      1,577,908       1,127,541
PURCHASED SOFTWARE, net...........................      1,912,663       2,153,401
OTHER ASSETS:
  Patent costs, net...............................         23,504          26,250
  Deposits and other, net.........................        111,135         134,259
                                                    -------------  --------------
    Total other assets............................        134,639         160,509
                                                    -------------  --------------
Total Assets......................................  $  41,977,563  $   39,667,699
                                                    -------------  --------------
                                                    -------------  --------------


                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                             
CURRENT LIABILITIES:
  Accounts payable................................  $   3,541,440  $    3,546,625
  Accrued liabilities.............................      1,694,184       2,365,401
  Accrued compensation............................        385,000         958,224
  Commissions payable.............................         88,235         735,157
  Warranty and rework reserve.....................        483,859         458,859
  Deferred revenue................................      2,623,155       1,788,797
                                                    -------------  --------------
    Total current liabilities.....................      8,815,873       9,853,063
                                                    -------------  --------------
COMMITMENTS AND CONTINGENCIES.....................       --              --
STOCKHOLDERS' EQUITY:
  Preferred stock, $.001 par value, 5,000,000
   shares authorized; none issued.................       --              --
  Common stock, $.001 par value, 30,000,000 shares
   authorized; 8,660,807 and 8,561,011 shares
   issued at June 30, 1995 and December 31, 1994,
   respectively...................................          8,661           8,561
  Additional paid-in capital......................     43,549,876      43,158,027
  Accumulated deficit.............................    (10,396,847)    (13,351,952)
                                                    -------------  --------------
    Total stockholders' equity....................     33,161,690      29,814,636
                                                    -------------  --------------
    Total liabilities and stockholders equity.....  $  41,977,563  $   39,667,699
                                                    -------------  --------------
                                                    -------------  --------------



  The accompanying notes to financial statements are an integral part of these
                                balance sheets.

                             CLINICOM INCORPORATED
                       CONDENSED STATEMENTS OF OPERATIONS



                                   FOR THE THREE MONTHS       FOR THE SIX MONTHS
                                       ENDED JUNE 30            ENDED JUNE 30
                                  -----------------------  ------------------------
                                     1995         1994        1995         1994
                                  -----------  ----------  -----------  -----------
                                                            
SALES:
  Net system sales..............  $10,778,425  $6,406,073  $19,450,088  $12,101,916
  Client support services.......    1,128,551     788,153    2,320,059    1,506,434
                                  -----------  ----------  -----------  -----------
    Total Sales.................   11,906,976   7,194,226   21,770,147   13,608,350
                                  -----------  ----------  -----------  -----------
COSTS AND EXPENSES:
  Cost of sales and support
   services.....................    6,315,079   3,413,271   11,428,993    6,656,911
  Research and development......    1,236,227     780,800    2,346,974    1,513,388
  Selling and marketing.........    1,418,885   1,234,787    2,758,417    2,316,291
  General and administrative....    1,499,804     598,252    2,381,007    1,175,180
                                  -----------  ----------  -----------  -----------
                                   10,469,995   6,027,110   18,915,391   11,661,770
                                  -----------  ----------  -----------  -----------
INCOME FROM OPERATIONS..........    1,436,981   1,167,116    2,854,756    1,946,580
OTHER INCOME (EXPENSE):
  Interest income...............      121,078     226,166      261,276      426,286
  Interest expense..............      --           --          --           --
  Other.........................      --              989       (3,187)       2,289
                                  -----------  ----------  -----------  -----------
NET INCOME BEFORE INCOME
 TAXES..........................    1,558,059   1,394,271    3,112,845    2,375,155
PROVISION FOR INCOME TAXES......       80,000     130,000      157,740      200,000
                                  -----------  ----------  -----------  -----------
NET INCOME......................  $ 1,478,059  $1,264,271  $ 2,955,105  $ 2,175,155
                                  -----------  ----------  -----------  -----------
                                  -----------  ----------  -----------  -----------
INCOME PER COMMON SHARE
  Primary.......................  $      0.16  $     0.14  $      0.33  $      0.24
                                  -----------  ----------  -----------  -----------
                                  -----------  ----------  -----------  -----------
  Fully diluted.................  $      0.16  $     0.14  $      0.33  $      0.24
                                  -----------  ----------  -----------  -----------
                                  -----------  ----------  -----------  -----------

WEIGHTED AVERAGE COMMON SHARES
 OUTSTANDING
  Primary.......................    9,051,780   8,862,878    9,006,591    8,904,684
                                  -----------  ----------  -----------  -----------
                                  -----------  ----------  -----------  -----------
  Fully diluted.................    9,051,780   8,862,878    9,007,360    8,907,142
                                  -----------  ----------  -----------  -----------
                                  -----------  ----------  -----------  -----------


            The accompanying notes to condensed financial statements
              are an integral part of these condensed statements.

                             CLINICOM INCORPORATED
                       CONDENSED STATEMENTS OF CASH FLOWS



                                                          FOR THE SIX MONTHS
                                                            ENDED JUNE 30
                                                       ------------------------
                                                          1995         1994
                                                       -----------  -----------
                                                              
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income.........................................  $ 2,955,105  $ 2,175,155
Adjustments to reconcile net income to net cash used
 in operating activities --
  Depreciation and amortization......................      907,957      399,291
  Loss on disposal of assets.........................        3,182      --
  Net change to inventory reserve....................       21,238        4,015
  Net change to warranty and rework reserve..........       25,000      165,703
Decrease (increase) in --
  Trade accounts receivable..........................   (1,610,589)  (1,160,135)
  Accrued revenue receivable.........................     (517,247)  (1,577,516)
  Inventories........................................   (1,204,099)     850,106
  Prepaid expenses and other.........................     (301,407)     426,482
  Deposits, other, and non current accounts
   receivable, net...................................       (6,876)     860,739
Increase (decrease) in --
  Accounts payable...................................       (5,185)    (205,091)
  Accrued liabilities, accrued compensation and
   commissions payable...............................   (1,891,363)     262,447
  Deferred revenue...................................      834,358   (1,703,306)
                                                       -----------  -----------
    Net cash flows from operating activities.........  $  (789,926) $   497,890
                                                       -----------  -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment.................  $  (591,599) $  (596,678)
  Patent costs.......................................      --            (7,498)
  Software development costs.........................     (609,691)    (325,940)
  Acquisition of KSH, Inc............................      --        (2,616,642)
                                                       -----------  -----------
    Net cash flows from investing activities.........   (1,201,290)  (3,546,758)
                                                       -----------  -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common stock under
   employee stock purchase plan......................      153,243      102,690
  Exercise of common stock options...................      238,706    1,038,558
                                                       -----------  -----------
    Net cash flows from financing activities.........      391,949    1,141,248
                                                       -----------  -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS..............   (1,599,267)  (1,907,620)
CASH AND CASH EQUIVALENTS, beginning of period.......    9,125,593   15,373,156
                                                       -----------  -----------
CASH AND CASH EQUIVALENTS, end of period.............  $ 7,526,326  $13,465,536
                                                       -----------  -----------
                                                       -----------  -----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION AND
 NONCASH INVESTING AND FINANCING ACTIVITIES:
  Cash paid during period for interest...............  $   --       $   --
                                                       -----------  -----------
                                                       -----------  -----------
  Inventory transferred to property and equipment....  $    28,391  $    44,655
                                                       -----------  -----------
                                                       -----------  -----------


            The accompanying notes to condensed financial statements
              are an integral part of these condensed statements.

                             CLINICOM INCORPORATED
                    NOTES TO CONDENSED FINANCIAL STATEMENTS

                                 JUNE 30, 1995

NOTE 1:  PRESENTATION
    The  accompanying financial information  should be read  in conjunction with
the audited financial statements and notes  thereto for the year ended  December
31,  1994  included in  the  10-K of  CliniCom  Incorporated ("CliniCom"  or the
"Company"). The financial information as of June 30, 1995 and for the three  and
six months ended June 30, 1995 and 1994 is unaudited; however, in the opinion of
management,  such  information reflects  all  adjustments (consisting  of normal
recurring adjustments) which  are necessary  for the fair  presentation of  such
information.  The results of operations for the  three and six months ended June
30, 1995 are  not necessarily indicative  of the results  for the entire  fiscal
year.

NOTE 2:  INVENTORIES
    Inventories are stated at the lower of cost (first-in, first-out) or market,
and consist of the following:



                                                          JUNE 30    DECEMBER 31
                                                            1995         1994
                                                         ----------  ------------
                                                               
Finished goods.........................................  $2,931,852   $ 1,639,064
Raw materials and components...........................     468,725       607,043
                                                         ----------  ------------
                                                         $3,400,577   $ 2,246,107
                                                         ----------  ------------
                                                         ----------  ------------


NOTE 3:  EARNINGS PER SHARE
    Earnings  per share  calculations are  based on  the daily  weighted average
number of shares of common stock and common stock equivalents outstanding during
each period. The dilutive effect of common stock equivalents from stock  options
and  warrants is  based on  the treasury stock  method using  the average market
price for each  period or,  for fully diluted  earnings per  share, the  closing
stock price for each period if higher.

NOTE 4:  PUBLIC OFFERING -- HBO & COMPANY -- MERGER AGREEMENT
    On  May 5, 1995, the Company filed a registration statement on Form S-3 with
the Securities  and  Exchange  Commission  in anticipation  of  an  offering  of
2,000,000  shares of  the Company  s common  stock. Of  this offering, 1,000,000
shares were to be sold  by the Company and 1,000,000  shares were to be sold  by
existing stockholders. Subsequently, on July 14, 1995 the Company entered into a
Merger  Agreement with HBO & Company (HBOC), an Atlanta-based health information
systems company. As  a result of  the pending acquisition  of CliniCom by  HBOC,
CliniCom  has suspended the proposed offering. The acquisition is anticipated to
be completed by mid October.

NOTE 5  KSH SYSTEMS, INC. ACQUISITION
    On June 21, 1994, CliniCom purchased substantially all of the assets of  KSH
Systems,  Inc.  The  purchase  price of  $2,619,000  was  allocated  as follows:
purchased software $2,407,000, other assets $120,000, trade accounts  receivable
$62,000  and property  and equipment  $30,000. The  purchased software  is being
amortized over five years and other assets is being amortized over two years.

NOTE 6:  MAJOR CUSTOMERS

    The following customers accounted for more  than 10% of total net sales  for
the three and six months ended June 30, 1995 and 1994:



                                                         FOR THE THREE    FOR THE SIX
                                                            MONTHS          MONTHS
                                                         ENDED JUNE 30   ENDED JUNE 30
                                                         -------------   -------------
                                                         1995    1994    1995    1994
                                                         -----   -----   -----   -----
                                                                     
A......................................................          19.6%           10.3%
B......................................................          12.4%
C......................................................  51.9%   11.0%   53.8%   14.1%
D......................................................  29.9%           16.4%
E......................................................                          12.3%
F......................................................                          13.9%
G......................................................
H......................................................
I......................................................

EX-99.B

                                                                   EXHIBIT 99(b)










                              CLINICOM INCORPORATED
                                FIRST QUARTER 1995

PART I -- FINANCIAL INFORMATION

                             CLINICOM INCORPORATED
                            CONDENSED BALANCE SHEETS
                                     ASSETS



                                                                                    MARCH 31        DECEMBER 31
                                                                                      1995             1994
                                                                                 ---------------  ---------------
                                                                                            
CURRENT ASSETS:
  Cash and cash equivalents....................................................  $     8,775,366  $     9,125,593
  Trade accounts receivable, net of allowance for doubtful accounts of $716,615
   for each period.............................................................       16,932,168       16,456,033
  Accrued revenue receivable...................................................        5,152,345        5,300,541
  Inventories..................................................................        2,471,743        2,246,107
  Prepaid expenses and other...................................................          837,360          593,401
                                                                                 ---------------  ---------------
    Total current assets.......................................................       34,168,982       33,721,675
                                                                                 ---------------  ---------------
PROPERTY AND EQUIPMENT, at cost:
  Furniture and equipment......................................................          621,039          588,757
  Leasehold improvements.......................................................          567,202          531,507
  Manufacturing equipment and tooling..........................................        1,236,874        1,171,961
  Research and development equipment and software..............................        2,900,653        2,804,215
                                                                                 ---------------  ---------------
                                                                                       5,325,768        5,096,440
Less -- Accumulated depreciation and amortization..............................       (2,820,276)      (2,591,867)
                                                                                 ---------------  ---------------
        Property and equipment, net............................................        2,505,492        2,504,573
                                                                                 ---------------  ---------------
SOFTWARE DEVELOPMENT COSTS, net................................................        1,332,143        1,127,541
PURCHASED SOFTWARE, net........................................................        2,033,032        2,153,401
OTHER ASSETS:
  Patent costs, net............................................................           24,877           26,250
  Deposits and other, net......................................................          126,759          134,259
                                                                                 ---------------  ---------------
    Total other assets.........................................................          151,636          160,509
                                                                                 ---------------  ---------------
Total assets...................................................................  $    40,191,285  $    39,667,699
                                                                                 ---------------  ---------------
                                                                                 ---------------  ---------------
                                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable.............................................................  $     2,167,316  $     3,546,625
  Accrued liabilities..........................................................        2,354,966        2,365,401
  Accrued compensation.........................................................          205,700          958,224
  Commissions payable..........................................................          173,582          735,157
  Warranty and rework reserve..................................................          458,859          458,859
  Deferred revenue.............................................................        3,305,049        1,788,797
                                                                                 ---------------  ---------------
    Total current liabilities..................................................        8,665,472        9,853,063
                                                                                 ---------------  ---------------
COMMITMENTS AND CONTINGENCIES..................................................        --               --
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value, 5,000,000 shares authorized; none issued.....        --               --
Common stock, $.001 par value, 30,000,000 shares authorized; 8,644,641 and
 8,561,011 shares issued at March 31, 1995 and December 31, 1994,
 respectively..................................................................            8,645            8,561
Additional paid-in capital.....................................................       43,392,074       43,158,027
Accumulated deficit............................................................      (11,874,906)     (13,351,952)
                                                                                 ---------------  ---------------
    Total stockholders' equity.................................................       31,525,813       29,814,636
                                                                                 ---------------  ---------------
Total liabilities and stockholder's equity.....................................  $    40,191,285  $    39,667,699
                                                                                 ---------------  ---------------
                                                                                 ---------------  ---------------


  The accompanying notes to financial statements are an integral part of these
                                balance sheets.

