BRIGHTSTAR INFORMATION TECHNOLOGY GROUP INC, S-1, 1997-12-24

BRIGHTSTAR INFORMATION TECHNOLOGY GROUP INC
S-1, 1997-12-24

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 24, 1997

REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------

FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------

BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
(Exact name of registrant as specified in its charter)

<TABLE>
<C> <C> <C>
DELAWARE 7373 76-0553110
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>

10375 RICHMOND AVENUE, SUITE 1620
HOUSTON, TEXAS 77042
(713) 361-2500
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

MARSHALL G. WEBB
BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
10375 RICHMOND AVENUE, SUITE 1620
HOUSTON, TEXAS 77042
(713) 361-2500
FAX: (713) 361-2501
(Name, address, including zip code, and telephone number,
including area code, of registrant's agent for service)
---------------------

Copies to:

<TABLE>
<C> <C>
ROBERT J. VIGUET, JR. TED W. PARIS
CHAMBERLAIN, HRDLICKA, WHITE, WILLIAMS & MARTIN BAKER & BOTTS, L.L.P.
1200 SMITH STREET, SUITE 1400 3000 ONE SHELL PLAZA
HOUSTON, TEXAS 77002-4310 HOUSTON, TEXAS 77002-4995
(713) 658-1818 (713) 229-1234
FAX: (713) 658-2553 FAX: (713) 229-1522
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
---------------------

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
---------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
=============================================================================================================================
TITLE OF EACH CLASS AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO BE TO BE AGGREGATE OFFERING AGGREGATE OFFERING REGISTRATION
REGISTERED REGISTERED(1) PRICE PER SHARE(1) PRICE(2)(3) FEE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par value......... -- -- $60,375,000 $17,811
=============================================================================================================================
</TABLE>

(1) In accordance with Rule 457(o) under the Securities Act of 1933, as amended,
the number of shares being registered and the proposed maximum offering
price per share are not included in this table.
(2) Includes shares of Common Stock issuable upon exercise of the Underwriters'
over-allotment option.
(3) Estimated solely for the purpose of calculating the registration fee.
---------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED DECEMBER 24, 1997

PROSPECTUS

3,750,000 Shares

BrightStar Information
Technology Group, Inc.

Common Stock

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

All of the shares of Common Stock offered hereby (the "Offering") are being
sold by BrightStar Information Technology Group, Inc. ("BrightStar"). Prior to
the Offering, there has been no public market for the Common Stock. It is
currently estimated that the initial public offering price will be between
$ and $ per share. See "Underwriting" for a list of the factors to be
considered in determining the initial public offering price. The Company has
applied to have the Common Stock approved for quotation on the Nasdaq National
Market under the symbol "BTSR."

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

THE SHARES OF COMMON STOCK OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 7.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
==============================================================================================================
PRICE TO UNDERWRITING DISCOUNTS PROCEEDS TO
PUBLIC AND COMMISSIONS(1) COMPANY(2)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share............................ $ $ $
- --------------------------------------------------------------------------------------------------------------
Total(3)............................. $ $ $
==============================================================================================================
</TABLE>

(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended (the "Securities Act"). See "Underwriting."
(2) Before deducting expenses of the Offering payable by the Company, estimated
at $3,100,000.
(3) The Company has granted the Underwriters a 30-day option to purchase up to
562,500 additional shares of Common Stock on the same terms and conditions
as set forth above, solely to cover over-allotments, if any. If such option
is exercised in full, the total Price to Public, Underwriting Discounts and
Commissions and Proceeds to Company will be $ , $ and
$ , respectively. See "Underwriting."

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

The shares of Common Stock offered by this Prospectus are offered by the
Underwriters, subject to prior sale, withdrawal, cancellation or modification of
the offer without notice, to delivery to and acceptance by the Underwriters and
to certain further conditions. It is expected that delivery of certificates
representing the shares of Common Stock will be made at the offices of Lehman
Brothers Inc., New York, New York, on or about , 1998.

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

LEHMAN BROTHERS
CIBC OPPENHEIMER
RAUSCHER PIERCE REFSNES, INC.

, 1998
<PAGE> 3

[GRAPHICS]

[DESCRIBE MAP OR PICTURE]

CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK. SUCH
TRANSACTIONS MAY INCLUDE THE PURCHASE OF SHARES OF COMMON STOCK FOLLOWING THE
PRICING OF THE OFFERING TO COVER A SYNDICATE SHORT POSITION IN THE COMMON STOCK
OR FOR THE PURPOSE OF MAINTAINING THE PRICE OF THE COMMON STOCK, AND THE
IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING."

This Prospectus may contain trademarks and service marks of other companies.

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<PAGE> 4

PROSPECTUS SUMMARY

The following summary should be read in conjunction with, and is qualified
in its entirety by, the more detailed information appearing elsewhere in this
Prospectus, including "Risk Factors" and the financial statements and the notes
thereto. Concurrently with and as a condition to the closing of the Offering,
BrightStar will (i) acquire, in separate transactions (collectively, the
"Acquisitions"), seven independent information technology ("IT") services
companies (each a "Founding Company") for a combination of cash and shares of
Common Stock, par value $0.001 per share, of BrightStar ("Common Stock") and
(ii) issue Common Stock in exchange for all outstanding shares of common stock
of BIT Group Services, Inc. ("BITG"), including the issuance of 826,550 shares
to BIT Investors, LLC ("BITI") and 346,800 shares to senior management of
BrightStar (the "Share Exchange"). BITG is currently the sole stockholder of
BrightStar. Unless otherwise indicated by the context, references herein to (i)
"BrightStar" mean BrightStar Information Technology Group, Inc. and BITG and
(ii) the "Company" mean BrightStar, together with all the Founding Companies.
The number of shares of Common Stock to be issued in the Acquisitions will
depend on the initial public offering price of the Common Stock. However, as
provided in the agreement relating to the Share Exchange (the "Share Exchange
Agreement"), the aggregate number of shares of Common Stock to be issued in
connection with the Acquisitions (excluding any shares that may become issuable
pursuant to post-closing adjustments to the purchase price for two of the
Acquisitions) and the Share Exchange will be 3,588,735 shares. See "The Company"
and "Certain Transactions -- Acquisitions of the Founding Companies." Unless
otherwise indicated, the information set forth in this Prospectus (i) gives
effect to the Acquisitions and the Share Exchange, (ii) assumes an initial
public offering price of $ per share and (iii) does not give effect to the
Underwriters' over-allotment option.

THE COMPANY

SUMMARY

BrightStar was organized to provide a wide range of IT services to Fortune
1000 companies and other large organizations. The Company provides strategic IT
consulting and enterprise resource planning ("ERP") software implementation
services, application development and maintenance services, systems integration
services, IT outsourcing and IT training services and related software products.
The Company's goal is to become a leader in the IT services industry through
consolidation of complementary businesses, expansion of its service and product
offerings and cross-selling to its combined customer base.

The Company employs more than 500 IT professionals in 10 United States
cities and six international locations and provides mission critical software
application and database design, development, implementation and maintenance
services across a wide array of computing environments including client/server,
midrange and mainframe business systems as well as real-time process control
systems. The Company provides its services and products to clients across a
broad spectrum of industries, including communications, consumer products,
energy, financial services, healthcare, industrial, insurance, media,
professional services, retail, and technology. Many of these clients have
maintained relationships with the Founding Companies over multiple years,
involving a large number of projects.

The worldwide IT market has expanded significantly in recent years, driven
by the trend towards open systems, greater affordability and improvements in
operating performance. The IT services market has expanded along with the IT
industry in general and, as businesses have sought to improve their
competitiveness, quality, productivity and profitability, the demand for
business process reengineering, technology consulting and outsourcing services
has increased. A report by Forrester Research, an independent research
organization which provides information concerning the IT services industry,
estimates that the market for IT consulting, design, implementation, management
and IT outsourcing was $124.0 billion in 1996 and will increase to $303.1
billion by 2002, representing an approximate compounded annual growth rate of
16%.

Among the leading factors driving growth in the IT services market is the
transition to distributed computing technologies such as client/server
architectures, local area networks ("LANs"), wide area networks ("WANs"), the
Internet and intranets. Such distributed systems enable the creation and
utilization of more functional and flexible applications that are critical to
the competitive needs of businesses. The Company believes that businesses are
increasingly purchasing ERP software applications, including those
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<PAGE> 5

offered by leading software vendors such as SAP, Oracle, PeopleSoft or Baan, and
implementing these applications to match their requirements.

The challenge of managing this transition while maintaining legacy systems
is placing a severe strain on many corporate IT departments. Many organizations
do not have the resources to keep pace with these newer technologies and are
reluctant to expand their IT departments and retrain and re-deploy their
in-house personnel to develop and implement these technologies. Consequently,
organizations are increasingly outsourcing the design and development of custom
solutions in order to improve efficiency, minimize the financial risks
associated with implementing new technologies and reduce their existing IT
infrastructures. Moreover, organizations that purchase ERP software applications
typically engage IT services and consulting companies to reengineer their
business processes and implement these software packages according to their
custom requirements. Organizations are also using outsourcing as a
cost-effective solution to large one-time IT projects such as those relating to
the year 2000 ("Year 2000") problem, which Gartner Group, Inc. has estimated
will cost in excess of $300 billion to resolve worldwide. The Company believes
it has a significant opportunity to provide a broad range of services to large
organizations that are seeking to reduce the number of IT services firms with
which they do business.

The Company's goal is to be a leading provider of IT solutions. The
Company's approach emphasizes: (i) a wide range of IT solutions; (ii) a strong
presence in multiple local and regional markets throughout the U.S. to enhance
its responsiveness and client service; (iii) IT solutions that address complex,
mission critical issues, including developing custom solutions and implementing
purchased software applications designed to increase productivity, reduce costs
and improve customer service; and (iv) a decentralized management structure to
provide flexibility and responsiveness to client needs and an entrepreneurial,
motivating environment for its professionals.

The Company's growth strategy focuses on: (i) maximizing intrinsic growth
opportunities by centralizing certain administrative functions, thereby allowing
management of the Founding Companies to focus on operations; (ii) capitalizing
on cross-selling opportunities by implementing programs that enable each
Founding Company to offer its particular IT expertise to the broad client base
of all of the other Founding Companies; (iii) attracting, training, motivating
and retaining highly skilled employees through effective recruiting efforts,
training in both legacy systems and emerging technologies, personalized career
and education management and competitive compensation and benefits; (iv)
commercializing products derived from software applications developed in the
course of providing IT services; (v) cultivating and expanding alliances with
leading developers and IT vendors in order to enhance its industry recognition
and increase its sales opportunities; and (vi) aggressively continuing its
acquisition program to broaden the Company's service and product offerings,
enhance its position in or enter into new niche markets, expand its presence in
existing geographic markets or enter into new geographic markets.

BrightStar has entered into definitive agreements to acquire the Founding
Companies concurrently with and as a condition to the closing of the Offering.
The aggregate consideration BrightStar will pay to acquire the Founding
Companies consists of (i) approximately $32.4 million in cash, (ii) 2,415,385
shares of Common Stock, and (iii) the assumption of approximately $5.1 million
of indebtedness of the Founding Companies. Two of the Acquisitions are subject
to post-closing adjustments payable in shares of Common Stock, based on the 1998
financial performance of the subject Founding Companies (the "Post-Closing
Adjustments"). The Company currently estimates that no shares of Common Stock
will be issuable in connection with the Post-Closing Adjustments. Accordingly,
the disclosures in this Prospectus assume that no shares of Common Stock will be
issued in connection with the Post-Closing Adjustments. See "Certain
Transactions -- Acquisitions of the Founding Companies."
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<PAGE> 6

THE OFFERING

Common Stock offered............. 3,750,000 shares

Common Stock to be outstanding
after the Offering(1)............ 7,338,735 shares

Use of proceeds.................. To pay the cash portion of the purchase
price for each of the Acquisitions
(estimated at $32.4 million), to repay
certain indebtedness of BrightStar, to pay
certain transaction costs related to the
Offering and the Acquisitions and for
general corporate purposes, which may
include future acquisitions. See "Use of
Proceeds."

Proposed Nasdaq National Market
symbol........................... BTSR
- ---------------

(1) The number of shares to be outstanding when the Offering closes will consist
of (i) an aggregate of 346,800 shares issued to BrightStar management in
connection with the Share Exchange, (ii) an aggregate of 826,550 shares
issued to BITI in connection with the Share Exchange, (iii) an aggregate of
2,415,385 shares issued as consideration in the Acquisitions and (iv) the
3,750,000 shares offered hereby. Such number of shares does not include (a)
approximately 550,000 shares that will be subject to options granted under
BrightStar's 1997 Stock Option Plan (the "1997 Stock Option Plan") on the
date the Offering closes, with an exercise price equal to the initial public
offering price per share, (b) an aggregate of 50,000 shares issuable
pursuant to a warrant (the "MG Warrant") issued by BrightStar to McFarland,
Grossman & Company, Inc. ("MGCO"), a financial advisory firm that assisted
the Company in connection with the Acquisitions, and (c) an aggregate of
14,285 shares issuable pursuant to an option (the "BGCA Option") issued by
BrightStar to Brewer-Gruenert Capital Advisors, LLC ("BGCA"), a consulting
firm engaged by the Company to assist in certain corporate development
matters. See "Management -- 1997 Stock Option Plan" and "Certain
Transactions."
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SUMMARY UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED SEPTEMBER 30,
DECEMBER 31, ------------------------
1996 1996 1997
------------ --------- ---------
<S> <C> <C> <C>
Statement of Operations Information(1):
Revenue............................................. $ 31,377 $ 22,386 $ 37,744
Cost of revenue..................................... 23,120 16,186 27,619
Selling, general and administrative expenses........ 8,053 6,098 8,679
Stock compensation expense.......................... -- -- 305
Depreciation and amortization(2).................... 1,479 1,104 1,296
--------- --------- ---------
Loss from operations................................ (1,275) (1,002) (155)
Interest expense.................................... -- -- --
Other income (expense), net......................... 181 49 (104)
--------- --------- ---------
Loss before income taxes............................ (1,094) (953) (259)
Income tax provision (benefit)(3)................... 14 (52) 240
--------- --------- ---------
Net loss............................................ $ (1,108) $ (901) $ (499)
========= ========= =========
Net loss per common share........................... $ (0.15) $ (0.12) $ (0.07)
========= ========= =========
Shares used in computing net loss per common
share............................................ 7,338,735 7,338,735 7,338,735
</TABLE>

<TABLE>
<CAPTION>
SEPTEMBER 30, 1997
-----------------------------
PRO
FORMA(1) AS ADJUSTED(4)
--------- --------------
<S> <C> <C>
Balance Sheet Information:
Cash...................................................... $ 1,046 $
Working capital (deficit)................................. (31,406)
Property and equipment, net............................... 2,001
Total assets.............................................. 54,602
Long-term debt, net of current maturities................. 521
Stockholders' equity...................................... 10,141
</TABLE>

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

(1) The pro forma combined statement of operations information assumes the
Acquisitions, the Share Exchange and the Offering (and the application of
the net proceeds therefrom) all were closed on January 1, 1996. The pro
forma balance sheet information assumes the Acquisitions and the Share
Exchange occurred on September 30, 1997. The pro forma combined statement of
operations information for the year ended December 31, 1996 is presented on
the basis of a year ended December 31 for each Founding Company, except (i)
the financial results of Blackmarr are reflected based on its fiscal year
ended September 30, 1996 and (ii) the financial results of SCS Australia are
reflected based on a period of 12 months ended September 30, 1996. The pro
forma combined statement of operations information for the nine-month
periods ended September 30, 1996 and 1997 is presented on the basis of the
nine months ended September 30 for each Founding Company for each period
presented, except the financial results of SCS Australia are reflected based
on the nine-month periods ended June 30 for each period presented. The pro
forma combined financial information (i) is not necessarily indicative of
the results the Company would have obtained had these events actually
occurred when assumed or of the Company's future results, (ii) is based on
preliminary estimates (primarily of the aggregate purchase price of the
Acquisitions) and certain assumptions management deems appropriate and (iii)
should be read in conjunction with the financial statements and notes
thereto included in this Prospectus. Excludes the following non-recurring
items: a one-time write-off for in-process research and development of $3.0
million; and compensation expense of $3.6 million for Common Stock issued to
the members of BrightStar's management at a price below the initial public
offering price.

(2) Includes amortization of goodwill to be recorded as a result of the
Acquisitions, as follows: $1.1 million for the year ended December 31, 1996
and $0.8 million for the nine-month periods ended September 30, 1996 and
1997.

(3) Assumes an effective tax rate of 40.0% on certain pro forma adjustments.

(4) Reflects the closing of the Offering and application of the net proceeds
therefrom. See "Use of Proceeds."
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RISK FACTORS

An investment in the Common Stock involves a high degree of risk.
Prospective investors should consider carefully the following risk factors, in
addition to the other information contained in this Prospectus, before
purchasing the shares of Common Stock offered hereby. Certain statements in the
"Prospectus Summary," "Risk Factors," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business" are
forward-looking and can be identified by the use of the words "expect,"
"anticipate," "project," "estimate," "predict" or similar expressions. Such
forward-looking statements are subject to various risks, uncertainties and
assumptions and actual results may differ materially from those expressed or
implied by such statements.

ABSENCE OF COMBINED OPERATING HISTORY

BrightStar was organized in May 1997 and has conducted no operations to
date other than in connection with the Offering and the Acquisitions. The
Founding Companies have operated as separate, independent businesses and there
can be no assurance that the Company will be able to integrate these businesses
successfully or to institute the necessary systems and procedures, including
accounting and financial reporting systems, to manage the combined enterprises
on a profitable basis. BrightStar's executive management team has only recently
been assembled, and no assurance can be given that it will be able to manage
effectively the combined entity or implement the Company's business strategy.
Until the Company establishes centralized accounting and other administrative
systems, it will rely on the existing systems of the Founding Companies. The
success of the Company will depend, in part, on the extent to which it is able
to centralize these systems, eliminate the unnecessary duplication of other
functions and otherwise integrate the Founding Companies and such additional
businesses as the Company may acquire. The inability of the Company to integrate
the Founding Companies and any subsequently acquired businesses successfully
could have a material adverse effect on the Company. See "Business -- Growth
Strategy" and "Management."

RISKS RELATED TO INTERNAL GROWTH AND OPERATING STRATEGIES

There can be no assurance that the Company will be able to improve the
profitability and expand the net sales of the Founding Companies and any
subsequently acquired businesses. The Company's ability to increase the net
sales of the Founding Companies and any subsequently acquired businesses will be
affected by various factors, including demand for IT services, the Company's
ability to expand the range of services it offers and the Company's ability to
enter new markets successfully. Many of these factors are beyond the control of
the Company. In addition, the Company's ability to effectively manage growth
will require the Company to expand and improve its operational, financial and
other internal systems and to attract, train, motivate and retain qualified
employees. If the Company's management is unable to manage internal growth, or
if new employees are unable to achieve anticipated performance levels, there
could be a material adverse effect on the Company. See "Business -- Growth
Strategy."

ATTRACTION AND RETENTION OF QUALIFIED EMPLOYEES

The Company's success depends in large part on its ability to attract,
train, motivate and retain highly skilled and experienced technical employees.
Qualified technical employees are in great demand and are likely to remain a
limited resource for the foreseeable future. Other providers of technical
staffing services, systems integrators, providers of outsourcing services,
computer consulting firms and temporary personnel agencies provide intense
competition for IT professionals with the skills and experience required to
perform the services offered by the Company. Competition for these professionals
has increased in recent years and the Company expects such competition will
continue to increase for the foreseeable future. There can be no assurance that
the Company will be able to attract and retain sufficient numbers of highly
skilled technical employees in the future. The loss of technical personnel or
the Company's inability to hire or retain sufficient technical personnel could
impair the Company's ability to secure and complete client engagements and could
have a material adverse effect on the Company. See "Business -- Human
Resources."

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FLUCTUATIONS IN OPERATING RESULTS

The Company's results of operations may fluctuate significantly from
quarter to quarter or year to year because of a number of factors, including but
not limited to: the rate of hiring and the productivity of revenue-generating
personnel; the availability of qualified IT professionals; the significance of
client engagements commenced and completed during a quarter; the number of
business days in a quarter; changes in the relative mix of the Company's
services; changes in the pricing of the Company's services; the timing and rate
of entrance into new geographic or IT speciality markets; departures or
temporary absences of key revenue-generating personnel; the structure and timing
of acquisitions; changes in the demand for IT services; and general economic
factors. The timing of revenue is difficult to forecast because the Company's
sales cycle for certain of its services and products can be relatively long and
is subject to a number of uncertainties, including clients' budgetary
constraints, the timing of clients' budget cycles, clients' internal approval
processes and general economic conditions. In addition, as is customary in the
industry, the Company's engagements generally are terminable without client
penalty. An unanticipated termination of a major project could result in a
higher than expected number of unassigned persons or higher severance expenses
as a result of the termination of the under-utilized employees. Due to all the
foregoing factors, the Company believes period-to-period comparisons of its
revenue and operating results should not be relied on as indicators of future
performance, and the results of any quarterly period may not be indicative of
results to be expected for a full year. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

RISKS RELATED TO THE COMPANY'S ACQUISITION STRATEGY

As an integral part of its business strategy, the Company will seek to
expand by acquiring additional IT businesses. The timing, size and success of
the Company's acquisition efforts and the associated capital commitments cannot
be predicted. The Company expects to face competition for acquisition
candidates, which may limit the number of acquisition opportunities available to
the Company and may lead to higher acquisition prices. There can be no assurance
that the Company will be able to identify, acquire or profitably manage
additional businesses or successfully integrate acquired businesses, if any,
into the Company without substantial costs, delays or other operational or
financial difficulties. In addition, acquisitions involve a number of other
risks, including failure of the acquired businesses to achieve expected results,
diversion of management's attention and resources to acquisitions, failure to
retain key customers or personnel of the acquired businesses and risks
associated with unanticipated events, liabilities or contingencies. Client
dissatisfaction or performance problems at a single acquired firm could
negatively affect the reputation of the Company. Acquisitions accounted for as
purchases may result in substantial annual noncash amortization charges for
goodwill and other intangible assets in the Company's statements of operations.
If the Company is unable to acquire complementary IT service businesses on
reasonable terms or successfully integrate and manage acquired companies, or if
performance problems occur at acquired companies, there could be a material
adverse effect on the Company. See "Use of Proceeds" and "Business -- Growth
Strategy."

NEED FOR ADDITIONAL FINANCING

The Company's acquisition strategy will require substantial capital. The
Company intends to finance future acquisitions with cash flow from operations,
through issuances of shares of Common Stock or debt securities, including
convertible debt securities, and through borrowings under its credit facilities.
Using internally generated cash or debt to complete acquisitions could
substantially limit the Company's operational and financial flexibility. The
extent to which the Company will be able or willing to use shares of Common
Stock to consummate acquisitions will depend on its market value from time to
time and the willingness of potential sellers to accept it as full or partial
payment. Using shares of Common Stock for this purpose may result in significant
dilution to then existing stockholders. To the extent the Company is unable to
use Common Stock to make future acquisitions, its ability to grow through
acquisitions may be limited by the extent to which it is able to raise capital
for this purpose through debt or additional equity financings. No assurance can
be given the Company will be able to obtain the necessary capital to finance a
successful acquisition program or its other cash needs. If the Company is unable
to obtain additional capital on acceptable terms, it may be required to reduce
the scope of its presently anticipated expansion. In addition to

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<PAGE> 10

requiring funding for acquisitions, the Company may need additional funds to
implement its internal growth and operating strategies or to finance other
aspects of its operations. If the Company is unable to obtain additional capital
on acceptable terms, or if the use of internally generated cash or debt to
complete acquisitions significantly limits the Company's operational or
financial flexibility, or if the Company is unable to use shares of Common Stock
to make future acquisitions, there could be a material adverse effect on the
Company. See "Use of Proceeds" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources -- Pro Forma Combined."

COMPETITION

The market for IT services is highly competitive and fragmented, is subject
to rapid change and has low barriers to entry. The Company competes for
potential clients with providers of outsourcing services, multinational
accounting firms, systems consulting and implementation firms, application
software firms, service groups of computer equipment companies, facilities
management companies, general management consulting firms and programming
companies. Many of these competitors have significantly greater financial,
technical and marketing resources and greater name recognition than the Company.
In addition, the Company competes with its clients' internal management
information systems ("MIS") departments. The Company believes the principal
competitive factors in the IT services industry include responsiveness to client
needs, availability of technical personnel, speed of applications development,
quality of service, price, project management capabilities, technical expertise
and ability to provide a wide variety of IT services. The Company believes that
its ability to compete also depends in part on a number of competitive factors
outside of its control, including the ability of its competitors to hire, retain
and motivate qualified technical personnel, the ownership by competitors of
software used by potential clients, the development of software that would
reduce or eliminate the need for certain of the Company's services, the price at
which others offer comparable services and the extent of its competitors'
responsiveness to customer needs. The Company expects that competition in the IT
services industry could increase in the future, partly due to low barriers to
entry. Increased competition could result in price reductions, reduced margins
or loss of market share for the Company. There can be no assurance that the
Company will be able to compete successfully against current and future
competitors. If the Company is unable to compete effectively, or if competition
among IT services companies results in a deterioration of market conditions for
IT services companies, there could be a material adverse effect on the Company.
See "Business -- Competition."

SIGNIFICANCE OF RELATIONSHIPS WITH SAP AG AND KPMG PEAT MARWICK LLP

The Company, through two Founding Companies, SCS America and SCS Australia,
has significant relationships with SAP AG of Germany ("SAP") and a unit of KPMG
Peat Marwick LLP ("KPMG"), from which substantial subcontracting revenue and
business referrals are derived. Each of SCS America and SCS Australia
subcontracts projects from SAP, and each benefits from its status as a national
implementation partner of SAP in the U.S. and Australia, respectively. SCS
Australia also generates significant revenue from subcontracting arrangements
with KPMG, which is a minority interest holder in SCS Australia (which minority
interest is being acquired by BrightStar in connection with its acquisition of
SCS Australia). The Company believes the key factor in maintaining and expanding
these relationships is the extent to which the Company can timely complete the
projects subcontracted or referred to it by SAP and KPMG in a cost-efficient
manner. If these relationships were to deteriorate or be discontinued or if the
Company's status as an SAP national implementation partner in the U.S. or
Australia was to be terminated, it could have a material adverse effect on the
Company. See "Business."

NATURE OF PROJECTS

Many of the Company's engagements involve projects that are critical to the
operations of its clients' businesses and provide benefits that may be difficult
to quantify. The Company's failure or inability to meet a client's expectations
in the performance of its services could result in a material adverse change to
the client's operations and therefore could give rise to claims against the
Company or damage the Company's reputation. In addition, the Company is exposed
to various risks and liabilities associated with placing its employees and
consultants in the workplaces of others, including possible claims of errors and
omissions, misuse of client

9
<PAGE> 11

proprietary information, misappropriation of funds, discrimination and
harassment, theft of client property, other criminal activity or torts and other
claims. Although the Founding Companies have not experienced any material claims
of these types, there can be no assurance that the Company will not experience
such claims in the future. If claims are successfully brought against the
Company as a result of the Company's performance on a project, or if the
Company's reputation is damaged, there could be a material adverse effect on the
Company.

In addition, a small percentage of the Company's projects are billed on a
fixed-fee basis. As a result of competitive factors or other reasons, the
Company could increase the number and size of projects billed on a fixed-fee
basis. The Company's failure to estimate accurately the resources and related
expenses required for a fixed-fee project or failure to complete contractual
obligations in a manner consistent with the project plan upon which a fixed-fee
contract is based could have a material adverse effect on the Company.

RAPID TECHNOLOGICAL CHANGE

The Company's success will depend in part on its ability to enhance its
existing products and services, to develop and introduce new services and
products and train its IT professionals in order to keep pace with continuing
changes in IT, evolving industry standards and changing client preferences.
There can be no assurance that the Company will be successful in addressing
these issues or that, even if these issues are addressed, the Company will be
successful in the marketplace. In addition, there can be no assurance that
products or technologies developed by others will not render the Company's
services noncompetitive or obsolete. The Company's failure to address these
issues successfully could have a material adverse effect on the Company.

POTENTIAL DECREASE IN SERVICES AFTER ADDRESSING THE YEAR 2000 PROBLEM

Although the Company has no significant revenues directly attributable to
Year 2000 conversion services to date, it expects to derive additional revenues
from Year 2000 conversion services for at least the next three years. In
addition, the Company believes that demand for Year 2000 conversion services
will continue after the turn of the century; however, this demand is expected to
begin to diminish after the year 2000 as many Year 2000 solutions are
implemented and tested. The Company also believes that some businesses may
decide to replace their existing systems rather than convert their old systems
to full functionality beyond Year 2000, and after the overall demand for Year
2000 solutions has been addressed, there can be no assurance that the
market-wide demand for IT services will not be materially and adversely
affected.

INTELLECTUAL PROPERTY RIGHTS

The Company's success depends on certain methodologies it utilizes in
designing, installing and integrating computer software and systems and other
proprietary intellectual property rights it has developed to serve its clients.
The Company's business includes the development of custom software in connection
with specific client engagements. Ownership of such software is generally
assigned to the client. The Company also develops certain application software
products, or software "tools," which remain the property of the Company.

The Company relies on a combination of nondisclosure and other contractual
arrangements and trade secret, copyright and trademark laws to protect its
proprietary rights and the proprietary rights of third parties from whom the
Company licenses intellectual property. The Company generally enters into
confidentiality agreements with its employees and consultants and limits access
to, and distribution of, its proprietary information. There can be no assurance
that the steps taken by the Company in this regard will be adequate to deter
misappropriation of proprietary information or that the Company will be able to
detect unauthorized use and take appropriate steps to enforce its intellectual
property rights. In addition, the laws of some foreign countries may not protect
the Company's proprietary rights as fully or in the same manner as do the laws
of the U.S. Also, despite the steps taken by the Company to protect its
proprietary rights, there can be no assurance that others will not develop
technologies similar or superior to the Company's technology or design around
the proprietary rights owned by the Company.

10
<PAGE> 12

Although the Company believes that its services and products do not
infringe on the intellectual property rights of others and that it has all
rights necessary to use the intellectual property employed in its business, the
Company is subject to the risk of litigation alleging infringement of
third-party intellectual property rights. Any such claims could require the
Company to spend significant sums in litigation, pay damages, develop non-
infringing intellectual property or acquire licenses to the intellectual
property which is the subject of the asserted infringement. If the Company is
unable to successfully enforce its intellectual property rights, or if claims
are successfully brought against the Company for infringing the intellectual
property rights of others, there could be a material adverse effect on the
Company. See "Business -- Intellectual Property Rights."

INTERNATIONAL OPERATIONS

The current and planned international operations of the Company are subject
to certain political, economic and other uncertainties not typically encountered
in domestic operations, including, among others, risks of war, expropriation or
nationalization of assets, renegotiation or nullification of existing contracts,
changing political conditions, changing laws and policies affecting trade and
investment, overlap of different tax structures, the general hazards associated
with the assertion of foreign sovereignty over certain areas in which operations
are conducted, costs of localizing services and products for foreign countries,
lack of acceptance of localized services and products in foreign countries,
longer accounts receivable payment cycles and logistical difficulties in
managing international operations. Foreign operations sometimes also face the
additional risks of fluctuating currency values, hard currency shortages and
controls of foreign currency exchange. Additionally, various foreign
jurisdictions have laws limiting the right and ability of foreign subsidiaries
and joint ventures to pay dividends and remit earnings to affiliated companies,
unless specified conditions precedent are met. The Company's inability to
successfully manage the risks of international operations could have a material
adverse effect on the Company.

DEPENDENCE ON KEY MANAGEMENT PERSONNEL

The Company's success will depend on the continuing efforts of its
executive officers and the senior management of the Founding Companies, and
likely will depend on the senior management of any significant businesses the
Company acquires in the future. Each of the Company's employment agreements with
its senior management and other key personnel provides that the employee will
not compete with the Company during the term of the agreement and following the
termination of the agreement for a specified term (ranging from one to three
years) in a specified geographical area. In most states, however, a covenant not
to compete will be enforced only to the extent it is necessary to protect a
legitimate business interest of the party seeking enforcement, does not
unreasonably restrain the party against whom enforcement is sought and is not
contrary to the public interest. This determination is made based on all the
facts and circumstances of the specific case at the time enforcement is sought.
Thus, there can be no assurance that a court will enforce such a covenant in a
given situation. If any of the Company's key management personnel do not
continue their management role after joining the Company and the Company is
unable to attract and retain qualified replacements, there could be a material
adverse effect on the Company. See "Management."

CONTROL BY EXISTING MANAGEMENT

Following the closing of the Acquisitions, the Share Exchange and the
Offering, executive officers and directors of BrightStar will beneficially own
approximately 1,609,331 shares of Common Stock (or 21.9% of the outstanding
shares of Common Stock). These stockholders will control in the aggregate
approximately 21.9% of the votes of all shares of Common Stock, and, if acting
in concert, may be able to exercise substantial influence over the Company's
affairs. See "Security Ownership of Certain Beneficial Owners and Management."

POTENTIAL EFFECT OF SHARES ELIGIBLE FOR FUTURE SALE

On closing of the Acquisitions and the Offering, 7,338,735 shares of Common
Stock will be outstanding. The 3,750,000 shares of Common Stock offered hereby
will be freely tradable unless acquired by affiliates of the Company. All of the
remaining shares of Common Stock to be outstanding on the closing of the
Acquisitions and the Offering (as well as all shares issuable pursuant to the
Post-Closing Adjustments, the MG Warrant and the BGCA Option) may be resold
publicly only following their effective registration under

11
<PAGE> 13

the Securities Act of 1933, as amended (the "Securities Act"), or pursuant to an
exemption from the registration requirements of that act, such as Rule 144
thereunder.

When the Offering closes, options to purchase up to a total of
approximately 550,000 shares of Common Stock pursuant to the 1997 Stock Option
Plan will be outstanding. BrightStar intends to file a registration statement on
Form S-8 to register the shares issuable pursuant to the 1997 Stock Option Plan.
After that registration statement becomes effective, the shares registered
thereby generally will on issuance be freely tradable by holders who are not
affiliates of BrightStar and, subject to the volume and other limitations of
Rule 144, by holders who are affiliates of BrightStar. See "Management -- 1997
Stock Option Plan."

BrightStar and its directors and executive officers, BITI and all persons
who will receive shares of Common Stock in connection with the Acquisitions have
agreed not to offer or sell any shares of Common Stock for a period of one year
from the date of this Prospectus (the "Lockup Period") without the prior written
consent of Lehman Brothers Inc., except that BrightStar may, subject to certain
limitations, issue Common Stock in connection with the Acquisitions and in
connection with future acquisitions, on exercise of the MG Warrant or the BGCA
Option and pursuant to Awards under the 1997 Stock Option Plan, provided that
the recipients of those shares agree not to offer or sell any of those shares
during the Lockup Period.

