Letter of Understanding - Law Office Information Systems Inc. and Pacific Data Conversion Corp.


     Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality 
request. Omissions are designated as *. A complete version of this exhibit has 
been filed separately with the Securities and Exchange Commission.
 
                            LETTER OF UNDERSTANDING


     This Letter of Understanding is by and between Law Office Information
Systems, Inc., an Arkansas Corporation (LOIS) and Pacific Data Conversion
Corporation, an Oregon Corporation (PDCC).

     WHEREAS, LOIS is in the electronic publishing business and PDCC is in the
electronic conversion business;

     WHEREAS, LOIS is in need of converting approximately 1.4 billion characters
of data over the next 6-month period and PDCC is capable and ready to perform
said conversion;

     IT IS THEREFORE AGREED AS FOLLOWS:

     That this Letter of Understanding will set forth the general Agreement by
and between LOIS and PDCC as to the terms and conditions that shall hereinafter
be set forth at a later date in an Agreement between the two companies.

     1.     LOIS shall immediately ship Raw Materials amounting to approximately
            1.4 billion characters to PDCC comprising of the State of Ohio.

     2.     LOIS shall send a check in the amount of * to PDCC
            representing a deposit of approximately 20% of the anticipated cost
            of the project.

     3.     PDCC shall accept said shipment in Oregon and send the same to its
            conversion facility in China. Both LOIS and PDCC shall share equally
            the cost of the shipment of the Raw Materials to China.

     4.     PDCC shall convert Raw Materials into Electronic Materials and
            return the same to LOIS on CD-ROM approximately every week.

     5.     PDCC warrants and represents that the Quality Standards of the
            Electronic Materials shall be accurate to within 99.995% of the raw
            Materials as defined by Measured Quality Standards.

     6.     LOIS shall have up to 15 days to check the Quality Standards of the
            Electronic Materials. If LOIS notifies PDCC within those 15 days
            that Quality Standards are not been met, PDCC shall have 15 days to
            correct the Electronic Materials. If LOIS does not notify PDCC
            within 15 days that Quality Standards have not been met, then and in
            that event it shall be deemed that the Electronic Materials have met
            Quality Standards. If PDCC fails to meet the Quality Standards on
            more than 4 occasions, LOIS shall have the right to cancel the
            Agreement and receive a refund on any monies remaining from its
            * deposit.

* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 
     7.     PDCC shall send an invoice to LOIS along with every shipment of the
            Electronic Materials in which the amount of the invoice shall equal
            * of Electronic Materials converted. Within 15 days if Quality
            Standards have been met, LOIS shall pay 80% of the invoice amount
            and the remaining 20% shall be taken from the deposit monies already
            paid by LOIS.

     8.     It is contemplated between the parties that PDCC will deliver
            approximately 75 million characters in the first month after
            receiving the Raw Materials in China. In the second month,
            approximately 350 million characters will be converted and 400
            million in the third month. Thereafter PDCC warrants that it shall
            convert and sent a minimum of 360 million characters each month with
            the goal of 400 million characters per month. If and in the event
            that PDCC fails to send at least 360 million characters in month
            four of this Agreement, PDCC shall have 15 additional days to meet
            this minimum requirement. If PDCC fails to deliver the minimum
            requirement after the 15-day period, then and in that event a
            penalty shall be deducted from the invoice for that particular month
            in the amount of * that should have been converted if PDCC had met
            its goal. If LOIS needs other Raw Material conversions after the
            State of Ohio is finished, PDCC shall be given a one-month grace
            period prior to the enforcement of these late delivery penalties.

     9.     The following are definitions of previously mentioned terms:

     .      'Raw Materials' - Raw Materials shall be understood to mean that
            materials used for conversion into an electronic format. Raw
            Materials shall generally consist of legal materials or legally
            related materials. Raw Materials can be in the form of print which
            are usually contained within a compiled format and bound together,
            in the form of both soft and hard bound books, pamphlets, folders,
            and the like.

     .      'Electronic Materials' - Electronic Materials shall be understood to
            mean Raw Materials that have been keyed (or otherwise converted);
            formatted in accordance with specified requirements; and supplied
            with all appropriate Coding Information and Emphasis Tags as
            specified by LOIS.

     .      'Quality Standards' - Quality Standards shall mean Electronic
            Materials that are accurately converted to Ninety-Nine and Nine
            Hundred Ninety Five Percent (99.995%) of the Raw Materials.

     .      'Measured Quality Standards' - Measured Quality Standards is the
            method used to determine Quality Standards. Upon the receipt of
            Electronic Materials sent by PDCC to LOIS, LOIS shall select a 100
            page continuous block of information (or as many 100 page blocks as
            LOIS desires) and compare the Raw Materials to the Electronic
            Materials. Accuracy of the conversion is checked by counting the
            total number of characters within said 100 page block(s) and the
            number of occurrences where the Raw Materials do not match the
            Electronic Materials. The total characters contained within a given
            100 page block of Electronic Materials minus the total characters of
            Electronic Materials converted incorrectly within such block(s)
            divided by the total characters contained within such 100 page
            block(s) (and expressed as a percentage 

* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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            by multiplying by 100) shall be the formula used to determine the
            Quality Standard. The results of the quality check shall be
            immediately sent to PDCC if the materials do not meet Quality
            Standards. PDCC shall then check its copy of the Electronic
            Materials to ascertain the veracity of said quality check. It is
            understood by both PDCC and LOIS, that the accuracy level of any 100
            page block so chosen by LOIS, shall be deemed to be that of the
            entire amount of Electronic Materials for that project.

            It is understood between the parties that when Measured Quality
            Standards are being determined, any character which is emphasized or
            effected by an emphasis tag (SGML character), is in fact emphasized
            or affected in a manner not consistent with the Raw Materials, then
            and in that event, all characters contained within the emphasized or
            affected characters shall be deemed not to be accurately converted.
            It is also understood that when a character or characters are
            emphasized or affected in the Raw Materials but not so affected or
            emphasized in the Electronic Materials, then and in that event, all
            characters that should have been emphasized or affected in the
            Electronic Materials shall be deemed not to be accurately converted.

     Signed to and agreed by the parties this 29th day of December, 1998.


LOIS, INC.                              PDCC
 
/s/ Kyle D. Parker                      /s/ Iris L. Hanney
----------------------------------      ---------------------------------------
Kyle D. Parker                          Iris L. Hanney
C.E.O.                                  V.P. Sales & Marketing

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