                             CLINICOM INCORPORATED
                       CONDENSED STATEMENTS OF OPERATIONS



                                                                                          FOR THE THREE MONTHS
                                                                                             ENDED MARCH 31
                                                                                      ----------------------------
                                                                                          1995           1994
                                                                                      -------------  -------------
                                                                                               
SALES:
  Net system sales..................................................................  $   8,671,663  $   5,695,843
  Client support services...........................................................      1,191,508        718,281
                                                                                      -------------  -------------
    Total Sales.....................................................................      9,863,171      6,414,124
                                                                                      -------------  -------------
COSTS AND EXPENSES:
  Cost of sales and support services................................................      5,113,914      3,243,640
  Research and development..........................................................      1,110,747        732,588
  Selling and marketing.............................................................      1,339,532      1,081,504
  General and administrative........................................................        881,203        576,928
                                                                                      -------------  -------------
                                                                                          8,445,396      5,634,660
                                                                                      -------------  -------------
INCOME FROM OPERATIONS..............................................................      1,417,775        779,464
OTHER INCOME (EXPENSE):
  Interest income...................................................................        140,198        200,120
  Interest expense..................................................................       --             --
  Other.............................................................................         (3,187)         1,300
                                                                                      -------------  -------------
NET INCOME BEFORE INCOME TAXES......................................................      1,554,786        980,884
PROVISION FOR INCOME TAXES..........................................................        (77,740)       (70,000)
                                                                                      -------------  -------------
NET INCOME..........................................................................  $   1,477,046  $     910,884
                                                                                      -------------  -------------
                                                                                      -------------  -------------
INCOME PER COMMON SHARE:
  Primary...........................................................................  $        0.16  $        0.10
                                                                                      -------------  -------------
                                                                                      -------------  -------------
  Fully Diluted.....................................................................  $        0.16  $        0.10
                                                                                      -------------  -------------
                                                                                      -------------  -------------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
  Primary...........................................................................      8,953,473      8,925,263
                                                                                      -------------  -------------
                                                                                      -------------  -------------
  Fully Diluted.....................................................................      9,046,458      8,927,130
                                                                                      -------------  -------------
                                                                                      -------------  -------------


            The accompanying notes to condensed financial statements
              are an integral part of these condensed statements.

                             CLINICOM INCORPORATED
                       CONDENSED STATEMENTS OF CASH FLOWS



                                                                                         FOR THE THREE MONTHS
                                                                                            ENDED MARCH 31
                                                                                    ------------------------------
                                                                                         1995            1994
                                                                                    --------------  --------------
                                                                                              
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income......................................................................  $    1,477,046  $      910,884
  Adjustments to reconcile net income to net cash used in operating activities --
    Depreciation and amortization.................................................         445,250         180,677
    Loss on disposition of assets.................................................           3,182        --
    Net change in inventory reserve...............................................        --                18,433
  Decrease (increase) in --
    Trade accounts receivable.....................................................        (476,135)     (1,112,335)
    Accrued revenue receivable....................................................         148,196      (1,716,736)
    Inventories...................................................................        (241,582)        716,140
    Prepaid expenses and other....................................................        (243,959)        267,013
    Deposits and other, net and noncurrent trade accounts receivable..............          (7,500)        888,138
  Increase (decrease) in --
    Accounts payable..............................................................      (1,379,309)        112,080
    Accrued liabilities, accrued compensation and commissions payable.............      (1,324,534)       (346,054)
    Deferred revenue..............................................................       1,516,252        (944,756)
    Warranty and rework reserve...................................................        --                96,613
                                                                                    --------------  --------------
      Net cash flows from operating activities....................................         (83,093)       (929,903)
                                                                                    --------------  --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment, net.........................................        (217,001)       (258,494)
  Patent costs....................................................................        --                  (900)
  Software development costs......................................................        (284,264)       (125,692)
                                                                                    --------------  --------------
      Net cash flows from investing activities....................................        (501,265)       (385,086)
                                                                                    --------------  --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Exercise of common stock options................................................         234,131       1,139,932
                                                                                    --------------  --------------
      Net cash flows from financing activities....................................         234,131       1,139,932
                                                                                    --------------  --------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS..............................        (350,227)       (175,057)
CASH AND CASH EQUIVALENTS, beginning of period....................................       9,125,593      15,373,156
                                                                                    --------------  --------------
CASH AND CASH EQUIVALENTS, end of period..........................................  $    8,775,366  $   15,198,099
                                                                                    --------------  --------------
                                                                                    --------------  --------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION AND NONCASH INVESTING AND
 FINANCING ACTIVITIES:
  Cash paid during period for interest............................................  $     --        $     --
                                                                                    --------------  --------------
                                                                                    --------------  --------------
  Inventory transferred to property and equipment.................................  $       15,946  $       29,582
                                                                                    --------------  --------------
                                                                                    --------------  --------------


            The accompanying notes to condensed financial statements
              are an integral part of these condensed statements.

                             CLINICOM INCORPORATED
                    NOTES TO CONDENSED FINANCIAL STATEMENTS
                                 MARCH 31, 1995

NOTE 1:  PRESENTATION
    The  accompanying financial information  should be read  in conjunction with
the annual financial statements  and notes thereto for  the year ended  December
31,  1994 included in the Company's 10-K.  The financial information as of March
31, 1995 and for the  three months ended March 31,  1995 and 1994 is  unaudited;
however, in the opinion of management, such information reflects all adjustments
(consisting  of normal recurring  adjustments) which are  necessary for the fair
presentation of such information. The results of operations for the three months
ended March  31, 1995  are not  necessarily indicative  of the  results for  the
entire fiscal year.

NOTE 2:  INVENTORIES
    Inventories are stated at the lower of cost (first-in, first-out) or market,
and consist of the following:



                                                                 MARCH 31      DECEMBER 31
                                                                   1995           1994
                                                               -------------  -------------
                                                                        
Finished goods...............................................  $   1,247,595  $   1,639,064
Raw materials and components.................................      1,224,148        607,043
                                                               -------------  -------------
                                                               $   2,471,743  $   2,246,107
                                                               -------------  -------------
                                                               -------------  -------------


NOTE 3:  EARNINGS PER SHARE
    Earnings  per share  calculations are  based on  the daily  weighted average
number of common and  common stock equivalents  outstanding during each  period.
The  dilutive effect of common stock equivalents from stock options and warrants
is based on the treasury  stock method using the  average market price for  each
period  or, for fully  diluted earnings per  share, the closing  stock price for
each period if higher.

NOTE 4:  PUBLIC OFFERING
    On May 5, 1995, the Company filed Form S-3 with the Securities and  Exchange
Commission  in anticipation of an offering of  2,000,000 shares of the Company s
common stock. Of the total offering, 1,000,000 shares are being sold by  certain
existing  shareholders and 1,000,000 shares are being sold by the Company. Up to
300,000 additional shares would also be available from existing shareholders  to
cover any over-allotments. The Company will not receive any of the proceeds from
the sale of shares by the selling stockholders.

NOTE 5:  KSH SYSTEMS, INC. ACQUISITION
    On  June 21, 1994, CliniCom Incorporated  purchased substantially all of the
assets of KSH Systems,  Inc. The purchase price  of $2,619,277 was allocated  as
follows:  purchased software  $2,407,367, other assets  $120,000, trade accounts
receivable $61,910 and property and equipment $30,000. The purchased software is
being amortized over  five years and  other assets is  being amortized over  two
years.

NOTE 6:  MAJOR CUSTOMERS
    The  following customers accounted for more than  10% of total net sales for
the three months ended March 31, 1995 and 1994:



                                                                  FOR THE THREE MONTHS
                                                                     ENDED MARCH 31
                                                                ------------------------
                                                                   1995         1994
                                                                -----------  -----------
                                                                       
A.............................................................       56.0%        17.7%
B.............................................................      --            26.4%
C.............................................................      --            25.0%

EX-99.C

                                                                   EXHIBIT 99(c)










                              CLINICOM INCORPORATED
                         AS OF DECEMBER 31, 1994 AND 1993




                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To CliniCom Incorporated:

    We  have audited the accompanying balance sheets of CLINICOM INCORPORATED (a
Delaware corporation)  as  of  December  31, 1994  and  1993,  and  the  related
statements  of operations, stockholders'  equity and cash flows  for each of the
three years in the  period ended December 31,  1994. These financial  statements
are  the responsibility  of the Company's  management. Our  responsibility is to
express an opinion on these financial statements based on our audits.

    We conducted  our  audits in  accordance  with generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence  supporting
the  amounts and disclosures in the financial statements. An audit also includes
assessing the  accounting  principles used  and  significant estimates  made  by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

    In our opinion, the financial  statements referred to above present  fairly,
in  all material respects, the financial position of CliniCom Incorporated as of
December 31, 1994 and 1993, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1994, in conformity
with generally accepted accounting principles.

                                                           Arthur Andersen, LLP

Denver, Colorado,
February 10, 1995

                                      F-1

                             CLINICOM INCORPORATED
                                 BALANCE SHEETS
                                     ASSETS



                                                                                            DECEMBER 31
                                                                                   ------------------------------
                                                                                        1994            1993
                                                                                   --------------  --------------
                                                                                             
CURRENT ASSETS:
  Cash and cash equivalents......................................................  $    9,125,593  $   15,373,156
  Trade accounts receivable, net of allowance for doubtful accounts of $716,615
   and $52,124, respectively.....................................................      16,456,033       4,948,016
  Accrued revenue receivable.....................................................       5,300,541       2,693,306
  Inventories....................................................................       2,246,107       2,316,400
  Prepaid expenses and other.....................................................         593,401         548,358
                                                                                   --------------  --------------
        Total current assets.....................................................      33,721,675      25,879,236
                                                                                   --------------  --------------
PROPERTY AND EQUIPMENT, at cost:
  Furniture and equipment........................................................         588,757         371,334
  Leasehold improvements.........................................................         531,507         152,458
  Manufacturing equipment and tooling............................................       1,171,961         702,760
  Research and development equipment and software................................       2,804,215       2,058,899
                                                                                   --------------  --------------
                                                                                        5,096,440       3,285,451
  Less- Accumulated depreciation and amortization................................      (2,591,867)     (1,898,339)
                                                                                   --------------  --------------
                                                                                        2,504,573       1,387,112
                                                                                   --------------  --------------
SOFTWARE DEVELOPMENT COSTS, net..................................................       1,127,541         589,012
PURCHASED SOFTWARE, net..........................................................       2,153,401        --
OTHER ASSETS:
  Patent costs, net..............................................................          26,250          24,244
  Deposits and other, net........................................................         134,259          30,284
  Noncurrent trade accounts receivable...........................................        --               905,138
                                                                                   --------------  --------------
        Total other assets.......................................................         160,509         959,666
                                                                                   --------------  --------------
                                                                                   $   39,667,699  $   28,815,026
                                                                                   --------------  --------------
                                                                                   --------------  --------------
                                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable...............................................................  $    3,546,625  $    1,036,102
  Accrued liabilities............................................................       2,365,401         976,183
  Accrued compensation...........................................................         958,224         637,592
  Commissions payable............................................................         735,157         548,890
  Warranty and rework reserve....................................................         458,859         545,905
  Deferred revenue...............................................................       1,788,797       2,833,966
                                                                                   --------------  --------------
        Total current liabilities................................................       9,853,063       6,578,638
                                                                                   --------------  --------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
  Preferred stock, $.001 par value, 5,000,000 shares authorized; none issued or
   outstanding...................................................................        --              --
  Common stock, $.001 par value, 30,000,000 shares authorized; 8,561,011 and
   8,052,490 shares issued and outstanding, respectively.........................           8,561           8,052
  Additional paid-in capital.....................................................      43,158,027      41,068,680
  Accumulated deficit............................................................     (13,351,952)    (18,840,344)
                                                                                   --------------  --------------
        Total stockholders' equity...............................................      29,814,636      22,236,388
                                                                                   --------------  --------------
                                                                                   $   39,667,699  $   28,815,026
                                                                                   --------------  --------------
                                                                                   --------------  --------------


                 The accompanying notes to financial statements
                 are an integral part of these balance sheets.

                                      F-2

                             CLINICOM INCORPORATED
                            STATEMENTS OF OPERATIONS



                                                                          FOR THE YEARS ENDED DECEMBER 31
                                                                   ----------------------------------------------
                                                                        1994            1993            1992
                                                                   --------------  --------------  --------------
                                                                                          
SALES:
  Net system sales...............................................  $   31,668,111  $   18,111,267  $   12,688,586
  Client support services........................................       3,747,417       2,035,088       1,345,756
                                                                   --------------  --------------  --------------
                                                                       35,415,528      20,146,355      14,034,342
                                                                   --------------  --------------  --------------
COSTS AND EXPENSES:
  Cost of sales and support services.............................      18,186,385       9,897,822       7,903,320
  Research and development.......................................       3,302,468       2,401,393       1,979,940
  Selling and marketing..........................................       5,045,584       2,772,710       1,947,518
  General and administrative.....................................       3,718,725       1,741,569       1,176,005
                                                                   --------------  --------------  --------------
                                                                       30,253,162      16,813,494      13,006,783
                                                                   --------------  --------------  --------------
INCOME FROM OPERATIONS...........................................       5,162,366       3,332,861       1,027,559

OTHER INCOME (EXPENSE):
  Interest income................................................         767,073         266,157         158,084
  Interest expense...............................................        --               (13,698)        (30,370)
  Other..........................................................           3,953          27,854         (10,314)
                                                                   --------------  --------------  --------------
NET INCOME BEFORE PROVISION FOR INCOME TAXES.....................       5,933,392       3,613,174       1,144,959
PROVISION FOR INCOME TAXES.......................................         445,000         270,000          20,000
                                                                   --------------  --------------  --------------
NET INCOME.......................................................  $    5,488,392  $    3,343,174  $    1,124,959
                                                                   --------------  --------------  --------------
                                                                   --------------  --------------  --------------
NET INCOME PER COMMON SHARE:
  Primary........................................................  $          .62  $          .41  $          .18
                                                                   --------------  --------------  --------------
                                                                   --------------  --------------  --------------
  Fully diluted..................................................  $          .62  $          .41  $          .17
                                                                   --------------  --------------  --------------
                                                                   --------------  --------------  --------------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
  Primary........................................................       8,900,982       8,098,628       6,302,470
                                                                   --------------  --------------  --------------
                                                                   --------------  --------------  --------------
  Fully diluted..................................................       8,901,514       8,229,592       6,640,044
                                                                   --------------  --------------  --------------
                                                                   --------------  --------------  --------------


                 The accompanying notes to financial statements
                   are an integral part of these statements.