The availability for sale, or sale, of the shares of Common Stock eligible
for future sale could adversely affect the market price of the Common Stock
prevailing from time to time. See "Shares Eligible for Future Sale."

NO PRIOR MARKET; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to the Offering, no public market for the Common Stock has existed,
and the initial public offering price, which BrightStar and representatives of
the Underwriters will negotiate, may not be indicative of the price at which the
Common Stock will trade after the Offering. See "Underwriting" for the factors
to be considered in determining the initial public offering price. BrightStar
has applied to have the Common Stock approved for quotation on the Nasdaq
National Market, but no assurance can be given that an active trading market
will develop or be maintained for the Common Stock. The market price of the
Common Stock after the Offering may fluctuate significantly from time to time in
response to numerous factors, including the timing of any acquisitions by the
Company, variations in the reported financial results of the Company or those of
its competitors, changes by financial research analysts in their estimates of
future earnings of the Company, and changing conditions in the economy in
general or in the Company's industry in particular, unfavorable publicity or
changes in applicable laws and regulations (or judicial or administrative
interpretations thereof) affecting the Company or its business. In addition, the
stock markets experience significant price and volume volatility from time to
time, which may affect the market price of the Common Stock for reasons
unrelated to the Company's performance.

POSSIBLE ANTI-TAKEOVER EFFECTS OF CERTAIN CHARTER PROVISIONS

BrightStar's Certificate of Incorporation, as amended (the "Certificate of
Incorporation"), authorizes the Board of Directors of BrightStar (the "Board of
Directors") to issue, without stockholder approval, one or more series of
preferred stock having such preferences, powers and relative, participating,
optional and other rights (including preferences over the Common Stock
respecting dividends and distributions and voting rights) as the Board of
Directors may determine. The issuance of this "blank-check" preferred stock
could render more difficult or discourage an attempt to obtain control of the
Company by means of a tender offer, merger, proxy contest or otherwise. In
addition, the Certificate of Incorporation contains a prohibition of stockholder
action by less than unanimous written consent. These provisions may also have
the effect of inhibiting or delaying a change in control of the Company. Certain
provisions of the Delaware General Corporation Law (the "DGCL") may also
discourage takeover attempts that have not been approved by the Board of
Directors. See "Description of Capital Stock."

IMMEDIATE AND SUBSTANTIAL DILUTION

Purchasers of Common Stock in the Offering will experience immediate,
substantial dilution in the net tangible book value of their stock of $ per
share and may experience further dilution in that value from issuances of Common
Stock in the future. See "Dilution."

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<PAGE> 14

THE COMPANY

GENERAL

BrightStar was organized in May 1997 to combine selected complementary
businesses to provide a wide range of IT services to Fortune 1000 companies and
other large organizations. The Company's goal is to become a leader in the IT
services industry through consolidation of complementary companies, expansion of
its service and product offerings and cross-selling to its combined customer
base. BrightStar has entered into definitive agreements to acquire the Founding
Companies concurrently with and as a condition to the closing of the Offering.

Collectively, the Founding Companies provide a wide range of IT services to
a diverse client base. Each of the Founding Companies is specialized and has
focused on establishing itself as the preferred provider for clients in its
respective service market or markets. BrightStar believes that the combination
of the Founding Companies creates a diverse service and product, geographic,
customer and industry mix. The following is a brief description of each of the
Founding Companies (the information regarding the number of employees for each
of the Founding Companies is given as of December 1, 1997):

Brian R. Blackmarr and Associates, Inc. ("Blackmarr"), founded in 1979, is
based in Dallas, Texas and has operations throughout the U.S. and in Caracas,
Venezuela and London, England. Blackmarr designs, develops and implements IT
solutions for complex business problems. Blackmarr's core business involves
application development, systems integration and consulting for distributed
computer systems and client/server systems. Blackmarr typically designs IT
solutions that are implemented in cooperation with a variety of vendors,
including Microsoft, PeopleSoft, Oracle, Sybase and Symantec. Blackmarr also
provides custom software development to its clients, and conducts scheduled
training for Microsoft, PeopleSoft, PC Docs and Oracle products, as well as
Internet training, in its certified Microsoft Level Three training facility
located in Dallas.

Blackmarr currently employs 146 IT professionals, supported by a staff of
25. Blackmarr had revenues of $7.2 million and $10.2 million for the nine months
ended September 30, 1996 and 1997, respectively.

Integrated Controls, Inc. ("ICON"), founded in 1991, is based in Lafayette,
Louisiana, with regional offices along the U.S. Gulf Coast. Its primary focus is
the design and implementation of industrial control and automation systems,
principally for clients in the energy industry. ICON provides IT solutions from
an engineering perspective through a professional staff which includes engineers
experienced in control systems design and process engineering. ICON designs and
implements software applications for real-time management information systems
and provides maintenance and support services. ICON has recently expanded its
services to provide telecommunications and networking solutions, including
services for implementing and managing web sites, intranets and LAN and WAN
systems. ICON is a Microsoft Partner and a Novell Partner and has obtained ISO
9001 certification covering its engineering services for electronic control
services, computer systems and digital communications systems.

ICON currently employs 149 IT professionals (45 of which are also
engineers), supported by a staff of 20. ICON had revenues of $4.2 million and
$8.0 million for the nine months ended September 30, 1996 and 1997,
respectively.

Mindworks Professional Education Group, Inc. ("Mindworks"), founded in
1995, is based in Scottsdale, Arizona. Its primary business is developing and
providing advanced training and certification for computer support staff and
network professionals. Its principal training focus is on the Microsoft
Certified Professional and Microsoft Certified System Engineer ("MCSE")
programs. Mindworks also provides training for the Computing Technology Industry
Association's A+ certification and the Novell Certified Network Administrator
and Certified Network Engineer programs. Mindworks has developed computer
training products, which it sells throughout the U.S. and internationally. Its
products include the Mindworks MCSE Self-Study Kit and the Mindworks A+
Certification Course.

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<PAGE> 15

Mindworks currently employs seven IT professionals, supported by a staff of
seven. Mindworks had revenues of $0.6 million and $1.0 million for the nine
months ended September 30, 1996 and 1997, respectively.

Software Consulting Services America, LLC ("SCS America"), founded in 1995,
is based in the San Francisco Bay area and has offices in Chicago, Illinois and
Los Angeles, California. SCS America is one of approximately 35 national
implementation partners in the U.S. for SAP AG of Germany ("SAP"). SAP's R/3
client-server software is a standard for companies seeking to coordinate
manufacturing, purchasing, accounting, finance and personnel data. SCS America
provides a full range of SAP consulting services directly to clients and
indirectly through global "logo" partners, such as multinational accounting and
consulting firms, or through SAP itself. Other services provided by SCS America
include project management, enterprise resource planning and data warehouse and
web site development.

SCS America currently employs 31 IT professionals, supported by a staff of
seven. SCS America had revenues of $3.1 million and $5.8 million for the nine
months ended September 30, 1996 and 1997, respectively.

SCS Unit Trust ("SCS Australia"), founded in 1994, is headquartered in
Melbourne, Australia, with offices in Sydney, Perth and Canberra, Australia. SCS
Australia specializes in providing SAP implementation and support to its
clients. SCS Australia has been a national implementation partner with SAP since
1995.

SCS Australia currently employs 149 IT professionals, supported by a staff
of 21. SCS Australia had revenues of $4.7 million and $9.3 million for the nine
months ended June 30, 1996 and 1997, respectively.

Software Innovators, Inc. ("SII"), founded in 1989, is located in Little
Rock, Arkansas. Its primary business is providing custom software development
and IT project outsourcing. SII provides business process reengineering and
technology support services, Internet commerce software development, web-site
design services and Year 2000 compliance services and related IT staffing. SII
also offers computer-aided instruction, computer-based education and knowledge
transfer via corporate intranets.

SII currently employs 32 IT professionals, supplemented and supported by
approximately 50 subcontractors and a staff of three. SII had revenues of $1.7
million and $2.6 million for the nine months ended September 30, 1996 and 1997,
respectively.

Zelo Group, Inc. ("Zelo"), founded in 1992, is located in Ventura,
California. Zelo provides computer-based litigation support services, document
archive services and business process reengineering services to clients engaged
in legal services, health care and other industries. Its litigation support
services include in-court trial support systems, document scanning and indexing
and full-text searching using its proprietary SmartCopy(TM) software. In
connection with its archive services, Zelo scans paper documents and stores the
digital images on compact discs for rapid retrieval using its proprietary
software. Zelo also provides IT integration services in connection with its
document archive services through the design and implementation of turn-key
systems, including LAN and WAN systems, office workflow automation and Internet
systems development and implementation.

Zelo currently employs eight IT professionals, supported by a staff of six.
Zelo had revenues of $0.9 million for the nine months ended September 30, 1996
and 1997.

SUMMARY OF TERMS OF THE ACQUISITIONS.

The aggregate consideration BrightStar will pay to acquire the Founding
Companies consists of (i) approximately $32.4 million in cash, (ii) 2,415,385
shares of Common Stock and (iii) the assumption of approximately $5.1 million of
indebtedness of the Founding Companies. Two of the Acquisitions are subject to
Post-Closing Adjustments payable in shares of Common Stock, based on the 1998
financial performance of the subject Founding Companies. The Company currently
estimates no shares of Common Stock will be issuable in connection with the
Post-Closing Adjustments. The Post-Closing Adjustments will be determined based
on the (i) actual revenues of SCS Australia for the 12 months ended December 31,
1998 and (ii) actual pre-tax income of SII for the 12 months ended December 31,
1998. The consideration being paid by

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<PAGE> 16

BrightStar for each Founding Company was determined by arm's-length negotiations
between BrightStar and representatives of that Founding Company.

The closing of each Acquisition is subject to customary conditions,
including, among others: the continuing accuracy of the representations and
warranties made by the parties thereto; the performance of their respective
covenants included in the agreements relating to the Acquisitions; and the
nonexistence of a material adverse change prior to the closing date.

Any Founding Company's acquisition agreement may be terminated under
certain circumstances prior to the closing of the Offering, including: (i) by
the mutual consent of the Board of Directors of BrightStar and the Founding
Company; (ii) if the Offering and the acquisition of that Founding Company are
not closed by April 30, 1998; (iii) by BrightStar if the disclosure schedules to
the acquisition agreement are amended to reflect a material adverse change with
respect to that Founding Company; or (iv) if a material breach or default under
the agreement by one party occurs and is not waived. See "Certain
Transactions -- Acquisitions of the Founding Companies."

Concurrently with the closing of the Acquisitions, BrightStar will enter
into employment agreements with each of the executives and certain key
management personnel of the Founding Companies. These agreements will generally
be for an initial term of from one to three years, with automatic renewals of
one year thereafter. See "Management."

BrightStar is a Delaware corporation. Its corporate offices are located at
10375 Richmond Avenue, Suite 1620, Houston, Texas 77042, and its telephone
number is (713) 361-2500.

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<PAGE> 17

USE OF PROCEEDS

The net proceeds to BrightStar from the Offering (assuming an initial
public offering price of $ per share) are estimated to be approximately
$ million (approximately $ million if the Underwriters exercise their
overallotment option in full), after deducting underwriting discounts and
commissions and estimated expenses of the Offering payable by the Company
(including the repayment of $1.8 million of advances from BITI under a loan
agreement between BrightStar and BITI (the "BITI Loan Agreement") to fund a
portion of the Offering expenses). Of the net proceeds, (i) $32.4 million will
be used to pay the cash portion of the purchase prices for the Acquisitions and
(ii) $5.1 million will be used concurrently for the repayment of certain
outstanding indebtedness of the Founding Companies (estimated as of the closing
of the Offering and excluding the repayment of the $1.8 million of advances from
BITI referred to above). The approximately $ million of remaining net proceeds
will be used for working capital and general corporate purposes, which may
include future acquisitions. Pending such use, the Company intends to invest
those remaining net proceeds in short-term, interest-bearing investment grade
securities. See "Certain Transactions."

The indebtedness of the Founding Companies to be repaid from the proceeds
of the Offering bears interest at rates ranging from 8.0% to 15.0% per annum and
would otherwise mature at various dates through 2001. Advances under the BIT
Loan Agreement bear interest at a rate of 10% per annum and are due 30 days
after the closing of the Offering.

DIVIDEND POLICY

The Company intends to retain earnings, if any, for general corporate
purposes, and does not anticipate paying any cash dividends on its Common Stock
for the foreseeable future. The payment of cash dividends on the Common Stock
will be within the sole discretion of the Board of Directors, and will depend on
several factors, including the Company's financial condition, results of
operations, cash flows from operations, current and anticipated cash needs and
expansion plans, the income tax laws then in effect, the requirements of
Delaware law and any restrictions that may be imposed by the Company's existing
and future credit facilities. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources -- Pro Forma Combined."

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<PAGE> 18

CAPITALIZATION

The following table sets forth the cash and capitalization of the Company
as of September 30, 1997 (i) on a pro forma combined basis to give effect to the
Acquisitions and the Share Exchange and (ii) on a pro forma combined basis as
adjusted to reflect the Offering at an assumed initial public offering price of
$ per share and the application of the estimated net proceeds therefrom. This
table should be read in conjunction with the Unaudited Pro Forma Combined
Financial Statements of the Company and the notes thereto included in this
Prospectus. See "Use of Proceeds" and "Certain Transactions -- Acquisitions of
the Founding Companies."

<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1997
------------------------
PRO FORMA AS ADJUSTED
--------- -----------
(IN THOUSANDS)
<S> <C> <C>
Cash........................................................ $ 1,046 $
======= =======
Notes payable and current maturities of long-term debt(1)... $ 5,088 $
Cash consideration payable to Founding Company
stockholders.............................................. 32,366
------- -------
Total short term debt............................. $37,454 $
======= =======
Long-term debt, net of current maturities(1)................ $ 521 $
Stockholders' equity:
Preferred Stock: $0.001 par value, 3,000,000 shares
authorized; none issued and outstanding................ --
Common Stock: $0.001 par value, 35,000,000 shares
authorized; 3,588,735 issued and outstanding, pro
forma; and 7,338,735 shares issued and outstanding, as
adjusted(2)............................................ 321
Restricted Common Stock, $0.001 par value, 2,000,000
shares authorized; none issued and outstanding......... --
Common Stock warrants.....................................
Additional paid-in capital................................ 16,063
Retained earnings......................................... (6,243)
------- -------
Total stockholders' equity........................ 10,141
------- -------
Total capitalization........................................ $10,662 $
======= =======
</TABLE>

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

(1) See the notes to Unaudited Pro Forma Combined Financial Statements and notes
to the Founding Companies' Financial Statements for a description of the
Company's debt.

(2) Excludes: (i) an aggregate of 550,000 shares subject to options granted (or
to be granted prior to the closing of the Offering) pursuant to the 1997
Stock Option Plan; (ii) 50,000 shares issuable pursuant to the MG Warrant;
and (iii) 14,285 shares issuable pursuant to the BGCA Option.

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<PAGE> 19

DILUTION

The deficit in pro forma combined net tangible book value of the Company as
of September 30, 1997 was approximately $29.5 million, or approximately $8.22
per share of Common Stock, after giving effect to the Acquisitions, the Share
Exchange and the net incurrence of indebtedness by the Company since September
30, 1997. The deficit in pro forma combined net tangible book value per share
represents the amount by which the Company's pro forma combined total
liabilities exceed its pro forma combined tangible assets at September 30, 1997,
divided by the number of shares of Common Stock to be outstanding after giving
effect to the Acquisitions (not including the Post-Closing Adjustments, which,
based on current estimates, are not expected to result in the issuance of
additional shares of Common Stock) and the Share Exchange. After giving effect
to the Offering (at an assumed initial public offering price of $ per
share) and the application of the estimated net proceeds therefrom, as described
in "Use of Proceeds," the Company's pro forma combined net tangible book value
as of September 30, 1997 would have been approximately $18.4 million, or
approximately $2.50 per share. This represents an immediate increase in pro
forma combined net tangible book value of approximately $10.72 per share to
existing stockholders and an immediate dilution of approximately $ per
share to investors purchasing shares in the Offering.

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............. $
Pro forma combined net tangible book value (deficit) per
share before the Offering................................. $(8.22)
Increase in pro forma combined net tangible book value per
share attributable to new investors....................... 10.72
------
Pro forma combined net tangible book value per share after
the Offering.............................................. 2.50
------
Dilution per share to new investors......................... $
======
</TABLE>

The dilution to new investors purchasing shares in the Offering will
increase if the initial public offering price is higher, and will decrease if
the initial public offering price is lower, than $ per share. See "Certain
Transactions -- Acquisitions of the Founding Companies."

The following table summarizes, on a pro forma basis to give effect to the
Acquisitions and the Share Exchange as of September 30, 1997, the number of
shares of Common Stock purchased from BrightStar, the total consideration paid
and the average price per share paid by existing stockholders (including persons
who will acquire Common Stock in the Acquisitions and the Share Exchange) and
the new investors purchasing shares of Common Stock in the Offering (before
deducting the underwriting discounts and commissions and estimated offering
expenses):

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION(1)
------------------- ---------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- ------- ------------ ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders........ 3,588,735 48.9% $(29,503,835) % $(8.22)
New investors................ 3,750,000 51.1% %
--------- ------ ------------ -------
Total.............. 7,338,735 100.0% $ 100.0%
========= ====== ============ =======
</TABLE>

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

(1) Total consideration paid by existing stockholders represents the Company's
pro forma combined stockholders' equity less pro forma combined goodwill, in
each case before giving effect to the Offering adjustments set forth in the
Unaudited Pro Forma Combined Balance Sheet of the Company included herein.

18
<PAGE> 20

SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

The following selected historical financial information of Blackmarr (the
accounting acquiror) has been derived from (i) the audited financial statements
of Blackmarr for the years ended September 30, 1995, 1996 and 1997 and as of
September 30, 1996 and 1997 and (ii) from the unaudited financial statements of
Blackmarr for the years ended September 30, 1993 and 1994 and as of September
30, 1993, 1994 and 1995, which have been prepared on the same basis as the
audited statements and, in the opinion of Blackmarr and BrightStar management,
reflect all adjustments, consisting of normal recurring adjustments, necessary
for a fair presentation of that information. See the combined historical
financial statements of Blackmarr and the notes thereto included herein. The
following summary unaudited pro forma financial information represents
historical information of the Company, as adjusted to give effect to (i) the
Acquisitions, (ii) the Share Exchange, (iii) the closing of the Offering and the
application of the estimated net proceeds therefrom and (iv) the other pro forma
adjustments described below. See the Unaudited Pro Forma Combined Financial
Statements and the notes thereto included herein.

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-----------------------------------------------
1993 1994 1995 1996 1997
------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
Historical Statement of Operations Information for
Blackmarr:
Revenue................................................... $4,688 $7,451 $7,043 $9,227 $12,190
Cost of revenue........................................... 3,768 5,917 5,592 7,659 10,063
Selling, general and administrative expenses.............. 728 1,325 1,413 1,555 1,668
Stock compensation expense................................ -- -- -- -- 305
Depreciation and amortization............................. 91 87 78 101 135
------ ------ ------ ------ -------
Income (loss) from operations............................. 101 122 (40) (88) 19
Interest expense.......................................... (10) (45) (66) (67) (96)
Other income, net......................................... -- -- 186 124 33
Income tax provision...................................... 22 19 40 -- 6
------ ------ ------ ------ -------
Net income (loss)......................................... $ 69 $ 58 $ 40 $ (31) $ (50)
====== ====== ====== ====== =======
</TABLE>

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED SEPTEMBER 30,
DECEMBER 31, ----------------------
1996 1996 1997
------------ --------- ---------
<S> <C> <C> <C>
Pro Forma Combined Statement of Operations(1):
Revenue................................................... $ 31,377 $ 22,386 $ 37,744
Cost of revenue........................................... 23,120 16,186 27,619
Selling, general and administrative expenses.............. 8,053 6,098 8,679
Stock compensation expense................................ -- -- 305
Depreciation and amortization(2).......................... 1,479 1,104 1,296
--------- --------- ---------
Loss from operations...................................... (1,275) (1,002) (155)
Interest expense.......................................... -- -- --
Other income (expense), net............................... 181 49 (104)
--------- --------- ---------
Loss before income taxes.................................. (1,094) (953) (259)
Income tax provision (benefit)(3)......................... 14 (52) 240
--------- --------- ---------
Net loss.................................................. $ (1,108) $ (901) $ (499)
========= ========= =========
Net loss per common share................................. $ (0.15) $ (0.12) $ (0.07)
========= ========= =========
Shares used in computing net loss per common share........ 7,338,735 7,338,735 7,338,735
========= ========= =========
</TABLE>

<TABLE>
<CAPTION>
BLACKMARR
------------------------------------ SEPTEMBER 30,
SEPTEMBER 30, 1997
------------------------------------ -------------------------------------------
BLACKMARR PRO FORMA PRO FORMA
1993 1994 1995 1996 HISTORICAL COMBINED(1) AS ADJUSTED(4)
------ ------ ------ ------ ---------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet:
Working capital (deficit)..... $ 80 $ 134 $ 284 $ 233 $ 337 $(31,406) $
Property and equipment, net... 190 184 119 181 292 2,001
Total assets.................. 1,156 1,923 1,609 1,926 3,501 54,602
Long-term debt, net of current
maturities.................. 5 497 42 42 17 521
Stockholders' equity.......... 284 342 396 423 682 10,141
</TABLE>

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

(3) Assumes an effective tax rate of 40.0% on certain pro forma adjustments.

(4) Reflects the closing of the Offering and application of the net proceeds
therefrom. See "Use of Proceeds."

19
<PAGE> 21

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with "Selected
Financial Information" and the financial statements and the notes thereto
included in this Prospectus. The following information contains forward-looking
statements. For a discussion of certain limitations inherent in such statements,
see "Risk Factors."

INTRODUCTION

BrightStar was organized in May 1997 to combine selected complementary
businesses to provide a wide range of IT services to Fortune 1000 companies and
other large organizations. BrightStar has entered into definitive agreements to
acquire the Founding Companies concurrently with and as a condition to the
closing of the Offering. Collectively, the Founding Companies provide a wide
range of IT services to a diverse client base. Each of the Founding Companies is
specialized and generally provides its IT services to clients primarily based on
daily rates (or time and materials charges). The Founding Companies have
historically operated as independent, privately owned entities, and their
results of operations reflect varying tax structures (subchapter S corporations
or C corporations) which have influenced the historical level of owners'
compensation. In addition, cost of revenue and selling, general and
administrative expense as a percentage of revenue may not be comparable among
the individual Founding Companies because of differences in their operations.

The Company's services and products include IT consulting and enterprise
resource planning ("ERP") software implementation services, application
development and maintenance services, systems integration services, IT
outsourcing and IT training services and related software products. The
Company's services are performed at clients' locations and at the Company's
facilities. In providing strategic IT consulting and ERP implementation
services, the Company generally assumes responsibility for project management
and bills the client on a time and materials basis, although a small percentage
of projects are billed on a fixed-price basis. IT project outsourcing services
are billed on a time and materials basis and generally have lower gross margins
than the Company's other service offerings.

Revenue is primarily recognized as services are rendered for time and
materials charges or, to a lesser extent, using the percentage-of-completion
method for fixed-price contracts. The timing of revenue is difficult to forecast
because the Company's sales cycle for certain of its services can be relatively
long and is subject to a number of uncertainties, including clients' budgetary
constraints, the timing of clients' budget cycles, clients' internal approval
processes and general economic conditions. In addition, as is customary in the
industry, the Company's engagements generally are terminable without client
penalty. The Company's revenue and results of operations may fluctuate
significantly from quarter to quarter or year to year because of a number of
factors, including but not limited to: the rate of hiring and the productivity
of revenue-generating personnel; the availability of qualified IT professionals;
the significance of client engagements commenced and completed during a quarter;
the number of business days in a quarter; changes in the relative mix of the
Company's services; changes in the pricing of the Company's services; the timing
and rate of entrance into new geographic or IT speciality markets; departures or
temporary absences of key revenue-generating personnel; the structure and timing
of acquisitions; changes in the demand for IT professionals; and general
economic factors.

The Company believes the combination of the Founding Companies will provide
opportunities to improve operating margins and increase profitability. The
Company believes it will be able to achieve operating efficiencies by
consolidating certain administrative functions. The pro forma financial
information herein reflects neither expected savings nor margin improvements but
does reflect management's estimate of such incremental costs.

Cost of revenue primarily consists of salaries (including non-billable and
training time), benefits and travel expenses for IT professionals. The Company
generally strives to maintain its gross profit margins by offsetting increases
in salaries and benefits with increases in billing rates.

20
<PAGE> 22

Selling, general and administrative ("SG&A") expenses primarily consist of
costs associated with (i) corporate overhead, (ii) sales and account management,
(iii) telecommunications, (iv) human resources, (v) recruiting and training and
(vi) other administrative expenditures.

In July 1996, the Commission issued Staff Accounting Bulletin No. 97 ("SAB
97") relating to business combinations immediately prior to an initial public
offering. SAB 97 requires that these combinations be accounted for using the
purchase method of accounting and requires that one of the companies be
designated as the accounting acquiror. Accordingly, for financial statement
presentation purposes, Blackmarr has been designated as the acquiring company
because its current shareholders, in the aggregate, will acquire more Common
Stock than will the former shareholders of any of the other Founding Companies
in connection with the Acquisitions. For the remaining Founding Companies, $43.7
million (pro forma as of September 30, 1997) of the excess of the purchase price
over the fair value of the net assets to be acquired by BrightStar will be
recorded as "goodwill" and will be amortized as a non-cash charge to the income
statement of BrightStar over a 40-year period. The annual pro forma impact of
this amortization expense, which is generally non-deductible for tax purposes,
is approximately $1.1 million. See "Certain Transactions -- Acquisitions of the
Founding Companies."

RESULTS OF OPERATIONS -- PRO FORMA COMBINED

The following pro forma combined financial information was derived from the
unaudited pro forma combined financial statements and gives effect to the
Acquisitions, the Share Exchange, the Offering and the application of the
estimated net proceeds therefrom and the effects of certain pro forma
adjustments to the historical financial statements, as if all those events had
taken place on January 1 of each period presented.

The combined results of operations for the interim periods presented below
do not purport to be comparable to and may not be indicative of the Company's
post-combination results of operations because (i) the Founding Companies were
not under common control or management and (ii) the Company established a new
basis of accounting to record the purchase of the Acquired Businesses under the
purchase method of accounting. See "Selected Financial Information" and the
Unaudited Pro Forma Combined Financial Statements and the Notes thereto included
herein.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED SEPTEMBER 30,
DECEMBER 31, ----------------------------------
1996(1) 1996 1997
--------------- ---------------- ---------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Revenue.......................... $31,377 100.0% $ 22,386 100.0% $37,744 100.0%
Costs and expenses:
Cost of revenue................ 23,120 73.6% 16,186 72.3% 27,619 73.2%
Selling, general and
administrative.............. 8,053 25.7% 6,098 27.2% 8,679 23.8%
Stock compensation expense..... -- -- -- -- 305 0.8%
Depreciation and
amortization................ 1,479 4.7% 1,104 4.9% 1,296 3.4%
------- ----- -------- ----- ------- -----
Loss from operations............. $(1,275) (4.1)% $ (1,002) (4.5)% $ (155) (0.4)%
======= ===== ======== ===== ======= =====
</TABLE>

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

(1) The pro forma combined statement of operations information for the year
ended December 31, 1996 is presented on the basis of a year ended December
31 for each Founding Company, except (i) the financial results of Blackmarr
are reflected based on its fiscal year ended September 30, 1996 and (ii) the
financial results of SCS Australia are reflected based on a period of 12
months ended September 30, 1996. The pro forma combined statement of
operations information for the nine-month periods ended September 30, 1996
and 1997 is presented on the basis of the nine months ended September 30 for
each Founding Company for each period presented, except the financial
results of SCS Australia are reflected based on the nine-month periods ended
June 30 for each period presented.

21
<PAGE> 23

Nine Months Ended September 30, 1997 Compared to Nine Months Ended September
30, 1996.

Revenue. Pro forma combined revenue increased $15.4 million, or 68.6%, for
the nine months ended September 30, 1997 compared to the nine months ended
September 30, 1996. The increase primarily resulted from a general increase in
revenue at each of the Founding Companies, including (i) a $6.9 million increase
in SAP consulting services revenue at SCS America and SCS Australia, (ii) a $3.0
million increase in Blackmarr's revenue as a result of overall increased demand
for its IT consulting services and (iii) a $3.7 million increase in ICON's
revenue as a result of opening two new offices and increased demand from its
customers in the energy industry.

Cost of revenue. Pro forma combined cost of revenue increased $11.4
million, or 70.6%, for the nine months ended September 30, 1997 compared to the
nine months ended September 30, 1996. The increase primarily resulted from
increased costs at each of the Founding Companies associated principally with
increases in the number of IT professionals, consistent with the increases in
their respective levels of service activity. As a percentage of revenue, cost of
revenue was 73.2% for the nine months ended September 30, 1997 compared to 72.3%
for the corresponding period in the prior year.

Selling, general and administrative expenses. Pro forma combined selling,
general and administrative expenses increased $2.6 million, or 42.3%, for the
nine months ended September 30, 1997 compared to the nine months ended September
30, 1996. The increase was primarily attributable to the addition of sales and
marketing personnel and the cost of opening and operating additional offices in
new geographical markets. As a percentage of revenue, selling, general and
administrative expenses decreased to 23.8% for the nine months ended September
30, 1997 compared to 27.2% for the corresponding period for the prior year.

LIQUIDITY AND CAPITAL RESOURCES -- PRO FORMA COMBINED

The Company is a holding company that will conduct all of its operations
through its subsidiaries. Accordingly, the Company's principal sources of
liquidity are the cash flow of its subsidiaries, cash available from lines of
credit it may establish and the unallocated net proceeds of this Offering. At
September 30, 1997, on a pro forma combined basis, after giving effect to (i)
the Acquisitions, (ii) the closing of the Offering and BrightStar's application
of its net proceeds therefrom to pay the cash portion of the aggregate
consideration for the Acquisitions and to repay indebtedness of the Founding
Companies (approximately $5.1 million) and (iii) the repayment by BrightStar of
advances from BITI under the BITI Loan Agreement, which have been used to fund
payment of a part of the expenses of the Offering, the Company would have an
aggregate of $ million of cash and cash equivalents, $ million of working
capital and no short or long term debt.

On a combined basis, the Founding Companies made capital expenditures of
approximately $0.7 million in the nine months ended September 30, 1997,
primarily for office equipment and computers. BrightStar currently expects that
the combined capital expenditures for the balance of 1997 will total
approximately $0.3 million. The Company expects to install or upgrade its
accounting and management information systems and to install an internal network
and communications system to facilitate exchange of information among the
Founding Companies. Management presently anticipates that expenditures for these
items will total approximately $3.0 million over the next two years; however, no
assurance can be made with respect to the actual timing and amount of such
expenditures.

The Company has initiated preliminary discussions with potential lenders
regarding a credit facility (the "Credit Facility"), to be used for general
corporate purposes, including financing of acquisitions, capital expenditures
and working capital. On the basis of those discussions, the Company expects to
enter into the Credit Facility at or prior to the closing of the Offering and
that the Credit Facility will provide for a revolving line of credit up to $20.0
million. The ability of the Company to secure the Credit Facility is subject to
satisfactory negotiations with prospective lenders as well as the negotiation
and execution of definitive loan documentation.

The Company intends to pursue acquisition opportunities. The timing, size
or success of any acquisition effort and the associated potential capital
commitments are unpredictable. The Company expects to fund

22
<PAGE> 24

future acquisitions through the issuance of additional equity, as well as
through a combination of working capital, cash flow from operations and
borrowings, including borrowings under the Credit Agreement.

The Company believes that cash flow from operations, borrowings under the
Credit Facility currently being negotiated and the unallocated net proceeds of
the Offering will be sufficient to fund its capital requirements for the
forseeable future.

INFLATION

Due to the relatively low levels of inflation experienced in the last three
years, and in the nine months ended September 30, 1997, inflation did not have a
significant effect on the results of operations of any of the Founding Companies
in those periods.

EXPOSURE TO CURRENCY FLUCTUATIONS

During the year ended December 31, 1996 and the nine months ended September
30, 1997, the percentage of the Company's revenues generated outside the United
States was 25% and 28%, respectively. Except for arrangements involving SCS
Australia, the Company's service contracts and sales agreements provide for
payment in U.S. dollars. SCS Australia's sales are payable in Australian
dollars. The exchange rate of Australian Dollars to U.S. Dollars ranged from A$
= U.S.$0.734 to U.S.$0.816 during 1996, with an average of A$ = U.S.$0.783 for
the year, and from A$ = U.S.$0.716 to U.S.$0.798 during the nine months ended
September 30, 1997, with an average of A$ = U.S. $0.761 for that period. As of
December 19, 1997, the exchange rate was A$ = U.S.$0.653. There can be no
assurance that all of the Company's future contracts will be payable in U.S. or
Australian Dollars. To the extent that any of the Company's future contracts are
payable in foreign currencies, the Company could be exposed to fluctuations in
currency exchange rates. To hedge a portion of the risks associated with such
fluctuations, the Company may, from time to time, engage in hedging transactions
in the future.

RESULTS OF OPERATIONS -- BLACKMARR

The following table presents certain selected data (and that data as a
percentage of revenue) of Blackmarr on a historical basis for the periods
indicated:

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
------------------------------------------------------
1995 1996 1997
--------------- --------------- ----------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Revenue......................... $7,043 100.0% $9,227 100.0% $12,190 100.0%
Cost of revenue............... 5,592 79.4% 7,659 83.0% 10,063 82.6%
Selling, general and
administrative expenses.... 1,413 20.1% 1,555 16.9% 1,668 13.7%
Stock compensation expense.... 305 2.5%
Depreciation and
amortization............... 78 1.1% 101 1.1% 135 1.1%
------ ------ ------ ------ ------- ------
Income (loss) from operations... $ (40) (0.6)% $ (88) (1.0)% $ 19 0.2%
====== ====== ====== ====== ======= ======
</TABLE>

Year Ended September 30, 1997 Compared to Year Ended September 30, 1996

Revenue -- Revenues increased $2.9 million, or 32.1%, for the year ended
September 30, 1997 compared to the year ended September 30, 1996. The increase
primarily resulted from the addition of new customer contracts representing
revenue of approximately $2.0 million in the consulting division and an increase
of approximately $0.9 million from the education division, which expanded its
course offerings from the previous year.

Cost of revenue -- Cost of revenue increased $2.4 million, or 31.4%, for
the year ended September 30, 1997 compared to the year ended September 30, 1996.
The increase was directly proportional to the increase in revenues and was
comprised of additional operational personnel added to support increased client
contracts.

23
<PAGE> 25

Selling, general and administrative expenses -- Selling, general and
administrative expenses increased $0.1 million, or 7.3%, for the year ended
September 30, 1997 compared to the year ended September 30, 1996. As a
percentage of revenue, selling, general and administrative expenses decreased
from 16.9% to 13.7% for the year ended September 30, 1997 compared to the year
ended September 30, 1996. The percentage decrease was attributable to the
Company increasing revenue without substantial additions in the number of
support personnel.

Stock compensation expense -- During March 1997, Blackmarr issued 3,068
shares of its common stock and in connection with these stock issuances,
compensation expense totaling $305,000 was recognized during the year ended
September 30, 1997 and is included in stock compensation expense.

Year Ended September 30, 1996 Compared to Year Ended September 30, 1995

Revenue -- Revenue increased $2.2 million, or 31.0%, for the year ended
September 30, 1996 compared to the year ended September 30, 1995. This increase
primarily resulted from additional consulting contracts with new customers and
increased sales of Blackmarr's proprietary software.

Cost of revenue -- Cost of revenue increased $2.1 million, or 37.0%, for
the year ended September 30, 1996 compared to year ended September 30, 1995. As
a percentage of revenue, cost of revenue increased from 79.4% to 83.0%, for the
year ended September 30, 1996 compared to the year ended September 30, 1995. The
increase was primarily attributable to a proportional increase in the number of
operational personnel to support new business and compensation increases for
professionals in response to market conditions.

Selling, general and administrative expenses -- Selling, general and
administrative expenses increased $0.1 million, or 10.0%, for the year ended
September 30, 1996 compared to the year ended September 30, 1995. As a
percentage of revenue, selling, general and administrative expenses decreased
from 20.1% to 16.9% for the year ended September 30, 1996 compared to the year
ended September 30, 1995. This percentage decrease is primarily attributable to
the Blackmarr's revenue increasing without a corresponding increase in the
number of support staff.

LIQUIDITY

The following table sets forth selected information from Blackmarr's
statement of cash flows:

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
------------------------
1995 1996 1997
------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C>
Net Cash Provided (Used) by Operating Activities............ $ 4 $ (79) $(256)
Net Cash Provided (Used) by Investing Activities............ 487 (211) (52)
Net Cash Provided (Used) by Financing Activities............ (521) 237 311
----- ----- -----
Net Change in Cash.......................................... $ (30) $ (53) $ 3
===== ===== =====
</TABLE>

At September 30, 1997, Blackmarr had $822,764 of borrowings outstanding
under a revolving line of credit provided by a commercial bank. The borrowing
capacity under the line of credit is $1,000,000, with interest payable monthly
at the bank's prime lending rate plus 1.0% (9.5% at September 30, 1997).
Borrowings under the line of credit are due and payable on demand, are subject
to borrowing base requirements based on 80% of eligible accounts receivable (as
defined in a related financing and security agreement) and are secured by
Blackmarr's accounts receivable and guaranteed by Blackmarr's principal
stockholder.

On November 5, 1996, Blackmarr refinanced certain outstanding indebtedness
through borrowings under a new term loan in the principal amount of $261,557.
The term loan is payable in 24 monthly installments of $10,898, plus interest at
the bank's prime lending rate plus 0.5% (9.0% at September 30, 1997). The term
loan is secured by Blackmarr's accounts receivable and a guarantee from
Blackmarr's principal stockholder. At

24
<PAGE> 26

September 30, 1997, the outstanding balance under the term loan was $141,679 and
matures as follows: $130,781 during the 12 months ended September 1998 and
$10,898 during the 12 months ended September 1999.

At September 30, 1997, Blackmarr also had indebtedness outstanding under
another note payable in the principal amount of $104,200, which was issued to a
bank and is payable on demand, with interest at 10% per annum.

ACCOUNTING MATTERS

In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share." SFAS
No. 128, which is effective for periods ending after December 15, 1997,
including interim periods, simplifies the standards for computing earnings per
share and replaces the presentation of primary earnings per share with a
presentation of basic earnings per share. The Company believes initial adoption
of this standard will not have a material impact on its financial position or
results of operations.

25
<PAGE> 27

BUSINESS

SUMMARY

BrightStar was organized to provide a wide range of IT services to Fortune
1000 companies and other large organizations. The Company provides strategic IT
consulting and ERP software implementation services, application development and
maintenance services, systems integration services, IT outsourcing and IT
training services and related software products. The Company's goal is to become
a leader in the fragmented IT services industry through consolidation of
complementary companies, expansion of its service and product offerings and
cross-selling to its combined customer base.

The Company employs more than 500 IT professionals in 10 U.S. and six
international locations and provides mission critical software application and
database design, development, implementation and maintenance services across a
wide array of computing environments including client/server, midrange and
mainframe business systems as well as real-time process control systems. The
Company provides its services and products to clients across a broad spectrum of
industries, including communications, consumer products, energy, financial
services, healthcare, industrial, insurance, media, professional services,
retail, and technology. Many of these clients have maintained relationships with
the Founding Companies over multiple years, involving a large number of
projects.

INDUSTRY BACKGROUND

Among the leading factors driving growth in the IT services market is the
transition to distributed computing technologies such as client/server
architectures, LANs, WANs, the Internet and intranets. Such distributed systems
enable the creation and utilization of more functional and flexible applications
that are critical to the competitive needs of businesses. The Company believes
businesses are increasingly purchasing ERP software applications, including
those offered by leading software vendors such as SAP, Oracle, PeopleSoft or
Baan, and implementing these applications to match their requirements.

The challenge of managing this transition while maintaining legacy systems
is placing a severe strain on many corporate IT departments. Many organizations
do not have the resources to keep pace with these newer technologies and are
reluctant to expand their IT departments and retrain and re-deploy their
in-house personnel to develop and implement these technologies. Consequently
organizations are increasingly outsourcing the design and development of custom
IT solutions in order to improve efficiency, minimize the financial risks
associated with implementing new technologies and reduce their existing IT
infrastructures. Moreover, organizations that purchase ERP software applications
typically engage IT services and consulting companies to reengineer their
business processes and implement these software packages according to their
custom requirements. Organizations are also using outsourcing as a
cost-effective solution to large one-time IT projects such as those relating to
the year 2000 ("Year 2000") problem, which Gartner Group, Inc. (in a report
dated December 1995) has estimated will cost in excess of $300 billion to
resolve worldwide.

Although market share in the IT industry was initially concentrated among
large computer manufacturers, the industry has become increasingly competitive
and fragmented. IT outsourcing services are provided by numerous firms including
multinational accounting firms, systems consulting and implementation firms,
software application vendors, service groups of computer equipment companies,
general management consulting firms and technical personnel and data processing
outsourcing companies. Given the complexity of managing these outside
relationships, large businesses and other organizations are seeking to reduce
the

26
<PAGE> 28

number of IT services firms that they deal with to a select few whom they can
trust to complete projects successfully, on time and within budget. The Company
believes it has a significant opportunity to provide a broad range of services
to large organizations that are seeking to reduce the number of IT services
firms with which they do business.

THE BRIGHTSTAR APPROACH

The Company's goal is to be a leading provider of IT solutions. The
Company's approach emphasizes the following key strategies:

Provide a Wide Range of IT Solutions. The Company provides a wide
range of IT solutions through the Founding Companies, each of which is
specialized and has focused on establishing itself as a preferred provider
for its clients. A key element of the Company's operating strategy is to
provide its clients with a wide range of high-quality IT services, while
maintaining the in-depth expertise and advanced skill sets offered by each
Founding Company. The Company offers its clients (i) access to a variety of
IT solutions, allowing its clients to outsource more of their IT work while
reducing the number of companies with which they must deal, (ii) IT
solutions from a coordinated, interdisciplinary team of IT professionals
rather than from separate companies and (iii) the support and resources of
a large firm, with the flexibility and responsiveness to changing client
needs of a smaller firm.

Offer Strong Local and Regional Presence. The Company believes that
its strong local and regional presence enables it to be responsive to its
clients' needs, enhances its ability to establish and maintain long-term
relationships with its clients and allows it to attract skilled,
locally-based IT professionals. The Company believes that each of its local
offices has developed substantial positive name recognition and goodwill,
and that, collectively, they create an opportunity to build a broad network
to provide enterprise-wide IT solutions to large business and institutional
clients on a national basis. The Company believes that a national network
will serve to reduce the Company's reliance on any single regional or local
economy.

Focus on Mission Critical Solutions. The Company focuses on providing
IT solutions to its clients' strategic business problems, including
developing custom solutions and implementing ERP software applications
designed to increase productivity, reduce costs and improve customer
service. To maintain this focus, the Company recruits and employs skilled
senior-level consultants, project managers, engineers and other technical
personnel with experience in the vertical markets it serves. The Company
also provides training to its clients during such projects to achieve high
levels of self-sufficiency among its clients' end users and internal IT
personnel. The Company believes its ability to deliver such mission
critical solutions fosters long-term relationships with its existing
clients and generates referrals of new clients.

Encourage Creativity; Foster Entrepreneurial Spirit. The Company
intends to operate with a decentralized management structure to provide a
motivating environment for its staff and to encourage the continuation of
close client relationships. Local management will be encouraged to initiate
and implement IT solutions to meet client needs, including the scheduling
of assignments, the hiring of employees and the development and
implementation of marketing strategies.

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<PAGE> 29

GROWTH STRATEGY

The Company believes that the key strategies comprising the BrightStar
approach provide a strong foundation for future growth. The Company's growth
strategy emphasizes the following elements:

Maximize Intrinsic Growth Opportunities. The Company intends to build
on the Founding Companies' strong history of internal growth. For the first
nine months of 1997, the Founding Companies had combined revenue growth of
68.6% over the corresponding period in 1996. The Company will centralize
certain administrative functions allowing management of the Founding
Companies to focus on operations. Moreover, companies are outsourcing more
of their IT needs, and the Company intends to capitalize on its strong
reputation in certain vertical markets and to expand into additional niche
markets.

Capitalize on Cross-selling Opportunities. The Company intends to
enhance its growth by cross-selling its broad range of services to the
combined client base of the Founding Companies. The Company will continue
the regional and local marketing efforts of the Founding Companies, with
the enhanced capability to offer its clients a wider range of IT services
and products. The Company will implement programs enabling each Founding
Company to offer its particular IT expertise to the Company's combined
client base. The Company plans to coordinate teams consisting of IT
professionals from the Founding Companies to provide services to its major
clients.

Attract, Train, Motivate and Retain Highly Skilled Employees. The
Company maintains programs and personnel, including seven full time
recruiters, to seek out and hire the best available IT professionals and to
train these professionals in both legacy systems and emerging technologies.
To attract, train, motivate and retain its employees, the Company focuses
on and provides (i) a corporate culture which promotes creativity and an
entrepreneurial spirit, (ii) compensation, incentive programs and benefits
including stock option grant and employee stock purchase programs and (iii)
career and advancement opportunities for its IT professionals, including
interdisciplinary training and access to the same technical training
programs offered to clients' IT professionals.

Expand Alliances With Leading Software Vendors. The Company is a SAP
national implementation partner in the U.S. and Australia and the Company
also has preferred "business partner" relationships with Microsoft,
PeopleSoft, Novell and Oracle, among others. These relationships allow the
Company to use the business partner's name and the "business partner"
designation in marketing the Company's services. The Company believes these
relationships result in direct client referrals and enhanced industry
recognition. The Company also believes these relationships enable the
Company to broaden its customer base, increase its competitiveness and
maintain its technological leadership through access to the most current
information and training on leading software, hardware and information
systems. The Company intends to continue to cultivate these relationships,
and may seek to form alliances with other developers and vendors of IT
technologies, in order to expand and increase its sales opportunities.

Commercialize Products Derived from IT Services. In the course of
developing and providing IT services to its clients, the Company has
developed products derived from software applications which can be used in
similar situations over a wide range of industries. For example, the
Company has commercialized and is generating licensing fees from several
training products.

Expand Through Strategic Acquisitions. The Company intends to
aggressively continue its acquisition program. The Company will seek
potential acquisition candidates to (i) increase its expertise or further
broaden its IT services offering, (ii) enhance the Company's position in
its existing niche markets or establish a position in new niche markets and
(iii) expand the Company's presence within its existing geographic markets
or enter into new geographic markets. The Company's focus will be to
acquire companies that have a strong history of growth and profitability,
strong employee retention, strong management and a reputation for providing
quality services. The Company believes that its ability to add value to
acquired operations by cross-selling its broad range of IT services,
decentralized management structure and access to financial resources will
make it an attractive acquiror of IT companies.

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<PAGE> 30

SERVICES AND PRODUCTS

The Company offers its clients a wide range of IT services and a variety of
software products. The Company provides IT consulting and ERP software
implementation services, application development and maintenance services,
systems integration services, IT outsourcing, IT training services and related
software products. The Company also seeks to develop additional products and
services which broaden its capabilities to meet its clients' needs.

Strategic IT Consulting Solutions and ERP Software Implementation. The
Company assists organizations to modernize their information systems and
processes and to improve productivity and business performance by defining
strategic IT objectives, designing IT infrastructures to support these
objectives and managing implementation of IT projects. As part of its business
process reengineering services, the Company designs IT solutions and implements
ERP software packages provided by a variety of vendors, including SAP and
Peoplesoft. The Company's IT consulting services include business process
modeling and reengineering, systems architecture and design, project management
and development of migration plans from mainframe legacy systems to distributed
computer networks utilizing client/server architectures. The Company is capable
of providing these IT consulting solutions at either the enterprise-wide or the
business function level.

Application Development and Maintenance. The Company provides mission
critical software application design, development and maintenance across a broad
spectrum of computing environments including client/server, midrange and
mainframe business systems as well as real-time process control systems. The
Company's consultants and software developers are typically engaged for part or
all of the life-cycle of application development, from requirements analysis and
systems planning through coding, testing, deployment and maintenance. In
developing desktop systems, the Company uses rapid prototyping techniques,
commercially available database and groupware software and standard application
development tools. As part of its systems maintenance and support services, the
Company assists clients in solving their Year 2000 programming issues. The
Company has designed and developed applications both independent of and as a
follow-on to its IT consulting engagements.

Systems Integration. The Company provides a wide range of systems
integration services including large-scale database integration, LAN and WAN
systems design and implementation, and the design and implementation of Internet
applications and intranets. The Company also develops and integrates turn-key
control systems for clients in the energy and process industries.

IT Outsourcing. The Company provides highly skilled IT professionals and
value-added services to augment the internal information systems staff of its
clients. The Company's IT professionals usually provide services at the client's
site, although services may be provided at the Company's facilities. The Company
is currently focused on providing IT professionals with Year 2000 remediation
skills. In addition, the Company provides specialized litigation support and
document management services including the scanning, indexing and electronic
archival of paper documents to assist its clients with their information
management needs.

IT Training. The Company maintains training centers in Scottsdale, Arizona,
Dallas, Texas and Lafayette, Louisiana. The Company's training programs for IT
professionals cover the Microsoft Certified Professional and MCSE programs, the
Computer Technology Industry Association's A+ Certification program and the
Novell Certified Network Administrator and Certified Network Engineer programs.
The Company also provides training to its clients' IT personnel related to
custom software and applications developed and implemented by the Company. The
Company currently markets two IT training products, a Microsoft MCSE self-study
kit, designed to help students master the various components of the Microsoft
Certified System Engineer Program in preparation for certification, and the
Computing Technology Industry Association's A+ Certification Course, designed to
instruct students in personal computer technical skills.

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<PAGE> 31

CLIENTS AND MARKETS

The Company provides services to a diverse group of clients, primarily
Fortune 1000 companies and other large organizations. Many of these clients have
substantial recurring requirements for IT services and products and have
maintained ongoing relationships with the Company over several years. On a
combined basis, the Founding Companies had two customers who each represented
more than 10% of the pro forma combined revenue for the year ended December 31,
1996 and the nine months ended September 30, 1997: KPMG and SAP (including their
respective affiliates). While the Company is not dependent on any single
customer, the loss of one of its significant customers could, at least on a
short-term basis, have an adverse effect on the Company. A partial list of
clients served by the Company in 1997 is presented in the table below:
<TABLE>
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
COMMUNICATIONS/MEDIA CONSUMER PRODUCTS/RETAIL
- ----------------------------------------------------------------------------------------------------------------
Australia Post Oxford University Mary Kay Cosmetics Tricon
ALLTEL Press Pepsico Tandy
GTE Southwestern Bell Pizza Hut WalMart Stores
Time Warner
- ----------------------------------------------------------------------------------------------------------------
ENERGY FINANCIAL AND PROFESSIONAL SERVICES
- ----------------------------------------------------------------------------------------------------------------
Alinta Gas Shell EDS Price Waterhouse
Chevron USA Ocean Energy Ernst & Young Royal Bank of
Conoco Western Mining J.P. Morgan Canada
Entergy Corporation KPMG Peat Marwick Visa
Mobil Woodside Petroleum O'Melveny & Myers
Pemex
- ----------------------------------------------------------------------------------------------------------------
GOVERNMENT/EDUCATION HEALTH CARE/INSURANCE
- ----------------------------------------------------------------------------------------------------------------
Boy Scouts Federal Reserve Banks Blue Cross/ Kaiser Permanente
of America of Dallas and Blue Shield Health Advantage
California Attorney Houston Johnson & Johnson Associated Hospital
General Southern Methodist Medical Services of Maine
California University
Department State of Arkansas
of Transportation U.S. Department of
City of Los Angeles Agriculture
County of Ventura University of Texas
- ----------------------------------------------------------------------------------------------------------------
INDUSTRIAL TECHNOLOGY
- ----------------------------------------------------------------------------------------------------------------
General Electric Spectrasite 3Com Motorola
Kintetsu Toyota Motor Autodesk SAP
Lockheed-Martin Corporation Fujitsu Texas Instruments
Mitsubishi Electric Worldwide Express Intel
Nissan Yamaha
- ----------------------------------------------------------------------------------------------------------------
</TABLE>

SALES AND MARKETING

The Company markets and provides its services directly through its main and
branch offices. The Company intends to focus its sales and marketing efforts on
(i) cross-selling the Company's complementary service capabilities across its
existing client base, (ii) implementing a national account program to secure
larger clients, (iii) establishing the Company as a provider of a wide range of
IT services on a nationwide basis and (iv) providing Company-wide marketing
support to its sales staff through production and distribution of marketing
materials, telemarketing, and industry association and trade shows and seminars.
As of December 1, 1997, the Company had approximately 20 full time sales and
marketing personnel.

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<PAGE> 32

HUMAN RESOURCES

The Company employs more than 500 IT professionals, supported by a staff of
approximately 90 sales, marketing and administrative personnel. The Company's
success depends in large part upon its ability to attract, train, motivate and
retain highly skilled technical employees. Qualified technical employees are in
great demand and are likely to remain a limited resource for the foreseeable
future. The Company dedicates significant resources to recruiting professionals
with both IT consulting and industry experience, and maintains a staff of
recruiters to aid in this effort. The Company also provides numerous training
programs for its IT professionals, including the training programs offered to
its clients' IT professionals, which it believes provides an advantage in
attracting and retaining such professionals.

None of the Company's employees are subject to a collective bargaining
arrangement. The Company considers its relationships with its employees to be
good.

COMPETITION

The market for IT services is highly competitive and fragmented, is subject
to rapid change and has low barriers to entry. The Company competes for
potential clients with providers of outsourcing services, multinational
accounting firms, systems consulting and implementation firms, application
software firms, service groups of computer equipment companies, facilities
management companies, general management consulting firms and programming
companies. Many of these competitors have significantly greater financial,
technical and marketing resources and greater name recognition than the Company.
In addition, the Company competes with its clients' internal MIS departments.
The Company believes the principal competitive factors in the IT services
industry include responsiveness to client needs, availability of technical
personnel, speed of applications development, quality of service, price, project
management capabilities, technical expertise and ability to provide a wide
variety of IT services. The Company believes that its ability to compete also
depends in part on a number of competitive factors outside of its control,
including the ability of its competitors to attract, train, motivate and retain
qualified technical personnel, the ownership by competitors of software used by
potential clients, the development of software that would reduce or eliminate
the need for the Company's services, the price at which others offer comparable
services and the extent of its competitors' responsiveness to client needs. The
Company expects that competition could increase in the future, partly due to low
barriers to entry. See "Risk Factors -- Competition."

FOREIGN OPERATIONS

The Company believes that significant opportunities exist to sell its
products and services in different geographic regions around the world. Through
geographic diversity, the Company believes it can mitigate its exposure to
downturns in local or regional economies. The Company's foreign operations
accounted for approximately 25% and 28% of the Company's revenue on a pro forma
combined basis for the year ended December 31, 1996 and the nine months ended
September 30, 1997, respectively, of which approximately 98% and 99%,
respectively, were generated by the Company's operations in Australia during
those periods.

SCS Australia, one of the Founding Companies, is an Australian company and
generates substantially all of its revenue in Australia. Blackmarr, another
Founding Company, has operations in Caracas, Venezuela and London, England. In
addition, several of the other Founding Companies have performed projects
outside the U.S., but maintain no permanent offices outside the U.S. Other than
engagements involving SCS Australia, substantially all of the Company's service
contracts and product sales arrangements have historically been payable in U.S.
dollars.

The current and planned foreign operations of the Company are subject to
certain political, economic and other uncertainties not encountered in domestic
operations, including, among others, risks of war, expropriation or
nationalization of assets, renegotiation or nullification of existing contracts,
changing political conditions, changing laws and policies affecting trade and
investment, overlap of different tax structures, the general hazards associated
with the assertion of foreign sovereignty over certain areas in which operations
are conducted, costs of localizing products and services for foreign countries,
lack of acceptance of localized products and services in foreign countries,
longer accounts receivable payment cycles and logistical difficulties

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<PAGE> 33

in managing foreign operations. Foreign operations sometimes also face the
additional risks of fluctuating currency values, hard currency shortages and
controls of foreign currency exchange. See "Risk Factors -- International
Operations."

INTELLECTUAL PROPERTY RIGHTS

The Company's success depends on certain methodologies it utilizes in
designing, installing and integrating computer software and systems and on other
proprietary intellectual property rights it has developed to serve its clients.
The Company's business includes the development of custom software in connection
with specific client engagements. Ownership of such software is generally
assigned to the client. The Company develops certain application software
products, or software "tools," which remain the property of the Company.

PROPERTY

The Company's principal executive offices are located at 10375 Richmond
Avenue, Suite 1620, Houston, Texas 77042. The Company's lease on these premises
covers 4,658 square feet and expires on November 30, 2002. The headquarters of
the Founding Companies are located in seven facilities, and are leased at
aggregate current monthly rents of approximately $67,500. The Company believes
that its properties are adequate for its needs. Furthermore, the Company
believes that suitable additional or replacement space will be available when
required on terms favorable to the Company.

LEGAL PROCEEDINGS

Neither BrightStar nor any of the Founding Companies is involved in any
legal proceedings which the Company believes could have a material adverse
effect on the Company.

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<PAGE> 34

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information concerning the executive
officers and directors of BrightStar.

<TABLE>
<CAPTION>
NAME AGE(1) POSITION
---- ------ --------
<S> <C> <C>
George M. Siegel...... 60 Chairman of the Board of Directors(2)
Marshall G. Webb...... 55 President, Chief Executive Officer and Director(2)
Michael A. Sooley..... 48 Executive Vice President and Chief Operating Officer
Thomas A. Hudgins..... 57 Executive Vice President of Sales and Marketing and Secretary
Daniel M. Cofall...... 42 Executive Vice President, Chief Financial Officer and Treasurer
Mark D. Diggs......... 50 Senior Vice President, Chief Projects and Integration Officer(5)
Brian R. Blackmarr.... 55 President of Blackmarr; Director(5)
</TABLE>

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

(1) At December 31, 1997

(2) Member of the Board Executive Committee

(3) Member of the Board Compensation Committee

(4) Member of the Board Audit Committee

(5) Appointment will become effective when the Offering closes

Members of the Board of Directors hold office until the next annual meeting
of stockholders and the election and qualification of their successors. Officers
are elected annually by, and serve at the discretion of, BrightStar's Board of
Directors.

George M. Siegel has served as Chairman of the Board of Directors of
BrightStar since its inception. Mr. Siegel co-founded MindWorks, a Founding
Company, in 1995. In 1990, he founded Dynamex Inc. (formerly Parcelway Courier
Systems, Inc.), and served as its President and Chief Executive Officer until
1995. In 1993, Mr. Siegel co-founded U.S. Delivery Systems, a public company
engaged in consolidating local messenger and delivery companies. Mr. Siegel
received his Bachelor of Science in Business Administration and Marketing from
Roosevelt University.

Marshall G. Webb has served as the President and Chief Executive Officer
of BrightStar since its inception. He co-founded SkillMaster, Inc. in 1987, and
served as its President and Chief Executive Officer from 1987 to 1994. He was
division president for Digital Solutions, Inc., a public company that purchased
SkillMaster's health care division, from 1994 to 1996, and returned to
SkillMaster in 1996 to supervise the successful consolidation of a group of
privately held staffing services companies. From 1979 to 1987, Mr. Webb served
in the capacities of Chief Operating Officer, Senior Vice President and Chief
Financial Officer for Talent Tree, Inc. and Manpower, Inc., each of which
specializes in staffing services. Mr. Webb is an alumnus of Southern Methodist
University in Dallas, Texas, and is a certified public accountant.

Michael A. Sooley has served as the Executive Vice President and Chief
Operating Officer of BrightStar since September 1997. From 1992 until September
1997, Mr. Sooley served as the Chief Information Officer ("CIO") for Vinson &
Elkins LLP, a major international law firm headquartered in Houston, Texas. He
served as the CIO for Bronson, Bronson & McKinnon in San Francisco, California
from 1990 until 1992. Mr. Sooley previously served as a management consultant
with Peat, Marwick, Mitchell & Co. (now KPMG Peat Marwick LLP, a multinational
accounting firm), and as a systems engineer and project manager with Electronic
Data Systems, Inc., a technology services company. Mr. Sooley earned his
Bachelor of Science degree in Electrical Engineering from Trinity College, and
his Master of Science degree in Management Science from Rensselaer Polytechnic
Institute.

Thomas A. Hudgins has served as the Executive Vice President of Sales and
Marketing and Secretary of BrightStar since its inception. He was a co-founder
of Delta X Corporation in 1967, a company engaged in the design and manufacture
of electronic hardware and software for production automation systems, and

33
<PAGE> 35

served as its Executive Vice President until February of 1997. Mr. Hudgins is a
registered professional engineer licensed to practice in Texas, and received a
Bachelor of Science in Industrial Engineering from Texas Tech University.

Daniel M. Cofall has served as Executive Vice President, Chief Financial
Officer and Treasurer of BrightStar since its inception. From 1996 to 1997, Mr.
Cofall served as Vice President of Finance and Chief Financial Officer of Honor
Management, Inc. From 1994 to 1996, he served in various capacities, including
Vice President of Finance and Administration, Chief Financial Officer, Chairman
of the Board of Directors and Chief Executive Officer of Automated Telephone
Management Systems, Inc., a public company headquartered in Dallas, Texas. From
1993 to 1994, he was Vice President of Finance for Affiliated Computer Services,
Inc., and assisted in its initial public offering. From 1991 to 1993, Mr. Cofall
served as Director of Finance for Maxum Health Care, a public company. Mr.
Cofall graduated from Notre Dame University with a Bachelor of Business
Administration degree, majoring in both Accounting and Finance. He received his
Masters of Business Administration degree from Southern Methodist University.
Mr. Cofall has also been a professor of corporate finance at the University of
Dallas Graduate School of Management in Dallas, Texas since 1985.

Mark D. Diggs will become BrightStar's Senior Vice President and Chief
Projects and Integration Officer at the closing of the Offering. He has more
than 23 years of systems development and project management experience, and in
1989 co-founded SII, a Founding Company, and currently serves as its President
and Chief Executive Officer. In 1993, Mr. Diggs was named Entrepreneur of the
Year by the Association of Arkansas Entrepreneurs, and served as the group's
President in 1994. Mr. Diggs formerly served as Chairman of the Governor's
Technology Advisory Subcommittee to the Legislative Committee on Communications
for the State of Arkansas in 1996 and 1997. Mr. Diggs received a Bachelor of
Science in Mathematics from Arkansas State University, and received a Masters of
Science degree in computer science from American Technological University. Since
1986, Mr. Diggs has served as an Adjunct Facility Department Head for Webster
University, and as an adjunct professor for the Webster University Graduate
Center Master Degree Program for computer resources management.

Brian R. Blackmarr will become a director of BrightStar at the closing of
the Offering. Mr. Blackmarr has served as President of Blackmarr, a Founding
Company, since its inception in 1979. He is a registered professional engineer,
and is a member of the Board of Trustees of the Texas A&M University Research
Foundation. Mr. Blackmarr received a Bachelor of Science degree in
Mechanical/Industrial Engineering from the University of Texas -- Arlington, and
a Masters of Science degree in Operations Research and Mechanical/Industrial
Engineering from the University of Texas -- Austin.

In addition to these persons, the Company intends to continue to employ
substantially all the members of senior management of each of the Founding
Companies following the closing of the Acquisitions.

COMMITTEES OF THE BOARD

The Board of Directors has established an Executive Committee, an Audit
Committee and a Compensation Committee. The Executive Committee advises the
Board of Directors on matters relating to the senior management of BrightStar.
The Audit Committee recommends the appointment of auditors and oversees the
accounting and audit functions of the Company. The Compensation Committee
determines executive officers' and key employees' salaries and bonuses and
administers the 1997 Stock Option Plan. Messrs. Siegel, Webb and will
serve as members of the Executive Committee, Messrs and will
serve as members of the Audit Committee and Messrs. and will
serve as members of the Compensation Committee.

DIRECTOR COMPENSATION

Directors who are employees of the Company do not receive additional
compensation for serving as directors. Directors who are not employees of the
Company ("Non-Employee Directors") receive no cash compensation for serving as
directors, except for reimbursement of expenses incurred in connection with
their attendance at Board and committee meetings or otherwise incurred in their
capacity as directors. Under BrightStar's 1997 Stock Option Plan, each
Non-Employee Director will receive options to acquire

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<PAGE> 36

5,000 shares of Common Stock at the beginning of his or her first year of
service as a director, and options to acquire 5,000 shares of Common Stock at
the beginning of each year of service thereafter. See -- "1997 Stock Option
Plan."

EXECUTIVE COMPENSATION AND EMPLOYMENT AGREEMENTS

BrightStar was organized in May 1997 and, prior to the Offering, has not
conducted any operations other than activities related to the Acquisitions and
the Offering. BrightStar has entered into employment agreements with Messrs.
Cofall and Sooley effective September 1, 1997 and October 1, 1997, respectively.
BrightStar will enter into employment agreements with each of Messrs. Webb,
Hudgins and Diggs effective January 1, 1998. Mr. Blackmarr will enter into an
employment agreement with Brian R. Blackmarr and Associates, Inc. effective on
the closing of the Offering. Mr. Webb and Mr. Blackmarr will receive an
annualized base salary of $175,000 and $225,000, respectively. Messrs. Sooley,
Hudgins, Cofall and Diggs will receive an annualized base salary of $150,000.

The executives of BrightStar will enter into employment agreements (the
"Executive Employment Agreements") which are similar in terms to those
employment agreements to be entered into between each of the Founding Companies
(or, in the case of SCS America and SCS Australia, successor corporations being
formed by BrightStar) and their executives as part of the Acquisitions. The
following summary of the Executive Employment Agreements does not purport to be
complete and is qualified by reference to them, copies of which have been filed
as exhibits to the Registration Statement of which this Prospectus is a part.
Each such Executive Employment Agreement provides for an annual base salary in
an amount not less than the initial specified amount and entitling the employee
to participate in all employee benefit plans sponsored by BrightStar in which
all other executive officers of BrightStar participate. Each of these agreements
has an initial three-year term and continues thereafter on a year-to-year basis
on the same terms and conditions existing at the time of renewal, subject to the
right of BrightStar and the employee to terminate the employee's employment at
any time. If the employee's employment is terminated by BrightStar without cause
(as defined) during the initial three year term, then that employee will be
entitled to (i) receive his current base salary together with any other earned
and unpaid compensation, vacation time accrued prior to termination plus an
amount equal to the amount of any earned bonuses and/or commissions, if any,
payable to the employee with respect to the 12 calendar months preceding
termination ("Severance Payments"), for the period ending the later of (a) the
end of the initial three year term of the agreement or (b) 12 months after
termination of employment and (ii) continued participation in BrightStar's
employee benefit plans (other than the granting of new awards under the 1997
Stock Option Plan or any other performance-based plan) for a period of 12 months
following the date of termination. If an employee is terminated without cause
during any one-year extension of the initial term of the Agreement, then that
employee shall continue to receive Severance Payments for a period of 12 months
after termination of such employment, and shall continue to participate for such
period in BrightStar's employee benefit plans (other than the granting of new
awards under the 1997 Stock Option Plan or any other performance-based plan). If
a change of control (as defined) of BrightStar occurs, and the terms of the
employment agreement are not adopted, the employee will be entitled to receive
an amount equal to 36 months of his then-current base salary under the
agreement, payable on a monthly basis. The Executive Employment Agreements
contain covenants limiting competition with the Company during the term of the
Executive Employment Agreement and for an additional period to be the longer of
four years from inception of the agreement, or one year after termination of
employment for cause.

1997 STOCK OPTION PLAN

In October 1997, the Board of Directors (the "Board") and the stockholders
of BrightStar adopted the 1997 Stock Option Plan. The 1997 Stock Option Plan
provides for the granting of stock-based awards ("Awards") to directors,
executive officers, certain other employees and certain non-employee consultants
of the Company. Within certain limitations provided by the 1997 Stock Option
Plan, such Awards may take any form and may include provisions regarding
vesting, exercise price, the amount of each grant and other terms as shall be
approved by the Board or by a committee designated by the Board. Stock options
granted under the 1997 Stock Option Plan may be either options that qualify as
"incentive stock options" ("Incentive

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<PAGE> 37

Options"), within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), or options that do not qualify as "incentive
stock options" ("Non-qualified Options"). The 1997 Stock Option Plan, which
permits up to 1.0 million shares of the Company's Common Stock to be issued,
terminates on October 31, 2007.

The 1997 Stock Option Plan is administered by the Board or by the
Compensation Committee of the Board, which committee, to the extent required to
qualify for certain exemptions under Rule 16b-3 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and to satisfy the requirements of
Section 162(m) of the Code, will at all times consist of at least two
non-employee directors. Subject to the terms of the 1997 Stock Option Plan, the
Board or the Compensation Committee determines the persons to whom Awards are
granted and the terms and the number of shares covered by each Award. The term
of each option may not exceed ten years from the date the option is granted, or
five years in the case of an incentive stock option granted to a holder of more
than 10% of the fully-diluted capital stock of BrightStar. Non-qualified Options
and Incentive Options may become exercisable immediately after the date of grant
and may continue to be exercisable, in whole or in part, up to ten years after
the date of grant, as determined by the Board or the Compensation Committee.