                                      F-3

                             CLINICOM INCORPORATED
                       STATEMENTS OF STOCKHOLDERS' EQUITY
              FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992



                                              COMMON STOCK
                                              AND WARRANTS         ADDITIONAL
                                         ----------------------     PAID-IN        ACCUMULATED
                                           SHARES      AMOUNT       CAPITAL          DEFICIT          TOTAL
                                         -----------  ---------  --------------  ---------------  --------------
                                                                                   
BALANCES, December 31, 1991............    4,965,666  $   4,965  $   24,316,869  $   (23,308,477) $    1,013,357
  Issuance of 1,750,000 shares of
   common stock pursuant to an initial
   public offering at $3.6875 per share
   on April 27, 1992, net of stock
   issuance costs of $1,346,694........    1,750,000      1,750       5,104,681        --              5,106,431
  Warrants for the purchase of 175,000
   common shares issued in conjunction
   with the initial public offering....      --              88        --              --                     88
  Net income...........................      --          --            --              1,124,959       1,124,959
                                         -----------  ---------  --------------  ---------------  --------------
BALANCES, December 31, 1992............    6,715,666      6,803      29,421,550      (22,183,518)      7,244,835

  Issuance of 1,150,000 shares of
   common stock pursuant to a public
   offering at $10.25 per share on July
   9, 1993, net of stock issuance costs
   of $946,602.........................    1,150,000      1,150      10,839,748        --             10,840,898
  Exercise of all outstanding warrants
   on July 9, 1993.....................      175,000         87         774,288        --                774,375
  Exercise of stock options............       11,824         12          33,094        --                 33,106
  Net income...........................      --          --            --              3,343,174       3,343,174
                                         -----------  ---------  --------------  ---------------  --------------
BALANCES, December 31, 1993............    8,052,490      8,052      41,068,680      (18,840,344)     22,236,388

  Exercise of stock options............      482,339        483       1,371,673        --              1,372,156
  Tax effect of stock options..........      --          --             445,000        --                445,000
  Issuance of common stock under
   employee stock purchase plan........       26,182         26         272,674        --                272,700
  Net income...........................      --          --            --              5,488,392       5,488,392
                                         -----------  ---------  --------------  ---------------  --------------
BALANCES, December 31, 1994............    8,561,011  $   8,561  $   43,158,027  $   (13,351,952) $   29,814,636
                                         -----------  ---------  --------------  ---------------  --------------
                                         -----------  ---------  --------------  ---------------  --------------


                 The accompanying notes to financial statements
                   are an integral part of these statements.

                                      F-4

                             CLINICOM INCORPORATED
                            STATEMENTS OF CASH FLOWS



                                                                             FOR THE YEARS ENDED DECEMBER 31
                                                                          --------------------------------------
                                                                              1994         1993         1992
                                                                          ------------  -----------  -----------
                                                                                            
OPERATING ACTIVITIES:
  Net income............................................................  $  5,488,392  $ 3,343,174  $ 1,124,959
  Adjustments to reconcile net income to net cash provided by (used for)
   operating activities --
      Depreciation and amortization.....................................     1,233,204      584,133      353,901
      Provision for income taxes........................................       445,000      --           --
      Net change in inventory reserve...................................       251,918      338,484     (140,869)
      Loss on disposition of assets.....................................           157        9,485       16,264
      Loss on abandonment of patents....................................       --            13,763      --
  Decrease (increase) in --
    Trade accounts receivables..........................................   (11,508,017)  (2,439,556)    (500,509)
    Accrued revenue receivable..........................................    (2,545,325)  (2,066,975)    (603,629)
    Inventories.........................................................      (344,764)    (684,265)    (894,495)
    Prepaid expenses and other..........................................       (45,043)    (351,014)      29,880
    Deposits and other, net and noncurrent trade accounts receivable....       889,496     (911,687)      56,153
  Increase (decrease) in --
    Accounts payable....................................................     2,510,523     (108,786)    (996,049)
    Accrued liabilities, accrued compensation and commissions payable...     1,896,117    1,347,869      304,634
    Deferred revenue....................................................    (1,045,169)   1,183,809      336,086
    Warranty and rework reserve.........................................       (87,046)     321,125      (76,250)
    Net change in interest payable on stockholders' notes...............       --          (509,826)      10,022
                                                                          ------------  -----------  -----------
        Net cash flows provided by (used for) operating activities......    (2,860,557)      69,733     (979,902)
                                                                          ------------  -----------  -----------
INVESTING ACTIVITIES:
  (Purchase) sale of short-term investments.............................       --         1,500,681   (1,500,681)
  Purchase of property and equipment, net...............................    (1,625,861)    (673,062)    (633,578)
  Patent costs..........................................................        (7,498)      (4,316)      (2,313)
  Software development costs............................................      (779,226)    (336,688)    (163,681)
  Decrease in restricted cash...........................................       --           --            42,000
  Acquisition of KSH Systems, Inc. assets...............................    (2,619,277)     --           --
                                                                          ------------  -----------  -----------
        Net cash flows provided by (used for) investing activities......    (5,031,862)     486,615   (2,258,253)
                                                                          ------------  -----------  -----------
FINANCING ACTIVITIES:
  Repayments of notes payable...........................................  $    --       $    (1,576) $  (167,250)
  Proceeds from issuance of common stock under employee stock purchase
   plan.................................................................       272,700      --           --
  Repayments of stockholders' notes payable.............................       --          (256,515)     --
  Deferred offering costs...............................................       --           --           269,099
  Issuance of common stock, net of offering costs.......................       --        10,840,898    5,106,431
  Issuance and exercise of common stock warrants........................       --           774,375           88
  Exercise of common stock options......................................     1,372,156       33,106      --
                                                                          ------------  -----------  -----------
        Net cash flows provided by financing activities.................     1,644,856   11,390,288    5,208,368
                                                                          ------------  -----------  -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS....................    (6,247,563)  11,946,636    1,970,213

CASH AND CASH EQUIVALENTS, beginning of year............................    15,373,156    3,426,520    1,456,307
                                                                          ------------  -----------  -----------

CASH AND CASH EQUIVALENTS, end of year..................................  $  9,125,593  $15,373,156  $ 3,426,520
                                                                          ------------  -----------  -----------
                                                                          ------------  -----------  -----------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION AND NONCASH INVESTING
 AND FINANCING ACTIVITIES:
    Cash paid during the year for interest..............................  $    --       $   523,524  $    18,588
                                                                          ------------  -----------  -----------
                                                                          ------------  -----------  -----------
    Inventory transferred to property and equipment.....................  $    163,139  $    37,358  $    51,031
                                                                          ------------  -----------  -----------
                                                                          ------------  -----------  -----------


                 The accompanying notes to financial statements
                   are an integral part of these statements.

                                      F-5

                             CLINICOM INCORPORATED
                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 1994

(1)  ORGANIZATION AND OPERATIONS

    CliniCom Incorporated (the "Company") was incorporated in 1985 and its first
significant  sales occurred in  1988. The Company  develops, assembles, markets,
installs and supports  computer based  clinical information systems  for use  by
healthcare  organizations  in  the  management  and  delivery  of  patient care.
Clinical information is the data concerning a patient's condition, diagnosis and
treatment used by healthcare providers  in rendering care. The Company  provides
an information system which facilitates health care planning and enables them to
record,  process, communicate and  document clinical information  and to deliver
documented, efficient  and  measurable  patient  care.  The  Company  system  is
marketed under the name CliniCom (the "CliniCom system").

(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    REVENUE RECOGNITION

    The  Company's revenues are primarily derived  from the sale of the CliniCom
system and  software licenses  to hospitals  and other  customers. The  CliniCom
system  includes  the  Company's  proprietary software  and  hardware  which are
integrated with a variety of  computers, terminals and printers manufactured  by
various  third parties. As  part of the  sale of a  CliniCom system, the Company
provides the hospital  with training  and implementation  services. The  Company
also  sells  additional  CliniCom  system hardware  and  software  components to
installed sites, in which case  additional training and implementation  services
are generally not required.

    The  Company recognizes revenue from system  sales and license agreements in
accordance  with   AICPA  Statement   of   Position  91-1,   "Software   Revenue
Recognition." Accordingly, revenues are recognized when all components necessary
for a functional system have been delivered, the Company's obligation to provide
training  and  support  services  has  been  substantially  completed, remaining
Company obligations, if any, are deemed insignificant, there are no  significant
uncertainties   with  respect  to  customer   acceptance  of  the  products  and
collectibility is probable. Revenues  from the sale  of additional hardware  and
software  are recognized upon shipment, provided that no significant obligations
for additional training and implementation services exist. Revenues from ongoing
maintenance and support are billed  monthly or semi-annually and are  recognized
in the applicable service month.

    Customer  payment terms vary.  Amounts collected or  due prior to satisfying
the above revenue recognition criteria are reflected as deferred revenue in  the
accompanying  balance  sheets.  Related  costs incurred  are  also  deferred and
charged to costs and expenses when the deferred revenue amounts are  recognized.
Accrued  revenue receivable represents amounts earned and recognized but not yet
invoiced to customers per terms of the related contracts.

    CASH AND CASH EQUIVALENTS

    For financial statement  purposes, the Company  considers all highly  liquid
cash  investments with maturity dates  of three months or  less to be considered
cash equivalents.

    INVENTORIES

    Inventories are stated at the lower  of first-in, first-out cost or  market,
and consist of the following:



                                                                          DECEMBER 31
                                                                  ----------------------------
                                                                      1994           1993
                                                                  -------------  -------------
                                                                           
Finished goods..................................................  $   1,639,064  $     828,351
Raw materials and components....................................        607,043      1,488,049
                                                                  -------------  -------------
                                                                  $   2,246,107  $   2,316,400
                                                                  -------------  -------------
                                                                  -------------  -------------


                                      F-6

    PROPERTY AND EQUIPMENT

    Property  and  equipment  is stated  at  cost. Maintenance  and  repairs are
charged to expense as incurred.  Major additions, replacements and  improvements
are  capitalized. Depreciation of  property and equipment  is provided using the
straight-line method  over estimated  useful lives  ranging from  three to  five
years.

    SOFTWARE DEVELOPMENT COSTS

    Costs  to  produce software  products are  capitalized  only after  a detail
program  design  free  of  high-risk  development  issues  has  been  developed.
Capitalization  ends when the product is ready for general release. Considerable
judgment by management is  required to assess  the technological feasibility  of
software  under development,  potential future  sales of  products produced, and
recoverability of capitalized costs. Amortization of software development  costs
on  a product-by-product basis commences when a product is ready for release and
is provided  using  the  straight-line method  over  three  years.  Amortization
expense  recognized was $240,697, $146,859 and  $55,070 for 1994, 1993 and 1992,
respectively.

    PURCHASED SOFTWARE

    Purchased software was acquired in conjunction with the purchase of  certain
assets  of KSH Systems, Inc. (see Note 8). Amortization of purchased software is
provided using the  straight-line method over  five years. Amortization  expense
recognized was $253,966 for 1994.

    PATENT COSTS

    Legal costs incurred in connection with filing patent claims are capitalized
as  patent costs.  Upon receiving  a determination  as to  whether the Company's
claims have been approved or denied, these costs are either amortized over their
estimated useful lives of three years or expensed.

    RESEARCH AND DEVELOPMENT COSTS

    Research and development costs are expensed as incurred. These costs consist
primarily of salaries, supplies and depreciation of equipment and software  used
for research and development.

    INCOME TAXES

    The  Company adopted  Statement of  Financial Accounting  Standards No. 109,
"Accounting for Income Taxes" ("SFAS No.  109") effective January 1, 1992.  This
change  in accounting principle had no cumulative effect on net income (see Note
7).

    Under SFAS No. 109, the current provision for income taxes represents actual
or estimated amounts payable or refundable on  tax returns filed or to be  filed
for  each  year.  Deferred  tax  assets and  liabilities  are  recorded  for the
estimated future tax effects of: (a) temporary differences between the tax basis
of assets  and liabilities  and  amounts reported  in the  accompanying  balance
sheets,  and (b) operating loss and tax credit carryforwards. The overall change
in deferred tax assets and liabilities for the period measures the deferred  tax
expense  (benefit) for  the period.  Effects of changes  in enacted  tax laws on
deferred tax assets and liabilities are reflected as adjustments to tax  expense
in  the  period of  enactment. The  measurement  of deferred  tax assets  may be
reduced by a  valuation allowance  based on judgmental  assessment of  available
evidence  if deemed more  likely than not that  some or all  of the deferred tax
assets will not be realized.

    NET INCOME PER COMMON SHARE

    Primary net  income  per common  share  has  been computed  based  upon  the
weighted average number of common stock and common stock equivalents outstanding
during  each period. Common  stock equivalents recognize  the potential dilutive
effects of the future  exercise of common stock  options and warrants (see  Note
5).  The dilutive effects of common stock  options and warrants are based on the
average market price  of common stock  for the period  during which the  options
were outstanding.