The 1997 Stock Option Plan provides that all Non-qualified Options and
Incentive Options which are not exercisable on the date of termination of an
option holder's employment generally expire when the optionee ceases to be
affiliated with the Company; however, the Board or the Compensation Committee
may, in its discretion, permit the holder to exercise unvested options upon such
termination. Options may not be transferred other than by will or the laws of
descent and distribution, and during the lifetime of an optionee may be
exercised only by the optionee. The 1997 Stock Option Plan provides that each
stock option agreement with respect to any Non-qualified Option or Incentive
Option shall specify the effects of termination of employment on exercisability
of those options and if the optionee is terminated (with cause or without
cause), then the vested portion of all options held by that optionee may become
exercisable for a three-month period following the termination of employment.

The 1997 Stock Option Plan contains a provision accelerating the receipt of
benefits pursuant to Awards upon the occurrence of specified events, including
merger, consolidation, dissolution or liquidation of BrightStar. The
acceleration of vesting of Awards in the event of a merger or other similar
event may have the effect of discouraging a proposal for merger, a takeover
attempt or other efforts to gain control of the Company.

Pursuant to an October 1997 action of the Board and under the terms of the
1997 Stock Option Plan, BrightStar has approved Non-qualified Options for each
of the initial Non-Employee Directors as follows (the "Non-Employee Director
Awards"): (i) the automatic grant to each of the initial Non-Employee Directors
(including those elected to begin service at the closing of the Offering) of
options to purchase 5,000 shares of Common Stock, effective as of the date the
initial public offering price is determined, at an exercise price per share
equal to the initial per share public offering price, (ii) the automatic grant
to each Non-Employee Director elected after the closing of the Offering of
options to purchase 5,000 shares of Common Stock, effective on the date of that
person's initial election as a director, at an exercise price per share equal to
the per share fair market value of the Common Stock on the date of that grant,
and (iii) the automatic grant to each Non-Employee Director of options to
purchase 5,000 shares of Common Stock at each annual meeting of stockholders
thereafter at which that director is re-elected or remains a director, unless
such annual meeting is held within three months following that person's election
as a director, at an exercise price per share equal to the per share fair market
value of the Common Stock on the date of grant. BrightStar has reserved 70,000
shares of Common Stock for issuance pursuant to the Non-Employee Director
Awards; however, the Board may revoke at any time the next automatic grant of
options otherwise provided for pursuant to the Non-Employee Director Awards.
Each option granted pursuant to the Non-Employee Director Awards shall be
exercisable in full one year after the date of grant and shall expire ten years
after the date of grant, unless sooner exercised or canceled due to termination
of service or death.

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<PAGE> 38

Payment on the exercise of an option may be in cash, by check or, at the
discretion of the Board, by delivery of shares of Common Stock with a "fair
market value," as defined in the 1997 Stock Option Plan, equal to the aggregate
exercise price.

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<PAGE> 39

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of December 15, 1997, and as adjusted to give
effect to the closing of the Acquisitions, the Share Exchange and the Offering,
as to (i) all persons who will then be the "beneficial owners", as defined by
the Securities and Exchange Commission ("SEC"), of 5% or more of the Common
Stock, (ii) each director and person nominated to become a director of
BrightStar on closing of the Offering; (iii) each executive officer of
BrightStar and (iv) all executive officers, directors and persons nominated to
become executive officers and directors of BrightStar as a group. All persons
listed have an address c/o the Company's principal executive offices and have
sole voting and investment power with respect to their shares, unless otherwise
indicated.

<TABLE>
<CAPTION>
SHARES SHARES
BENEFICIALLY BENEFICIALLY
OWNED PRIOR TO OWNED AFTER
OFFERING(2) OFFERING(2)(3)
------------------- -------------------
NUMBER OF NUMBER OF
BENEFICIAL OWNER(1) SHARES PERCENT SHARES PERCENT
------------------- --------- ------- --------- -------
<S> <C> <C> <C> <C>
Brian R. Blackmarr............................. -- -- 709,801 9.7%
Mark D. Diggs.................................. 90,679 7.7% 232,082 3.2%
George M. Siegel............................... 128,364 10.9% 164,902 2.2%
Marshall G. Webb............................... 155,464 13.2% 155,464 2.1%
Thomas A. Hudgins.............................. 149,310 12.7% 149,310 2.0%
Daniel M. Cofall............................... 137,772 11.7% 137,772 1.9%
Michael A. Sooley.............................. 60,000 5.1% 60,000 *
All executive officers and directors as a group
(seven persons).............................. 721,589 1,609,331 21.9%
</TABLE>

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

* Less than 1%.

(1) All persons listed have sole voting and investment power with respect to
their shares unless otherwise indicated.

(2) Giving effect to the Share Exchange and the dissolution and liquidation of
BITI immediately following the closing of the Offering.

(3) Giving effect to the Offering and the issuance of 2,415,385 shares of Common
Stock in connection with the Acquisitions.

39
<PAGE> 40

CERTAIN TRANSACTIONS

ORGANIZATION OF BRIGHTSTAR

In connection with the formation of the Company, BITG, predecessor to
BrightStar, issued 100,000 shares of its common stock to BITI in consideration
for a cash payment in the amount of $10,000. George M. Siegel, Marshall G. Webb,
Thomas A. Hudgins, Daniel M. Cofall, Mark D. Diggs, each of whom is an executive
officer or director of BrightStar, together with Michael Miller, chief financial
officer of SII, purchased all the outstanding Class B units of BITI, the only
units authorized to vote for the election of BITI managers, for aggregate
consideration of $10,000. Messrs. Siegel, Webb, Hudgins, Diggs and Miller also
own all the outstanding Series A-1 Class A units of BITI. Effective December 15,
1997, BITI executed a share exchange agreement with BrightStar to effect the
Share Exchange concurrently with the closing of the Offering. The governing
regulations of BITI provide that BITI is to be dissolved and liquidated
effective upon the closing of the Offering. Upon dissolution and liquidation of
BITI following the closing of the Share Exchange and the Offering, (i) the
holders of the Series A-1 Class A units will receive in cash their original
purchase price of $490,000 ("Purchase Price") for the units, plus shares of
Common Stock having an aggregate value equal to the holder's Purchase Price,
based on the initial public offering price of the Common Stock (the "IPO
Price"), (ii) the holders of the Series A-2 Class A units will receive in cash
their Purchase Price of $1,300,000 for the units, plus shares of Common Stock
having an aggregate value equal to four times the holder's Purchase Price (based
on the IPO Price), and (iii) the holders of the Class B units are entitled to
receive the remaining shares of Common Stock received by BITI in the Share
Exchange and the remaining cash, if any.

In connection with the formation of the Company, BITG issued an aggregate
of 41,958 shares of its common stock to its officers and directors (each of whom
is also an officer or director of the Company) at a purchase price of $0.10 per
share. Under the terms of the Share Exchange Agreement, BrightStar will exchange
shares of its newly issued Common Stock for all of the outstanding capital stock
of BITG (on a 8.2655-for-one basis) concurrently with the closing of the
Offering. BITI will receive 826,550 shares of Common Stock in connection with
the Share Exchange (of which an aggregate of 388,858 shares will then be
distributed to the holders of Class B units of BITI (as described above)) and an
aggregate of 437,692 shares will then be distributed to the holders of the
Series A-1 and Series A-2 Class A units of BITI (as described above). In
addition, an aggregate of 346,800 shares of Common Stock (the "Management
Compensation Shares") will be issued to members of BrightStar's management in
exchange for their shares of BITG common stock, including shares issued as
follows: 42,900 shares to George M. Siegel; 70,000 shares to Marshall G. Webb;
and 60,000 shares to each of Thomas A. Hudgins, Daniel M. Cofall, and Michael A.
Sooley, respectively.

BrightStar has entered into stock repurchase agreements with each of
Messrs. Webb, Hudgins, Cofall and Sooley, pursuant to which BrightStar is
entitled to repurchase, for $0.10 per share, a portion of the Management
Compensation Shares issued to each of them, in the event such individual (i) is
terminated from his employment with BrightStar for cause (as defined in the
agreements) or (ii) voluntarily resigns from his employment with BrightStar
within 12 months of the closing of Offering. All Management Compensation Shares
held by such persons will initially be subject to the repurchase rights and that
number will be reduced pro rata each month thereafter until the end of that
12-month period. Messrs. Webb, Hudgins, Cofall and Sooley may not sell any of
the Management Compensation Shares so long as they remain subject to the
repurchase rights.

Pursuant to the BITI Loan Agreement, BITI has made cash advances to enable
BrightStar to pay various professional and administrative expenses in connection
with the formation of BrightStar, the acquisition of the Founding Companies and
the Offering. As of December 15, 1997, there were outstanding advances under the
BITI Loan Agreement totaling $0.5 million, which advances bear interest at 10%
per annum and are to be repaid within 30 days following the closing of the
Offering. All advances under the BITI Loan Agreement, together with accrued
interest thereon, will be repaid from the net proceeds of the Offering. See "Use
of Proceeds."

40
<PAGE> 41

ACQUISITIONS OF THE FOUNDING COMPANIES

Concurrently with the closing of the Offering, BrightStar will acquire all
of the issued and outstanding capital stock or substantially all of the assets
of the Founding Companies, at which time, each Founding Company will become a
wholly owned subsidiary of BrightStar. The aggregate consideration BrightStar
will pay to acquire the Founding Companies (before the Post-Closing Adjustments)
consists of (i) approximately $32.4 million in cash, (ii) 2,415,385 shares of
Common Stock and (iii) approximately $5.1 million of indebtedness of the
Founding Companies to be assumed by BrightStar. In addition, the purchase price
for each of SCS Australia and SII may be increased by a Post-Closing Adjustment,
which, for SCS Australia, may be up to 209,230 shares of Common Stock based on
actual fiscal 1998 revenues exceeding a certain threshold, and for SII will be
equal to one-third of the amount of SII's actual fiscal 1998 pre-tax net income
in excess of $1.3 million, and which, in each case, is to be payable in shares
of Common Stock valued at the initial price to the public set forth on the cover
of this Prospectus. The Company currently estimates, however, that no shares of
Common Stock will be issuable in connection with the Post-Closing Adjustments.
The consideration being paid in the Acquisitions was determined by arm's-length
negotiations between the Company and the respective Founding Companies.

The closing of each Acquisition is subject to customary conditions
including, among others: the continuing accuracy of the representations and
warranties made by the parties thereto, the performance of their respective
covenants included in the agreements relating to the Acquisitions; and the
nonexistence of a material adverse change in the results of operations,
financial condition or business of each Founding Company prior to the closing
date. There can be no assurance that the conditions to closing of the
Acquisitions will be satisfied or waived or that the acquisition agreements will
not be terminated prior to consummation.

The following table sets forth the consideration to be paid and debt
assumed for each of the Founding Companies.

<TABLE>
<CAPTION>
SHARES OF DEBT
CASH COMMON STOCK ASSUMED
------- ------------ -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Blackmarr(1).............................. $ 3,015 927,569 $1,151
ICON...................................... 6,121 316,354 1,773
Mindworks................................. 500 76,923 283
SCS America............................... 11,000 384,615 150
SCS Australia(2).......................... 10,355 455,539 1,444
SII(3).................................... 1,000 187,077 --
Zelo...................................... 375 67,308 317
------- --------- ------
Totals.......................... $32,366 2,415,385 $5,118
======= ========= ======
</TABLE>

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

(1) Marshall G. Webb, Thomas A. Hudgins, Daniel M. Cofall and Michael A. Sooley
have each agreed to exchange their shares of Common Stock for an equal
number of shares of Restricted Common Stock contemporaneously with the
closing of the Offering to the extent necessary to ensure that the
shareholders of Blackmarr will become, collectively, the largest holder of
Common Stock entitled to vote immediately following the Acquisitions. See
"Description of Capital Stock -- Common Stock and Restricted Common Stock."

(2) Does not include shares of Common Stock issuable in connection with a
Post-Closing Adjustment to be based upon 1998 revenue.

(3) Does not include shares of Common Stock issuable in connection with a
Post-Closing Adjustment to be based upon 1998 pre-tax net income. The cash
consideration includes the assumed repayment of a $550,000 promissory note
(which is not included in the amount shown for debt assumed) issued in
December 1997 to a former stockholder of SII in exchange for his equity
interest in SII in anticipation of BrightStar's acquisition of SII.

41
<PAGE> 42

As consideration for their interests in the Founding Companies, certain
officers, directors and beneficial owners of more than 5% of the outstanding
shares of Common Stock will receive cash and shares of Common Stock of the
Company as set forth in the table below.

<TABLE>
<CAPTION>
SHARES OF
NAME CASH COMMON STOCK
---- ------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
George M. Siegel...................................... $ 238 36,538
Brian R. Blackmarr.................................... 2,307 709,801
Mark D. Diggs......................................... 736 141,403
------ -------
Total....................................... $3,281 887,742
====== =======
</TABLE>

In connection with the Acquisitions, the Company will enter into employment
agreements with certain key employees of the Founding Companies. Total annual
compensation pursuant to such agreements ranges from approximately $90,000 to
approximately $225,000 depending on the duties of such employees and their
positions with the Founding Companies. These employment agreements have terms of
three years and generally provide, among other things, that the employee will
not compete with the Company during the term of the employment agreement and for
additional periods of up to the greater of one year after the termination of
their employment thereunder or the termination date set forth in the agreement.
For a discussion of the employment agreements between the Company and its
executive officers, see "Management -- Executive Compensation and Employment
Agreements."

FINANCIAL ADVISORY SERVICES

In August 1997, BITG engaged McFarland, Grossman & Company, Inc. ("MGCO")
to provide financial advisory services for a period of six months in connection
with the Acquisitions and related financings. Under the terms of the engagement
letter between BrightStar and MGCO (the "MGCO Engagement Letter"), BrightStar
paid MGCO an initial advisory fee of $15,500, plus monthly fees aggregating
$75,000 through December 1997, and reimbursed MGCO for its out-of-pocket
expenses relating to the services provided. In connection with the MGCO
Engagement Letter, BITG issued the MG Warrant to MGCO for $100 in cash. Pursuant
to the Share Exchange Agreement, BrightStar has assumed all obligations of BITG
under the MG Warrant. As adopted by BrightStar, the MG Warrant provides for the
purchase of up to 50,000 shares of Common Stock, at a per share exercise price
equal to the lesser of $6.00 or 60% of the initial public offering price set
forth on the cover page of this Prospectus. The MG Warrant may be exercised in
whole or, from time to time, in part, at any time during the five-year period
beginning on the issuance date of the MG Warrant. BrightStar granted certain
registration rights to MGCO with respect to the shares of Common Stock issuable
upon exercise of the MG Warrant.

Pursuant to the MGCO Engagement Letter, MGCO will be entitled to receive
the following fees in the future: (i) a graduated fee of not less than $400,000
payable upon the closing of the Acquisitions, which is estimated to be $1.4
million; (ii) a senior debt placement fee equal to 2% of the amount of any
future credit facility arranged by MGCO; and (iii) a private placement fee equal
to 6% of the amount of any private placement made by BrightStar within two years
of March 2, 1998 with any capital source introduced to BrightStar by MGCO during
the term of the MGCO Engagement Letter, together with a warrant to purchase an
amount equal to 10% of the securities issued in any such private placement at
the issue price in that private placement.

In September 1997, BrightStar engaged Brewer-Gruenert Capital Advisors, LLC
("BGCA"), to provide consulting services regarding corporate development matters
for a period of one year in connection with future acquisitions of IT companies
by BrightStar and any private investors introduced to BrightStar by BGCA. Under
the terms of the consulting agreement (the "BGCA Agreement") between BrightStar
and BGCA, BrightStar will pay BGCA, at the close of the Offering, an executive
search fee of $60,000 for services rendered thereunder, and will reimburse BGCA
from time to time for its out-of-pocket expenses relating to the services
provided. In connection with the BGCA Agreement, BrightStar also issued the BGCA
Option giving BGCA the option to purchase the number of shares of Common Stock
equal to $100,000 divided by the

42
<PAGE> 43

difference between the per share initial public offering price of the Common
Stock set forth on the cover page of this Prospectus and the exercise price of
$6.00 per share.

Pursuant to the BGCA Agreement, BGCA will be entitled to receive the
following fees in the future: (i) a graduated success fee, payable on the
closing of an acquisition by the Company of a company presented to the Company
by BGCA and (ii) a cash fee equal to 10% of the amount of the gross investment
proceeds received by the Company from any investor identified by BGCA during the
term of the BGCA Agreement.

COMPANY POLICY

In the future, any material transactions between the Company and directors,
officers, employees or other affiliates of the Company are anticipated to be
minimal and will, in any case, be approved in advance by a majority of the
Board, including a majority of disinterested members of the Board.

DESCRIPTION OF CAPITAL STOCK

GENERAL

The Certificate of Incorporation authorizes the issuance of 40,000,000
shares of capital stock, consisting of 35,000,000 shares of Common Stock,
2,000,000 Shares of Restricted Common Stock and 3,000,000 shares of Preferred
Stock ("Preferred Stock"). At December 15, 1997, 100 shares of Common Stock were
outstanding (all of which were held by BITG), and no shares of Restricted Common
Stock or Preferred Stock were outstanding. On closing of the Acquisitions, the
Share Exchange and the Offering, BrightStar will have outstanding 7,338,735
shares of Common Stock, and no shares of Restricted Common Stock or Preferred
Stock will be outstanding. The following summary description of certain terms of
BrightStar's capital stock is considered to be material to a prospective
investor and is qualified in its entirety by reference to the Certificate of
Incorporation, which is included as an exhibit to the Registration Statement of
which this Prospectus is a part. All capitalized terms used and not defined
below have the respective meanings given to them in the Certificate of
Incorporation.

COMMON STOCK AND RESTRICTED COMMON STOCK

The holders of Common Stock are each entitled to one vote for each share
held on all matters to which they are entitled to vote, including the election
of directors. The holders of Restricted Common Stock have no voting rights.
After the closing of the Offering, the Board of Directors will be elected
annually and will serve one-year terms. Cumulative voting for the election of
directors is not permitted. Any director, or the entire Board of Directors, may
be removed at any time, with cause, by a majority of the aggregate number of
votes which may be cast by the holders of outstanding shares of Common Stock.

Any shares of Restricted Common Stock that may be issued will automatically
convert into Common Stock on a share-for-share basis (i) in the event any person
acquires beneficial ownership of 25% or more of the outstanding shares of Common
Stock of BrightStar in or as a result of a transaction or a series of
transactions that shall not have been approved or ratified by at least 80% of
the Continuing Directors (as defined in the Charter), (ii) 18 months after the
closing of the Offering or (iii) in the event a majority of the aggregate number
of votes which may be cast by the holders of outstanding shares of Common Stock
approve such conversion.

Subject to the rights of any then outstanding shares of Preferred Stock,
holders of Common Stock (and Restricted Common Stock if any are issued) are
entitled to participate pro rata in such dividends as may be declared in the
discretion of the Board of Directors out of the funds legally available
therefor. Holders of Common Stock (and Restricted Common Stock if any are
issued) are entitled to share ratably in the net assets of BrightStar on
liquidation after payment or provision for all liabilities and any preferential
liquidation rights of any Preferred Stock then outstanding. Holders of Common
Stock and holders of Restricted Common Stock will have no preemptive rights to
purchase shares of stock of BrightStar. Shares of Common Stock are not subject
to any redemption provisions and are not convertible into any other securities
of BrightStar. Shares

43
<PAGE> 44

of Restricted Common Stock, if issued, will not be subject to any redemption
provisions, but will be convertible into Common Stock on the occurrence of
certain events as described above. All outstanding shares of Common Stock are,
and the shares of Common Stock to be issued pursuant to the Offering and the
Acquisitions will be, on payment therefor, fully paid and non-assessable.

PREFERRED STOCK

The Preferred Stock may be issued from time to time by the Board in one or
more classes or series. Subject to the provisions of the Certificate of
Incorporation and limitations prescribed by law, the Board is expressly
authorized to adopt resolutions to issue the shares, to fix the number of shares
and to change the number of shares constituting any class or series and to
provide for or change the voting powers, designations, preferences and relative,
participating, optional or other special rights, qualifications, limitations or
restrictions thereof, including dividend rights (including whether dividends are
cumulative), dividend rates, terms of redemption (including sinking fund
provisions), redemption prices, conversion rights and liquidation preferences of
the shares constituting any series of the Preferred Stock, in each case without
any further action or vote by the stockholders. BrightStar has no current plans
to issue any shares of Preferred Stock.

One of the effects of undesignated Preferred Stock may be to enable the
Board to render more difficult or to discourage an attempt to obtain control of
BrightStar by means of a tender offer, proxy contest, merger or otherwise, and
thereby to protect the continuity of BrightStar's management. The issuance of
shares of the Preferred Stock pursuant to the Board's authority described above
may adversely affect the rights of the holders of Common Stock and Restricted
Common Stock. For example, Preferred Stock issued by BrightStar may rank prior
to the Common Stock and Restricted Common Stock as to dividend rights,
liquidation preference or both, may have full or limited voting rights and may
be convertible into shares of Common Stock. Accordingly, the issuance of shares
of Preferred Stock may discourage bids for the Common Stock or may otherwise
adversely affect the market price of the Common Stock.

STATUTORY BUSINESS COMBINATION PROVISION

BrightStar is subject to Section 203 of the DGCL which, with certain
exceptions, prohibits a Delaware corporation from engaging in any of a broad
range of business combinations with any "interested stockholder" for a period of
three years following the date that stockholder became an interested
stockholder, unless: (i) prior to that date, the board of directors of the
corporation approved either the business combination or the transaction which
resulted in the stockholder becoming an interested stockholder, (ii) on closing
of the transaction which resulted in the stockholder becoming an interested
stockholder, the interested stockholder owned at least 85% of the voting stock
of the corporation outstanding at the time the transaction commenced, excluding
for purposes of determining the number of shares outstanding those shares owned
(a) by persons who are directors and also officers of the corporation and (b)
employee stock plans in which employee participants do not have the right to
determine confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer, or (iii) on or after that date, the
business combination is approved by the board of directors and authorized at an
annual or special meeting of stockholders by the affirmative vote of at least
66 2/3% of the outstanding voting stock not owned by the interested stockholder.
Under Section 203, the restrictions described above also do not apply to certain
business combinations proposed by an interested stockholder following the
announcement or notification of one of certain extraordinary transactions
involving the corporation and a person who had not been an interested
stockholder during the previous three years or who became an interested
stockholder with the approval of a majority of the corporation's directors who
were directors prior to that person becoming an interested stockholder during
the previous three years or were recommended for election or elected to succeed
those directors by a majority of those directors. An "interested stockholder" is
defined as any person that is (a) the owner of 15% or more of the outstanding
voting stock of the corporation or (b) an affiliate or associate of the
corporation and was the owner of 15% or more of the outstanding voting stock of
the corporation at any time within the three-year period immediately prior to
the date it is sought to be determined whether that person was an interested
stockholder.

44
<PAGE> 45

CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND BYLAWS

Pursuant to the Certificate of Incorporation and as permitted by Delaware
law, a director of BrightStar is not liable to BrightStar or its stockholders
for monetary damages for breach of fiduciary duty as a director, except for
liability in connection with a breach of duty of loyalty to BrightStar or its
stockholders, for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, for dividend payments,
stock repurchases or redemptions illegal under Delaware law or any transaction
in which that director derived an improper personal benefit.

Additionally, the Certificate of Incorporation provides that directors and
officers of BrightStar will be indemnified by BrightStar to the fullest extent
authorized by Delaware law, as it now exists or may in the future be amended,
against all expenses and liabilities actually and reasonably incurred in
connection with service for or on behalf of BrightStar, and further permits the
advancing of expenses incurred in defense of claims.

The Certificate of Incorporation also provides that any action required or
permitted to be taken by the stockholders of BrightStar must be effected at a
duly called meeting and may not be taken or effected by a written consent of
stockholders in lieu thereof. The Certificate of Incorporation provides that a
special meeting of stockholders may be called only by the President, the Board
or by such other person or persons as may be authorized in BrightStar's Bylaws.
BrightStar's Bylaws provide that only those matters set forth in the notice of
the special meeting may be considered or acted on at that special meeting. The
Certificate of Incorporation provides that the Board may adopt, amend or repeal
BrightStar's Bylaws by the affirmative vote of a majority of the Board without
the consent or vote of BrightStar's stockholders; provided, however, that the
stockholders of BrightStar may adopt, amend or repeal BrightStar's Bylaws by the
affirmative vote of the holders of at least a majority of the shares entitled to
vote in the election of directors which are present in person or represented by
proxy at a duly constituted meeting of BrightStar's stockholders at which a
quorum is present.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is
.

SHARES ELIGIBLE FOR FUTURE SALE

On closing of the Acquisitions, the Share Exchange and the Offering,
7,338,735 shares of Common Stock will be outstanding. See "Certain
Transactions -- Acquisitions of the Founding Companies." The 3,750,000 shares of
Common Stock offered hereby will be freely tradeable unless acquired by
affiliates of BrightStar. All the remaining shares of Common Stock to be
outstanding on the closing of the Acquisitions (including shares to be issued in
connection with the Post-Closing Adjustments), the Share Exchange and the
Offering (as well as all shares issuable pursuant to the MG Warrant and the BGCA
Option) may be resold publicly only following their effective registration under
the Securities Act or pursuant to an exemption from the registration
requirements of that act, such as Rule 144 thereunder.

When the Offering closes, BrightStar also will have outstanding (i) options
to purchase approximately 550,000 shares of Common Stock, which were (or will
have been) granted pursuant to the 1997 Stock Option Plan, (ii) the MG Warrant
(which provides for the issuance of up to 50,000 shares of Common Stock and
grants the holder thereof certain registration rights) and (iii) the BGCA Option
(which provides for the issuance of up to 14,285 shares of Common Stock).
BrightStar intends to file a registration statement on Form S-8 to register the
shares issuable pursuant to its 1997 Stock Option Plan. After that registration
statement becomes effective, the shares registered thereby generally will on
issuance be available for sale in the open market by holders who are not
affiliates of BrightStar and, subject to the volume and other limitations of
Rule 144, by holders who are affiliates of BrightStar. See "Management -- 1997
Stock Option Plan."

In general, under Rule 144, if a minimum of one year has elapsed since the
later of the date of acquisition of the restricted securities from BrightStar or
an affiliate of BrightStar, the holder (or holders whose shares of Common Stock
are aggregated), of such restricted securities, including holders who may be
deemed "affiliates

45
<PAGE> 46

of BrightStar," is entitled to sell within any three-month period a number of
shares that does not exceed the greater of (i) one percent of the then
outstanding shares of the Common Stock (approximately 73,000 shares on
completion of the Offering) or (ii) the average weekly reported volume of
trading of the Common Stock during the four calendar weeks preceding such sale.
Sales under Rule 144 are also subject to certain provisions regarding the manner
of sale, notice requirements and the availability of current public information
about BrightStar. Affiliates may sell shares not constituting restricted
securities in accordance with the foregoing volume limitations and other
requirements but without regard to the one year holding period. Under Rule
144(k), if a period of at least two years has elapsed since the later of the
date on which restricted securities were acquired from BrightStar or an
affiliate of BrightStar, a holder of such restricted securities who is not an
affiliate at the time of the sale and has not been an affiliate for at least
three months prior to the sale is entitled to sell the shares immediately
without regard to the volume limitations and other conditions of Rule 144
described above. The foregoing summary of Rule 144 is not intended to be a
complete description thereof and is qualified in its entirety by reference
thereto. The SEC has proposed certain amendments to Rule 144 that would, among
other things, eliminate the manner of sale requirements and revise the notice
provisions of that rule. The SEC has also solicited comments on other possible
changes to Rule 144, including possible revisions to the one- and two-year
holding periods and volume limitations described above.

BrightStar and its directors and executive officers, BITI, all persons who
will receive BrightStar Common Stock in connection with the Share Exchange and
all persons who receive shares of Common Stock in connection with the
Acquisitions have agreed not to directly or indirectly, offer for sale, sell,
contract to sell, grant any option or other right for the sale of, or otherwise
dispose of (or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition by any person at any time in the
future of) any shares of Common Stock or any securities, indebtedness or other
rights exercisable for or convertible or exchangeable into shares of Common
Stock prior to the expiration of one year after the date of this Prospectus (the
"Lockup Period"), without the prior written consent of Lehman Brothers Inc.,
except that BrightStar may issue Common Stock in connection with the
Acquisitions and in connection with future acquisitions, on exercise of the MG
Warrant and the BGCA Option and pursuant to Awards under the 1997 Stock Option
Plan, provided that the recipients of those shares agree not to offer or sell
any of those shares during the Lockup Period.

BrightStar intends to register 4,000,000 additional shares of Common Stock
under the Securities Act during the second quarter of 1998 for its use in
connection with future acquisitions. Those shares generally will be freely
tradable after their issuance by persons not affiliated with the Company unless
the Company contractually restricts their resale, and resales of those shares
during the Lockup Period would require the prior written consent of Lehman
Brothers Inc. The registration rights described above do not apply to the
registration statement relating to the shares registered for use in connection
with future acquisitions.

46
<PAGE> 47

UNDERWRITING

Under the terms and subject to the conditions contained in an Underwriting
Agreement dated the date of this Prospectus (the "Underwriting Agreement"), the
underwriters named below (the "Underwriters"), for whom Lehman Brothers Inc.,
CIBC Oppenheimer Corp. and Rauscher Pierce Refsnes, Inc. are acting as the
representatives (the "Representatives"), have severally agreed to purchase, and
BrightStar has agreed to sell, the respective number of shares of Common Stock
set forth opposite the name of each such Underwriter below:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
------------ ---------
<S> <C>
Lehman Brothers Inc. .......................................
CIBC Oppenheimer Corp. .....................................
Rauscher Pierce Refsnes, Inc.(1) ...........................

---------
Total............................................. 3,750,000
=========
</TABLE>

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

(1) Pending regulatory approval, effective January 2, 1998, Rauscher Pierce
Refsnes, Inc. is combining with Dain Bosworth Incorporated to form Dain
Rauscher Incorporated.

The Underwriting Agreement provides that the obligation of the Underwriters
to purchase the shares of Common Stock are subject to certain conditions, and
that, if any of the foregoing shares of Common Stock are purchased by the
Underwriters pursuant to the Underwriting Agreement, then all of the shares of
Common Stock agreed to be purchased by the Underwriters pursuant to the
Underwriting Agreement must be so purchased.

BrightStar has been advised by the Representatives that the Underwriters
propose to offer the shares of Common Stock in part directly to the public at
the public offering price set forth on the cover page of this Prospectus, and in
part to certain dealers (who may include the Underwriters) at such public
offering price, less a selling concession not in excess of $ per share.
The Underwriters may allow, and such dealers may reallow, a concession not in
excess of $ per share to certain brokers or dealers. After the initial
offering to the public, the public offering price, the concession to selected
dealers and the reallowance may be changed by the Underwriters.

BrightStar has granted the Underwriters an option to purchase up to 562,500
additional shares of Common Stock at the initial public offering price less the
underwriting discounts and commissions shown on the cover page of this
Prospectus, solely to cover over-allotments, if any. Such option may be
exercised at any time until 30 days after the date of the Underwriting
Agreement. To the extent that the option is exercised, each Underwriter will be
committed, subject to certain conditions, to purchase a number of additional
shares of Common Stock proportionate to such Underwriter's initial commitment as
indicated in the preceding table.

BrightStar has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute,
under certain circumstances, to payments that the Underwriters may be required
to make in respect thereof.

BrightStar and its directors and executive officers, BITI, all persons who
will receive BrightStar Common Stock in connection with the Share Exchange and
all persons acquiring shares of Common Stock in

47
<PAGE> 48

connection with the Acquisitions have agreed not to, directly or indirectly,
offer for sale, sell, contract to sell, grant any option or other right for the
sale of, or otherwise dispose of (or enter into any transaction or device which
is designed to, or could be expected to, result in the disposition by any person
at any time in the future of) any shares of Common Stock or any securities,
indebtedness or other rights exercisable for or convertible or exchangeable into
shares of Common Stock prior to the expiration of one year after the date of
this Prospectus, without the prior written consent of Lehman Brothers Inc.,
except that BrightStar may, subject to certain limitations, issue shares of
Common Stock in connection with the Acquisitions and in connection with future
acquisitions, on exercise of the MG Warrant and the BGCA Option and pursuant to
Awards under the 1997 Stock Option Plan, provided that the recipients of these
shares agree not to offer or sell any of these shares during the Lockup Period.

Prior to the Offering, there has been no public market for the Common
Stock. The initial public offering price will be negotiated between BrightStar
and the Representatives. Among the factors to be considered in determining the
initial public offering price, in addition to prevailing market conditions, will
be the history of and the prospects for the industry in which the Company
competes, the past and present operations of the Founding Companies, the
historical results of operations of the Founding Companies, the Company's
capital structure, estimates of the business potential and earnings prospects of
the Company, an overall assessment of the Company, an assessment of the
Company's management and the consideration of the above factors in relation to
market valuation of companies in related businesses. There can be no assurance
that an active trading market will develop for the Common Stock or that the
Common Stock will trade in the public market subsequent to the Offering at or
above the initial public offering price.

Until the distribution of Common Stock is completed, rules of the
Commission may limit the ability of the Underwriters and certain selling group
members to bid for and purchase shares of Common Stock. As an exception to these
rules, the Representatives are permitted to engage in certain transactions that
stabilize the price of the Common Stock. Such transactions may consist of bids
or purchases for the purposes of pegging, fixing or maintaining the price of the
Common Stock.

If the Underwriters over-allot (i.e., if they sell more shares of Common
Stock than are set forth on the cover page of this Prospectus), and thereby
create a short position in the Common Stock in connection with the Offering, the
Representatives may reduce that short position by purchasing Common Stock in the
open market. The Representatives also may elect to reduce any short position by
exercising all or part of the over-allotment option described herein.

The Representatives also may impose a penalty bid on certain Underwriters
and selling group members. This means that, if the Representatives purchase
shares of Common Stock in the open market to reduce the Underwriters' short
position or to stabilize the price of the Common Stock, they may reclaim the
amount of the selling concession from the Underwriters and selling group members
who sold those shares as part of the Offering.

In general, purchases of a security for the purpose of stabilization or to
reduce a syndicate short position could cause the price of the security to be
higher than it might otherwise be in the absence of such purchases. The
imposition of a penalty bid might have an effect on the price of a security to
the extent that it were to discourage resales of the security by purchasers in
the Offering.

Neither BrightStar nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Common Stock. In addition, neither
BrightStar nor any of the Underwriters makes any representations that the
Representatives will engage in such transactions or that such transactions, once
commenced, will not be discontinued without notice.

At the request of BrightStar, the Underwriters have reserved up to 187,500
of the shares of Common Stock offered hereby for sale at the initial public
offering price to employees of the Company and other persons associated with the
Company.

Any offer of the shares of Common Stock in Canada will be made only
pursuant to an exemption from the requirements to file a prospectus in the
relevant province of Canada in which such offer is made.

48
<PAGE> 49

Purchasers of the shares of Common Stock offered hereby may be required to
pay stamp taxes and other charges in accordance with the law and practices of
the country of purchase, in addition to the offering price set forth on the
cover page hereof.

The Representatives have informed BrightStar that the Underwriters do not
intend to confirm sales of shares of Common Stock offered hereby to accounts
over which they exercise discretionary authority.

Rauscher Pierce Refsnes, Inc. ("Rauscher") provided financial advisory
services to BrightStar in connection with the Acquisitions and the Offering, for
which Rauscher will be paid a fee of $100,000, payable by BrightStar. Rauscher
is also the holder of 20 Series A-2 Class A units of BITI, which it acquired for
a Purchase Price of $100,000.

LEGAL MATTERS

Certain legal matters in connection with the Common Stock being offered
hereby will be passed on for the Company by Chamberlain, Hrdlicka, White,
Williams & Martin of Houston, Texas. Certain members of Chamberlain, Hrdlicka,
White, Williams & Martin own Series A-2 Class A units of BITI, representing
approximately 3.8% of the outstanding Series A-2 Class A units. Certain legal
matters related to the Offering will be passed on for the Underwriters by Baker
& Botts, L.L.P., Houston, Texas.

EXPERTS

The audited financial statements of Blackmarr, ICON, Mindworks, SCS
America, SII and Zelo included in this Prospectus have been audited by Deloitte
& Touche LLP, independent auditors, as indicated in their reports (included
herein), and are included in reliance upon the reports of such firm given upon
their authority as experts in accounting and auditing.

The audited financial statements of SCS Australia included in this
Prospectus have been audited by Deloitte Touche Tohmatsu, independent auditors,
as indicated in their report (included herein), and are included in reliance
upon the report of such firm given upon their authority as experts in accounting
and auditing.

ADDITIONAL INFORMATION

BrightStar has not previously been subject to the reporting requirements of
the Exchange Act. BrightStar has filed with the SEC a Registration Statement on
Form S-1 (together with all amendments, schedules and exhibits thereto, the
"Registration Statement") under the Securities Act, with respect to the Common
Stock offered hereby. This Prospectus, which is included as part of the
Registration Statement, does not contain all of the information set forth in the
Registration Statement, certain portions of which have been omitted in
accordance with the rules and regulations of the Commission. Statements
contained in this Prospectus as to the contents of any contract or other
document referred to herein are not necessarily complete, and in each instance
that a reference is made to a contract or other document filed as an exhibit to
the Registration Statement, each such statement is qualified in all respects by
such reference. A copy of the Registration Statement may be examined without
charge at the Commission's principal offices at 450 Fifth Street, N. W.,
Washington, D.C. 20549, and at the regional offices of the Commission located at
7 World Trade Center, Suite 1300, New York, New York 10048, and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of all or
any part of the Registration Statement may be obtained from the Public Reference
Section of the Commission upon payment of certain fees prescribed by the
Commission. Copies of such materials may also be obtained over the Internet at
http://www.sec.gov.

49
<PAGE> 50

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Unaudited Pro Forma Combined Financial Statements
Basis of Presentation of Unaudited Pro Forma Combined
Financial Statements.................................... F-2
Unaudited Pro Forma Combined Balance Sheet as of September
30, 1997................................................ F-3
Unaudited Pro Forma Combined Statement of Operations for
the year ended December 31, 1997........................ F-4
Unaudited Pro Forma Combined Statement of Operations for
the nine months ended September 30, 1996................ F-5
Unaudited Pro Forma Combined Statement of Operations for
the nine months ended September 30, 1997................ F-6
Notes to Unaudited Pro Forma Financial Statements......... F-7
Historical Financial Statements
Brian R. Blackmarr and Associates, Inc.
Independent Auditors' Report............................ F-12
Balance Sheet as of September 30, 1996 and 1997......... F-13
Statement of Operations for each of the three years in
the period ended September 30, 1997.................... F-14
Statement of Stockholders' Equity for each of the three
years in the period ended September 30, 1997........... F-15
Statement of Cash Flows for each of the three years in
the period ended September 30, 1997.................... F-16
Notes to Financial Statements........................... F-17
Integrated Controls, Inc.
Independent Auditors' Report............................ F-21
Balance Sheet as of December 31, 1995 and 1996.......... F-22
Statement of Income for each of the three years in the
period ended December 31, 1996......................... F-23
Statement of Stockholders' Equity for each of the three
years in the period ended December 31, 1996............ F-24
Statement of Cash Flows for each of the three years in
the period ended December 31, 1996..................... F-25
Notes to Financial Statements........................... F-26
Mindworks Professional Education Group, Inc.
Independent Auditors' Report............................ F-32
Balance Sheet as of December 31, 1996................... F-33
Statement of Operations for the year ended December 31,
1996................................................... F-34
Statement of Stockholders' Equity for the year ended
December 31, 1996...................................... F-35
Statement of Cash Flows for the year ended December 31,
1996................................................... F-36
Notes to Financial Statements........................... F-37
Software Consulting Services America, LLC
Independent Auditors' Report............................ F-41
Balance Sheet as of December 31, 1995 and 1996.......... F-42
Statement of Income for the period ended December 31,
1995 and the year ended December 31, 1996.............. F-43
Statement of Members' Equity for the period ended
December 31, 1995 and the year ended December 31,
1996................................................... F-44
Statement of Cash Flows for the period ended December
31, 1995 and the year ended December 31, 1996.......... F-45
Notes to Financial Statements........................... F-46
SCS Unit Trust
Independent Auditors' Report............................ F-50
Balance Sheet as of June 30, 1995 and 1996.............. F-51
Statement of Income for the period ended June 30, 1995
and for each of the two years in the period ended June
30, 1997............................................... F-52
Statement of Members' Equity for the period ended June
30, 1995 and for each of the two years in the period
ended June 30, 1997.................................... F-53
Statement of Cash Flows for the period ended June 30,
1995 and for each of the two years in the period ended
June 30, 1997.......................................... F-54
Notes to Financial Statements........................... F-55
Software Innovators, Inc.
Independent Auditors' Report............................ F-59
Balance Sheet as of July 31, 1997....................... F-60
Statement of Operations for each of the two years in the
period ended July 31, 1997............................. F-61
Statement of Stockholders' Equity for each of the two
years in the period ended July 31, 1997................ F-62
Statement of Cash Flows for each of the two years in the
period ended July 31, 1997............................. F-63
Notes to Financial Statements........................... F-64
Zelo Group, Inc.
Independent Auditors' Report............................ F-67
Balance Sheet as of December 31, 1996................... F-68
Statement of Operations for the year ended December 31,
1996................................................... F-69
Statement of Stockholders' Deficit for the year ended
December 31, 1996...................................... F-70
Statement of Cash Flows for the year ended December 31,
1996................................................... F-71
Notes to Financial Statements........................... F-72
BIT Investors, LLC
Consolidated Balance Sheet as of September 30, 1997
(unaudited)............................................ F-74
Consolidated Statement of Operations for the period
ended September 30, 1997 (unaudited)................... F-75
Consolidated Statement of Stockholders' Deficit for the
period ended September 30, 1997 (unaudited)............ F-76
Consolidated Statement of Cash Flows for the period
ended September 30, 1997 (unaudited)................... F-77
Notes to Unaudited Consolidated Financial Statements.... F-78
</TABLE>

F-1
<PAGE> 51

BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC. AND FOUNDING COMPANIES

BASIS OF PRESENTATION OF UNAUDITED PRO FORMA
COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma combined financial statements give effect
to (i) the acquisitions (the "Acquisitions") by BrightStar Information
Technology Group, Inc. ("BrightStar") of (a) the outstanding capital stock of
Brian R. Blackmarr and Associates, Inc. ("Blackmarr"), Integrated Controls, Inc.
("ICON"), Mindworks Professionals Education Group, Inc. ("Mindworks"), Software
Innovators, Inc. ("SII"), Zelo Group, Inc ("Zelo") and (b) substantially all the
net assets of Software Consulting Services America, LLC ("SCS America") and SCS
Unit Trust ("SCS Australia" and, together with Blackmarr, ICON, Mindworks, SII,
Zelo and SCS America, the "Founding Companies") and (ii) a share exchange with
BIT Investors, LLC ("BITI") and senior management of BrightStar for all
outstanding common stock of BIT Group Services, Inc. ("BITG") and (iii) the
closing of BrightStar's initial public offering (the "Offering") and the
application of the estimated net proceeds therefrom. BrightStar and the Founding
Companies are hereinafter collectively referred to as the "Company." The
Acquisitions will close concurrently with and as a condition to the closing of
the Offering and will be accounted for using the purchase method of accounting,
with Blackmarr being reflected as the "accounting acquiror." Pursuant to the
share exchange agreement between BrightStar and the BITG stockholders (the
"Share Exchange Agreement"), the aggregate amount of common stock issued in
connection with the Acquisitions and the Share Exchange shall be 3,588,735
shares (excluding any shares, par value $0.001 per share, of BrightStar ("Common
Stock") that may become issuable pursuant to post-closing adjustments to the
purchase price for two of the Acquisitions).

The unaudited pro forma combined balance sheet gives effect to the
Acquisitions and the Offering as if they had occurred on September 30, 1997. The
unaudited pro forma combined statements of operations give effect to the
Acquisitions and the Offering as if they had occurred on January 1, 1996.

The Company believes the combination of the Founding Companies will provide
opportunities to improve operating margins and increase profitability, including
the consolidation of certain duplicative administrative functions. The Company
believes it will be able to achieve operating efficiencies by consolidating
certain administrative functions. The pro forma financial information herein
reflects neither expected savings nor margin improvements but do reflect
management's estimate of such incremental costs.

The pro forma adjustments are based on preliminary estimates (primarily of
the aggregate purchase price of the Acquisitions), available information and
certain assumptions that management deems appropriate, but which may be revised
as additional information becomes available. The pro forma financial information
does not purport to represent what the Company's financial position or results
of operations would actually have been if such transactions had in fact occurred
on the dates assumed and is not necessarily representative of the Company's
financial position or results of operations for any future period. Since the
Founding Companies were not under common control or management, historical
combined results may not be comparable to, or indicative of, future performance.
The unaudited pro forma combined financial statements should be read in
conjunction with the other financial statements and notes thereto included in
this Prospectus. See "Risk Factors" included in this Prospectus.

F-2
<PAGE> 52

BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC. AND FOUNDING COMPANIES

UNAUDITED PRO FORMA COMBINED BALANCE SHEET
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
BITI
BLACKMARR ICON MINDWORKS SCS AMERICA SCS AUSTRALIA SII ZELO CONSOLIDATED
---------- ---------- --------- ----------- ------------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cash and cash
equivalents............ $ 19,777 $ 28,429 $ 41,032 $ 96,628 $ 3,477 $ 430,490 $ -- $ 425,780
Accounts receivable, net
of allowance for
doubtful accounts...... 2,806,306 2,771,787 130,494 1,377,938 3,009,009 267,371 151,011 647
Inventory............... 31,117
Unbilled revenue........ 151,704 73,989 307,962
Deferred taxes.......... 161,564
Prepaid expenses and
other current assets... 15,449 2,750 29,486 18,466 600
---------- ---------- --------- ---------- ---------- ---------- --------- ----------
Total current
assets............. 3,139,351 2,815,665 205,393 1,548,555 3,349,934 716,327 151,611 426,427
Property and equipment,
net.................... 292,483 1,188,369 110,869 169,166 74,469 42,588 118,943 3,933
Goodwill................ 103,712
Other assets............ 68,788 81,659 16,208 37,016 45,254 4,028 351,086
---------- ---------- --------- ---------- ---------- ---------- --------- ----------
TOTAL ASSETS......... $3,500,622 $4,189,405 $ 332,470 $1,754,737 $3,469,657 $ 758,915 $ 274,582 $ 781,446
========== ========== ========= ========== ========== ========== ========= ==========
Accounts payable........ $ 421,293 $ 248,909 $ 98,005 $ 19,678 $ 570,645 $ 22,322 $ 93,177 $ 344,125
Short-term debt......... 822,764 1,232,357 150,000 1,444,092 106,285 490,000
Current maturities of
long-term debt......... 234,981 278,489 97,083 130,000
Current portion of
capital
lease obligations...... 76,299 25,342
Accrued liabilities and
other accrued
expenses............... 682,706 734,178 18,963 406,970 1,394,064 145,630 1,271
Deferred revenue........ 563,987 1,611 26,824
Deferred income taxes... 449,547 61,709
Payable to Founding
Companies..............
---------- ---------- --------- ---------- ---------- ---------- --------- ----------
Total current
liabilities........ 2,802,030 2,943,480 215,662 576,648 3,408,801 229,661 381,628 835,396
Long-term debt, net of
current maturities..... 10,898 64,930 186,323
Capital lease
obligations, net of
current portion........ 6,172 196,926 55,329
Deferred taxes.......... 175,767 6,306
---------- ---------- --------- ---------- ---------- ---------- --------- ----------
Total long-term
liabilities........ 17,070 437,623 186,323 -- -- 6,306 55,329 --
Common stock............ 318,068 16,250 600 60,856 1,000 5,000 143
Stock warrants..........
Additional paid-in
capital................ 25,248 59,400 35,882 3,616,577
Retained earnings
(deficit).............. 363,454 945,927 (129,515) 1,178,089 489,816 (167,375) (3,670,670)
Treasury stock.......... (179,123) (3,750)
---------- ---------- --------- ---------- ---------- ---------- --------- ----------
Total equity......... 681,522 808,302 (69,515) 1,178,089 60,856 522,948 (162,375) (53,950)
---------- ---------- --------- ---------- ---------- ---------- --------- ----------
TOTAL LIABILITIES AND
EQUITY............. $3,500,622 $4,189,405 $ 332,470 $1,754,737 $3,469,657 $ 758,915 $ 274,582 $ 781,446
========== ========== ========= ========== ========== ========== ========= ==========

<CAPTION>
PRO FORMA OFFERING
BRIGHTSTAR TOTAL ADJUSTMENTS PRO FORMA ADJUSTMENTS AS ADJUSTED
---------- ----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Cash and cash
equivalents............ $ $ 1,045,613 $ -- $ 1,045,613 $ 4,236,730(b),(c) $ 5,282,343
Accounts receivable, net
of allowance for
doubtful accounts...... 10,514,563 10,514,563 10,514,563
Inventory............... 31,117 31,117 31,117
Unbilled revenue........ 533,655 533,655 533,655
Deferred taxes.......... 161,564 161,564 161,564
Prepaid expenses and
other current assets... 66,751 66,751 66,751
-------- ----------- ----------- ----------- ------------ -----------
Total current
assets............. 12,353,263 -- 12,353,263 4,236,730 16,589,993
Property and equipment,
net.................... 2,000,820 2,000,820 2,000,820
Goodwill................ 103,712 39,540,719(a) 39,644,431 4,044,123(d) 43,688,554
Other assets............ 604,039 604,039 5,690,000(e) 6,294,039
-------- ----------- ----------- ----------- ------------ -----------
TOTAL ASSETS......... $ $15,061,834 $39,540,719 $54,602,553 $ 13,970,853 $68,573,406
======== =========== =========== =========== ============ ===========
Accounts payable........ $ $ 1,818,154 $ -- $ 1,818,154 $ $ 1,818,154
Short-term debt......... 4,245,498 4,245,498 (4,245,498)(c)
Current maturities of
long-term debt......... 740,553 740,553 (740,553)(c)
Current portion of
capital
lease obligations...... 101,641 101,641 (101,641)(c)
Accrued liabilities and
other accrued
expenses............... 3,383,782 3,383,782 3,383,782
Deferred revenue........ 592,422 592,422 592,422
Deferred income taxes... 511,256 511,256 511,256
Payable to Founding
Companies.............. 32,366,000(a) 32,366,000 (32,366,000)(c)
-------- ----------- ----------- ----------- ------------ -----------
Total current
liabilities........ 11,393,306 32,366,000 43,759,306 (37,453,692) 6,305,614
Long-term debt, net of
current maturities..... 262,151 262,151 (262,151)(c)
Capital lease
obligations, net of
current portion........ 258,427 258,427 (258,427)(c)
Deferred taxes.......... 182,073 182,073 182,073
-------- ----------- ----------- ----------- ------------ -----------
Total long-term
liabilities........ -- 702,651 -- 702,651 (520,578) 182,073
Common stock............ 401,917 (81,087)(a) 320,830 (313,491)(b) 7,339
Stock warrants.......... 450,000(e) 450,000
Additional paid-in
capital................ 3,737,107 12,325,925(a) 16,063,032 51,808,614(b),(d),(e) 67,871,646
Retained earnings
(deficit).............. (990,274) (5,252,992)(a) (6,243,266) (6,243,266)

Treasury stock.......... (182,873) 182,873(a)
-------- ----------- ----------- ----------- ------------ -----------
Total equity......... 2,965,877 7,174,719 10,140,596 51,945,123 62,085,719
-------- ----------- ----------- ----------- ------------ -----------
TOTAL LIABILITIES AND
EQUITY............. $ $15,061,834 $39,540,719 $54,602,553 $ 13,970,853 $68,573,406
======== =========== =========== =========== ============ ===========
</TABLE>

See notes to unaudited pro forma combined financial statements.

F-3
<PAGE> 53
BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC. AND FOUNDING COMPANIES

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
SCS SCS
BLACKMARR ICON MINDWORKS AMERICA AUSTRALIA SII ZELO
----------- ---------- ---------- ----------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue............................. $ 9,226,955 $6,126,844 $ 808,192 $4,672,094 $7,051,721 $2,409,106 $1,081,694
Cost of revenue..................... 7,659,342 4,000,727 358,289 3,398,398 5,447,676 1,525,992 729,760
----------- ---------- ---------- ---------- ---------- ---------- ----------
Gross profit........................ 1,567,613 2,126,117 449,903 1,273,696 1,604,045 883,114 351,934
Selling, general and administrative
expenses........................... 1,554,926 1,588,067 407,675 753,013 923,371 666,645 374,468
Stock compensation expense..........
Depreciation and amortization....... 100,661 124,066 63,435 19,962 43,466 23,882 11,534
Goodwill amortization...............
----------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from operations....... (87,974) 413,984 (21,207) 500,721 637,208 192,587 (34,068)
Interest expense.................... (67,178) (73,363) (33,733) (99,961) (12,473)
Other income (expense), net......... 124,412 15,979 (4,671) 17,416 27,584
----------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) before income taxes... (30,740) 356,600 (54,940) 496,050 554,663 220,171 (46,541)
Income tax provision................ 106 141,151 91,592
----------- ---------- ---------- ---------- ---------- ---------- ----------
Net income (loss)................... $ (30,846) $ 215,449 $ (54,940) $ 496,050 $ 554,663 $ 128,579 $ (46,541)
=========== ========== ========== ========== ========== ========== ==========
Net loss per common share...........
Shares used in computing
net loss per common share..........

<CAPTION>
BITI COMBINED
CONSOLIDATED BRIGHTSTAR TOTAL ADJUSTMENTS PRO FORMA
-------------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenue............................. $ -- $ -- $31,376,606 $ -- $31,376,606
Cost of revenue..................... 23,120,184 23,120,184
-------- -------- ----------- ----------- -----------
Gross profit........................ -- -- 8,256,422 -- 8,256,422
Selling, general and administrative
expenses........................... 6,268,165 1,784,000 (b),(d),(f) 8,052,165
Stock compensation expense..........
Depreciation and amortization....... 387,006 387,006
Goodwill amortization............... 1,092,214 (c) 1,092,214
-------- -------- ----------- ----------- -----------
Income (loss) from operations....... -- -- 1,601,251 (2,876,214) (1,274,963)
Interest expense.................... (286,708) 286,708 (a)
Other income (expense), net......... 180,720 180,720
-------- -------- ----------- ----------- -----------
Income (loss) before income taxes... -- -- 1,495,263 (2,589,506) (1,094,243)
Income tax provision................ 232,849 (219,224)(e) 13,625
-------- -------- ----------- ----------- -----------
Net income (loss)................... $ -- $ -- $ 1,262,414 $(2,370,282) $(1,107,868)
======== ======== =========== =========== ===========
Net loss per common share........... $ (0.15)
===========
Shares used in computing
net loss per common share.......... 7,338,735
===========
</TABLE>

See notes to unaudited pro forma combined financial statements.

F-4
<PAGE> 54

BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC. AND FOUNDING COMPANIES

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
SCS SCS
BLACKMARR ICON MINDWORKS AMERICA AUSTRALIA SII ZELO
----------- ---------- ---------- ----------- ------------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue.............................. $ 7,194,200 $4,234,100 $ 578,998 $3,076,161 $4,741,708 $1,698,618 $861,811
Cost of revenue...................... 5,684,766 2,751,358 226,760 2,260,182 3,662,961 1,105,820 494,362
----------- ---------- ---------- ---------- ---------- ---------- --------
Gross profit......................... 1,509,434 1,482,742 352,238 815,979 1,078,747 592,798 367,449
Selling, general and administrative
expenses............................ 1,433,309 1,098,015 297,862 450,055 639,088 473,611 367,986
Stock compensation expense...........
Depreciation and amortization........ 85,593 79,879 47,148 9,903 34,484 18,725 8,651
Goodwill amortization................
----------- ---------- ---------- ---------- ---------- ---------- --------
Income (loss) from operations........ (9,468) 304,848 7,228 356,021 405,175 100,462 (9,188)
Interest expense..................... (52,570) (51,116) (23,757) (57,693) (9,477)
Other income (expense), net.......... 10,831 (2,260) 27,774 12,338
----------- ---------- ---------- ---------- ---------- ---------- --------
Income (loss) before income taxes.... (62,038) 264,563 (16,529) 353,761 375,256 112,800 (18,665)
Income tax provision................. (13,905) 104,060 37,492
----------- ---------- ---------- ---------- ---------- ---------- --------
Net income (loss).................... $ (48,133) $ 160,503 $ (16,529) $ 353,761 $ 375,256 $ 75,308 $(18,665)
=========== ========== ========== ========== ========== ========== ========
Net loss per common share............
Shares used in computing
net loss per common share...........

<CAPTION>
BITI COMBINED
CONSOLIDATED BRIGHTSTAR TOTAL ADJUSTMENTS PRO FORMA
-------------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenue.............................. $ -- $ -- $22,385,596 $ -- $22,385,596
Cost of revenue...................... 16,186,209 16,186,209
-------- -------- ----------- ----------- -----------
Gross profit......................... -- -- 6,199,387 -- 6,199,387
Selling, general and administrative
expenses............................ 4,759,926 1,338,000(b),(d),(f) 6,097,926
Stock compensation expense...........
Depreciation and amortization........ 284,383 284,383
Goodwill amortization................ 819,160(c) 819,160
-------- -------- ----------- ----------- -----------
Income (loss) from operations........ -- -- 1,155,078 (2,157,160) (1,002,082)
Interest expense..................... (194,613) 194,613(a)
Other income (expense), net.......... 48,683 48,683
-------- -------- ----------- ----------- -----------
Income (loss) before income taxes.... -- -- 1,009,148 (1,962,547) (953,399)
Income tax provision................. 127,647 (179,826)(e) (52,179)
-------- -------- ----------- ----------- -----------
Net income (loss).................... $ -- $ -- $ 881,501 $(1,782,721) $ (901,220)
======== ======== =========== =========== ===========
Net loss per common share............ $ (0.12)
===========
Shares used in computing
net loss per common share........... 7,338,735
===========
</TABLE>

See notes to unaudited pro forma combined financial statements.

F-5
<PAGE> 55

BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC. AND FOUNDING COMPANIES

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>

BLACKMARR ICON MINDWORKS SCS AMERICA SCS AUSTRALIA SII ZELO
----------- ---------- ---------- ----------- ------------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue............................ $10,180,070 $7,975,042 $1,015,554 $5,783,098 $9,318,822 $2,615,961 $855,883
Cost of revenue.................... 8,019,087 5,315,461 394,939 4,263,097 7,561,760 1,633,994 430,857
----------- ---------- ---------- ---------- ---------- ---------- --------
Gross profit....................... 2,160,983 2,659,581 620,615 1,520,001 1,757,062 981,967 425,026
Selling, general and administrative
expenses......................... 1,157,290 1,882,187 501,124 1,113,287 1,294,300 934,638 394,820
Stock compensation expense......... 305,000
Depreciation and amortization...... 109,868 189,018 42,752 51,346 53,220 17,191 12,974
Goodwill amortization..............
----------- ---------- ---------- ---------- ---------- ---------- --------
Income (loss) from operations...... 588,825 588,376 76,739 355,368 409,542 30,138 17,232
Interest expense................... (76,193) (111,931) (19,595) (5,880) (112,569) (16,937)
Other income (expense), net........ 26,100 26,319 278 (172,074) 15,237
----------- ---------- ---------- ---------- ---------- ---------- --------
Income (loss) before income
taxes............................ 538,732 502,764 57,144 349,766 124,899 45,375 295
Income tax provision............... 216,130 198,221 10,885
----------- ---------- ---------- ---------- ---------- ---------- --------
Net income (loss).................. $ 322,602 $ 304,543 $ 57,144 $ 349,766 $ 124,899 $ 34,490 $ 295
=========== ========== ========== ========== ========== ========== ========
Net loss per common share..........
Shares used in computing net loss
per common share.................

<CAPTION>
BITI COMBINED
CONSOLIDATED BRIGHTSTAR TOTAL ADJUSTMENTS PRO FORMA
-------------- ---------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenue............................ $ -- $ -- $37,744,430 $ -- $37,744,430
Cost of revenue.................... 27,619,195 27,619,195
----------- -------- ----------- ----------- -----------
Gross profit....................... -- -- 10,125,235 -- 10,125,235
Selling, general and administrative
expenses......................... 63,883 7,341,529 1,338,000(d) 8,679,529
Stock compensation expense......... 3,606,720 3,911,720 (3,606,720)(e) 305,000
Depreciation and amortization...... 67 476,436 476,436
Goodwill amortization.............. 819,160(b) 819,160
----------- -------- ----------- ----------- -----------
Income (loss) from operations...... (3,670,670) (1,604,450) 1,449,560 (154,890)
Interest expense................... (343,105) 343,105(a)
Other income (expense), net........ (104,140) (104,140)
----------- -------- ----------- ----------- -----------
Income (loss) before income
taxes............................ (3,670,670) (2,051,695) 1,792,665 (259,030)
Income tax provision............... 425,236 (185,116)(c) 240,120
----------- -------- ----------- ----------- -----------
Net income (loss).................. $(3,670,670) $ -- $(2,476,931) $1,977,781 $ (499,150)
=========== ======== =========== =========== ===========
Net loss per common share.......... $ (0.07)
===========
Shares used in computing net loss
per common share................. 7,338,735
===========
</TABLE>

See notes to unaudited pro forma combined financial statements.

F-6
<PAGE> 56

BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC. AND FOUNDING COMPANIES

NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS

1. GENERAL

BrightStar was formed to create a national provider of information
technology consulting services. BrightStar has conducted no operations to date
and will acquire the Founding Companies concurrently with and as a condition to
the closing of the Offering.

The historical financial statements represent the financial position and
results of operations of the Founding Companies and were derived from the
respective Founding Companies' financial statements as indicated. All Founding
Companies have a December 31 year-end except for Blackmarr, SII and SCS
Australia. The unaudited pro forma combined statement of operations present (i)
the results of operations of Icon, Mindworks, SCS America, SII and Zelo for the
year ended December 31, 1996 and the nine-months ended September 30, 1996 and
1997, (ii) the results of operations of Blackmarr for the year ended September
30, 1996 and the nine-months ended September 30, 1996 and 1997 and (iii) the
results of operations of SCS Australia for the year ended September 30, 1996 and
the nine-months ended June 30, 1996 and 1997. The audited historical financial
statements included herein have been included in accordance with Rule 3-05 of
Regulation S-X of the Securities and Exchange Commission.

2. ACQUISITION OF FOUNDING COMPANIES

Concurrent with and as a condition to the closing of the Offering,
BrightStar will acquire all of the outstanding capital stock or substantially
all the net assets of the Founding Companies. The acquisitions will be accounted
for using the purchase method of accounting, with Blackmarr being treated as the
accounting acquiror. Management of BrightStar anticipates, based on its
preliminary analysis, that the historical carrying values of the Founding
Companies' assets and liabilities will approximate their fair values.

The following table sets forth the estimated consideration to be paid in
cash and shares of common stock. For purposes of computing the estimated
purchase price for accounting purposes, the value of the shares is determined
using an estimated fair value of $ per share, which represents a discount
of 20% from an assumed initial public offering price of $ per share due to
restrictions on the resale and transferability of the shares to be issued in the
Acquisitions. The estimated purchase price for each Acquisition and related
allocations of the excess purchase price are subject to certain purchase price
adjustments at and following closing.

<TABLE>
<CAPTION>
AMOUNT IN COMMON
COMMON STOCK
CASH STOCK SHARES
------- --------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Founding Company:
Blackmarr......................................... $ 3,015 $ 927,569
ICON.............................................. 6,121 316,354
Mindworks......................................... 500 76,923
SCS America....................................... 11,000 384,615
SCS Australia(1).................................. 10,355 455,539
SII(2)............................................ 1,000 187,077
Zelo.............................................. 375 67,308
------- ------- ---------
Total..................................... $32,366 $ 2,415,385
======= ======= =========
</TABLE>

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

(1) Does not include any shares of Common Stock that may be issuable in
connection with a post-closing adjustment to be based upon 1998 revenue. The
Company currently estimates that no shares of Common Stock will be issuable
in connection with that post-closing adjustment.

F-7
<PAGE> 57

BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC. AND FOUNDING COMPANIES

NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS -- (CONTINUED)

(2) Does not include any shares of Common Stock that may be issuable in
connection with a post-closing adjustment to be based upon 1998 pre-tax net
income. The Company currently estimates that no shares of Common Stock will
be issuable in connection with that post-closing adjustment. The cash
consideration includes the assumed repayment of a $550,000 promissory note
issued in December 1997 to a former stockholder of SII in exchange for his
equity interest in SII in anticipation of BrightStar's acquisition of SII.

3. UNAUDITED PRO FORMA COMBINED BALANCE SHEET ADJUSTMENTS AS OF
SEPTEMBER 30, 1997

PRO FORMA ADJUSTMENTS

a. Records the purchase by Blackmarr, as the accounting acquiror, of the
other Founding Companies and BITI, which will result in an aggregate of
$39.6 million of goodwill. The purchase price allocation below also
gives effect to the writeoff of the one-time charge for acquired
in-process research and development discussed in notes 4.b and 5.b and
the one-time charge related to the issuance of common stock to
BrightStar management discussed in note 6.e as reflected in retained
earnings.

<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS
--------------
(IN THOUSANDS)
<S> <C>
Assets:
Goodwill.................................................. $39,541
=======
Liabilities and stockholders' equity:
Payable to founding stockholders.......................... $32,366
-------
Stockholders' equity:
Common stock........................................... (81)
Paid-in capital........................................ 12,326
Retained earnings...................................... (5,252)
Treasury stock......................................... 182
-------
Total stockholders' equity........................ 7,175
-------
Total liabilities and stockholders' equity........ $39,541
=======
</TABLE>

OFFERING ADJUSTMENTS

b. Records the $ million of cash proceeds from the issuance of shares
of Common Stock, net of estimated cash offering costs of $ million.
Offering costs primarily consist of underwriting discounts and
commissions, accounting fees, legal fees, financial advisory fees
(including fees paid through the issuance to advisors of a warrant and
an option to purchase Common Stock) and printing expenses. Also
reflects adjustments to aggregate par value of Common Stock
outstanding after giving effect to the Offering to reflect the total
number of shares to be outstanding, including the shares to be issued
to BrightStar's management (see note 3.d).

c. Records the cash portion of the consideration paid in connection with
the Acquisitions and reduction of certain debt obligations with the
proceeds from the Offering.

F-8
<PAGE> 58

BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC. AND FOUNDING COMPANIES

NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS -- (CONTINUED)

d. Records the issuance of 388,858 shares of Common Stock to be issued as
consideration for the Class B units of BITI, which were issued to
members of the Company's management. These shares were valued at a
discount of 20% to the assumed initial public offering price of
$ per share, which resulted in goodwill of approximately $4.0
million.

e. Records (i) the issuance of 437,692 shares of Common Stock as
consideration for the Series A-1 and Series A-2 Class A units of BITI,
which represents financing costs in connection with arrangements
entered into to fund start-up costs and (ii) the issuance of a warrant
and an option to purchase Common Stock, which were issued as partial
payment for certain financial advisory and consulting services.

<TABLE>
<CAPTION>
OFFERING
(B) (C) (D) (E) ADJUSTMENTS
-------- -------- ------ -------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Assets:
Cash and cash equivalents...... $ 42,211 $(37,974) $ $ $ 4,237
Other assets................... 5,690 5,690
Goodwill....................... 4,044 4,044
-------- -------- ------ -------- --------
Total Assets................ $ 42,211 $(37,974) $4,044 $ 5,690 $ 13,971
======== ======== ====== ======== ========
Liabilities and Stockholders'
Equity:
Short-term debt payable........ $ (4,245) $ (4,245)
Long-term debt and capital
lease obligations........... (1,363) (1,363)
Cash consideration payable to
Founding Company
stockholders................ (32,366) (32,366)
-------- -------- ------ -------- --------
Total Liabilities........... (37,974) (37,974)
-------- -------- ------ -------- --------
Stockholders' Equity:
Common stock................ (314) (314)
Stock warrants.............. 450 450
Paid-in capital............. 42,525 4,044 5,240 51,809
-------- -------- ------ -------- --------
Total Stockholders'
Equity.................... 42,211 4,044 5,690 51,945
-------- -------- ------ -------- --------
Total Liabilities and
Stockholders' Equity...... $ 42,211 $(37,974) $4,044 $ 5,690 $ 13,971
======== ======== ====== ======== ========
</TABLE>

4. UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS FOR THE YEAR ENDED
DECEMBER 31, 1996

a. Records the anticipated reduction in interest expense due to the
repayment of the outstanding debt and capital lease obligations of the
Founding Companies and the related effect on the provision (benefit)
for income taxes.

b. Excludes a $3.0 million one-time charge for acquired in-process
research and development from the Founding Companies, due to its
non-recurring nature.

c. Records goodwill amortization related to the Acquisitions, using a
40-year estimated life.

d. Excludes a $5.7 million one-time charge for certain financing costs
associated with the Acquisitions, due to its non-recurring nature.

e. Records the incremental provisions for federal and state income taxes
relating to the conversion from an S Corporation (or other status not
subject to corporate-level income tax) to a C Corporation for each of
SCS America, SCS Australia, Mindworks and Zelo.