                                      F-7

    For  fully  diluted net  income per  common  share, common  stock equivalent
calculations are based on the market price  at the end of the period if  greater
than  the average price for the period  and stock options and warrants exercised
during the period are treated as outstanding for the entire period.

(3)  COMMITMENTS AND CONTINGENCIES

    OPERATING LEASES

    The Company leases  its office  and production  facilities. Rentals  include
operating  and maintenance  charges which  are periodically  adjusted to reflect
actual costs. Rental expense for 1994, 1993 and 1992 was $426,755, $238,250  and
$241,440,  respectively.  Future  minimum  rentals  under  these  leases  are as
follows:



                                                                          AMOUNT
                                                                       -------------
                                                                    
1995.................................................................  $     444,000
1996.................................................................        467,000
1997.................................................................        461,000
1998.................................................................         95,000
1999.................................................................       --
                                                                       -------------
                                                                       $   1,467,000
                                                                       -------------
                                                                       -------------


    The Company sublet a  portion of its leased  space during 1993 and  received
rental income of approximately $37,000. This space is no longer sublet.

    LEGAL MATTERS

    An entity unrelated to the Company has claimed the name "CliniCom" infringes
on  the name  of that  entity and threatened  to initiate  litigation unless the
Company discontinued use  of such  name. In  response, the  Company initiated  a
declaratory judgment action in the United States District Court for the District
of  Colorado, in part to establish jurisdiction over the matter in Colorado. The
Company proceeded with the litigation in  1994 and intends to vigorously  defend
its  right to  use the name  CliniCom and, in  any event, does  not believe this
matter will ultimately have a materially adverse effect on its operating results
or financial condition.

    Additionally, the Company is exposed to asserted and unasserted legal claims
encountered in  the normal  course  of business.  Management believes  that  the
ultimate  resolution of these matters will not have a material adverse effect on
the operating results or the financial position of the Company.

    EMPLOYEE BENEFIT PLAN

    The Company has a defined contribution 401(k) plan which is available to all
eligible employees. Under the 401(k) Plan, company contributions are made at the
discretion of the board of directors. No matching contributions were made by the
Company for 1994, 1993 or 1992.

    EXECUTIVE RETENTION PLAN

    The Company has  an Executive  Retention Plan with  selected officers  which
provides  for certain  payments and continuation  of benefits  should an officer
terminate employment as defined by the Executive Retention Plan.

(4)  STOCKHOLDERS' EQUITY

    PREFERRED STOCK

    The Company has authorized  5,000,000 shares of  $.001 par value,  preferred
stock  which may be  issued in one or  more series with  such powers, rights and
preferences as the board of directors may determine.

    Series A preferred shares issued in 1990 and 1991 were mandatorily converted
to common stock on June  27, 1991, when Series  B preferred shares were  issued.
The Series B preferred shares were subsequently converted to common stock at the
effective date of the Company's initial public offering.

                                      F-8

These conversions have been given retroactive effect to the dates of issuance of
the preferred stock in determining all common share and per common share amounts
reflected in the accompanying financial statements.

    COMMON STOCK

    The  Company effected certain reverse splits of its common stock in 1991 and
1992, prior to its initial  public offering. A stock dividend  in the form of  a
two  for one stock split  was declared in 1993. All  common share and per common
share amounts reflected in the accompanying financial statements and notes  give
retroactive effect to these stock splits.

    In  April  1992,  the Company  received  approximately $5.1  million  in net
proceeds from a public offering of its  common stock. In July 1993, the  Company
received  approximately $10.8 million in net  proceeds from an additional public
offering of its common stock.

    STOCKHOLDERS' NOTES AND INTEREST PAYABLE

    In 1991 and prior years, investors loaned money to the Company evidenced  by
demand  notes with interest at 10% per  annum. At December 31, 1992, the balance
was $766,341 and was due  on demand, but not before  June 30, 1993. These  notes
and  accrued interest were paid in full  in July 1993. Interest expense includes
$13,494  and  $11,756  in  1993   and  1992,  respectively,  related  to   these
stockholders' notes.

(5)  STOCK OPTIONS AND WARRANTS

    WARRANTS

    The  underwriter  for  the  Company's  initial  public  offering  was issued
warrants, for a  nominal price, to  purchase an aggregate  of 175,000 shares  of
common  stock at a price  per share of $4.425.  These warrants were exercised at
the time of the Company's public offering in July 1993.

    STOCK OPTION PLAN

    The Company  has adopted  two stock  option plans  (the First  Plan and  the
Second  Plan). The  First Plan  provides for  the grant  of either  incentive or
nonqualified options to purchase common stock  to officers and employees of  the
Company.  The total number of shares subject to issuance under the First Plan is
1,620,000 shares. The option price of stock options granted under the First Plan
is determined by the Company's board of directors and is generally not less than
the fair market value of the stock at the date of grant.

    The number and terms of options granted under the First Plan are  determined
by the board of directors when granted. Options granted under the First Plan are
exercisable  for a period determined by the board of directors but not more than
ten years following the  date of grant.  The options granted  in 1991 and  still
outstanding  are 100% vested at  December 31, 1994. The  options granted in 1993
vest as follows:  31.25% on the  grant date and  6.25% on the  last day of  each
fiscal  quarter, beginning December  31, 1993 and  ending June 30,  1996. Of the
options granted in 1994, 365,000 vest  as follows: 25% on each anniversary  date
until  fully  vested.  The remaining  60,050  options  granted in  1994  vest as

                                      F-9

follows: 25% at  the grant  date; 12.5%  on the last  day of  June and  December
beginning  June 30, 1994, and ending December 31, 1996. The following summarizes
activity in the First Plan during 1994, 1993 and 1992:



                                                                           NUMBER OF
                                                                            SHARES     PRICE PER SHARE
                                                                          -----------  ----------------
                                                                                 
Granted in 1991 and outstanding at December 31, 1991....................      821,334  $           2.80
  Canceled..............................................................       (3,060)             2.80
                                                                          -----------  ----------------
Outstanding at December 31, 1992........................................      818,274              2.80
  Granted...............................................................      240,000             14.50
  Canceled..............................................................       (5,338)             2.80
  Exercised.............................................................      (11,824)             2.80
                                                                          -----------  ----------------
Outstanding at December 31, 1993........................................    1,041,112        2.80-14.50
  Granted...............................................................      425,050      13.875-19.75
  Canceled..............................................................       (4,417)            19.75
  Exercised.............................................................     (469,839)       2.80-14.50
                                                                          -----------  ----------------
Outstanding at December 31, 1994........................................      991,906  $    2.80-$19.75
                                                                          -----------  ----------------
                                                                          -----------  ----------------
Exercisable at December 31, 1994........................................      509,115  $    2.80-$19.75
                                                                          -----------  ----------------
                                                                          -----------  ----------------


    The Second Plan provides for the  grant of nonqualified options to  purchase
up  to 100,000 shares of  common stock to nonemployee  directors of the Company.
The option price  of shares granted  under the  Second Plan is  the fair  market
value  of the common stock  on the date of grant.  The Second Plan provides that
each existing nonemployee director at the  time the Second Plan was adopted  and
all  future nonemployee directors will receive options to purchase 10,000 shares
initially and  2,000 shares  of common  stock upon  reelection to  the board  of
directors.  The  terms of  the  options granted  are  determined by  a committee
appointed by the board of directors. An  option shall expire no later than  five
years  after the date it was granted.  Options issued under the Second Plan vest
at the rate of 50% of the total number of shares on the date of grant and  12.5%
annually thereafter. The following summarizes activity in the Second Plan during
1994, 1993 and 1992:



                                                                              NUMBER OF
                                                                               SHARES     PRICE PER SHARE
                                                                             -----------  ---------------
                                                                                    
Outstanding at December 31, 1991...........................................      --       $     --
  Granted..................................................................      50,000         3.60-3.66
                                                                             -----------  ---------------
Outstanding at December 31, 1992...........................................      50,000         3.60-3.66
  Granted..................................................................      10,000             10.00
                                                                             -----------  ---------------
Outstanding at December 31, 1993...........................................      60,000        3.60-10.00
  Granted..................................................................      10,000             13.88
  Canceled.................................................................      (3,750)             3.60
  Exercised................................................................     (12,500)        3.60-3.66
                                                                             -----------  ---------------
Outstanding at December 31, 1994...........................................      53,750   $   3.66-$13.88
                                                                             -----------  ---------------
                                                                             -----------  ---------------
Exercisable at December 31, 1994                                                 35,000   $   3.66-$13.88
                                                                             -----------  ---------------
                                                                             -----------  ---------------


    EMPLOYEE STOCK PURCHASE PLAN

    In  March 1993, the Company's board  of directors approved an Employee Stock
Purchase Plan (the  Plan). The  Plan authorizes the  issuance of  up to  200,000
shares  of common stock for purchase by the Plan's participants, as defined, and
is intended to qualify as an Employee Stock Purchase Plan within the meaning  of
Section  423  of the  Internal Revenue  Code. Payroll  deductions are  made from
participating employees'  salaries to  automatically purchase  shares of  common
stock on the last day of

                                      F-10

the  purchase period, as defined. All  amounts withheld from employees' salaries
through December 31, 1994, are reflected in stockholders' equity. As of December
31, 1994, 173,818 shares of  common stock are available  to be issued under  the
Plan.

(6)  MAJOR CUSTOMERS

    Because  of the high price of the  CliniCom system relative to total Company
revenues to date, sales to various customers have accounted for more than 10% of
total net sales for 1994, 1993 and 1992 as shown below:



                                                                      DECEMBER 31
                                                         -------------------------------------
CUSTOMER                                                    1994         1993         1992
-------------------------------------------------------  -----------  -----------  -----------
                                                                          
A......................................................       29.2%        19.3%       --
B......................................................      --           --            13.5%
C......................................................      --           --            11.8%


    In December 1993, the Company  entered into a three-year mutually  exclusive
license  and distribution  agreement with HBO  & Company of  Georgia ("HBOC"), a
leading  healthcare  information  systems   company,  whereby  HBOC  agreed   to
distribute  certain  Company software  to new  and  existing HBOC  customers who
require nursing  application  software. The  sale  and  delivery to  HBOC  of  a
software  master  license  for  sublicensing  to  then  existing  HBOC customers
represented 19% of total  1993 revenues. HBOC  purchases software, hardware  and
installation  and  support  services  from  the  Company.  Total  1994  revenues
attributable to  the HBOC  agreement were  approximately 29%  of sales  for  the
period. As of December 31, 1994, accrued revenues and receivables from HBOC were
approximately $12,054,000.

(7)  INCOME TAXES

    As  of December 31,  1994, the Company had  approximately $12,700,000 of net
operating loss carryovers  for tax  purposes. Utilization of  the carryovers  is
subject  to limitations for  federal alternative minimum  tax purposes. Further,
the  Company  has  approximately  $750,000  of  research  and  development   and
alternative  minimum tax credits available to offset future federal tax. The net
operating loss and  credit carryovers  expire through  2009 and  are subject  to
examination by tax authorities.

    A greater than 50% change in ownership within a three year period results in
an  annual  limitation on  a  company's ability  to  utilize net  operating loss
("NOL") carryforwards from  tax periods prior  to the ownership  change. Such  a
change  in  ownership occurred  with respect  to the  Company in  February 1988.
Restrictions have lapsed for all  but approximately $685,000 of such  restricted
NOL. Remaining restrictions will lapse in 1995.

    In  adopting  SFAS  No.  109,  the  Company  determined  that  approximately
$6,900,000 of previously unrecognized deferred tax assets as of January 1, 1992,
did not satisfy the realization criteria set forth in the standard. Accordingly,
a valuation allowance was recorded equal  to aggregate net deferred tax  assets.
Realization  of these benefits depends on  future taxable income, the attainment
of which, is uncertain. Accordingly, no cumulative adjustment to income was made
upon adoption of SFAS No. 109.

                                      F-11

    The Company's deferred tax assets and  liabilities at December 31, 1994  and
1993 were as follows:



                                                                      DECEMBER 31
                                                             ------------------------------
                                                                  1994            1993
                                                             --------------  --------------
                                                                       
Deferred tax assets --
  Depreciation differences.................................  $       40,000  $       70,000
  Deferred revenue.........................................          96,000         964,000
  Allowance for doubtful accounts..........................         274,000          16,000
  Inventory reserves.......................................         415,000         439,000
  Accrued expenses not yet deductible for tax..............         329,000         166,000
  Net operating loss carryforwards.........................       4,860,000       3,525,000
  Tax credit carryforwards.................................         750,000         670,000
  Other....................................................          17,000          25,000
                                                             --------------  --------------
                                                                  6,781,000       5,875,000
                                                             --------------  --------------
Deferred tax liabilities --
  Software development costs...............................        (431,000)       (200,000)
                                                             --------------  --------------
Net deferred tax assets....................................       6,350,000       5,675,000
Less -- Valuation allowance................................      (6,350,000)     (5,675,000)
                                                             --------------  --------------
                                                             $     --        $     --
                                                             --------------  --------------
                                                             --------------  --------------


    Although  the Company achieved profitability  for the third consecutive year
in fiscal  1994,  management believes  the  Company must  continue  to  generate
profits  for at least another year before sufficient evidence exists to conclude
that the Company's deferred tax assets are realizable. As such, an adjustment to
the valuation allowance was recorded in 1994 to maintain the valuation allowance
sufficient to offset the aggregate net deferred tax assets.