F-9
<PAGE> 59

BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC. AND FOUNDING COMPANIES

NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS -- (CONTINUED)

f. Records BrightStar's estimated corporate selling, general and
administrative expenses and the related effect on the provision
(benefit) for income taxes.

<TABLE>
<CAPTION>
OFFERING
(A) (C) (E) (F) ADJUSTMENTS
------- ------- ------- ------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Revenue........................................ $ $ $ $ $
Cost of revenue................................
Selling, general and administrative
expenses(b).................................. 1,784 1,784
Depreciation and amortization..................
Stock compensation expense.....................
Interest expense(d)............................ (287) (287)
Goodwill amortization.......................... 1,092 1,092
------- ------- ------- ------- --------
Income before taxes............................ 287 (1,092) (1,784) (2,589)
Provision (benefit) for income taxes........... 115 380 (714) (219)
------- ------- ------- ------- --------
Net income (loss).......................... $ 172 $(1,092) $ (380) $(1,070) $ (2,370)
======= ======= ======= ======= ========
</TABLE>

5. UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1996

a. Records the anticipated reduction in interest expense due to repayment
of outstanding debt and capital lease obligations of the Founding
Companies and the related effect on the provision (benefit) for income
taxes.

b. Excludes a $3.0 million one-time charge for acquired in-process
research and development from the Founding Companies, due to its
non-recurring nature.

c. Records goodwill amortization related to the Acquisitions, using a
40-year estimated life.

d. Excludes a $5.7 million one-time charge for certain financing costs
associated with the Acquisitions, due to its non-recurring nature.

f. Records BrightStar's estimated corporate selling, general and
administrative expenses and the related effect on the provision
(benefit) for income taxes.

<TABLE>
<CAPTION>
OFFERING
(A) (C) (E) (F) ADJUSTMENTS
------- ------- ------- ------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Revenue........................................ $ $ $ $ $
Cost of revenue................................
Selling, general and administrative
expenses(b).................................. 1,338 1,338
Depreciation and amortization..................
Stock compensation expense.....................
Interest expense(d)............................ (195) (195)
Goodwill amortization.......................... 819 819
------- ------- ------- ------- --------
Income before taxes............................ 195 (819) (1,338) (1,962)
Provision (benefit) for income taxes........... 78 278 (535) (179)
------- ------- ------- ------- --------
Net income (loss).......................... $ 117 $ (819) $ (278) $ (803) $ (1,783)
======= ======= ======= ======= ========
</TABLE>

F-10
<PAGE> 60

BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC. AND FOUNDING COMPANIES

NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS -- (CONTINUED)

6. UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1997

b. Records goodwill amortization related to the Acquisitions, using a
40-year estimated life.

c. Records the incremental provisions for federal and state income taxes
relating to the conversion from an S Corporation (or other status not
subject to corporate-level income tax) to a C Corporation for each of
SCS America, SCS Australia, Mindworks and Zelo.

d. Records BrightStar's estimated corporate selling, general and
administrative expenses and the related effect on the provision
(benefit) for income taxes.

e. Records the reversal of a non-cash compensation charge related to the
issuance of 346,800 shares of common stock issued to senior management
of BrightStar in the Share Exchange due to its non-recurring nature.

<TABLE>
<CAPTION>
OFFERING
(A) (B) (C) (D) (E) ADJUSTMENTS
------- ------- ------- ------- ------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Revenue.............................. $ $ $ $ $ $
Cost of revenue......................
Selling, general and administrative
expenses........................... 1,338 1,338
Depreciation and amortization........
Stock compensation expense........... (3,607) (3,607)
Interest expense..................... (343) (343)
Goodwill amortization................ 819 819
------- ------- ------- ------- ------- -------
Income before taxes.................. 343 (819) (1,338) 3,607 1,793
Provision (benefit) for income
taxes.............................. 137 213 (535) (185)
------- ------- ------- ------- ------- -------
Net income (loss)................ $ 206 $ (819) $ (213) $ (803) $ 3,607 $ 1,978
======= ======= ======= ======= ======= =======
</TABLE>

7. PRO FORMA LOSS PER COMMON SHARE

The number of shares used to compute pro forma loss per common share
includes the total number of shares of common stock outstanding when the
Offering closes of 7,338,735 shares. Common shares issuable upon exercise of
common stock warrants and common stock options are anti-dilutive (decreases the
net loss per share) for the periods presented.

F-11
<PAGE> 61

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Brian R. Blackmarr and Associates, Inc.:

We have audited the accompanying balance sheets of Brian R. Blackmarr and
Associates, Inc. (the "Company") as of September 30, 1996 and 1997, and the
related statements of operations, stockholders' equity and cash flows for each
of the three years in the period ended September 30, 1997. 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, such financial statements present fairly, in all material
respects, the financial position of Brian R. Blackmarr and Associates, Inc. at
September 30, 1996 and 1997, and the results of its operations and its cash
flows for each of the three years in the period ended September 30, 1997, in
conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Dallas, Texas
December 19, 1997

F-12
<PAGE> 62

BRIAN R. BLACKMARR AND ASSOCIATES, INC.

BALANCE SHEETS

ASSETS

<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------------
1996 1997
---------- ----------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents................................. $ 16,905 $ 19,777
Certificate of deposit.................................... 60,000
Trade accounts receivable, net of allowance for doubtful
accounts of $442,438 and $437,013 at September 30, 1996
and 1997, respectively................................. 1,102,791 2,729,262
Accounts receivable -- employees.......................... 47,500 39,529
Income tax refund receivable.............................. 18,476 37,515
Unbilled revenue.......................................... 285,046 151,704
Deferred tax asset........................................ 163,569 161,564
---------- ----------
Total current assets.............................. 1,694,287 3,139,351
PROPERTY AND EQUIPMENT -- Net............................... 181,035 292,483
DEFERRED TAX ASSET.......................................... 16,051 9,943
OTHER ASSETS................................................ 34,702 58,845
---------- ----------
TOTAL ASSETS................................................ $1,926,075 $3,500,622
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable.......................................... $ 423,877 $ 421,293
Line of credit............................................ 599,764 822,764
Current maturities of notes payable....................... 37,332 234,981
Current maturities of capital lease obligations........... 30,200 76,299
Accrued salaries and other accrued expenses............... 235,170 682,706
Income taxes payable...................................... 32,609
Deferred revenue.......................................... 101,969 563,987
---------- ----------
Total current liabilities......................... 1,460,921 2,802,030
LONG-TERM DEBT:
Notes payable, net of current maturities.................. 37,336 10,898
Capital lease obligations, net of current portion......... 4,348 6,172
---------- ----------
Total long-term debt.............................. 41,684 17,070

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
Common stock, no par value -- 100,000 shares authorized,
10,000 and 13,068 shares issued and outstanding,
respectively........................................... 10,000 318,068
Retained earnings......................................... 413,470 363,454
---------- ----------
Total stockholders' equity........................ 423,470 681,522
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY........ $1,926,075 $3,500,622
========== ==========
</TABLE>

See notes to financial statements.

F-13
<PAGE> 63

BRIAN R. BLACKMARR AND ASSOCIATES, INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
---------------------------------------
1995 1996 1997
---------- ---------- -----------
<S> <C> <C> <C>
REVENUE............................................... $7,043,296 $9,226,955 $12,189,942
COST OF REVENUE....................................... 5,592,329 7,659,342 10,063,300
---------- ---------- -----------
Gross profit........................................ 1,450,967 1,567,613 2,126,642
OPERATING EXPENSES:
Selling, general and administrative................. 1,413,485 1,554,926 1,667,897
Stock compensation expense.......................... 305,000
Depreciation and amortization....................... 78,218 100,661 134,689
---------- ---------- -----------
Total operating expenses.................... 1,491,703 1,655,587 2,107,586
---------- ---------- -----------
INCOME (LOSS) FROM OPERATIONS......................... (40,736) (87,974) 19,056
OTHER INCOME.......................................... 185,782 124,412 33,414
INTEREST EXPENSE...................................... (66,343) (67,178) (96,020)
---------- ---------- -----------
INCOME (LOSS) BEFORE INCOME TAXES..................... 78,703 (30,740) (43,550)
INCOME TAX EXPENSE.................................... 39,233 106 6,466
---------- ---------- -----------
NET INCOME (LOSS)..................................... $ 39,470 $ (30,846) $ (50,016)
========== ========== ===========
</TABLE>

See notes to financial statements.

F-14
<PAGE> 64

BRIAN R. BLACKMARR AND ASSOCIATES, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK TOTAL
----------------- RETAINED STOCKHOLDERS'
SHARES AMOUNT EARNINGS EQUITY
------ -------- -------- -------------
<S> <C> <C> <C> <C>
BALANCE, OCTOBER 1, 1994.......................... 10,000 $ 10,000 $404,846 $414,846
Net income...................................... 39,470 39,470
------ -------- -------- --------
BALANCE, SEPTEMBER 30, 1995....................... 10,000 10,000 444,316 454,316
Net loss........................................ (30,846) (30,846)
------ -------- -------- --------
BALANCE, SEPTEMBER 30, 1996....................... 10,000 10,000 413,470 423,470
Issuance of common stock........................ 3,068 308,068 308,068
Net loss........................................ (50,016) (50,016)
------ -------- -------- --------
BALANCE, SEPTEMBER 30, 1997....................... 13,068 $318,068 $363,454 $681,522
====== ======== ======== ========
</TABLE>

See notes to financial statements.

F-15
<PAGE> 65

BRIAN R. BLACKMARR AND ASSOCIATES, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-------------------------------------
1995 1996 1997
--------- --------- -----------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss).................................... $ 39,470 $ (30,846) $ (50,016)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization..................... 78,218 100,661 134,689
Additions to allowance for doubtful accounts...... 464,510 (5,425)
Deferred income taxes............................. 14,591 (32,503) 8,113
Compensation expense on issuance of common
stock........................................... 305,000
Cash provided by (used in) operating working
capital:
Trade accounts receivable....................... (170,773) (330,930) (1,621,046)
Accounts receivable -- employees................ (39,799) (4,834) 7,971
Income tax refund receivable.................... (1,585) (16,891) (19,039)
Unbilled revenue................................ 5,320 (158,693) 133,342
Other assets.................................... (14,456) 12,740 (24,143)
Accounts payable................................ 206,414 (300,708) (2,584)
Accrued salaries and other accrued expenses..... 2,020 226,170 447,536
Income taxes payable............................ 6,765 (83,417) (32,609)
Deferred revenue................................ (121,917) 76,043 462,018
--------- --------- -----------
Net cash provided by (used in) operating
activities................................. 4,268 (78,698) (256,193)
--------- --------- -----------
INVESTING ACTIVITIES:
Redemption of (investment in) certificate of
deposit........................................... 500,000 (60,000) 60,000
Capital expenditures................................. (13,013) (150,576) (111,612)
--------- --------- -----------
Net cash provided by (used in) investing
activities................................. 486,987 (210,576) (51,612)
--------- --------- -----------
FINANCING ACTIVITIES:
Borrowings under (payments on) line of credit........ 599,764 223,000
Proceeds from (payments on) term loan................ (454,596) (357,900) 141,679
Payments on note payable and capital lease
obligations....................................... (66,568) (5,068) (57,070)
Proceeds from issuance of common stock............... 3,068
--------- --------- -----------
Net cash provided by (used in) financing
activities................................. (521,164) 236,796 310,677
--------- --------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS... (29,909) (52,478) 2,872
CASH AND CASH EQUIVALENTS:
Beginning of year.................................... 99,292 69,383 16,905
--------- --------- -----------
End of year.......................................... $ 69,383 $ 16,905 $ 19,777
========= ========= ===========
SUPPLEMENTAL INFORMATION:
Interest paid........................................ $ 66,343 $ 67,178 $ 96,020
========= ========= ===========
Income taxes paid.................................... $ 32,609 $ -- $ 50,000
========= ========= ===========
Equipment financed through capital leases............ $ -- $ 34,548 $ 47,923
========= ========= ===========
</TABLE>

See notes to financial statements.

F-16
<PAGE> 66

BRIAN R. BLACKMARR AND ASSOCIATES, INC.

NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization -- Brian R. Blackmarr and Associates, Inc., a Texas
corporation (the "Company"), is an interdisciplinary, professional consulting
firm that provides managerial information system and engineering services to a
variety of businesses and government agencies. The Company was incorporated in
1979 and is headquartered in Dallas, Texas.

Basis of Presentation and Use of Estimates -- The accompanying financial
statements have been prepared in accordance with generally accepted accounting
principles. The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

Revenue Recognition -- The Company provides its services for fees that are
primarily based on time and materials used to complete projects for clients.
Accordingly, revenue is recognized as consulting services are performed.
Unbilled revenue is recorded for contract services provided for which a billing
has not been rendered. Deferred revenue represents the excess of amounts billed
over contract costs and expenses incurred.

Cash Equivalents -- The Company's cash equivalents consist of liquid
investments purchased with original maturities of three months or less.

Property and Equipment -- The Company's various items of property and
equipment are stated at cost, less accumulated depreciation and amortization.
Depreciation is computed using the declining balance method over the estimated
useful lives of the assets, which range from three to seven years. Amortization
is computed over the estimated useful lives of the assets or the lease term,
whichever is shorter.

Financial Instruments -- The Company's financial instruments consist of
cash and cash equivalents, trade accounts receivable, short-term debt and
accounts and notes payable, the carrying values of which are reasonable
estimates of their fair values due to the short-term maturities or current
interest rates.

Deferred Income Taxes -- The Company provides for deferred income taxes
under the asset and liability method for temporary differences in the
recognition of income and expense for tax and financial reporting purposes.

2. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30,
--------------------
1996 1997
-------- --------
<S> <C> <C>
Computer equipment and software............................. $365,554 $475,928
Furniture and fixtures...................................... 243,399 244,637
Equipment under capital lease............................... 111,910 246,435
-------- --------
Total....................................................... 720,863 967,000
Less accumulated depreciation and amortization.............. 539,828 674,517
-------- --------
Property and equipment -- net..................... $181,035 $292,483
======== ========
</TABLE>

Depreciation and amortization expense charged to operations was $100,661
and $134,689 for the years ended September 30, 1996 and 1997, respectively.

F-17
<PAGE> 67

BRIAN R. BLACKMARR AND ASSOCIATES, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

3. LINE OF CREDIT AND LONG-TERM DEBT

At September 30, 1996 and 1997, the Company had $599,764 and $822,764,
respectively, of borrowings outstanding under a revolving line of credit
provided by a commercial bank. The borrowing capacity under the line of credit
was increased in November 1996 from $750,000 to $1,000,000, with interest
payable monthly at the bank's prime lending rate plus 1.0% (9.5% at September
30, 1997). Borrowings under the line of credit are due and payable on demand,
are subject to borrowing base requirements based on 80% of eligible accounts
receivable (as defined in a related financing and security agreement) and are
secured by the Company's accounts receivable and guaranteed by the Company's
principal stockholder.

At September 30, 1996, the Company also had indebtedness outstanding under
a promissory note issued to a financial institution in the amount of $74,668,
due in 36 monthly principal payments and bearing interest at the lender's prime
rate plus 1.5%. On November 5, 1996, the Company refinanced the indebtedness
outstanding under the line of credit and the promissory note. Through the
refinancing, a term loan in the principal amount of $261,557 was originated to
refinance $250,000 of indebtedness outstanding under the line of credit and the
balance due on the promissory note totaling $71,557, reduced by the Company's
$60,000 certificate of deposit. The term loan is payable in 24 monthly
installments of $10,898, plus interest at the bank's prime lending rate plus
0.5% (9.0% at September 30, 1997). The term loan is secured by the Company's
accounts receivable and a guarantee from the Company's principal stockholder. At
September 30, 1997, the outstanding balance under the term loan was $141,679 and
matures as follows: $130,781 through September 1998 and $10,898 through
September 1999.

At September 30, 1997, the Company also had indebtedness outstanding under
another note payable in the principal amount of $104,200, which was issued to a
bank and is payable on demand, with interest at 10% per annum.

4. INCOME TAXES

The components of income tax expense are as follows:

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
------------------------------
1995 1996 1997
------- -------- -------
<S> <C> <C> <C>
Current expense...................................... $24,642 $ 32,609 $(1,647)
Deferred expense (benefit)........................... 14,591 (32,503) 8,113
------- -------- -------
Total...................................... $39,233 $ 106 $ 6,466
======= ======== =======
</TABLE>

A reconciliation of the statutory federal income tax rate to the effective
rate is as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30,
-------------------------------
1995 1996 1997
------- -------- --------
<S> <C> <C> <C>
Provision (benefit) at statutory rate............... $27,546 $(10,759) $(14,807)
State taxes, net of federal benefits................ 2,091 6 (1,293)
Nondeductible travel and entertainment.............. 9,596 10,859 22,566
------- -------- --------
Total..................................... $39,233 $ 106 $ 6,466
======= ======== ========
</TABLE>

F-18
<PAGE> 68

BRIAN R. BLACKMARR AND ASSOCIATES, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The tax effects of temporary differences result in a net deferred tax asset
as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30,
--------------------
1996 1997
-------- --------
<S> <C> <C>
Current deferred tax asset -- allowance for doubtful
accounts.................................................. $163,569 $161,564
Noncurrent deferred tax asset -- property and equipment..... 16,051 9,943
-------- --------
Net deferred tax asset............................ $179,620 $171,507
======== ========
</TABLE>

Management believes that no valuation allowance against the net deferred
tax asset is necessary.

5. LEASE COMMITMENTS

The Company leases office space, computer workstations and office equipment
under various operating and capital leases, that expire at various dates through
the year 2000. At September 30, 1996 and 1997, assets recorded under capital
leases were $111,910 and $246,435, respectively, and related accumulated
amortization was $54,851 and $104,579, respectively.

Minimum future commitments under these agreements at September 30, 1997 are
as follows:

<TABLE>
<CAPTION>
CAPITAL OPERATING
------- ---------
<S> <C> <C>
Year ending September 30:
1998...................................................... $78,063 $208,992
1999...................................................... 6,845 70,582
2000...................................................... 9,637
------- --------
Total minimum lease payments................................ 84,908 $289,211
========
Less amounts representing interest.......................... 2,437
-------
Present value of capital lease obligations.................. 82,471
Less current portion of capital lease obligations........... 76,299
-------
Long-term capital lease obligations, less current portion... $ 6,172
=======
</TABLE>

Rent expense was $365,214, $372,271 and $394,123 during the years ended
September 30, 1995, 1996 and 1997, respectively, and is included in selling,
general and administrative expense in the statements of operations.

6. COMMON STOCK

During March 1997, the Company issued 3,068 shares of common stock with an
estimated fair value of approximately $100 per share to certain employees for $1
per share. In connection with these stock issuances, compensation expense
totaling $305,000 was recognized during the year ended September 30, 1997 and is
included in stock compensation expense.

7. RETIREMENT PLAN

The Company maintains a 401(k) retirement plan in which substantially all
salaried employees are eligible to participate. Employees may contribute up to
15% of their compensation to the plan, subject to certain limits imposed by
regulations under the Internal Revenue Code. The Company may, at its sole
discretion, make contributions to the plan. The Company has not made any
contributions to the plan.

F-19
<PAGE> 69

BRIAN R. BLACKMARR AND ASSOCIATES, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

8. SUBSEQUENT EVENTS

In December 1997, the stockholders of the Company entered into a definitive
agreement with BrightStar Information Technology Group, Inc. ("BrightStar") for
the acquisition by BrightStar of all the Company's outstanding common stock. The
consummation of the acquisition is contingent upon BrightStar's initial public
offering of its common stock.

* * * * * *

F-20
<PAGE> 70

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Integrated Controls, Inc.:

We have audited the accompanying balance sheets of Integrated Controls,
Inc. (the "Company") as of December 31, 1995 and 1996, and the related
statements of income, stockholders' equity and cash flows for each of the three
years ended December 31, 1996. 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.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of Integrated Controls, Inc. at December 31,
1995 and 1996, and the results of its operations and its cash flows for the
years ended December 31, 1996, in conformity with generally accepted accounting
principles.

DELOITTE & TOUCHE LLP

Dallas, Texas
December 19 , 1997

F-21
<PAGE> 71

INTEGRATED CONTROLS, INC.

BALANCE SHEETS

ASSETS

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------- SEPTEMBER 30,
1995 1996 1997
---------- ---------- -------------
(UNAUDITED)
<S> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents............................. $ 4,165 $ 61,308 $ 28,429
Accounts receivable, net of allowance for doubtful
accounts of $10,000 at December 31, 1996........... 907,361 1,634,927 2,771,787
Prepaid expenses and other current assets............. 27,003 41,748 15,449
---------- ---------- ----------
Total current assets.......................... 938,529 1,737,983 2,815,665
PROPERTY AND EQUIPMENT -- Net........................... 365,134 802,479 1,188,369
OTHER ASSETS:
Investment in and advances to affiliate............... 36,659 45,362 71,141
Goodwill, net of accumulated amortization............. 103,712
Deposits and other.................................... 4,487 10,926 10,518
---------- ---------- ----------
Total other assets............................ 41,146 56,288 185,371
---------- ---------- ----------
TOTAL ASSETS............................................ $1,344,809 $2,596,750 $4,189,405
========== ========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Short-term borrowings................................. $ 573,911 $ 983,702 $1,232,357
Current maturities of long-term debt and current
portion of capital lease obligations............... 81,045 183,883 278,489
Bank overdraft........................................ 31,870 62,811
Accounts payable...................................... 42,508 140,072 186,098
Accrued salaries and other liabilities................ 98,937 246,074 734,178
Deferred income taxes................................. 249,249 334,333 449,547
---------- ---------- ----------
Total current liabilities..................... 1,077,520 1,888,064 2,943,480
LONG-TERM LIABILITIES:
Long-term debt, net of current maturities............. 38,412 112,168 64,930
Capital lease obligations, net of current portion..... 196,926
Deferred income taxes................................. 36,692 92,759 175,767
---------- ---------- ----------
Total long-term liabilities................... 75,104 204,927 437,623
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, no par value -- 600,000 shares
authorized; 300,000 shares issued and outstanding
at December 31, 1995 and 328,351 shares issued and
outstanding at December 31, 1996................... 16,250 16,250 16,250
Additional paid-in capital............................ 25,248 25,248
Retained earnings..................................... 425,935 641,384 945,927
Treasury stock, 100,000 shares at cost at December 31,
1995 and 71,649 shares at cost at December 31,
1996............................................... (250,000) (179,123) (179,123)
---------- ---------- ----------
Total stockholders' equity.................... 192,185 503,759 808,302
---------- ---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.... $1,344,809 $2,596,750 $4,189,405
========== ========== ==========
</TABLE>

See notes to financial statements.

F-22
<PAGE> 72

INTEGRATED CONTROLS, INC.

STATEMENTS OF INCOME

See notes to financial statements.

F-23
<PAGE> 73

INTEGRATED CONTROLS, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
------------------ PAID-IN RETAINED TREASURY STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS STOCK EQUITY
-------- ------- ---------- -------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1994.... 400,000 $16,250 $ -- $ 67,709 $ -- $ 83,959
Net income................ 155,825 155,825
-------- ------- ------- -------- --------- ---------
BALANCE, DECEMBER 31,
1994...................... 400,000 16,250 -- 223,534 -- 239,784
Purchase of treasury
shares................. (100,000) (250,000) (250,000)
Net income................ 202,401 202,401
-------- ------- ------- -------- --------- ---------
BALANCE, DECEMBER 31,
1995...................... 300,000 16,250 -- 425,935 (250,000) 192,185
Sale of treasury shares in
connection with
employee stock purchase
plan................... 28,351 25,248 70,877 96,125
Net income................ 215,449 215,449
-------- ------- ------- -------- --------- ---------
BALANCE, DECEMBER 31,
1996...................... 328,351 16,250 25,248 641,384 (179,123) 503,759
NET INCOME (Unaudited)...... 304,543 304,543
-------- ------- ------- -------- --------- ---------
BALANCE, SEPTEMBER 30, 1997
(Unaudited)............... 328,351 $16,250 $25,248 $945,927 $(179,123) $ 808,302
======== ======= ======= ======== ========= =========
</TABLE>

See notes to financial statements.

F-24
<PAGE> 74

INTEGRATED CONTROLS, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------ -------------------------
1994 1995 1996 1996 1997
--------- ---------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income................................. $ 155,825 $ 202,401 $ 215,449 $ 160,503 $ 304,543
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation and amortization............ 28,153 59,665 124,066 79,879 189,018
Deferred income taxes.................... 99,429 117,720 141,151 104,060 198,221
Equity in earnings of affiliate.......... (3,125) (15,922) (10,525) (25,998)
Cash provided by (used in) operating
working capital:
Accounts receivable.................... (295,957) (394,746) (727,566) (354,564) (1,096,591)
Prepaid expenses and other current
assets.............................. (11,099) (2,822) (14,745) 14,219 26,299
Accounts payable and overdrafts........ 25,612 36,607 65,694 24,851 108,837
Accrued salaries and other
liabilities......................... 61,626 5,015 147,137 253,457 450,536
Deposits and other..................... 1,961 (2,802) (6,439) (3,350) 7,516
--------- ---------- ----------- ----------- -----------
Net cash provided by (used in)
operating activities.............. 65,550 17,913 (71,175) 268,530 162,381
--------- ---------- ----------- ----------- -----------
INVESTING ACTIVITIES:
Capital expenditures....................... (148,244) (243,525) (561,411) (280,218) (232,321)
Advances to and repayments from
affiliate................................ (111,857) 78,323 7,219 7,000
Acquisition of Einstein Digital Media...... (37,597)
--------- ---------- ----------- ----------- -----------
Net cash used in investing
activities........................ (260,101) (165,202) (554,192) (273,218) (269,918)
--------- ---------- ----------- ----------- -----------
FINANCING ACTIVITIES:
Proceeds from short-term borrowings........ 472,181 1,178,029 1,791,570 930,000 505,881
Repayment of short-term borrowings......... (352,116) (963,765) (1,231,779) (1,032,510) (382,226)
Proceeds from issuance of long-term-debt... 97,750 83,692 309,508 174,240 146,084
Repayment of long-term-debt and capital
leases................................... (18,509) (51,257) (132,914) (87,890) (195,081)
Repayment of note payable to related
party.................................... (150,000)
Repurchase of treasury stock............... (100,000)
Proceeds from issuance of common stock..... 96,125 96,125
--------- ---------- ----------- ----------- -----------
Net cash provided by financing
activities........................ 199,306 146,699 682,510 79,965 74,658
--------- ---------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS................................ 4,755 (590) 57,143 75,277 (32,879)
CASH AND CASH EQUIVALENTS:
Beginning of period........................ 4,755 4,165 4,165 61,308
--------- ---------- ----------- ----------- -----------
End of period.............................. $ 4,755 $ 4,165 $ 61,308 $ 79,442 $ 28,429
========= ========== =========== =========== ===========
SUPPLEMENTAL INFORMATION:
Interest paid.............................. $ 13,773 $ 23,779 $ 73,363 $ 51,116 $ 111,931
========= ========== =========== =========== ===========
Income taxes paid.......................... $ -- $ -- $ -- $ -- $ --
========= ========== =========== =========== ===========
NONCASH INVESTING AND FINANCING:
Note payable issued in connection with the
acquisition of Einstein Digital Media.... $ -- $ -- $ -- $ -- $ 125,000
========= ========== =========== =========== ===========
Equipment financed through capital
leases................................... $ -- $ -- $ -- $ -- $ 293,291
========= ========== =========== =========== ===========
Repurchase of common stock for note
payable.................................. $ -- $ 150,000 $ -- $ -- $ --
========= ========== =========== =========== ===========
</TABLE>

See notes to financial statements.

F-25
<PAGE> 75

INTEGRATED CONTROLS, INC.

NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization -- Integrated Controls, Inc., a Louisiana corporation (the
"Company"), provides control system engineering, digital communication and
computer consulting services to various customers throughout the Gulf Coast area
of the United States and to certain international customers. The Company was
incorporated in 1991 and is headquartered in Lafayette, Louisiana and maintains
offices in Baton Rouge and New Orleans, Louisiana and Houston, Texas.

Revenue Recognition -- The Company provides its services for fees that are
based on time and materials used to complete projects for clients. Accordingly,
revenue is recognized as engineering, digital communication and computer
consulting services are performed.

Cash Equivalents -- The Company's cash equivalents consist of liquid
investments purchased with original maturities of three months or less.

Property and Equipment -- The Company's various items of property and
equipment are stated at cost, less accumulated depreciation and amortization.
Depreciation is computed principally using straight-line methods over the
estimated useful lives of the individual assets, which range from five to 15
years. Leasehold improvements are amortized over the lease term.

Goodwill -- The goodwill reflected on the accompanying balance sheets
represents the cost in excess of estimated fair value of the net assets
(including tax attributions) acquired in the Einstein Digital Media acquisition
(see Note 2). Goodwill is being amortized on a straight-line basis over a
seven-year period.

Equity Investment -- The Company owns 50% of ICON Environmental Services,
Inc. ("ICON Environmental") and accounts for this investment using the equity
method of accounting. The Company's share of earnings of this affiliate totaled
$3,125 and $15,922 for the years ended December 31, 1995 and 1996, respectively.
The Company had outstanding advances to ICON Environmental totaling $33,534 at
December 31, 1995, and $26,315 at December 31, 1996. These balances are included
in the investment in and advances to affiliate account.

Financial Instruments -- The Company's financial instruments consist of
cash and cash equivalents, accounts receivable, short-term debt, and accounts
and notes payable, the carrying values of which are reasonable estimates of
their fair values due to their short-term maturities or current interest rates.

Interim Financial Information -- The interim financial statements as of
September 30, 1997, and for the nine months ended September 30, 1996 and 1997,
are unaudited, and certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been omitted. In the opinion of management, all
adjustments, consisting only of normal recurring adjustments, necessary to
fairly present the financial position, results of operations and cash flows with
respect to the interim financial statements, have been included. The results of
operations for the interim periods are not necessarily indicative of the results
to be achieved for the entire fiscal year.

F-26
<PAGE> 76

INTEGRATED CONTROLS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

2. ACQUISITION

On May 13, 1997, the Company acquired all the assets of Einstein Digital
Media for cash of $37,597, the issuance of a promissory note in the original
principal amount of $125,000 and the assumption of approximately $44,000 in
liabilities. Einstein Digital Media develops Internet-based advertising and
marketing media. Goodwill in the amount of $110,445 was recorded as a result of
the acquisition.

3. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1995 1996
-------- ----------
<S> <C> <C>
Computer equipment and software............................. $360,330 $ 769,781
Furniture, fixtures and equipment........................... 95,452 247,412
Vehicles.................................................... 7,900 7,900
-------- ----------
Total............................................. 463,682 1,025,093
Less accumulated depreciation and amortization.............. 98,548 222,614
-------- ----------
Property and equipment -- net..................... $365,134 $ 802,479
======== ==========
</TABLE>

4. SHORT-TERM BORROWINGS

Short-term borrowings consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1995 1996
-------- --------
<S> <C> <C>
Notes payable to AFCO Credit Corporation, due in nine
monthly installments, with interest at rates ranging from
8.76% to 11.50% per annum, maturing in September 1997..... $ 27,003 $ 30,569
Promissory note payable to a former stockholder in the
original principal amount of $150,000, payable in ten
monthly installments of $15,000, bearing no interest, with
final maturity on January 15, 1996........................ 150,000
Bank line of credit (see description below)................. 396,908 953,133
-------- --------
Total short-term borrowings....................... $573,911 $983,702
======== ========
</TABLE>

Bank Line of Credit -- The Company has a $1,200,000 line of credit with a
commercial bank for working capital requirements. The line of credit bears
interest at the bank's prime rate (9.75% at December 31, 1996) and matured May
31, 1997. Amounts available for borrowings are based on the level and
composition of the Company's accounts receivable. The line of credit is secured
by a first security interest in the Company's accounts receivable and property
and equipment and the continuing guaranty of the Company's principal
stockholders. In August 1997, the Company renewed its line of credit with the
bank and increased the amount available to $1,700,000. The new line bears
interest at the bank's prime rate plus 1% and matures on May 31, 1998.

The line of credit agreement requires the maintenance of certain minimum
financial ratios. As of December 31, 1996, the Company was in violation of
certain of these covenants. The bank waived the covenant violations for the year
ended December 31, 1996.

F-27
<PAGE> 77

INTEGRATED CONTROLS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

5. LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1995 1996
-------- --------
<S> <C> <C>
Equipment loans from a commercial bank (the "Bank"), due in
monthly installments, including interest at rates ranging
from 8.0% to 10.25%, maturing through December 1998,
secured by equipment and the continuing guaranty of the
Company's principal stockholders.......................... $119,457 $296,051
Less current portion........................................ 81,045 183,883
-------- --------
Long-term debt, less current portion........................ $ 38,412 $112,168
======== ========
</TABLE>

Equipment Line of Credit -- Borrowings from the Bank for equipment
purchases are made under an equipment line of credit arrangement (the "Equipment
Line"). The Equipment Line provided for borrowings through May 31, 1997, with
repayment terms over a two-year period. The Equipment Line bears interest at a
rate equal to the Bank's prime rate plus 1/2%. Borrowings under the Equipment
Line are generally subject to the same terms and conditions as the Company's
line of credit facility discussed in Note 4. In August 1997, the Company entered
into an additional term loan with the Bank in the original principal amount of
$61,438, payable in 35 monthly installments of $1,986, including interest at the
Bank's prime rate plus 1.5%, due July 2000.

The aggregate annual maturities of long-term debt at December 31, 1996 are
as follows:

<TABLE>
<S> <C>
Year ended December 31:
1997.................................................. $183,883
1998.................................................. 112,168
--------
Total......................................... $296,051
========
</TABLE>

6. EMPLOYEE BENEFIT PLANS

The Company maintains a defined contribution (401(k)) plan for all eligible
employees who have completed at least one month of service. Employees may elect
to defer up to 25% of their salary, subject to statutory limits, through
contributions to the plan. Employer matching and profit sharing contributions
are discretionary, and, to date, no matching or profit sharing contributions
have been made.

7. COMMITMENTS AND CONTINGENCIES

The Company has guaranteed certain bank indebtedness of ICON Environmental.

The Company is also jointly listed with ICON Environmental on a
cross-corporate indemnity agreement with an insurance company that entitles
either company to purchase surety bond insurance. In the event there would be a
claim against a performance bond obtained by ICON Environmental, the Company
could be liable in the event of default by ICON Environmental.

The Company entered into a two-year employment agreement with the former
president of Einstein Digital Media. Under the terms of the agreement, the
Company has agreed to pay the employee a bonus of up to $150,000 if certain
performance objectives are achieved. The bonus is payable in May 1998 and is
payable in cash and up to 50% in common stock.

F-28
<PAGE> 78

INTEGRATED CONTROLS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

8. STOCKHOLDERS' EQUITY

Stock Split -- During 1996, the Company effected a 1,000-for-1 stock split,
which increased the number of issued shares from 400 to 400,000. The number of
shares of common stock outstanding has been restated to give effect to the stock
split.

Treasury Stock -- During 1995, the Company reacquired 100,000 shares of
common stock from a stockholder for total consideration of $250,000. The Company
paid cash of $100,000 and issued a short-term promissory note in the face amount
of $150,000. The promissory note was repaid in full during 1996. During 1996,
the Company reissued 28,351 of the treasury shares in connection with the
Employee Stock Purchase Plan discussed below.

Employee Stock Purchase Plan -- During 1996, the Company adopted an
Employee Stock Purchase Plan (the "Plan"), which provided eligible employees
with the opportunity to acquire up to 100,000 shares of the Company's common
stock at a price of $4.11 per share, which was the estimated fair value per
share based on an independent appraisal. The Company issued 28,351 shares under
the Plan and raised approximately $96,000, net of offering costs totaling
approximately $20,000. The offering period expired during 1996, and no further
shares are issuable under the Plan. Under the terms of the Plan, the Company has
the option to repurchase employees' shares for a period of seven months after
termination of employment at a price based on a specified formula similar to
that used in determining the offering price.

9. OPERATING LEASES

The Company leases various equipment and its office facility under
noncancelable operating lease arrangements extending through 2002. Rental
expense was $45,501, $77,997 and $136,503 for the years ended December 31, 1994,
1995 and 1996, respectively, and is included in selling, general and
administrative expense in the statements of income.

Minimum future lease payments under noncancelable operating leases at
December 31, 1996 are as follows:

<TABLE>
<S> <C>
Year ending December 31:
1997................................................... $ 261,600
1998................................................... 226,900
1999................................................... 202,100
2000................................................... 197,900
2001................................................... 181,400
----------
Total.......................................... $1,069,900
==========
</TABLE>

In May 1997, the Company began leasing computer equipment under capital
lease arrangements extending through 2002. Future minimum lease payments
required under these noncancelable leases are as follows:

<TABLE>
<S> <C>
Year ending December 31:
1997.................................................... $ 53,667
1998.................................................... 82,189
1999.................................................... 82,189
2000.................................................... 41,703
--------
Total........................................... $259,748
========
</TABLE>

F-29
<PAGE> 79

INTEGRATED CONTROLS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

10. INCOME TAXES

The components of income tax expense are as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1994 1995 1996
------- -------- --------
<S> <C> <C> <C>
Current............................................. $ -- $ -- $ --
Deferred............................................ 99,428 117,720 141,151
------- -------- --------
Total..................................... $99,428 $117,720 $141,151
======= ======== ========
</TABLE>

Deferred taxes are principally due to differences in the basis and
depreciable lives for property and equipment for book and tax purposes, net
operating loss carryforwards and the use of the cash method of accounting for
tax purposes.

Deferred tax assets and liabilities consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1995 1996
--------- ---------
<S> <C> <C>
Asset -- net operating loss carryforward.................... $ 82,764 $ 155,940
Liabilities:
Cash basis differences.................................... (332,013) (490,431)
Property, equipment and other............................. (36,692) (92,601)
--------- ---------
Net deferred tax liability.................................. $(285,941) $(427,092)
========= =========
</TABLE>

For income tax purposes, the Company has available unused net operating
loss carryforwards of approximately $415,000 at December 31, 1996, which may be
applied against future taxable income of the Company. These carryforwards expire
in various years ranging from 2007 through 2011.

The following is a reconciliation of taxes computed at the federal
statutory rate to the provision for income taxes included in the financial
statements:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1994 1995 1996
------- -------- --------
<S> <C> <C> <C>
Taxes computed by applying federal statutory rate... $86,786 $108,841 $121,244
State income taxes, net of federal benefits......... 9,477 11,524 13,454
Expenses not deductible for tax purposes............ 3,165 3,496 6,453
Other............................................... (6,141)
------- -------- --------
Total..................................... $99,428 $117,720 $141,151
======= ======== ========
</TABLE>

11. CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS

A majority of the Company's accounts receivable at December 31, 1996 result
from sales to third-party companies engaged in the oil and gas industry or
related industries. This concentration of customers may impact the Company's
overall credit risk, in that these entities may be similarly affected by changes
in economic or other conditions. In addition, the Company generally does not
require collateral or other security to support customer receivables.

During the year ended December 31, 1996, sales to two customers accounted
for approximately 25% and 12% of the Company's revenues, respectively.
Receivables from these customers totaled approximately $628,000 at December 31,
1996.

F-30
<PAGE> 80

INTEGRATED CONTROLS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

12. SUBSEQUENT EVENT

In December 1997, the stockholders of the Company entered into an agreement
with BrightStar Information Technology Group, Inc. ("BrightStar") for the
acquisition by BrightStar of all the Company's outstanding common stock. The
consummation of the acquisition is contingent upon BrightStar's initial public
offering of its common stock.

* * * * * *

F-31
<PAGE> 81

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Mindworks Professional Education Group, Inc.:

We have audited the accompanying balance sheet of Mindworks Professional
Education Group, Inc. (the "Company") as of December 31, 1996, and the related
statements of operations, stockholders' deficit and cash flows for the year
ended December 31, 1996. 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 audit.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of Mindworks Professional Education Group, Inc.
at December 31, 1996, and the results of its operations and its cash flows for
the year ended December 31, 1996, in conformity with generally accepted
accounting principles.

DELOITTE & TOUCHE LLP

Dallas, Texas
December 19 , 1997

F-32
<PAGE> 82

MINDWORKS PROFESSIONAL EDUCATION GROUP, INC.

BALANCE SHEETS

ASSETS

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents................................. $ 17,711 $ 41,032
Accounts receivable....................................... 63,978 130,494
Inventory................................................. 5,395 31,117
Prepaid expenses and other current assets................. 2,750
--------- ---------
Total current assets.............................. 87,084 205,393
PROPERTY AND EQUIPMENT -- Net............................... 123,306 110,869
OTHER ASSETS:
Intangibles, net of accumulated amortization of $11,250 at
December 31, 1996...................................... 18,750 13,125
Deposits.................................................. 3,083 3,083
--------- ---------
Total other assets................................ 21,833 16,208
--------- ---------
TOTAL ASSETS................................................ $ 232,223 $ 332,470
========= =========

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
Current maturities of long-term debt and capital lease
obligation............................................. $ 41,307 $ 97,083
Accounts payable.......................................... 34,002 98,005
Accrued liabilities....................................... 14,611 18,963
Deferred revenue.......................................... 4,911 1,611
--------- ---------
Total current liabilities......................... 94,831 215,662
LONG-TERM DEBT, net of current maturities................... 264,051 186,323
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT:
Common stock, $.01 par value -- 10,000,000 shares
authorized; 60,000 shares issued and outstanding....... 600 600
Additional paid-in capital................................ 59,400 59,400
Accumulated deficit....................................... (186,659) (129,515)
--------- ---------
Total stockholders' deficit....................... (126,659) (69,515)
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT....... $ 232,223 $ 332,470
========= =========
</TABLE>

See notes to financial statements.

F-33
<PAGE> 83

MINDWORKS PROFESSIONAL EDUCATION GROUP, INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED SEPTEMBER 30,
DECEMBER 31, --------------------------
1996 1996 1997
------------ ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
REVENUE................................................ $808,192 $578,998 $1,015,554
COST OF REVENUE........................................ 358,289 226,760 394,939
-------- -------- ----------
Gross profit......................................... 449,903 352,238 620,615
OPERATING EXPENSES:
Selling, general and administrative.................. 407,675 297,862 501,124
Depreciation and amortization........................ 63,435 47,148 42,752
-------- -------- ----------
Total operating expenses..................... 471,110 345,010 543,876
-------- -------- ----------
INCOME (LOSS) FROM OPERATIONS.......................... (21,207) 7,228 76,739
INTEREST EXPENSE....................................... (33,733) (23,757) (19,595)
-------- -------- ----------
NET INCOME (LOSS)...................................... $(54,940) $(16,529) $ 57,144
======== ======== ==========
</TABLE>

See notes to financial statements.

F-34
<PAGE> 84

MINDWORKS PROFESSIONAL EDUCATION GROUP, INC.

STATEMENTS OF STOCKHOLDERS' DEFICIT

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
--------------- PAID-IN ACCUMULATED STOCKHOLDERS'
SHARES AMOUNT CAPITAL DEFICIT DEFICIT
------ ------ ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1995.................. 600 $600 $59,400 $(131,719) $ (71,719)
Net loss................................ (54,940) (54,940)
--- ---- ------- --------- ---------
BALANCE, DECEMBER 31, 1996................ 600 600 59,400 (186,659) (126,659)
Net income (Unaudited).................. 57,144 57,144
--- ---- ------- --------- ---------
BALANCE, SEPTEMBER 30, 1997 (Unaudited)... 600 $600 $59,400 $(129,515) $ (69,515)
=== ==== ======= ========= =========
</TABLE>

See notes to financial statements.

F-35
<PAGE> 85

MINDWORKS PROFESSIONAL EDUCATION GROUP, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED SEPTEMBER 30,
DECEMBER 31, --------------------------
1996 1996 1997
------------ ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss).................................... $(54,940) $(16,529) $ 57,144
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization..................... 63,435 47,148 42,752
Provision for allowance for doubtful accounts..... 4,000
Cash provided by (used in) operating working capital:
Accounts receivable............................... (63,978) (63,215) (70,516)
Inventory......................................... (395) (25,057) (25,722)
Prepaid expenses and other current assets......... 3,618 (2,750)
Accounts payable.................................. 3,505 7,596 64,003
Accrued liabilities............................... 14,611 6,930 4,352
Deferred revenue.................................. 4,681 24,319 (3,300)
-------- -------- ---------
Net cash provided by (used in) operating
activities................................. (29,463) (18,808) 69,963
-------- -------- ---------
INVESTING ACTIVITIES -- Capital expenditures........... (55,089) (52,229) (24,690)
-------- -------- ---------
FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt............. 132,296 148,607 133,406
Repayment of long-term debt and capital lease........ (34,373) (40,470) (155,358)
-------- -------- ---------
Net cash provided by (used in) financing
activities................................. 97,923 108,137 (21,952)
-------- -------- ---------
NET INCREASE IN CASH AND CASH
EQUIVALENTS.......................................... 13,371 37,100 23,321
CASH AND CASH EQUIVALENTS:
Beginning of period.................................. 4,340 4,340 17,711
-------- -------- ---------
End of period........................................ $ 17,711 $ 41,440 $ 41,032
======== ======== =========
SUPPLEMENTAL INFORMATION:
Interest paid........................................ $ 33,733 $ 23,757 $ 19,595
======== ======== =========
</TABLE>

See notes to financial statements.

F-36
<PAGE> 86

MINDWORKS PROFESSIONAL EDUCATION GROUP, INC.

NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization -- Mindworks Professional Education Group, Inc., an Arizona
corporation (the "Company"), provides technical training and certification
preparation for information technology professionals and others. The Company was
incorporated in 1995 and is headquartered in Scottsdale, Arizona.

Basis of Presentation and Use of Estimates -- The accompanying financial
statements have been prepared in accordance with generally accepted accounting
principles. The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Revenue Recognition -- The Company recognizes revenue from the sale of
training kits and tuition received from training seminars is recognized as
product is shipped or services are performed. Deferred revenue represents
payments received for future training course attendance.

Cash Equivalents -- The Company's cash equivalents consist of liquid
investments purchased with an original maturity of three months or less.

Property and Equipment -- The Company's various items of property and
equipment are stated at cost, less accumulated depreciation and amortization.
Depreciation is computed using the declining balance method over the estimated
useful lives of the assets, which range from five to seven years. Amortization
is computed on a straight-line basis over the estimated useful lives of the
assets or the lease term, whichever is shorter.

Financial Instruments -- The Company's financial instruments consist of
cash and cash equivalents, accounts receivable, short-term debt and accounts and
notes payable, the carrying values of which are reasonable estimates of their
fair values due to the short-term maturities or current interest rates.

Intangibles -- The Company's intangibles consist of intellectual property
rights contributed by certain principals at the inception of the Company.
Amortization is computed using the straight-line method over four years.

Income Taxes -- The Company is a subchapter S Corporation and, accordingly,
is not subject to corporate-level federal income tax. Income generated by the
Company is taxed to the stockholders individually. Accordingly, no income tax
expense has been recorded in the financial statements.

F-37
<PAGE> 87

MINDWORKS PROFESSIONAL EDUCATION GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

2. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
1996
------------
<S> <C>
Computer equipment and software............................. $126,709
Furniture, fixtures and equipment........................... 56,032
Leasehold improvements...................................... 24,840
--------
Total............................................. 207,581
Less accumulated depreciation and amortization.............. 84,275
--------
Property and equipment -- net..................... $123,306
========
</TABLE>

Depreciation and amortization expense charged to operations was $55,935 for
the year ended December 31, 1996.

3. LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
1996
------------
<S> <C>
Equipment loans, due in monthly installments, including
interest at the bank's prime rate ranging from 9.75% to
10.50% per annum, maturing through January 2001, secured
by equipment and the continuing guaranty of the Company's
principal stockholders.................................... $149,166
Promissory note payable to a stockholder; due in quarterly
payments through September 30, 1997 -- interest-only at a
rate of 10% per annum; after September 30, 1997, balance
is payable in 30 monthly installments of $5,000, plus
interest at 10% per annum................................. 150,000
--------
Total long-term debt........................................ 299,166
Less current portion........................................ 35,115
--------
Long-term debt, less current portion.............. $264,051
========
</TABLE>

4. CAPITAL LEASE OBLIGATION

The Company is leasing equipment under a capital lease through October
1997. Future minimum rental payments required under this noncancelable lease at
December 31, 1996 are as follows:

<TABLE>
<S> <C>
Total payments.............................................. $7,170
Less amounts representing interest.......................... 978
------
Capital lease obligation.................................... 6,192
Less current portion........................................ 6,192
------
Capital lease obligation, long-term......................... $ --
======
</TABLE>

5. OPERATING LEASES

The Company leases office space under a noncancelable operating lease
arrangement through October 31, 2000. Rental expenses charged to operations
totaled $35,711 for the year ended December 31, 1996 and is included in general
and administrative expense in the statements of operations.

F-38
<PAGE> 88

MINDWORKS PROFESSIONAL EDUCATION GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Minimum future lease payments under the noncancelable operating lease at
December 31, 1996 are as follows:

<TABLE>
<S> <C>
Year ending December 31:
1997.................................................... $ 35,035
1998.................................................... 36,415
1999.................................................... 36,761
2000.................................................... 37,800
--------
Total........................................... $146,011
========
</TABLE>

In October 1997, the Company signed a five-year lease on a new facility in
Scottsdale, Arizona, which will commence on the completion of certain tenant
improvements. The Company is currently in negotiations to sublease the existing
office space.

Minimum future lease payments under this new operating lease are as
follows:

<TABLE>
<S> <C>
Year ending December 31:
1998.................................................... $181,158
1999.................................................... 184,795
2000.................................................... 188,431
2001.................................................... 192,203
2002.................................................... 196,109
--------
Total........................................... $942,696
========
</TABLE>

6. EMPLOYEE BENEFIT PLANS

The Company currently offers a Salary Reduction Simplified Employee Pension
plan to its employees. Under the plan, the Company withholds a portion of
participants' salaries, which it forwards to the trustee on a monthly basis. The
funds are then invested in individual retirement accounts as designated by the
employees. The Company does not provide any matching funds under the plan.

7. RELATED PARTY TRANSACTIONS

As of December 31, 1996, the Company had an outstanding note payable to a
stockholder for $150,000. The note provides for interest at a rate of 10% per
annum, with interest-only payments made quarterly. Beginning October 1, 1997,
principal payments of $5,000 will be paid for a period of 30 months. Interest
expense of $13,500 was paid for the year ended December 31, 1996.

8. CONCENTRATION OF CREDIT RISK

Financial instruments that subject the Company to potential concentration
of credit risk consist principally of cash and cash equivalents, short-term
investments and trade accounts receivable. The Company places its cash and cash
equivalents and short-term investments in and limits the amount of credit
exposure to one financial institution.

F-39
<PAGE> 89

MINDWORKS PROFESSIONAL EDUCATION GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

9. SUBSEQUENT EVENT

* * * * * *

F-40
<PAGE> 90

INDEPENDENT AUDITORS' REPORT

To the Members of
Software Consulting Services America, LLC:

We have audited the accompanying balance sheets of Software Consulting
Services America, LLC (the "Company") as of December 31, 1995 and 1996, and the
related statements of income, members' equity and cash flows for the period from
February 7, 1995 (date of inception) to December 31, 1995, and the year ended
December 31, 1996. 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 audits 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 Software Consulting Services
America, LLC as of December 31, 1995 and 1996, and the results of its operations
and its cash flows for the period from February 7, 1995 (date of inception) to
December 31, 1995, and the year ended December 31, 1996, in conformity with
generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Dallas, Texas
December 19 , 1997

F-41
<PAGE> 91

SOFTWARE CONSULTING SERVICES AMERICA, LLC

BALANCE SHEETS

ASSETS

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------- SEPTEMBER 30,
1995 1996 1997
-------- ---------- -------------
(UNAUDITED)
<S> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents............................ $162,469 $ 311,670 $ 96,628
Trade accounts receivable............................ 221,270 622,085 1,377,938
Unbilled revenue..................................... 33,715 246,992 73,989
Accounts receivable -- employees..................... 7,813
-------- ---------- ----------
Total current assets......................... 425,267 1,180,747 1,548,555
PROPERTY AND EQUIPMENT -- Net.......................... 16,751 92,281 169,166
OTHER ASSETS........................................... 577 4,358 37,016
-------- ---------- ----------
TOTAL ASSETS................................. $442,595 $1,277,386 $1,754,737
======== ========== ==========

LIABILITIES AND MEMBERS' EQUITY

CURRENT LIABILITIES:
Accounts payable..................................... $ 7,938 $ 2,919 $ 19,678
Accrued payroll and other accrued expenses........... 85,755 324,654 406,970
Line of credit....................................... 150,000
Notes payable to members............................. 150,000
-------- ---------- ----------
Total current liabilities.................... 93,693 477,573 576,648
COMMITMENTS AND CONTINGENCIES
MEMBERS' EQUITY........................................ 348,902 799,813 1,178,089
-------- ---------- ----------
TOTAL LIABILITIES AND MEMBERS' EQUITY.................. $442,595 $1,277,386 $1,754,737
======== ========== ==========
</TABLE>

See notes to financial statements.

F-42
<PAGE> 92

SOFTWARE CONSULTING SERVICES AMERICA, LLC

STATEMENTS OF INCOME

See notes to financial statements.

F-43
<PAGE> 93

SOFTWARE CONSULTING SERVICES AMERICA, LLC

STATEMENTS OF MEMBERS' EQUITY

<TABLE>
<S> <C>
Original capital contributed on February 7, 1995.......... $ 200,000
Net income................................................ 148,902
----------
MEMBERS' EQUITY AT DECEMBER 31, 1995........................ 348,902
Capital contributed....................................... 11,111
Distributions to members.................................. (56,250)
Net income................................................ 496,050
----------
MEMBERS' EQUITY AT DECEMBER 31, 1996........................ 799,813
Capital contributed (Unaudited)........................... 61,111
Distributions to members (Unaudited)...................... (32,601)
Net income (Unaudited).................................... 349,766
----------
MEMBERS' EQUITY AT SEPTEMBER 30, 1997 (Unaudited)........... $1,178,089
==========
</TABLE>

See notes to financial statements.

F-44
<PAGE> 94

SOFTWARE CONSULTING SERVICES AMERICA, LLC

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
PERIOD ENDED YEAR ENDED SEPTEMBER 30,
DECEMBER 31, DECEMBER 31, -------------------------
1995 1996 1996 1997
------------ ------------ ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income................................. $ 148,902 $ 496,050 $ 353,761 $ 349,766
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation and amortization........... 3,890 19,962 9,903 51,346
Cash provided by (used in) operating
working capital:
Trade accounts receivable............. (221,270) (400,815) (387,661) (755,853)
Accounts receivable from employees.... (7,813) 7,813 7,813
Unbilled revenue...................... (33,715) (213,277) (185,091) 173,003
Other assets.......................... (3,922) (9,925) (32,658)
Accounts payable...................... 7,938 (5,019) 1,965 16,759
Accrued payroll and other accrued
expenses........................... 85,755 238,899 106,575 82,316
--------- --------- --------- ---------
Net cash provided by (used in)
operating activities............. (16,313) 139,691 (102,660) (115,321)
--------- --------- --------- ---------
INVESTING ACTIVITIES:
Capital expenditures....................... (20,512) (95,351) (42,206) (128,231)
Organizational costs....................... (706)
--------- --------- --------- ---------
Net cash used in investing
activities....................... (21,218) (95,351) (42,206) (128,231)
--------- --------- --------- ---------
FINANCING ACTIVITIES:
Member contributions....................... 200,000 11,111 61,111
Member distributions....................... (56,250) (56,250) (32,601)
Borrowings (repayments) of notes payable to
members................................. 150,000 106,250 (150,000)
Proceeds from line of credit............... 150,000
--------- --------- --------- ---------
Net cash provided by financing
activities....................... 200,000 104,861 50,000 28,510
--------- --------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS................................ 162,469 149,201 (94,866) (215,042)
CASH AND CASH EQUIVALENTS:
Beginning of period........................ 162,469 162,469 311,670
--------- --------- --------- ---------
End of period.............................. $ 162,469 $ 311,670 $ 67,603 $ 96,628
========= ========= ========= =========
SUPPLEMENTAL INFORMATION:
Interest paid.............................. $ -- $ -- $ -- $ 5,880
========= ========= ========= =========
Income taxes paid.......................... $ -- $ -- $ -- $ --
========= ========= ========= =========
</TABLE>

See notes to financial statements.

F-45
<PAGE> 95

SOFTWARE CONSULTING SERVICES AMERICA, LLC

NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization -- Software Consulting Services America, LLC, a California
limited liability company (the "Company"), provides professional software
consulting services, primarily under subcontracting arrangements with SAP AG of
Germany ("SAP") in connection with the implementation of software systems
developed by SAP. The Company was organized on February 7, 1995, and is
headquartered in Foster City, California. According to the Company's operating
agreement, the Company will continue in existence until December 31, 2020,
unless sooner dissolved pursuant to the operating agreement or the California
Limited Liability Company Act.

Cash and Cash Equivalents -- The Company's cash equivalents consist of
liquid instruments with original maturities of three months or less.

Property and Equipment -- The Company's various items of property and
equipment are stated at cost, less accumulated depreciation and amortization.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets and amortization, which is three years. Amortization
is computed on a straight-line basis over the estimated useful lives of the
assets or the lease term, whichever is shorter.

Financial Instruments -- The Company's financial instruments consist of
cash and cash equivalents, trade accounts receivable, short-term debt, and
accounts and notes payable, the carrying values of which are reasonable
estimates of their fair values due to their short-term maturities or current
interest rates.

Income Taxes -- The Company is treated as a partnership for income tax
purposes, and therefore, is not a taxpaying entity for federal and California
income tax purposes. Income generated by the Company is taxed to the members
individually. Accordingly, no income tax expense has been recorded in the
accompanying financial statements.

Interim Financial Information -- The interim finacial statements as of
September 30, 1997, and for the nine months ended September 30, 1996 and 1997,
are unaudited, and certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been omitted. In the opinion of management, all
adjustments, consisting only of normal recurring adjustments, necessary to
fairly present the financial position, results of operations and cash flows with
respect to the interim financial statements, have been included. The results of
operations for the interim periods are not necessarily indicative of the results
to be achieved for the entire fiscal year.

F-46
<PAGE> 96

SOFTWARE CONSULTING SERVICES AMERICA, LLC

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

2. PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT CONSIST OF THE FOLLOWING:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1995 1996
------- --------
<S> <C> <C>
Computer equipment and software............................. $20,512 $115,292
Furniture and fixtures...................................... 571
------- --------
Total....................................................... 20,512 115,863
Less accumulated depreciation and amortization.............. 3,761 23,582
------- --------
Property and equipment -- net..................... $16,751 $ 92,281
======= ========
</TABLE>

Depreciation expense charged to operations was $3,890 and $19,962 for the
years ended December 31, 1995 and 1996, respectively.

3. LINE OF CREDIT AGREEMENT

In January 1997, the Company entered into a revolving line of credit
agreement with a bank to meet short-term working capital requirements. The line
of credit provides for borrowings equal to the lesser of $650,000 or 80% of
eligible accounts receivable, and borrowings thereunder are secured by all the
Company's assets. The line of credit agreement is scheduled to expire on January
12, 1998. The interest rate applicable to borrowings under the line of credit is
the bank's prime rate plus 1.8%.

4. LEASE COMMITMENTS

The Company leases office facilities, computers and certain office
equipment under several noncancelable operating lease agreements. The agreements
expire at various dates through the year 2000.

Future minimum lease commitments under these operating leases at December
31, 1996, are as follows:

<TABLE>
<S> <C>
Year ending December 31:
1997.................................................. $116,304
1998.................................................. 121,428
1999.................................................. 121,020
2000.................................................. 19,830
--------
$378,582
========
</TABLE>

During the period ended December 31, 1995, and the year ended December 31,
1996, rental expense under the various operating lease arrangements totaled
$1,511 and $15,167, respectively, and is included in selling, general and
administrative expense in the statements of income.

5. RELATED PARTY TRANSACTIONS

Revenues for the period ended December 31, 1995, and the year ended
December 31, 1996, include sales to a member and an affiliate of a member of the
Company totaling $31,728 and $123,950, respectively. At December 31, 1995 and
1996, unbilled revenue from a member of the Company were $29,815 and $0,
respectively.

Notes payable to members at December 31, 1996 were $150,000. The notes are
unsecured, are due on demand and do not bear interest.

F-47
<PAGE> 97

SOFTWARE CONSULTING SERVICES AMERICA, LLC

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

6. OPTION PLANS

The Company established a 1996 Option Plan, pursuant to which options to
purchase membership units in the Company are awarded. The option awards are
subject to vesting, at the rate of approximately 16.7% every six months, over
three years from the grant date. The exercise price per unit is not less than
the fair market value on the date each option is granted. Any unexercised
options will expire on the fifth anniversary of the date of grant. The option
agreements may be subject to termination under certain circumstances, such as a
change in control, as defined in the agreements. Unitholders may receive up to
10% of the net proceeds resulting from certain changes in control resulting from
the sale of all or substantially all the assets of the Company.

Options to purchase units awarded under the 1996 Option Plan are summarized
as follows:

<TABLE>
<CAPTION>
WEIGHTED
UNITS OPTION AVERAGE WEIGHTED
UNDER PRICE PER EXERCISE AVERAGE
OPTION UNIT PRICE FAIR VALUE
------ --------- -------- ----------
<S> <C> <C> <C> <C>
Granted in 1995 and outstanding at December
31, 1995................................. -- $ -- $ -- $ --
Granted in 1996............................ 27,650 $1.60 $1.60 $0.78
------
Outstanding at December 31, 1996........... 27,650 $1.60 $1.60 $0.78
======
Exercisable at December 31, 1996........... 3,417 $1.60 $1.60 $0.78
======
</TABLE>

The Company applies the provisions of Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees," and related interpretations
in accounting for its options. Accordingly, no compensation cost has been
recognized for such option grants. Had compensation cost for the Company's
options been determined based on the fair value at the grant dates for awards
consistent with the method prescribed by the Financial Accounting Standards
Board's Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation," the Company's pro forma net income would have been
reduced by $4,400 to $491,650 in 1996.

The weighted average fair value of options granted during 1996 was
estimated at $0.78. The fair value of each option grant is estimated on the date
of grant using the Black-Scholes option-pricing model, with the following
weighted average assumptions used for grants in 1996: risk-free interest rates
of 6.75%, no dividend yield, expected lives of ten years and no expected
volatility (because the units are not publicly traded).

7. EMPLOYEE BENEFITS

In September 1996, the Company established an elective salary reduction
profit sharing plan pursuant to Internal Revenue Code Section 401(k). Under the
plan, eligible employees can make voluntary pretax contributions to the plan.
Employee contributions cannot exceed 15% of eligible compensation or other tax-
regulated limits. There are no matching or Company discretionary contributions
under the plan.

Employment agreements with the members require that, in the event of a
change in control of the Company, the Company shall continue the members'
salaries for a one- to two-year period following the change in control.

8. CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS

Financial instruments that subject the Company to potential concentration
of credit risk consist principally of temporary cash investments. The Company
generally places its temporary cash investments in a

F-48
<PAGE> 98

SOFTWARE CONSULTING SERVICES AMERICA, LLC

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

single financial institution. On occasion, the Company maintains deposits in
excess of federally insured amounts at that financial institution.

For the period ended December 31, 1995, and the year ended December 31,
1996, 91% and 85%, respectively, of the Company's revenues consisted of revenues
derived from services performed under subcontracting arrangements with SAP.

Approximately 99% and 69% of the Company's accounts receivable and 12% and
86% of the Company's unbilled revenue at December 31, 1995 and 1996,
respectively, were attributable to SAP.

9. SUBSEQUENT EVENT

In December 1997, the Company entered into an agreement with BrightStar
Information Technology Group, Inc. ("BrightStar") for the acquisition by
BrightStar of all the Company's assets and assumption of certain of its
liabilities. The consummation of the acquisition is contingent upon BrightStar's
initial public offering of its common stock.

* * * * *

F-49
<PAGE> 99

INDEPENDENT AUDITORS' REPORT

To the Board of Directors of
Software Consulting Services Pty. Ltd. as
Trustee for the SCS Unit Trust:

We have audited the accompanying balance sheets of the SCS Unit Trust (the
"Trust") as of June 30, 1996 and 1997, and the related statements of income,
unit capital and beneficiaries' loan accounts and cash flows for the period from
October 1, 1994 (date of inception) to June 30, 1995, and for each of the two
years in the period ended June 30, 1997 (all expressed in Australian dollars).
These financial statements are the responsibility of the management of Software
Consulting Services Pty. Ltd. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in Australia and the United States of America. Those standards require
that we plan and perform the audits 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, such financial statements present fairly, in all material
respects, the financial position of the SCS Unit Trust as of June 30, 1996 and
1997, and the results of its operations and its cash flows for the period from
October 1, 1994 (date of inception) to June 30, 1995, and for each of the two
years in the period ended June 30, 1997, in conformity with accounting
principles generally accepted in the United States of America.

Our audits also comprehended the translation of Australian dollar amounts
into U.S. dollar amounts and, in our opinion, such translation has been made in
conformity with the basis stated in Note 1. Such U.S. dollar amounts are
presented solely for the convenience of readers in the United States of America.

DELOITTE TOUCHE TOHMATSU

Melbourne, Australia
December 19 , 1997

F-50
<PAGE> 100

SCS UNIT TRUST

BALANCE SHEETS

ASSETS

<TABLE>
<CAPTION>
A$ US$ A$ US$
JUNE 30,
----------------------- JUNE 30, SEPTEMBER 30, SEPTEMBER 30,
1996 1997 1997 1997 1997
---------- ---------- ---------- ------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents........ $ 427,173 $ 4,790 $ 3,477 $ 4,790 $ 3,477
Trade accounts receivable........ 1,529,065 3,012,656 2,186,886 3,899,779 2,830,850
Unbilled revenue................. 690,217 501,029 424,248 307,962
Sundry debtors................... 749 159,803 116,001 245,432 178,159
Prepaid expenses and other
current assets................ 15,939 23,375 16,968 40,620 29,486
---------- ---------- ---------- ---------- ----------
Total current assets..... 1,972,926 3,890,841 2,824,361 4,614,869 3,349,934
PROPERTY AND EQUIPMENT -- Net...... 58,995 98,809 71,725 102,589 74,469
OTHER ASSETS....................... 34,321 24,913 34,894 25,329
INVESTMENT IN AFFILIATED TRUST..... 27,448 19,925 27,448 19,925
---------- ---------- ---------- ---------- ----------
TOTAL ASSETS............. $2,031,921 $4,051,419 $2,940,924 $4,779,800 $3,469,657
========== ========== ========== ========== ==========

LIABILITIES AND UNIT CAPITAL

CURRENT LIABILITIES:
Accounts payable................. $ 118,057 $ 721,602 $ 523,811 $ 786,120 $ 570,645
Accrued payroll and payroll
taxes......................... 743,335 1,621,796 1,177,262 1,776,650 1,289,670
Other accrued expenses........... 105,334 118,883 86,297 143,813 104,394
Beneficiaries' loan accounts..... 1,059,359 1,505,302 1,092,698 1,989,381 1,444,092
---------- ---------- ---------- ---------- ----------
Total current
liabilities............ 2,026,085 3,967,583 2,880,068 4,695,964 3,408,801
COMMITMENTS AND CONTINGENCIES
UNIT CAPITAL....................... 5,836 83,836 60,856 83,836 60,856
---------- ---------- ---------- ---------- ----------
TOTAL LIABILITIES AND
UNIT CAPITAL........... $2,031,921 $4,051,419 $2,940,924 $4,779,800 $3,469,657
========== ========== ========== ========== ==========
</TABLE>

See notes to financial statements.