    The components of  the provision  for federal income  taxes attributable  to
income from operations as of December 31, 1994 and 1993 were as follows:



                                                                      DECEMBER 31
                                                             ------------------------------
                                                                  1994            1993
                                                             --------------  --------------
                                                                       
Current --
  Federal (alternative minimum tax)........................  $      120,000  $      110,000
  State....................................................         325,000         160,000
  Deferred (change in net deferred assets).................       1,523,000         961,000
  Adjustment to valuation allowance........................      (1,523,000)       (961,000)
                                                             --------------  --------------
Income tax expense.........................................  $      445,000  $      270,000
                                                             --------------  --------------
                                                             --------------  --------------


                                      F-12

    A  reconciliation of income  tax provision computed  by applying the Federal
income tax  rate  of 34%  to  net  income as  of  December 31,  1994  and  1993,
respectively is as follows:



                                                                       DECEMBER 31
                                                              -----------------------------
                                                                   1994           1993
                                                              --------------  -------------
                                                                        
Computed normal tax provision...............................  $    2,017,000  $   1,228,000
Tax effect of permanent differences.........................          53,000         53,000
Alternative minimum tax.....................................         120,000        110,000
State taxes, net of federal tax benefit.....................         204,000        106,000
Increase in tax credit carryforwards........................        (254,000)      (270,000)
Decrease in valuation allowance related to amounts reported
 in consolidated income.....................................      (1,523,000)      (961,000)
Other.......................................................        (172,000)         4,000
                                                              --------------  -------------
Income tax expense..........................................         445,000        270,000
                                                              --------------  -------------
Tax effect of deductions for stock option compensation......      (2,653,000)      --
Increase in valuation allowance for portion of NOL
 representing stock option compensation.....................       2,208,000       --
                                                              --------------  -------------
  Tax effect of stock options credited to additional paid-in
   capital..................................................        (445,000)      --
                                                              --------------  -------------
    Total provision for income taxes........................  $     --        $     270,000
                                                              --------------  -------------
                                                              --------------  -------------


    The  Company will claim tax deductions  of approximately $6,300,000 for 1994
related to  taxable  stock  option compensation  not  charged  against  reported
earnings.  For  1994,  the  related  tax  benefit  recognized  and  included  in
additional paid-in  capital was  limited  to income  tax expense  applicable  to
operations.  These deductions form a part  of the Company's NOL carryforward and
related deferred  tax  asset,  against  which a  valuation  allowance  has  been
provided.   Future  reversals  of  this  portion  of  the  valuation  allowance,
approximately $2,000,000, will be added to additional paid-in capital. Reversals
of the  remainder of  the  valuation allowance  will  reduce future  income  tax
expense.

(8)  KSH SYSTEMS, INC. ACQUISITION

    On  June 21, 1994, the Company purchased  substantially all of the assets of
KSH Systems,  Inc. The  acquisition was  accounted for  in accordance  with  the
purchase  method of accounting  for business combinations  and, accordingly, the
results of  operations  of KSH  Systems,  Inc.  are included  in  the  financial
statements  from the date of the purchase.  The purchase price of $2,619,277 was
allocated  as  follows:  purchased  software  of  $2,407,367,  other  assets  of
$120,000,  trade accounts  receivable of $61,910  and property  and equipment of
$30,000. The purchased software is being amortized over five years (see Note 2).

                                      F-13

(9)  UNAUDITED SUPPLEMENTARY DATA

    The following is a summary of selected quarterly financial information:



                                                                1994
                                     -----------------------------------------------------------
                                                         THREE MONTHS ENDED
                                     -----------------------------------------------------------    YEAR ENDED
                                       MARCH 31        JUNE 30     SEPTEMBER 30    DECEMBER 31     DECEMBER 31
                                     -------------  -------------  -------------  --------------  --------------
                                                                                   
Net sales..........................  $   6,414,124  $   7,194,226  $   6,529,962  $   15,277,216  $   35,415,528
Gross profit.......................  $   3,170,484  $   3,780,955  $   2,867,006  $    7,410,698  $   17,229,143
Income from continuing
 operations........................  $     779,464  $   1,167,116  $     151,018  $    3,064,768  $    5,162,366
Net income applicable to common
 stock.............................  $     910,884  $   1,264,271  $     291,266  $    3,021,971  $    5,488,392
Net income per common share........  $        0.10  $        0.14  $        0.04  $         0.34  $         0.62
Weighted average shares
 outstanding.......................      8,927,130      8,862,878      8,928,428       8,832,618       8,901,514




                                                                  1993
                                       ----------------------------------------------------------
                                                           THREE MONTHS ENDED
                                       ----------------------------------------------------------    YEAR ENDED
                                         MARCH 31        JUNE 30     SEPTEMBER 30    DECEMBER 31    DECEMBER 31
                                       -------------  -------------  -------------  -------------  --------------
                                                                                    
Net sales............................  $   4,070,625  $   4,824,674  $   5,757,787  $   5,493,269  $   20,146,355
Gross profit.........................  $   1,806,220  $   2,228,907  $   2,863,253  $   3,350,153  $   10,248,533
Income from continuing operations....  $     336,137  $     671,519  $   1,050,644  $   1,274,561  $    3,332,861
Net income applicable to common
 stock...............................  $     332,662  $     661,193  $   1,032,068  $   1,317,251  $    3,343,174
Net income per common share..........  $        0.05  $        0.09  $        0.12  $        0.15  $         0.41
Weighted average shares
 outstanding.........................      7,365,054      7,453,324      8,763,823      8,873,141       8,229,592


                                      F-14

EX-99.D

                                                                   EXHIBIT 99(d)










                              CLINICOM INCORPORATED
                               THIRD QUARTER 1994



PART I -- FINANCIAL INFORMATION

                             CLINICOM INCORPORATED
                            CONDENSED BALANCE SHEETS
                                     ASSETS



                                                                                  SEPTEMBER 30      DECEMBER 31
                                                                                      1994             1993
                                                                                 ---------------  ---------------
                                                                                            
CURRENT ASSETS:
  Cash and cash equivalents....................................................  $    12,210,462  $    15,373,156
  Trade accounts receivable....................................................        7,146,394        4,948,016
  Accrued revenue receivable...................................................        5,111,661        2,693,306
  Inventories..................................................................        3,965,556        2,316,400
  Prepaid expenses.............................................................          190,476          548,358
                                                                                 ---------------  ---------------
    Total current assets.......................................................       28,624,549       25,879,236
                                                                                 ---------------  ---------------
PROPERTY AND EQUIPMENT, at cost:
  Furniture and equipment......................................................          559,545          371,334
  Leasehold improvements.......................................................          373,897          152,458
  Manufacturing equipment and tooling..........................................        1,058,438          702,760
  Research and development equipment and software..............................        2,537,061        2,058,899
                                                                                 ---------------  ---------------
                                                                                       4,528,941        3,285,451
  Less -- Accumulated depreciation and amortization............................       (2,366,786)      (1,898,339)
                                                                                 ---------------  ---------------
                                                                                       2,162,155        1,387,112
                                                                                 ---------------  ---------------
INTERNAL SOFTWARE DEVELOPMENT COSTS, net.......................................        1,016,858          589,012
PURCHASED SOFTWARE, net........................................................        2,273,770        --
                                                                                 ---------------  ---------------
OTHER ASSETS:
  Patent costs, net............................................................           27,623           24,244
  Deposits and other, net......................................................          150,436           30,284
  Non current trade accounts receivable........................................        --                 905,138
                                                                                 ---------------  ---------------
    Total other assets.........................................................          178,059          959,666
                                                                                 ---------------  ---------------
                                                                                 $    34,255,391  $    28,815,026
                                                                                 ---------------  ---------------
                                                                                 ---------------  ---------------
                                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable                                                               $     3,099,566  $     1,036,102
  Accrued liabilities..........................................................        1,498,436          976,183
  Accrued compensation.........................................................          728,224          637,592
  Commissions payable..........................................................          250,161          548,890
  Warranty and rework reserve..................................................          691,774          545,905
  Deferred revenue.............................................................        1,776,487        2,833,966
                                                                                 ---------------  ---------------
    Total current liabilities..................................................        8,044,648        6,578,638
                                                                                 ---------------  ---------------
STOCKHOLDERS' EQUITY:
  Preferred stock, $.001 par value, 5,000,000 shares authorized; none issued...        --               --
  Common stock, $.001 par value, 30,000,000 shares authorized; 8,546,367 and
   8,052,490 shares issued at September 30, 1994 and December 31, 1993,
   respectively................................................................            8,546            8,052
  Additional paid-in capital...................................................       42,576,120       41,068,680
  Accumulated deficit..........................................................      (16,373,923)     (18,840,344)
                                                                                 ---------------  ---------------
    Total stockholders' equity.................................................       26,210,743       22,236,388
                                                                                 ---------------  ---------------
                                                                                 $    34,255,391  $    28,815,026
                                                                                 ---------------  ---------------
                                                                                 ---------------  ---------------


                 The accompanying notes to financial statements
                 are an integral part of these balance sheets.

                             CLINICOM INCORPORATED
                       CONDENSED STATEMENTS OF OPERATIONS



                                                         FOR THE THREE MONTHS           FOR THE NINE MONTHS
                                                          ENDED SEPTEMBER 30             ENDED SEPTEMBER 30
                                                     ----------------------------  ------------------------------
                                                         1994           1993            1994            1993
                                                     -------------  -------------  --------------  --------------
                                                                                       
SALES:
  Net system sales.................................  $   5,370,162  $   5,222,094  $   17,472,078  $   13,218,867
  Client support services..........................      1,159,800        535,693       2,666,234       1,434,219
                                                     -------------  -------------  --------------  --------------
                                                         6,529,962      5,757,787      20,138,312      14,653,086
                                                     -------------  -------------  --------------  --------------
COSTS AND EXPENSES:
  Cost of sales and support services...............      3,662,956      2,894,534      10,319,867       7,754,706
  Research and development.........................        835,731        622,102       2,349,119       1,700,387
  Selling and marketing............................      1,071,194        793,447       3,387,485       1,900,902
  General and administrative.......................        809,063        397,060       1,984,243       1,238,793
                                                     -------------  -------------  --------------  --------------
                                                         6,378,944      4,707,143      18,040,714      12,594,788
                                                     -------------  -------------  --------------  --------------
INCOME FROM OPERATIONS.............................        151,018      1,050,644       2,097,598       2,058,298
OTHER INCOME (EXPENSE):
  Interest income..................................        162,248         83,473         588,534         151,407
  Interest expense.................................       --                 (774)       --               (13,698)
  Other............................................       --                5,725           2,289          16,916
                                                     -------------  -------------  --------------  --------------
NET INCOME BEFORE INCOME TAXES.....................        313,266      1,139,068       2,688,421       2,212,923
PROVISION FOR INCOME TAXES.........................        (22,000)      (107,000)       (222,000)       (187,000)
                                                     -------------  -------------  --------------  --------------
NET INCOME.........................................  $     291,266  $   1,032,068  $    2,466,421  $    2,025,923
                                                     -------------  -------------  --------------  --------------
                                                     -------------  -------------  --------------  --------------
INCOME PER COMMON SHARE
  Primary..........................................  $        0.03  $        0.12  $         0.28  $         0.26
                                                     -------------  -------------  --------------  --------------
                                                     -------------  -------------  --------------  --------------
  Fully diluted....................................  $        0.03  $        0.12  $         0.28  $         0.26
                                                     -------------  -------------  --------------  --------------
                                                     -------------  -------------  --------------  --------------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
  Primary..........................................      8,926,891      8,736,662       8,918,029       7,796,399
                                                     -------------  -------------  --------------  --------------
                                                     -------------  -------------  --------------  --------------
  Fully diluted....................................      8,928,428      8,763,823       8,918,757       7,881,417
                                                     -------------  -------------  --------------  --------------
                                                     -------------  -------------  --------------  --------------


            The accompanying notes to condensed financial statements
              are an integral part of these condensed statements.

                             CLINICOM INCORPORATED
                       CONDENSED STATEMENTS OF CASH FLOWS



                                                                                           FOR THE NINE MONTHS
                                                                                            ENDED SEPTEMBER 30
                                                                                         ------------------------
                                                                                            1994         1993
                                                                                         -----------  -----------
                                                                                                
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income...........................................................................  $ 2,466,421  $ 2,025,923
  Adjustments to reconcile net income to net cash used in operating activities --
    Depreciation and amortization......................................................      766,009      406,452
    Loss on disposal of assets.........................................................      --             9,485
    Additions to inventory reserve.....................................................        4,015      323,930
    Loss on abandonment of patents.....................................................      --            13,763
    Additions to warranty reserve......................................................      165,703      356,411
    Increase in stockholders' notes and interest payable...............................      --            13,494
  Decrease (increase) in --
    Trade accounts receivable..........................................................   (2,198,378)  (2,691,636)
    Accrued revenue receivable.........................................................   (2,356,445)  (1,754,232)
    Inventories........................................................................   (1,722,499)     (61,539)
    Prepaid expenses...................................................................      357,882       68,671
    Deposits, other, and non current accounts receivable...............................      888,319       (6,549)
  Increase (decrease) in --
    Accounts payable...................................................................    2,063,464     (168,137)
    Accrued liabilities................................................................      314,156      485,749
    Warranty reserve...................................................................      (19,834)     (56,529)
    Deferred revenue...................................................................   (1,057,479)  (1,060,803)
                                                                                         -----------  -----------
      Net cash flows from operating activities.........................................  $  (328,666) $(2,095,547)
                                                                                         -----------  -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment...................................................  $(1,144,161) $  (579,278)
  Patent costs.........................................................................       (7,498)      (1,799)
  Internal software development costs..................................................     (571,026)    (237,899)
  Short-term investments...............................................................      --         1,500,681
  Proceeds from sale of fixed assets...................................................      --            31,150
  Acquisition of KSH Systems, Inc......................................................   (2,619,277)     --
                                                                                         -----------  -----------
    Net cash flows from investing activities...........................................   (4,341,962)     712,855
                                                                                         -----------  -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayments of notes payable..........................................................      --            (1,576)
  Payment of stockholders' notes and interest payable..................................      --          (779,835)
  Issuance of common stock, net of offering costs......................................      --        10,840,897
  Proceeds from exercise of warrants...................................................      --           774,375
  Exercise of common stock options and employee stock purchases........................    1,507,934       31,707
                                                                                         -----------  -----------
    Net cash flows from financing activities...........................................    1,507,934   10,865,568
                                                                                         -----------  -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS................................................   (3,162,694)   9,482,876
CASH AND CASH EQUIVALENTS, beginning of period.........................................   15,373,156    3,426,520
                                                                                         -----------  -----------
CASH AND CASH EQUIVALENTS, end of period...............................................  $12,210,462  $12,909,396
                                                                                         -----------  -----------
                                                                                         -----------  -----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION AND NONCASH INVESTING AND FINANCING
 ACTIVITIES:
  Cash paid during period for interest.................................................      --       $   523,524
                                                                                         -----------  -----------
                                                                                         -----------  -----------
  Inventory transferred to property and equipment......................................  $    69,326  $    31,742
                                                                                         -----------  -----------
                                                                                         -----------  -----------


            The accompanying notes to condensed financial statements
              are an integral part of these condensed statements.

                             CLINICOM INCORPORATED
                    NOTES TO CONDENSED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1994

NOTE 1:  PRESENTATION
    The  accompanying financial information  should be read  in conjunction with
the annual financial statements  and notes thereto for  the year ended  December
31,  1993  included  in the  Company's  10-K.  The financial  information  as of
September 30, 1994 and for  the three and nine  months ended September 30,  1994
and  1993 is unaudited; however, in  the opinion of management, such information
reflects all adjustments (consisting of normal recurring adjustments) which  are
necessary  for  the  fair  presentation  of  such  information.  The  results of
operations for  the three  and nine  months  ended September  30, 1994  are  not
necessarily indicative of the results for the entire fiscal year.

NOTE 2:  INVENTORIES
    Inventories are stated at the lower of cost (first-in, first-out) or market,
and consist of the following:



                                                                  SEPTEMBER 30    DECEMBER 31
                                                                      1994           1993
                                                                  -------------  -------------
                                                                           
Finished goods..................................................  $   2,698,818  $     828,351
Raw materials and components....................................      1,266,738      1,488,049
                                                                  -------------  -------------
                                                                  $   3,965,556  $   2,316,400
                                                                  -------------  -------------
                                                                  -------------  -------------


NOTE 3:  EARNINGS PER SHARE
    Earnings  per share  calculations are  based on  the daily  weighted average
number of common and  common stock equivalents  outstanding during each  period.
The  dilutive effect of common stock equivalents from stock options and warrants
is based on the treasury  stock method using the  average market price for  each
period  or, for fully  diluted earnings per  share, the closing  stock price for
each period if higher.

NOTE 4:  PUBLIC OFFERING
    In July, 1993, the Company completed  a stock offering. In conjunction  with
this  offering, all outstanding  common stock purchase  warrants were exercised.
This increased the  number of  shares of  common stock  outstanding by  662,500.
Subsequently,  the exercise of common stock  options has increased the number of
common shares outstanding to 8,546,367.

NOTE 5:  KSH SYSTEMS, INC. ACQUISITION
    On June 21, 1994, CliniCom  Incorporated purchased substantially all of  the
assets  of KSH Systems, Inc.  The purchase price of  $2,619,277 was allocated as
follows: purchased software  $2,407,367, other assets  $120,000, trade  accounts
receivable $61,910 and property and equipment $30,000. The purchased software is
being  amortized over five  years and other  assets is being  amortized over two
years.

NOTE 6:  MAJOR CUSTOMERS
    The following customers accounted for more  than 10% of total net sales  for
the three and nine months ended September 30, 1994 and 1993:



                                     FOR THE THREE MONTHS      FOR THE NINE MONTHS
                                      ENDED SEPTEMBER 30        ENDED SEPTEMBER 30
                                   ------------------------  ------------------------
                                      1994         1993         1994         1993
                                   -----------  -----------  -----------  -----------
                                                              
A................................       24.9%                     17.6%
B................................       15.8%
C................................                                 10.0%
D................................                    25.8%
E................................                    24.5%
F................................                    12.6%
G................................                                              11.2%
H................................                                              10.9%
I................................

EX-99.E

                                                                   EXHIBIT 99(e)










                              CLINICOM INCORPORATED
                               SECOND QUARTER 1994



PART 1 -- FINANCIAL INFORMATION

                             CLINICOM INCORPORATED
                            CONDENSED BALANCE SHEETS
                                     ASSETS



                                                                                  JUNE 30        DECEMBER 31
                                                                                   1994             1993
                                                                              ---------------  ---------------
                                                                                         
CURRENT ASSETS:
  Cash and cash equivalents.................................................  $    13,465,536  $    15,373,156
  Trade accounts receivable.................................................        6,170,061        4,948,016
  Accrued revenue receivable................................................        4,270,822        2,693,306
  Inventories...............................................................        1,417,624        2,316,400
  Prepaid expenses..........................................................          121,876          548,358
                                                                              ---------------  ---------------
    Total current assets....................................................       25,445,919       25,879,236
                                                                              ---------------  ---------------
PROPERTY AND EQUIPMENT, at cost:
  Furniture and equipment...................................................          487,322          371,334
  Leasehold improvements....................................................          193,719          152,458
  Manufacturing equipment and tooling.......................................          965,684          702,760
  Research and development equipment and software...........................        2,310,060        2,058,899
                                                                              ---------------  ---------------
                                                                                    3,956,785        3,285,451
  Less -- Accumulated depreciation and amortization.........................       (2,184,403)      (1,898,339)
                                                                              ---------------  ---------------
                                                                                    1,772,382        1,387,112
                                                                              ---------------  ---------------
INTERNAL SOFTWARE DEVELOPMENT COSTS, net....................................          819,498          589,012
                                                                              ---------------  ---------------
PURCHASED SOFTWARE, net.....................................................        2,391,372        --
                                                                              ---------------  ---------------
OTHER ASSETS:
  Patent costs, net.........................................................           28,997           24,244
  Deposits and other, net...................................................          193,010           30,284
  Non current trade accounts receivable.....................................        --                 905,138
                                                                              ---------------  ---------------
    Total other assets......................................................          222,007          959,666
                                                                              ---------------  ---------------
                                                                              $    30,651,178  $    28,815,026
                                                                              ---------------  ---------------
                                                                              ---------------  ---------------

                                     LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable..........................................................  $       831,011  $     1,036,102
  Accrued liabilities.......................................................        1,467,796          976,183
  Accrued compensation......................................................          723,224          637,592
  Commissions payable.......................................................          234,092          548,890
  Warranty and rework reserve...............................................          711,608          545,905
  Deferred revenue..........................................................        1,130,660        2,833,966
                                                                              ---------------  ---------------
    Total current liabilities...............................................        5,098,391        6,578,638
                                                                              ---------------  ---------------
STOCKHOLDERS' EQUITY:
  Preferred stock, $.001 par value, 5,000,000 shares authorized; none
   issued...................................................................        --               --
  Common stock, $.001 par value, 30,000,000 shares authorized; 8,443,860 and
   8,052,490 shares issued at June 30, 1994 and December 31, 1993,
   respectively.............................................................            8,444            8,052
  Additional paid-in capital................................................       42,209,532       41,068,680
  Accumulated deficit.......................................................      (16,665,189)     (18,840,344)
                                                                              ---------------  ---------------
    Total stockholders' equity..............................................       25,552,787       22,236,388
                                                                              ---------------  ---------------
                                                                              $    30,651,178  $    28,815,026
                                                                              ---------------  ---------------
                                                                              ---------------  ---------------


                 The accompanying notes to financial statements
                 are an integral part of these balance sheets.

                             CLINICOM INCORPORATED
                       CONDENSED STATEMENTS OF OPERATIONS



                                                          FOR THE THREE MONTHS           FOR THE SIX MONTHS
                                                             ENDED JUNE 30                  ENDED JUNE 30
                                                      ----------------------------  -----------------------------
                                                          1994           1993            1994           1993
                                                      -------------  -------------  --------------  -------------
                                                                                        
SALES:
  Net system sales..................................  $   6,406,073  $   4,345,263  $   12,101,916  $   7,996,773
  Client support services...........................        788,153        479,411       1,506,434        898,526
                                                      -------------  -------------  --------------  -------------
                                                          7,194,226      4,824,674      13,608,350      8,895,299
                                                      -------------  -------------  --------------  -------------
COSTS AND EXPENSES:
  Cost of sales and support services................      3,413,271      2,595,767       6,656,911      4,860,172
  Research and development..........................        780,800        557,047       1,513,388      1,078,285
  Selling and marketing.............................      1,234,787        593,071       2,316,291      1,107,455
  General and administrative........................        598,252        407,270       1,175,180        841,733
                                                      -------------  -------------  --------------  -------------
                                                          6,027,110      4,153,155      11,661,770      7,887,645
                                                      -------------  -------------  --------------  -------------
INCOME FROM OPERATIONS..............................      1,167,116        671,519       1,946,580      1,007,654
OTHER INCOME (EXPENSE):
  Interest income...................................        226,166         30,805         426,286         67,934
  Interest expense..................................       --               (6,395)       --              (12,924)
  Other.............................................            989         10,264           2,289         11,191
                                                      -------------  -------------  --------------  -------------
NET INCOME BEFORE INCOME TAXES......................      1,394,271        706,193       2,375,155      1,073,855
PROVISION FOR INCOME TAXES..........................        130,000         45,000         200,000         80,000
                                                      -------------  -------------  --------------  -------------
NET INCOME..........................................  $   1,264,271  $     661,193  $    2,175,155  $     993,855
                                                      -------------  -------------  --------------  -------------
                                                      -------------  -------------  --------------  -------------
INCOME PER COMMON SHARE
  Primary...........................................  $        0.14  $        0.09  $         0.24  $        0.13
                                                      -------------  -------------  --------------  -------------
                                                      -------------  -------------  --------------  -------------
  Fully diluted.....................................  $        0.14  $        0.09  $         0.24  $        0.13
                                                      -------------  -------------  --------------  -------------
                                                      -------------  -------------  --------------  -------------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
  Primary...........................................      8,862,878      7,410,564       8,904,684      7,389,204
                                                      -------------  -------------  --------------  -------------
                                                      -------------  -------------  --------------  -------------
  Fully diluted.....................................      8,862,878      7,453,324       8,907,142      7,453,308
                                                      -------------  -------------  --------------  -------------
                                                      -------------  -------------  --------------  -------------


            The accompanying notes to condensed financial statements
              are an integral part of these condensed statements.

                             CLINICOM INCORPORATED
                       CONDENSED STATEMENTS OF CASH FLOWS



                                                                                         FOR THE SIX MONTHS
                                                                                           ENDED JUNE 30
                                                                                   ------------------------------
                                                                                        1994            1993
                                                                                   --------------  --------------
                                                                                             
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income.....................................................................  $    2,175,155  $      993,855
  Adjustments to reconcile net income to net cash used in operating activities --
    Depreciation and amortization................................................         399,291         261,304
    Loss on disposal of assets...................................................        --                 4,890
    Additions to inventory reserve...............................................           4,015         224,689
    Loss on abandonment of patents...............................................        --                13,763
    Additions to warranty reserve................................................         165,703         169,321
    Increase in stockholders' notes and interest payable.........................        --                12,720
  Decrease (increase) in --
    Trade accounts receivable....................................................      (1,160,135)       (632,768)
    Accrued revenue receivable...................................................      (1,577,516)     (1,603,117)
    Inventories..................................................................         850,106        (148,499)
    Prepaid expenses.............................................................         426,482          45,562
    Deposits, other, and non current accounts receivable.........................         860,739          (5,248)
  Increase (decrease) in --
    Accounts payable.............................................................        (205,091)        750,813
    Accrued liabilities..........................................................         262,447         224,671
    Warranty reserve.............................................................        --               (47,266)
    Deferred revenue.............................................................      (1,703,306)       (802,176)
                                                                                   --------------  --------------
      Net cash flows from operating activities...................................  $      497,890  $     (537,486)
                                                                                   --------------  --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment.............................................  $     (596,678) $     (259,259)
  Patent costs...................................................................          (7,498)         (1,585)
  Internal software development costs............................................        (325,940)       (166,965)
  Short-term investments.........................................................        --             1,500,681
  Acquisition of KSH, Inc........................................................      (2,616,642)       --
                                                                                   --------------  --------------
      Net cash flows from investing activities...................................      (3,546,758)      1,072,872
                                                                                   --------------  --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayments of notes payable....................................................        --                (1,576)
  Change in interest receivable..................................................        --              (304,254)
  Exercise of common stock options and employee stock purchases..................    1,141,248 --        --
                                                                                   --------------  --------------
      Net cash flows from financing activities...................................       1,141,248        (305,830)
                                                                                   --------------  --------------
NET CHANGE IN CASH AND CASH EQUIVALENTS..........................................      (1,907,620)        229,556
CASH AND CASH EQUIVALENTS, beginning of period...................................      15,373,156       3,426,520
                                                                                   --------------  --------------
CASH AND CASH EQUIVALENTS, end of period.........................................  $   13,465,536  $    3,656,076
                                                                                   --------------  --------------
                                                                                   --------------  --------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION AND NONCASH INVESTING AND
 FINANCING ACTIVITIES:
  Cash paid during period for interest...........................................        --        $          203
                                                                                   --------------  --------------
                                                                                   --------------  --------------
  Inventory transferred to property and equipment................................  $       44,655  $       16,479
                                                                                   --------------  --------------
                                                                                   --------------  --------------


            The accompanying notes to condensed financial statements
              are an integral part of these condensed statements.

                             CLINICOM INCORPORATED
                    NOTES TO CONDENSED FINANCIAL STATEMENTS
                                 JUNE 30, 1994

NOTE 1:  PRESENTATION
    The  accompanying financial information  should be read  in conjunction with
the annual financial statements  and notes thereto for  the year ended  December
31,  1993 included in the  Company's 10-K. The financial  information as of June
30, 1994 and  for the  three and  six months  ended June  30, 1994  and 1993  is
unaudited;  however, in the opinion of management, such information reflects all
adjustments (consisting of normal recurring adjustments) which are necessary for
the fair presentation  of such information.  The results of  operations for  the
three  and six months ended June 30,  1994 are not necessarily indicative of the
results for the entire fiscal year.

NOTE 2:  INVENTORIES
    Inventories are stated at the lower of cost (first-in, first-out) or market,
and consist of the following:



                                                                     JUNE 30      DECEMBER 31
                                                                      1994           1993
                                                                  -------------  -------------
                                                                           
Finished goods..................................................  $     389,691  $     828,351
Raw materials and components....................................      1,027,933      1,488,049
                                                                  -------------  -------------
                                                                  $   1,417,624  $   2,316,400
                                                                  -------------  -------------
                                                                  -------------  -------------


NOTE 3:  EARNINGS PER SHARE
    Earnings per  share calculations  are based  on the  daily weighted  average
number  of common and  common stock equivalents  outstanding during each period.
The dilutive effect of common stock equivalents from stock options and  warrants
is  based on the treasury  stock method using the  average market price for each
period or, for  fully diluted earnings  per share, the  closing stock price  for
each period if higher.

NOTE 4:  PUBLIC OFFERING
    In  July, 1993, the Company completed  a stock offering. In conjunction with
this offering, all  outstanding common stock  purchase warrants were  exercised.
This  increased the  number of  shares of  common stock  outstanding by 662,500.
Subsequently, the exercise of common stock  options has increased the number  of
common shares outstanding to 8,443,860.

NOTE 5:  KSH SYSTEMS, INC. ACQUISITION
    On  June 21, 1994, CliniCom Incorporated  purchased substantially all of the
assets of KSH Systems,  Inc. The purchase price  of $2,616,642 was allocated  as
follows:  purchased software  $2,404,732, other assets  $120,000, trade accounts
receivable $61,910 and property and equipment $30,000. The purchased software is
being amortized over  five years and  other assets is  being amortized over  two
years.

NOTE 6:  MAJOR CUSTOMERS
    The  following customers accounted for more than  10% of total net sales for
the three and six months ended June 30, 1994 and 1993:



                                     FOR THE THREE MONTHS    FOR THE SIX MONTHS ENDED
                                        ENDED JUNE 30                JUNE 30
                                   ------------------------  ------------------------
                                      1994         1993         1994         1993
                                   -----------  -----------  -----------  -----------
                                                              
A................................       19.6%                     10.3%
B................................       12.4%
C................................       11.0%                     14.1%
D................................                                 13.9%
E................................                                 12.3%
F................................                    16.7%
G................................                    10.9%
H................................                    10.3%                     17.7%
I................................                                              14.8%

EX-99.F

                                                                   EXHIBIT 99(f)










                              CLINICOM INCORPORATED
                               FIRST QUARTER 1994





PART I -- FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                             CLINICOM INCORPORATED
                            CONDENSED BALANCE SHEETS
                                     ASSETS



                                                                                 MARCH 31        DECEMBER 31
                                                                                   1994             1993
                                                                              ---------------  ---------------
                                                                                         
CURRENT ASSETS:
  Cash and cash equivalents.................................................  $    15,198,099  $    15,373,156
  Trade accounts receivable.................................................        6,060,351        4,948,016
  Accrued revenue receivable................................................        4,410,042        2,693,306
  Inventories...............................................................        1,552,245        2,316,400
  Prepaid expenses..........................................................          281,345          548,358
                                                                              ---------------  ---------------
    Total current assets....................................................       27,502,082       25,879,236
                                                                              ---------------  ---------------
PROPERTY AND EQUIPMENT, at cost:
  Furniture and equipment...................................................          472,765          371,334
  Leasehold improvements....................................................          166,524          152,458
  Manufacturing equipment and tooling.......................................          788,196          702,760
  Research and development equipment and software...........................        2,191,042        2,058,899
                                                                              ---------------  ---------------
                                                                                    3,573,527        3,285,451
  Less -- Accumulated depreciation and amortization.........................       (2,029,916)      (1,898,339)
                                                                              ---------------  ---------------
                                                                                    1,543,611        1,387,112
                                                                              ---------------  ---------------
SOFTWARE DEVELOPMENT COSTS, net.............................................          666,977          589,012
                                                                              ---------------  ---------------
OTHER ASSETS:
  Patent costs, net.........................................................           23,771           24,244
  Deposits and other, net...................................................           47,284           30,284
  Noncurrent trade accounts receivable......................................        --                 905,138
                                                                              ---------------  ---------------
    Total other assets......................................................           71,055          959,666
                                                                              ---------------  ---------------
                                                                              $    29,783,725  $    28,815,026
                                                                              ---------------  ---------------
                                                                              ---------------  ---------------
                                     LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable..........................................................  $     1,148,182  $     1,036,102
  Accrued liabilities.......................................................        1,248,867          976,183
  Accrued compensation......................................................          368,224          637,592
  Commissions payable.......................................................          199,520          548,890
  Warranty and rework reserve...............................................          642,518          545,905
  Deferred revenue..........................................................        1,889,210        2,833,966
                                                                              ---------------  ---------------
    Total current liabilities...............................................        5,496,521        6,578,638
                                                                              ---------------  ---------------
                                                                              ---------------  ---------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
  Preferred stock, $.001 par value, 5,000,000 shares authorized; none
   issued...................................................................        --               --
  Common stock, $.001 par value, 15,000,000 shares authorized; 8,443,390 and
   8,052,490 shares issued at March 31, 1994 and December 31, 1993,
   respectively.............................................................            8,443            8,052
  Additional paid-in capital................................................       42,208,221       41,068,680
  Accumulated deficit.......................................................      (17,929,460)     (18,840,344)
                                                                              ---------------  ---------------
    Total stockholders' equity..............................................       24,287,204       22,236,388
                                                                              ---------------  ---------------
                                                                              $    29,783,725  $    28,815,026
                                                                              ---------------  ---------------
                                                                              ---------------  ---------------


                 The accompanying notes to financial statements
                 are an integral part of these balance sheets.

                             CLINICOM INCORPORATED
                       CONDENSED STATEMENTS OF OPERATIONS



                                                                                       FOR THE THREE MONTHS
                                                                                          ENDED MARCH 31
                                                                                   ----------------------------
                                                                                       1994           1993
                                                                                   -------------  -------------
                                                                                            
SALES:
  Net system sales...............................................................  $   5,695,843  $   3,651,510
  Client support services........................................................        718,281        419,115
                                                                                   -------------  -------------
                                                                                       6,414,124      4,070,625
                                                                                   -------------  -------------
COSTS AND EXPENSES:
  Cost of sales and support services.............................................      3,243,640      2,264,405
  Research and development.......................................................        732,588        521,238
  Selling and marketing..........................................................      1,081,504        514,384
  General and administrative.....................................................        576,928        434,461
                                                                                   -------------  -------------
                                                                                       5,634,660      3,734,488
                                                                                   -------------  -------------
INCOME FROM OPERATIONS...........................................................        779,464        336,137
OTHER INCOME (EXPENSE):
  Interest income................................................................        200,120         37,129
  Interest expense...............................................................       --               (6,529)
  Other..........................................................................          1,300          1,131
                                                                                   -------------  -------------
NET INCOME BEFORE INCOME TAXES...................................................        980,884        367,868
PROVISION FOR INCOME TAXES.......................................................         70,000         35,206
                                                                                   -------------  -------------
NET INCOME.......................................................................  $     910,884  $     332,662
                                                                                   -------------  -------------
                                                                                   -------------  -------------
INCOME PER COMMON SHARE:
  Primary........................................................................  $        0.10  $        0.05
                                                                                   -------------  -------------
                                                                                   -------------  -------------
  Fully Diluted..................................................................  $        0.10  $        0.05
                                                                                   -------------  -------------
                                                                                   -------------  -------------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
  Primary........................................................................      8,925,263      7,365,045
                                                                                   -------------  -------------
                                                                                   -------------  -------------
  Fully Diluted..................................................................      8,927,130      7,365,054
                                                                                   -------------  -------------
                                                                                   -------------  -------------


            The accompanying notes to condensed financial statements
              are an integral part of these condensed statements.

                             CLINICOM INCORPORATED
                       CONDENSED STATEMENTS OF CASH FLOWS



                                                                                      FOR THE THREE MONTHS
                                                                                         ENDED MARCH 31
                                                                                  -----------------------------
                                                                                       1994           1993
                                                                                  --------------  -------------
                                                                                            
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income....................................................................  $      910,884  $     332,662
  Adjustments to reconcile net income to net cash used in operating activities
   --
    Depreciation and amortization...............................................         180,677        127,586
    Loss on disposal of fixed assets............................................        --                  216
    Net change in warranty reserve..............................................          96,613        106,292
    Net change in inventory reserve.............................................          18,433        109,689
    Loss on abandonment of patents..............................................        --               13,763
  Decrease (increase) in --
    Trade accounts receivable...................................................      (1,112,335)       (27,100)
    Accrued revenue receivable..................................................      (1,716,736)      (355,393)
    Inventories.................................................................         716,140        (13,071)
    Prepaid expenses............................................................         267,013         38,971
    Deposits and noncurrent trade accounts receivable...........................         888,138         (5,249)
  Increase (decrease) in --
    Accounts payable............................................................         112,080       (276,224)
    Accrued liabilities.........................................................        (346,054)       129,023
    Deferred revenue............................................................        (944,756)      (827,648)
    Interest payable on stockholders' notes.....................................        --                6,325
                                                                                  --------------  -------------
      Net cash flows from operating activities..................................  $     (929,903) $    (640,158)
                                                                                  --------------  -------------
                                                                                  --------------  -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Sale of short term investments................................................  $     --        $   1,500,681
  Purchase of property and equipment............................................        (258,494)       (72,096)
  Patent costs..................................................................            (900)        (1,585)
  Software development costs....................................................        (125,692)       (77,650)
                                                                                  --------------  -------------
    Net cash flows from investing activities....................................        (385,086)     1,349,350
                                                                                  --------------  -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayments of notes payable...................................................        --               (1,576)
  Exercise of common stock options..............................................       1,139,932       --
                                                                                  --------------  -------------
    Net cash flows from financing activities....................................       1,139,932         (1,576)
                                                                                  --------------  -------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS............................        (175,057)       707,614
CASH AND CASH EQUIVALENTS, beginning of period..................................      15,373,156      3,426,520
                                                                                  --------------  -------------
CASH AND CASH EQUIVALENTS, end of period........................................  $   15,198,099  $   4,134,134
                                                                                  --------------  -------------
                                                                                  --------------  -------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION AND NONCASH INVESTING AND
 FINANCING ACTIVITIES:
  Cash paid during period for interest..........................................  $     --        $         203
                                                                                  --------------  -------------
                                                                                  --------------  -------------
  Inventory transferred to property and equipment...............................  $       29,582  $      15,821
                                                                                  --------------  -------------
                                                                                  --------------  -------------


            The accompanying notes to condensed financial statements
              are an integral part of these condensed statements.

                             CLINICOM INCORPORATED
                    NOTES TO CONDENSED FINANCIAL STATEMENTS
                                 MARCH 31, 1994

NOTE 1:  PRESENTATION
    The  financial information  should be  read in  conjunction with  the annual
financial statements and  notes thereto  for the  year ended  December 31,  1993
included  in the Company's 10-K. The financial information as of March 31, 1994,
and for the three months ended March 31, 1994 and 1993 is unaudited; however, in
the opinion of management, all  adjustments consisting only of normal  recurring
adjustments  necessary for  a fair  presentation of  such information  have been
made. Certain  prior year  amounts  have been  reclassified  to conform  to  the
current  year presentation. The results of operations for the three months ended
March 31, 1994  are not  necessarily indicative of  the results  for the  entire
fiscal year.

NOTE 2:  INVENTORIES
    Inventories are stated at the lower of cost (first-in, first-out) or market,
and consist of the following:



                                                                    MARCH 31      DECEMBER 31
                                                                      1994           1993
                                                                  -------------  -------------
                                                                           
Finished goods..................................................  $     544,399  $     828,351
Raw materials and components....................................      1,007,846      1,488,049
                                                                  -------------  -------------
                                                                  $   1,552,245  $   2,316,400
                                                                  -------------  -------------
                                                                  -------------  -------------


NOTE 3:  EARNINGS PER SHARE
    Earnings  per share  calculations are  based on  the daily  weighted average
number of  common stock  and common  stock equivalents  outstanding during  each
period.  The dilutive effect  of common stock equivalents  from stock options is
based on the treasury stock method.

NOTE 4:  MAJOR CUSTOMERS
    The following customers accounted for more  than 10% of total net sales  for
the quarters ended March 31, 1994 and 1993:



                                                                  MARCH 31
                                                          ------------------------
                                                             1994         1993
                                                          -----------  -----------
                                                                 
A.......................................................       26.4%       --
B.......................................................       25.0%       --
C.......................................................       17.7%       --
D.......................................................      --            26.4%
E.......................................................      --            22.9%
F.......................................................      --            12.6%


NOTE 5:  EMPLOYEE STOCK PURCHASE PLAN
    The  Company's Board of Directors and stockholders have approved an Employee
Stock Purchase Plan (The  "Plan"). The Plan authorizes  the issuance of  200,000
shares  of  common stock  for purchase  by  the Plan  participants. The  Plan is
intended to qualify  as an Employee  Stock Purchase Plan  within the meaning  of
Section 423 of the Internal Revenue Code.

EX-99.G

                                                            Exhibit 99(g)

                        PRO FORMA FINANCIAL INFORMATION

The following unaudited Pro Forma Combined Income Statements for the six months
ended June 30, 1995, and the year ended December 31, 1994, have been prepared to
reflect adjustments to HBOC's historical results of operations to five effect to
the acquisition of HSG and the proposed Merger as if each had occurred on
January 1 of each period presented.  The attached Pro Forma Combined Balance
Sheets as of June 30, 1995, give effect to the Merger as if it had occurred on
that date.

These pro forma statements have been prepared by HBOC based on the audited
financial statements of HSG and CliniCom for the year ended December 31, 1994,
and the unaudited financial statements of HSG for the period from January 1
through June 17, 1995, and of CliniCom for the six months ended June 30, 1995,
which statements are incorporated by reference or included herein.

These pro forma statements are not necessarily indicative of the results of
operations which would have been attained had each of the acquisitions been
consummated on the dates indicated or which may be attained in the future.
These pro forma statements should be read in conjunction with the historical
financial statements and notes thereto of HBOC, HSG, and CliniCom incorporated
by reference or included herein.





HBO & COMPANY AND SUBSIDIARIES
PRO FORMA COMBINED INCOME STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 1995
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------


                                                                     Pro Forma      Pro Forma                Pro Forma     Pro Forma
(In Thousands, Except for Per Share Data)     HBOC        HSG       Adjustments     Combined    CliniCom    Adjustments    Combined
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      
Revenue                                       $190,245    $53,429    $17,048  (2)    $258,440    $21,770   ($2,813) (8)    $277,397
                                                                      (2,282) (3)
------------------------------------------------------------------------------------------------------------------------------------

Operating Expense:
    Cost of Operations                          91,279          -     44,263  (2)     137,194     11,429    (4,231) (8)     145,510
                                                                        (296) (3)                            1,418  (8)
                                                                         130  (3)                             (300) (9)
                                                                       3,334  (3)
                                                                        (456) (3)
                                                                      (1,060) (3)
    Marketing                                   26,411          -      6,048  (2)      29,810      2,758      (390) (9)      32,178
                                                                      (2,649) (3)
    Research and Development                    16,453          -      4,509  (2)      16,724      2,347      (600) (9)      18,471
                                                                      (4,238) (3)
    General and Administrative                  20,490          -     12,597  (2)      29,309      2,381      (760) (9)      30,930
                                                                      (1,896) (3)
                                                                         767  (3)
                                                                      (2,649) (3)
    Purchased Research and
        Development Charge                     125,520          -   (125,520) (5)           0          -         -                0
    HSG Operating Expense                            -     50,369    (50,369) (2)           0          -         -                0
------------------------------------------------------------------------------------------------------------------------------------
        Total Operating Expense                280,153     50,369   (117,485)         213,037     18,915    (4,863)         227,089
------------------------------------------------------------------------------------------------------------------------------------
Operating Income (Loss)                        (89,908)     3,060    132,251           45,403      2,855     2,050           50,308
Other Expense, Net                               1,026      3,233          -            4,259       (258)        -            4,001
------------------------------------------------------------------------------------------------------------------------------------
Income (Credit) Before
    Provision for Income Taxes                 (90,934)      (173)   132,251           41,144      3,113     2,050           46,307
Provision (Credit) for
    Income Taxes                               (36,373)     1,433     51,398  (6)      16,458        158     1,907  (10)     18,523
------------------------------------------------------------------------------------------------------------------------------------
Net Income (Loss)                             ($54,561)   ($1,606)   $80,853          $24,686     $2,955      $143          $27,784
------------------------------------------------------------------------------------------------------------------------------------
Earnings (Loss) Per Share:
    Primary                                     ($1.69)                                 $0.66      $0.33                      $0.68
    Fully Diluted                               ($1.69)                                 $0.66      $0.33                      $0.67
------------------------------------------------------------------------------------------------------------------------------------
Weighted Average Shares Outstanding:
    Primary                                     32,333                 5,149  (7)      37,482      9,007    (5,404) (11)     41,085
    Fully Diluted                               32,333                 5,323  (7)      37,656      9,007    (5,404) (11)     41,259
------------------------------------------------------------------------------------------------------------------------------------







HBO & COMPANY AND SUBSIDIARIES
PRO FORMA COMBINED INCOME STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1994
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------



                                                                     Pro Forma      Pro Forma                 Pro Forma   Pro Forma
(In Thousands, Except for Per Share Data)    HBOC         HSG       Adjustments     Combined    CliniCom     Adjustments   Combined
-----------------------------------------------------------------------------------------------------------------------------------

                                                                                                     
Revenue                                     $327,201    $121,241    $36,732   (2)   $480,546    $35,416     ($5,440)  (8)  $510,522
                                                                     (4,628)  (3)
-----------------------------------------------------------------------------------------------------------------------------------


Operating Expense:
     Cost of Operations                      172,894           -     93,480   (2)    273,131     18,186      (5,005)  (8)   285,277
                                                                       (746)  (3)                              (435)  (8)
                                                                        260   (3)                              (600)  (9)
                                                                      6,668   (3)
                                                                       (925)  (3)
                                                                      1,500   (4)
     Marketing                                42,769           -     14,625   (2)     52,825      5,046        (780)  (9)    57,091
                                                                     (4,569)  (3)
     Research and Development                 28,928           -      9,153   (2)     37,125      3,303      (1,200)  (9)    39,228
                                                                       (956)  (3)
     General and Administrative               34,590           -     20,393   (2)     50,476      3,719      (1,520)  (9)    52,675
                                                                     (3,879)  (3)
                                                                      1,534   (3)
                                                                     (2,162)  (3)
     HSG Operating Expense                         -     100,919   (100,919)  (2)          0          -           -               0
------------------------------------------------------------------------------------------------------------------------------------
         Total Operating Expense             279,181     100,919     33,457          413,557     30,254      (9,540)        434,271
------------------------------------------------------------------------------------------------------------------------------------
Operating Income (Loss)                       48,020      20,322     (1,353)          66,989      5,162       4,100          76,251
Other Expense, Net                             1,031       6,703          -            7,734       (771)          -           6,963
------------------------------------------------------------------------------------------------------------------------------------
Income (Credit) Before Provision for          46,989      13,619     (1,353)          59,255      5,933       4,100          69,288
     Income Taxes
Provision (Credit) for Income Taxes           18,830       7,877     (3,005)  (6)     23,702        445       3,568  (10)    27,715
------------------------------------------------------------------------------------------------------------------------------------
Net Income                                   $28,159      $5,742     $1,652          $35,553     $5,488        $532         $41,573
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Earnings Per Share:
     Primary                                   $0.85                                   $0.96      $0.62                       $1.03
     Fully Diluted                             $0.85                                   $0.96      $0.62                       $1.02
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Weighted Average Shares Outstanding:
     Primary                                  32,973                  4,000   (7)     36,973      8,901      (5,341) (11)    40,533
     Fully Diluted                            33,106                  4,000   (7)     37,106      8,902      (5,341) (11)    40,667
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------










HBO & COMPANY AND SUBSIDIARIES
PRO FORMA COMBINED BALANCE SHEETS
JUNE 30, 1995
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------


                                                                                                      Pro Forma        Pro Forma
(In Thousands)                                                      HBOC          CliniCom           Adjustments        Combined
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
Assets
     Current Assets:
          Cash and Cash Equivalents                               $8,232            $7,526                -              $15,758
          Receivables, Net                                       131,709            23,884          (13,486)  (8)        142,107
          Current Deferred Income Taxes                            9,130                 -                -                9,130
          Inventories                                              1,868             3,401                -                5,269
          Prepaids and Other Current Assets                       12,061               895           (1,879)  (8)         11,077
------------------------------------------------------------------------------------------------------------------------------------
              Total Current Assets                               163,000            35,706          (15,365)             183,341
------------------------------------------------------------------------------------------------------------------------------------
          Intangibles, Net                                       181,293                 -                -              181,293
          Deferred Income Taxes                                   33,096                 -                -               33,096
          Property and Equipment, Net                             31,983             2,646                -               34,629
          Capitalized Software, Net                               25,626             3,491             (400)  (8)         28,717
          Other Noncurrent Assets, Net                             6,457               135                -                6,592
------------------------------------------------------------------------------------------------------------------------------------
Total Assets                                                    $441,455           $41,978         ($15,765)            $467,668
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------

Liabilities and Stockholders' Equity
     Current Liabilities                                        $175,370            $8,816         ($12,209)  (8)       $171,977
     Long-Term Debt                                                  879                 -                -                  879
     Other Long-Term Liabilities                                  23,437                 -                -               23,437
     Stockholders' Equity                                        241,769            33,162           (3,556)  (8)        271,375
------------------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity                      $441,455           $41,978         ($15,765)            $467,668
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------






NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
(In Thousands)

GENERAL

1.  The foregoing Pro Forma Combined Income Statements for the six months ended
June 30, 1995, and the year ended December 31, 1994, give effect to the
acquisition of HSG which was completed on June 17, 1995, and the Merger.  The
foregoing Pro Forma Combined Balance Sheets as of June 30, 1995, give effect to
the Merger as if it had occurred on that date.  No pro forma adjustments are
necessary for the HSG acquisition on the attached June 30, 1995, Pro Forma
Combined Balance Sheets since that transaction was completed on June 17, 1995.

HBOC accounted for the acquisition of HSG as a purchase.  The Merger, which is
subject to certain conditions including CliniCom stockholder approval, is
expected to close in the early fourth quarter of 1995.  The transaction will be
accounted for as a pooling of interests.

Adjustments to the Pro Forma Combined Income Statements include such adjustments
as are necessary to allocate the HSG purchase price based on the estimated fair
market value of the assets acquired and the liabilities assumed and to give
effect to events that are directly attributable to the HSG transaction and the
Merger, which are expected to have a continuing impact on HBOC and are factually
supportable. The adjustments related to the Pro Forma Combined Income Statements
assume the transactions were consummated on January 1 of each period presented.

Adjustments to the Pro Forma Combined Balance Sheets include such adjustments as
are necessary to give effect to events that are directly attributable to the
transaction and factually supportable.  The adjustments related to the Pro Forma
Combined Balance Sheets assume the transaction was consummated on June 30, 1995.

HSG ACQUISITION

2.  HSG revenue and expense classifications were historically broken out using
different policies than those applied by HBOC.  The adjustments necessary to
reclassify HSG revenue and expenses in accordance with HBOC policies are:




                                      6/30/95            12/31/94
                                      -------            --------
                                                  
Revenue                               $17,048             $36,732
Cost of Operations                    $44,263             $93,480
Marketing                              $6,048             $14,625
Research and Development               $4,509              $9,153
General and Administrative            $12,597             $20,393
HSG Operating Expense                $(50,369)          $(100,919)






Historically, HSG netted certain costs against revenue for presentation, while
HBOC has historically reported revenue as a gross number.

3.  The following adjustments are necessary to adjust the June 30, 1995, and
December 31, 1994, income statement impact of the asset and liability fair
market value adjustments assuming the purchase of HSG had been consummated on
January 1 of each period presented:




                                      6/30/95            12/31/94
                                      -------            --------
                                                   
HSG Capitalized Software                $(296)              $(746)
HSG Goodwill                          $(1,896)            $(3,879)
HBOC Capitalized Software                $130                $260
HBOC Customer Lists-
    to amortize over 15 years          $3,334              $6,668
HBOC Goodwill-
    to amortize over seven years         $767              $1,534
Deferred Revenue:
    Revenue                           $(2,282)            $(4,628)
    Cost of Operations                  $(456)              $(925)
Terminated Employees:
    Cost of Operations                $(1,060)                 $-
    Marketing                         $(2,649)           $ (4,569)
    Research and Development          $(4,238)              $(956)
    General and Administrative        $(2,649)            $(2,162)



HBOC recorded the HSG deferred revenue acquired at its cost (the cost to service
remaining commitment).  The net profit which had been deferred has been
eliminated.

The reduction of expense related to terminated employees results from the
permanent termination of certain HSG employees in order to eliminate certain
redundant positions and increase the efficiency of the combined operations.

4.  HSG was charged an allocated amount for the use of FDC's Data Center.  In
1994, the amount charged was less than that deemed reasonable by management by
$1,500.  The adjusted charge reflects that which will be charged to HBOC in the
future.  The 1995 charge has been deemed reasonable by management.

5.  In the second quarter of 1995, HBOC recorded a $125,520 charge primarily
related to purchased research and development of HSG.  This nonrecurring charge
has been eliminated from the June 30, 1995, Pro Forma Combined Income
Statements.

6.  The provision for income tax was derived by using the HBOC effective tax
rate of 40%.






7.  The weighted average shares outstanding have been adjusted for the HSG
acquisition to give effect to the additional 4 million shares of HBOC Common
Stock outstanding assuming the transaction had been consummated on January 1 of
each period presented and to give effect to the dilutive effect of stock options
outstanding at June 30, 1995, assuming that HBOC had had net income.

THE MERGER

8.  Beginning in 1988, HBOC and CliniCom were parties to various distribution
arrangements.  Accordingly, certain intercompany transactions and balances are
included in the historical financial statements of HBOC and CliniCom.  The
adjustments necessary to eliminate intercompany transactions assuming the
pooling of interests had been consummated on January 1 of each period presented
are:




                                      6/30/95            12/31/94
                                      -------            --------
                                                   
Revenue                               $(2,813)            $(5,440)
Cost of Operations                    $(4,231)            $(5,005)



The following adjustments are necessary to correctly match revenue and expenses
according to HBOC policies assuming the pooling of interests had been
consummated on January 1 of each period presented:




                                      6/30/95            12/31/94
                                      -------            --------
                                                   
Cost of Operations                     $1,418               $(435)



The adjustments necessary to eliminate intercompany balances assuming the
pooling of interests had been consummated on June 30, 1995, are:




                                               6/30/95
                                               -------
                                            
Receivables                                    $(13,486)
Prepaids and Other Current Assets               $(1,879)
Capitalized Software                              $(400)
Current Liabilities                            $(12,209)
Retained Earnings                               $(3,556)



9.  The following adjustments are necessary to adjust the June 30, 1995, and
December 31, 1994, income statement to give effect to employee terminations.
The reduction of expense related to terminated employees results from the
permanent termination of certain CliniCom employees in order to eliminate
certain redundant positions and increase the efficiency of the combined
operations.  The adjustments, assuming the pooling of interests had been
consummated on January 1 of each period presented, are:






                                      6/30/95            12/31/94
                                      -------            --------
                                                   
    Cost of Operations                  $(300)              $(600)
    Marketing                           $(390)              $(780)
    Research and Development            $(600)            $(1,200)
    General and Administrative          $(760)            $(1,520)



10. The provision for income tax was derived by using the HBOC effective tax
rate of 40%.

11. The Merger agreement provides for the exchange of .4 of a share of HBOC
Common Stock for each share of currently outstanding CliniCom common stock.