F-51
<PAGE> 101

SCS UNIT TRUST

STATEMENTS OF INCOME
<TABLE>
<CAPTION>
A$
A$
US$
PERIOD FROM A$ A$ THREE MONTHS
OCTOBER 1, YEAR ENDED
1994, YEAR ENDED JUNE 30, ENDED SEPTEMBER 30,
TO JUNE 30, ------------------------- JUNE 30, --------------------------
1996 1996 1997 1997 1996 1997
---------------- ---------- ----------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
REVENUE............................. $2,774,362 $7,775,358 $14,876,861 $10,799,113 $2,948,005 $5,721,070
COST OF REVENUE..................... 2,114,792 5,958,918 11,957,304 8,679,807 2,277,632 4,636,471
-------- ---------- ----------- ------------ ---------- ----------
Gross profit....................... 659,570 1,816,440 2,919,557 2,119,306 670,373 1,084,599
OPERATING EXPENSES:
Selling, general and
administrative................... 516,977 1,037,333 2,019,064 1,465,638 362,252 578,597
Depreciation and amortization...... 20,624 55,193 79,431 57,659 11,305 12,705
-------- ---------- ----------- ------------ ---------- ----------
Total operating expenses..... 537,601 1,092,526 2,098,495 1,523,297 373,557 591,302
-------- ---------- ----------- ------------ ---------- ----------
INCOME FROM OPERATIONS.............. 121,969 723,914 821,062 596,009 296,816 493,297
OTHER INCOME (EXPENSE):
Equity in losses of affiliated
trust............................ (90,216) (65,488) (22,554)
Allowance for investment in
affiliated trust................. (162,336) (117,840)
Interest income.................... 7,234 19,935 20,857 15,140 8,854 601
Interest expense................... (24,481) (81,594) (198,325) (143,964) (54,228) (83,751)
Other income....................... 1,674
Gain (loss) on sale of property and
equipment........................ 18,222 (2,273) (1,650)
-------- ---------- ----------- ------------ ---------- ----------
Total other income
(expense)................... (17,247) (41,763) (432,293) (313,802) (67,928) (83,150)
-------- ---------- ----------- ------------ ---------- ----------
NET INCOME................... $ 104,722 $ 682,151 $ 388,769 $ 282,207 $ 228,888 $ 410,147
======== ========== =========== ============ ========== ==========

US$

THREE MONTHS
ENDED
SEPTEMBER 30,
1997
---------------
(UNAUDITED)
<S> <C>
REVENUE............................. $4,152,925
COST OF REVENUE..................... 3,365,614
----------
Gross profit....................... 787,311
OPERATING EXPENSES:
Selling, general and
administrative................... 420,003
Depreciation and amortization...... 9,223
----------
Total operating expenses..... 429,226
----------
INCOME FROM OPERATIONS.............. 358,085
OTHER INCOME (EXPENSE):
Equity in losses of affiliated
trust............................
Allowance for investment in
affiliated trust.................
Interest income.................... 436
Interest expense................... (60,795)
Other income.......................
Gain (loss) on sale of property and
equipment........................
----------
Total other income
(expense)................... (60,359)
----------
NET INCOME................... $ 297,726
==========
</TABLE>

See notes to financial statements.

F-52
<PAGE> 102

SCS UNIT TRUST

STATEMENTS OF UNIT CAPITAL AND BENEFICIARIES' LOAN ACCOUNTS

<TABLE>
<CAPTION>
A$
BENEFICIARIES'
A$ LOAN
UNIT CAPITAL ACCOUNTS
------------ --------------
<S> <C> <C>
Original capital contributed and beneficiaries' loans..... $ 5,836 $ 556,847
Net income................................................ 104,722
Repayment of beneficiaries' loans......................... (156,758)
--------- ----------
BALANCES AT JUNE 30, 1995................................... 5,836 504,811
Interest on beneficiaries' accounts....................... 80,856
Repayment of beneficiaries' loans......................... (208,459)
Net income................................................ 682,151
--------- ----------
BALANCES AT JUNE 30, 1996................................... 5,836 1,059,359
Capital contributed....................................... 577,996 435,337
Capital redemption........................................ (499,996)
Repayment of beneficiaries' loans......................... (562,038)
Interest on beneficiaries' accounts....................... 183,875
Net income................................................ 388,769
--------- ----------
BALANCES AT JUNE 30, 1997................................... 83,836 1,505,302
Interest on beneficiaries' accounts (Unaudited)........... 73,932
Net income (Unaudited).................................... 410,147
--------- ----------
BALANCES AT SEPTEMBER 30, 1997 (Unaudited).................. $ 83,836 $1,989,381
========= ==========
</TABLE>

<TABLE>
<CAPTION>
US$
BENEFICIARIES'
US$ LOAN
UNIT CAPITAL ACCOUNTS
------------ --------------
<S> <C> <C>
BALANCES AT JUNE 30, 1996................................... $ 4,236 $ 768,988
Capital contributed....................................... 419,567 316,011
Capital redemption........................................ (362,947)
Repayment of beneficiaries' loans......................... (407,983)
Interest on beneficiaries' accounts....................... 133,475
Net income................................................ 282,207
--------- ----------
BALANCES AT JUNE 30, 1997................................... 60,856 1,092,698
Interest on beneficiaries' accounts (Unaudited)........... 53,668
Net income (Unaudited).................................... 297,726
--------- ----------
BALANCES AT SEPTEMBER 30, 1997 (Unaudited).................. $ 60,856 $1,444,092
========= ==========
</TABLE>

See notes to financial statements.

F-53
<PAGE> 103

SCS UNIT TRUST

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
A$ US$
A$ THREE
PERIOD FROM A$ THREE MONTHS MONTHS
OCTOBER 1, 1994 YEAR ENDED JUNE 30, YEAR ENDED ENDED SEPTEMBER 30, ENDED
TO JUNE 30, ----------------------- JUNE 30, ------------------------- SEPTEMBER 30,
1995 1996 1997 1997 1996 1997 1997
--------------- --------- ----------- ----------- ----------- ----------- -------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net Income................ $ 104,722 $ 682,151 $ 388,769 $ 282,207 $ 228,888 $ 410,147 $ 297,726
Adjustments to reconcile
net income to net cash
provided by (used in)
operating activities:
Depreciation and
amortization.......... 20,624 55,193 79,431 57,659 11,305 12,705 9,223
Interest expense on
beneficiaries' loan
accounts.............. 80,856 183,875 133,475 52,443 73,932 53,668
(Gain) loss on sale of
property and
equipment............. (18,222) 2,273 1,650
Equity in losses of
affiliated trust...... 90,216 65,488 22,554
Allowance for investment
in affiliated trust... 162,336 117,840
Cash provided by (used
in) operating working
capital:
Trade accounts
receivable.......... (822,962) (706,103) (1,483,591) (1,076,938) (359,177) (887,123) (643,964)
Unbilled revenue...... (690,217) (501,029) (185,650) 265,969 193,067
Sundry debtors........ (29,600) 28,851 (159,054) (115,457) (68,070) (85,629) (62,158)
Prepaid expenses and
other current
assets.............. (13,222) (2,717) (7,436) (5,398) (25,317) (17,245) (12,518)
Other assets.......... (34,321) (24,913) (573) (416)
Accounts payable...... 34,175 83,882 603,545 438,113 68,251 64,518 46,834
Accrued payroll and
payroll taxes....... 434,708 308,627 878,461 637,675 120,041 154,854 112,408
Other accrued
expenses............ 105,334 13,549 9,835 36,212 24,930 18,097
--------- --------- ----------- ----------- --------- --------- ---------
Net cash provided by
(used in)
operating
activities........ (271,555) 617,852 27,836 20,207 (98,520) 16,485 11,967
--------- --------- ----------- ----------- --------- --------- ---------
INVESTING ACTIVITIES:
Investment in affiliated
trust................... (280,000) (203,253) (100,000)
Proceeds from sale of
property and equipment.. 96,883 1,599 1,161
Capital expenditures...... (100,406) (108,227) (123,117) (89,371) (45,428) (16,485) (11,967)
--------- --------- ----------- ----------- --------- --------- ---------
Net cash used in
investing
activities........ (100,406) (11,344) (401,518) (291,463) (145,428) (16,485) (11,967)
--------- --------- ----------- ----------- --------- --------- ---------
FINANCING ACTIVITIES:
Unit capital
contributions........... 996 577,996 419,567 577,996
Unit capital
redemptions............. (499,996) (362,947) (499,996)
Beneficiaries' loans...... 556,847 435,337 316,011 261,645
Repayment of
beneficiaries' loans.... (156,758) (208,459) (562,038) (407,983) (133,133)
Borrowings (repayments) of
unitholders' notes
payable................. 7,243 (7,243)
--------- --------- ----------- ----------- --------- --------- ---------
Net cash provided by
(used in)
financing
activities........ 408,328 (215,702) (48,701) (35,352) 206,512 -- --
--------- --------- ----------- ----------- --------- --------- ---------
NET INCREASE (DECREASE) IN
CASH AND CASH
EQUIVALENTS............... 36,367 390,806 (422,383) (306,608) (37,436) -- --
CASH AND CASH EQUIVALENTS:
Beginning of period....... 36,367 427,173 310,085 427,173 4,790 3,477
--------- --------- ----------- ----------- --------- --------- ---------
End of period............. $ 36,367 $ 427,173 $ 4,790 $ 3,477 $ 389,737 $ 4,790 $ 3,477
========= ========= =========== =========== ========= ========= =========
</TABLE>

See notes to financial statements.

F-54
<PAGE> 104

SCS UNIT TRUST

NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization -- SCS Unit Trust (the "Trust") was formed on October 1, 1994,
and operates as a professional software consulting practice specializing in
implementations of software systems developed by SAP AG of Germany ("SAP"). The
business of the Trust operates under the name of its trustee, Software
Consulting Services Pty. Ltd. (the "Trustee") headquartered in Melbourne,
Australia.

Translation of Australian Dollar Statements to U.S. Dollar
Statements -- The financial statements of the Trust are stated in Australian
dollars ("A$"), the currency of the country in which the Trust is incorporated
and operates. The translation of A$ amounts into U.S. dollar ("US$") amounts as
of June 30, 1997 and September 30, 1997 and for the periods ended June 30, 1997
and September 30, 1997 has been made solely for the convenience of readers in
the United States of America and has been made at the rate of 1.378 (A$) to 1
(US$), the approximate rate of exchange at September 30, 1997. Such translation
should not be construed as a representation that the A$ amounts could be
converted into US$ at that or any other rate.

Revenue Recognition -- Revenue is recognized as consulting services are
performed. Any anticipated losses on fixed price consulting contracts are
charged to earnings when identified. Accounts receivable represent only amounts
billed and currently due from clients. Recoverable costs and accrued profit
related to fixed price contracts, on which revenue has been recognized but
billings have not been presented to the client, are included in unbilled
revenue.

Cash and Cash Equivalents -- The Company's cash equivalents consist of
liquid instruments purchased with original maturities of three months or less.

Property and Equipment -- The Company's various items of property and
equipment are stated at cost, less accumulated depreciation and amortization.
Depreciation for computer equipment, office equipment and furniture and fixtures
is computed using the declining balance method at rates of 60%, 30% and 20%,
respectively. Leasehold improvements are amortized using the declining balance
method at a rate of 40%.

Investments -- The Trust has a 40% investment in the TCS Discretionary Unit
Trust ("TCS"). Through its investment in TCS, the Trust effectively owns 28% of
the ASAP Discretionary Unit Trust ("ASAP"), which is in the business of
marketing and implementing SAP software for middle-market companies. The Trust's
investment in TCS is accounted for using the equity method of accounting.

Beneficiaries' Loan Accounts -- The beneficiaries of the Trust are the
holders of the Trust's unit capital, are entitled to receive the income of the
Trust and are paid interest on their loan balances at the discretion of the
directors of the Trustee. Profit is allocated to the unitholders at the end of
each fiscal year and is credited to the beneficiaries' accounts. The unitholders
provide funding to the Trust, which is repayable at call. Interest is calculated
on the unpaid balance of the beneficiaries' loan accounts at a rate approved by
the directors of the Trustee, which was 15% for 1995, 1996 and 1997.

Financial Instruments -- The Company's financial instruments consist of
cash and cash equivalents, trade accounts receivable and accounts payable, the
carrying values of which are reasonable estimates of their fair values due to
their short-term maturities or current interest rates.

F-55
<PAGE> 105

SCS UNIT TRUST

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Income Taxes -- Under current income tax legislation, the Trustee and the
Trust are not subject to income tax, provided the unitholders are presently
entitled to the net income of the Trust for taxation purposes. Accordingly, no
income tax expense has been recorded in the financial statements.

Interim Financial Information -- The interim financial statements as of
September 30, 1997, and for the three months ended September 30, 1996 and 1997,
are unaudited, and certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been omitted. In the opinion of management, all
adjustments, consisting only of normal recurring adjustments, necessary to
fairly present the financial position, results of operations and cash flows with
respect to the interim financial statements, have been included. The results of
operations for the interim periods are not necessarily indicative of the results
to be achieved for the entire fiscal year.

2. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
A$ US$
JUNE 30,
--------------------- JUNE 30,
1996 1997 1997
-------- --------- --------
<S> <C> <C> <C>
Computer equipment and software................... $ 71,190 $ 145,401 $105,546
Furniture, fixtures and equipment................. 34,244 73,010 52,998
Leasehold improvements............................ 5,054 3,669
-------- --------- --------
Total............................................. 105,434 223,465 162,213
Less accumulated depreciation and amortization.... (46,439) (124,656) (90,488)
-------- --------- --------
Property and equipment -- net........... $ 58,995 $ 98,809 $ 71,725
======== ========= ========
</TABLE>

Depreciation and amortization expense charged to operations was A$55,193
and A$79,431 (US$57,659) for the years ended June 30, 1996 and 1997,
respectively.

3. OVERDRAFT FACILITY

The Trust has a A$900,000 (US$653,310) bank overdraft facility agreement. A
debenture charge over the assets of the trust and the trustee and a deed of
subordination over the beneficiaries' loan accounts of $1,200,000 serves as
collateral for borrowings under the facility. The facility bears interest at the
bank's overdraft interest rate plus 0.4%. At June 30, 1997, the interest rate
was 9.85%.

Approximately A$444,000 (US$322,300) was outstanding under the facility at
June 30, 1997. No borrowings were outstanding at June 30, 1996.

F-56
<PAGE> 106

SCS UNIT TRUST

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. LEASE COMMITMENTS

The Trust leases office facilities and certain computer and office
equipment under several noncancelable operating lease agreements. The agreements
expire at various dates through the year 2001.

Future minimum lease commitments under these operating leases at June 30,
1997, are as follows:

<TABLE>
<CAPTION>
A$ US$
-------- --------
<S> <C> <C>
Year ending June 30:
1998................................................. $443,264 $321,765
1999................................................. 286,660 208,086
2000................................................. 37,182 26,990
2001................................................. 2,457 1,784
-------- --------
$769,563 $558,625
======== ========
</TABLE>

During the periods ended June 30, 1995, 1996 and 1997, rental expense under
the various operating lease obligations totaled A$8,470, A$59,272 and A$333,505
(US$242,091), respectively, and is included in selling, general and
administrative expense in the statements of income.

5. RELATED PARTY TRANSACTIONS

The Trust is subcontracted by a unitholder of the Trust and an affiliated
trust to provide software implementation services. Revenue included sales to a
unitholder of the Trust for the period ended June 30, 1997, totaling A$4,193,598
(US$3,044,133). Sales to an affiliated trust for the periods ended June 30, 1996
and 1997, were A$132,825 and A$2,601,464 (US$1,888,403), respectively.

Trade Accounts Receivables and Unbilled Revenue regarding the sales to a
unitholder of the Trust at June 30, 1997 are A$650,310 (US$472,060) and
A$504,802 (US$366,436), respectively.

Receivables from an affiliated trust at June 30, 1996 and 1997 are
A$132,825 and A$409,208 (US$297,044), respectively.

Expenses include payments for consultants to a unitholder of the Trust for
the period ended June 30, 1997 of A$256,888 (US$186,475) and a reimbursement of
expenses by an affiliated trust for the same period of A$128,541 (US$93,308).

Payables to a unitholder of the Trust for the period ended June 30, 1997
are A$145,970 (US$105,960).

All of the transactions noted above were on terms and conditions no more
favorable than the normal commercial terms and conditions applicable to the
Trust and its affiliate.

6. INVESTMENT IN AFFILIATED TRUST

At June 30, 1997, the Trust's equity investment in TCS exceeded the Trust's
share of the net assets of TCS. This excess has resulted in a write-down of the
carrying value of the investment as follows:

<TABLE>
<CAPTION>
A$ US$
-------- --------
<S> <C> <C>
Cost of investment in TCS................................... $280,000 $203,253
Share of operating losses................................... 90,216 65,488
-------- --------
Equity accounted investment................................. 189,784 137,765
Allowance to reduce investment to estimated fair value...... 162,336 117,840
-------- --------
Investment in affiliated trust.............................. $ 27,448 $ 19,925
======== ========
</TABLE>

F-57
<PAGE> 107

SCS UNIT TRUST

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

7. SUPERANNUATION

Employees other than contractors participate in a superannuation plan,
which is a mandatory retirement savings plan in Australia. Under the plan,
employers must contribute 6% of the salary of eligible employees to the plan.
The Trust does not sponsor a specific plan, and employees may contribute to the
superannuation plan of their choice. There are no matching or discretionary
contributions by the Trust.

8. CONCENTRATION OF CREDIT RISK

Financial instruments that subject the Trust to potential concentration of
credit risk consist principally of cash and cash equivalents, short-term
investments and trade accounts receivable. The Trust places its cash and cash
equivalents and short-term investments in and limits the amount of credit
exposure to one financial institution.

9. SUBSEQUENT EVENT

In December 1997, the Trust entered into an agreement with BrightStar
Information Technology Group, Inc. ("BrightStar") for the acquisition by
BrightStar of all the Trust's assets and assumption of certain of its
liabilities. The consummation of the acquisition is contingent upon BrightStar's
initial public offering of its common stock.

* * * * * *

F-58
<PAGE> 108

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Software Innovators, Inc.:

We have audited the accompanying balance sheets of Software Innovators,
Inc. (the "Company") as of July 31, 1996 and 1997, and the related statements of
operations, stockholders' equity and cash flows for the years then ended. 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.

In our opinion, the accompanying financial statements present fairly, in
all material respects, the financial position of Software Innovators, Inc. as of
July 31, 1996 and 1997, and the results of its operations and its cash flows for
the years then ended in conformity with generally accepted accounting
principles.

DELOITTE & TOUCHE LLP

Dallas, Texas
December 19, 1997

F-59
<PAGE> 109

SOFTWARE INNOVATORS, INC.

BALANCE SHEETS

ASSETS

<TABLE>
<CAPTION>
JULY 31,
-------------------- OCTOBER 31,
1996 1997 1997
-------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents............................... $163,053 $354,754 $505,310
Accounts receivable..................................... 173,815 196,782 167,901
Prepaid expenses and other current assets............... 50,014 18,549 17,841
-------- -------- --------
Total current assets............................ 386,882 570,085 691,052
PROPERTY AND EQUIPMENT -- Net............................. 60,545 69,986 67,096
-------- -------- --------
TOTAL ASSETS.................................... $447,427 $640,071 $758,148
======== ======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable........................................ $ 10,202 $ 4,052 $ 8,167
Current portion of capital lease obligation............. 4,522 4,522
Accrued expenses........................................ 40,104 258,575 233,211
Deferred income taxes................................... 56,832 45,545 17,506
-------- -------- --------
Total current liabilities....................... 107,138 312,694 263,406
CAPITAL LEASE OBLIGATION, net of current portion.......... 15,518 15,518
DEFERRED INCOME TAXES..................................... 11,184 6,306 6,306
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $1 par value -- 1,000 shares authorized,
issued and outstanding; nonvoting common stock $1 par
value -- 9,000 shares authorized, none outstanding... 1,000 1,000 1,000
Additional paid-in capital.............................. 9,000 35,882 35,882
Retained earnings....................................... 325,855 272,421 439,786
Treasury stock, 450 shares and 250 shares, respectively,
at cost................................................. (6,750) (3,750) (3,750)
-------- -------- --------
Total stockholders' equity...................... 329,105 305,553 472,918
-------- -------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY...... $447,427 $640,071 $758,148
======== ======== ========
</TABLE>

See notes to financial statements.

F-60
<PAGE> 110

SOFTWARE INNOVATORS, INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
JULY 31, OCTOBER 31,
----------------------- -----------------------
1996 1997 1996 1997
---------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
REVENUE...................................... $1,952,713 $2,981,802 $ 610,147 $1,011,381
COST OF REVENUE.............................. 1,262,822 1,948,546 364,393 504,670
---------- ---------- ---------- ----------
Gross profit............................... 689,891 1,033,256 245,754 506,711
OPERATING EXPENSES:
Selling, general and administrative........ 501,181 1,100,335 135,356 237,449
Depreciation and amortization.............. 26,221 23,444 6,129 3,789
---------- ---------- ---------- ----------
Total operating expenses........... 527,402 1,123,779 141,485 241,238
---------- ---------- ---------- ----------
INCOME (LOSS) FROM OPERATIONS................ 162,489 (90,523) 104,269 265,473
OTHER INCOME:
Interest income............................ 6,440 17,231 2,736 4,181
Other, net................................. 5,685 3,694 2,114 9,421
---------- ---------- ---------- ----------
Total other income................. 12,125 20,925 4,850 13,602
---------- ---------- ---------- ----------
INCOME (LOSS) BEFORE INCOME TAXES............ 174,614 (69,598) 109,119 279,075
INCOME TAX EXPENSE (BENEFIT):
Current.................................... 8,314 67,474 139,749
Deferred................................... 61,582 (16,164) (23,827) (28,039)
---------- ---------- ---------- ----------
Total income tax expense
(benefit)........................ 69,896 (16,164) 43,647 111,710
---------- ---------- ---------- ----------
NET INCOME (LOSS)............................ $ 104,718 $ (53,434) $ 65,472 $ 167,365
========== ========== ========== ==========
</TABLE>

See notes to financial statements.

F-61
<PAGE> 111

SOFTWARE INNOVATORS, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TREASURY STOCK TOTAL
--------------- PAID-IN RETAINED ---------------- STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS SHARES AMOUNT EQUITY
------ ------ ---------- -------- ------ ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, AUGUST 1, 1995............. 1,000 $1,000 $ 9,000 $221,137 450 $(6,750) $224,387
Net income........................ 104,718 104,718
----- ------ ------- -------- ---- ------- --------
BALANCE, JULY 31, 1996.............. 1,000 1,000 9,000 325,855 450 (6,750) 329,105
Reissuance of 200 shares of
treasury stock................. 26,882 (200) 3,000 29,882
Net loss.......................... (53,434) (53,434)
----- ------ ------- -------- ---- ------- --------
BALANCE, JULY 31, 1997.............. 1,000 1,000 35,882 272,421 250 (3,750) 305,553
Net income (Unaudited)............ 167,365 167,365
----- ------ ------- -------- ---- ------- --------
BALANCE, SEPTEMBER 30, 1997
(UNAUDITED)....................... 1,000 $1,000 $35,882 $439,786 250 $(3,750) $472,918
===== ====== ======= ======== ==== ======= ========
</TABLE>

See notes to financial statements.

F-62
<PAGE> 112

SOFTWARE INNOVATORS, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED JULY 31, OCTOBER 31,
------------------- -------------------
1996 1997 1996 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss)................................ $104,718 $(53,434) $ 65,472 $167,365
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating
activities:
Depreciation and amortization................. 26,221 23,444 6,129 3,789
Deferred income taxes......................... 61,582 (16,164) (23,827) (28,039)
Cash provided by (used in) operating working
capital:
Accounts receivable......................... (90,002) (22,967) (24,226) 28,881
Prepaid expenses and other assets........... (50,604) 31,465 3,310 (191)
Accounts payable............................ (38,936) (6,150) 3,066 4,115
Accrued expenses............................ (14,820) 218,463 68,546 (25,364)
-------- -------- -------- --------
Net cash provided by (used in) operating
activities............................. (1,841) 174,657 98,470 150,556
-------- -------- -------- --------
INVESTING ACTIVITIES:
Proceeds from sale of equipment.................. 10,000
Capital expenditures............................. (5,245) (7,891)
-------- -------- -------- --------
Net cash provided by (used in) investing
activities............................. 4,755 (7,891) -- --
-------- -------- -------- --------
FINANCING ACTIVITIES:
Payments on capital lease obligation............. (4,947)
Proceeds from issuance of treasury stock......... 29,882
-------- -------- -------- --------
Net cash provided by financing
activities............................. -- 24,935 -- --
-------- -------- -------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS.......... 2,914 191,701 98,470 150,556
CASH AND CASH EQUIVALENTS:
Beginning of period.............................. 160,139 163,053 163,053 354,754
-------- -------- -------- --------
End of year period............................... $163,053 $354,754 $261,523 $505,310
======== ======== ======== ========
SUPPLEMENTAL INFORMATION:
Interest paid.................................... $ -- $ 2,227 $ -- $ --
======== ======== ======== ========
Income taxes paid................................ $ 33,600 $ -- $ -- $ --
======== ======== ======== ========
Equipment financed through capital lease......... $ -- $ 24,987 $ -- $ --
======== ======== ======== ========
</TABLE>

See notes to financial statements.

F-63
<PAGE> 113

SOFTWARE INNOVATORS, INC.

NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization -- Software Innovators, Inc., an Arkansas corporation (the
"Company"), provides computer and data processing consulting services to a
variety of businesses and government agencies. The Company was incorporated in
1989 and operates primarily within the State of Arkansas.

Cash Equivalents -- The Company's cash equivalents consist of liquid
investments purchased with original maturities of three months or less.

Property and Equipment -- The Company's various items of property and
equipment are stated at cost, less accumulated depreciation and amortization.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets, which range from three to 15 years. Leasehold
improvements are amortized on the straight-line method over the primary term of
the lease.

Interim Financial Information -- The interim financial statements as of
October 31, 1997, and for the three months ended October 31, 1996 and 1997, are
unaudited, and certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been omitted. In the opinion of management, all adjustments,
consisting only of normal recurring adjustments, necessary to fairly present the
financial position, results of operations and cash flows with respect to the
interim financial statements, have been included. The results of operations for
the interim periods are not necessarily indicative of the results to be achieved
for the entire fiscal year.

2. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
JULY 31,
-------------------
1996 1997
-------- --------
<S> <C> <C>
Computer and office equipment............................... $ 77,082 $ 77,082
Furniture and fixtures...................................... 27,165 27,165
Leasehold improvements...................................... 17,415 46,700
-------- --------
Total....................................................... 121,662 150,947
Less accumulated depreciation and amortization.............. 61,117 80,961
-------- --------
Property and equipment -- net..................... $ 60,545 $ 69,986
======== ========
</TABLE>

F-64
<PAGE> 114

SOFTWARE INNOVATORS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

3. INCOME TAXES

The components of deferred income taxes in the accompanying balance sheets
are as follows:

<TABLE>
<CAPTION>
JULY 31,
-------------------
1996 1997
-------- --------
<S> <C> <C>
Deferred tax liabilities:
Accounts receivable....................................... $ 66,554 $ 75,348
Accumulated depreciation and amortization................. 11,184 6,308
Other..................................................... 9,543 1,884
-------- --------
87,281 83,540
Deferred tax assets -- accrued vacation and other
expenses.................................................. (19,265) (31,688)
-------- --------
Net deferred tax liabilities................................ $ 68,016 $ 51,852
======== ========
</TABLE>

The provisions for income taxes in the financial statements differ from the
amounts determined by applying the federal statutory rate of 34% to earnings
(loss) before income taxes. The reconciling items and amounts as of July 31 are
as follows:

<TABLE>
<CAPTION>
1996 1997
-------- --------
<S> <C> <C>
Provision (benefit) at statutory rate....................... $ 59,369 $(25,348)
Permanent differences....................................... 3,036 12,382
State taxes, net of federal benefits........................ 7,491 (3,198)
-------- --------
$ 69,896 $(16,164)
======== ========
</TABLE>

4. LEASE COMMITMENTS

The Company leases office space and certain equipment and vehicles under
several noncancelable operating lease agreements that expire at various dates
through June 2000. Future minimum lease payments under these agreements at July
31, 1997, are as follows:

<TABLE>
<S> <C>
Year Ending July 31:
1998.................................................... $ 62,338
1999.................................................... 32,841
2000.................................................... 11,772
--------
$106,951
========
</TABLE>

The Company incurred lease expense of $47,116 and $57,396 in fiscal 1996
and fiscal 1997, respectively, which is included in selling, general and
administrative expense in the statements of operations.

F-65
<PAGE> 115

SOFTWARE INNOVATORS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The Company is leasing a telephone system under a capital lease that
extends through May 2001. Future minimum rental payments required under this
noncancelable lease at July 31, 1997 are as follows:

<TABLE>
<S> <C>
Year ending July 31:
1998...................................................... $ 6,303
1999...................................................... 6,303
2000...................................................... 6,303
2001...................................................... 5,251
-------
24,160
Less amounts representing interest.......................... 4,120
-------
Capital lease obligation at July 31, 1997................... 20,040
Less current portion........................................ 4,522
-------
Capital lease obligation, long-term......................... $15,518
=======
</TABLE>

5. EMPLOYEE BENEFIT PLANS

The Company has established a 401(k) plan effective January 1, 1997, for
all employees who have attained the age of 21 and completed at least one year of
service. Each plan participant can contribute up to the maximum amount allowed
by the Internal Revenue Code to the plan through payroll deductions. The
Company's matching contribution to the plan is discretionary and is determined
each year by the Board of Directors. The employee's vested percentage regarding
the Company's matching contribution varies according to years of service. The
Company's expense for contributions to the plan was $15,256 during fiscal 1997.
No contributions were made by the Company in fiscal 1996.

6. CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS

The Company maintains its cash in bank deposit accounts that, at times, may
exceed federally insured limits.

For the years ended July 31, 1996 and 1997, programming and consulting
services to one customer accounted for approximately 63% and 62%, respectively,
of the Company's total revenues. This customer accounted for approximately 44%
and 68% of the outstanding accounts receivable balance at July 31, 1996 and
1997, respectively.

7. SUBSEQUENT EVENT

* * * * * *

F-66
<PAGE> 116

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholder of
Zelo Group, Inc.:

We have audited the accompanying balance sheet of Zelo Group, Inc. (the
"Company") as of December 31, 1996, and the related statements of operations,
stockholder's deficit and cash flows for the year ended December 31, 1996. 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 audit.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of Zelo Group, Inc. at December 31, 1996, and
the results of its operations and its cash flows for the year ended December 31,
1996, in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Dallas, Texas
December 19, 1997

F-67
<PAGE> 117

ZELO GROUP, INC.

BALANCE SHEETS

ASSETS

LIABILITIES AND STOCKHOLDER'S DEFICIT

CURRENT LIABILITIES:
Current maturities of notes payable....................... $ 145,000 $ 130,000
Current obligations under capital leases.................. 25,342
Line of credit............................................ 47,282 106,285
Accounts payable and accrued liabilities.................. 29,817 93,177
Deferred revenue.......................................... 26,824
--------- ---------
Total current liabilities......................... 222,099 381,628
OBLIGATIONS UNDER CAPITAL LEASES -- Less current
portion................................................... 55,329
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S DEFICIT:
Common stock, no par value -- 25,000 shares authorized;
2,500 shares issued and outstanding.................... 5,000 5,000
Accumulated deficit....................................... (167,670) (167,375)
--------- ---------
Total stockholder's deficit....................... (162,670) (162,375)
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT....... $ 59,429 $ 274,582
========= =========
</TABLE>

See notes to financial statements.

F-68
<PAGE> 118

ZELO GROUP, INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED SEPTEMBER 30,
DECEMBER 31, --------------------------
1996 1996 1997
------------ ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
REVENUE................................................ $1,081,694 $861,811 $855,883
COST OF REVENUE........................................ 729,760 494,362 430,857
---------- -------- --------
Gross profit......................................... 351,934 367,449 425,026
OPERATING EXPENSES:
Selling, general and administrative.................. 374,468 367,986 394,820
Depreciation and amortization........................ 11,534 8,651 12,974
---------- -------- --------
Total operating expenses..................... 386,002 376,637 407,794
---------- -------- --------
INCOME (LOSS) FROM OPERATIONS.......................... (34,068) (9,188) 17,232
OTHER EXPENSE -- Interest.............................. (12,473) (9,477) (16,937)
---------- -------- --------
NET INCOME (LOSS)...................................... $ (46,541) $(18,665) $ 295
========== ======== ========
</TABLE>

See notes to financial statements.

F-69
<PAGE> 119

ZELO GROUP, INC.

STATEMENTS OF STOCKHOLDER'S DEFICIT

<TABLE>
<CAPTION>
COMMON STOCK TOTAL
---------------- ACCUMULATED STOCKHOLDER'S
SHARES AMOUNT DEFICIT DEFICIT
------ ------ ----------- -------------
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1996......................... 2,500 $5,000 $(121,129) $(116,129)
Net loss....................................... (46,541) (46,541)
----- ------ --------- ---------
BALANCE, DECEMBER 31, 1996....................... 2,500 5,000 (167,670) (162,670)
Net income (Unaudited)......................... 295 295
----- ------ --------- ---------
BALANCE, SEPTEMBER 30, 1997 (Unaudited).......... 2,500 $5,000 $(167,375) $(162,375)
===== ====== ========= =========
</TABLE>

See notes to financial statements.

F-70
<PAGE> 120

ZELO GROUP, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED SEPTEMBER 30,
DECEMBER 31, --------------------------
1996 1996 1997
------------ ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss).................................. $ (46,541) $ (18,665) $ 295
Adjustments to reconcile net income (loss) to net
cash used in operating activities:
Depreciation and amortization................... 11,534 8,651 12,974
Cash provided by (used in) operating working
capital:
Accounts receivable........................... 86,224 50,275 (115,674)
Prepaid expenses and other current assets..... (400) 200 (2,427)
Accounts payable and accrued liabilities...... (148,373) (144,821) 63,360
Deferred revenue.............................. 26,824
--------- --------- ---------
Net cash used in operating activities...... (97,556) (104,360) (14,648)
--------- --------- ---------
INVESTING ACTIVITIES -- Capital expenditures......... (13,867) (3,500) (22,691)
--------- --------- ---------
FINANCING ACTIVITIES:
Borrowings (payments) on notes payable............. 95,000 110,000 (15,000)
Payments on capital lease obligations.............. (9,677)
Net borrowings from line of credit................. 19,437 6,628 59,002
--------- --------- ---------
Net cash provided by financing
activities............................... 114,437 116,628 34,325
--------- --------- ---------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS..... 3,014 8,768 (3,014)
CASH AND CASH EQUIVALENTS:
Beginning of period................................ 3,014
--------- --------- ---------
End of period...................................... $ 3,014 $ 8,768 $ --
========= ========= =========
SUPPLEMENTAL INFORMATION:
Interest paid...................................... $ 7,106 $ 4,111 $ 16,187
========= ========= =========
Income taxes paid.................................. $ -- $ -- $ --
========= ========= =========
Equipment financed through capital leases.......... $ -- $ -- $ 90,349
========= ========= =========
</TABLE>

See notes to financial statements.

F-71
<PAGE> 121

ZELO GROUP, INC.

NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization -- Zelo Group, Inc., a California corporation (the "Company"),
provides document management services using digital scanning equipment to store
documents on compact disc. The Company also provides system integration services
for complex document management systems to various customers primarily in the
legal and medical professions. The Company was incorporated in 1992 and is
headquartered in Ventura, California.

Cash Equivalents -- The Company's cash equivalents consist of liquid
investments purchased with original maturities of three months or less.

Property and Equipment -- The Company's various items of property and
equipment are stated at cost, less accumulated depreciation and amortization.
Depreciation is provided principally using straight-line methods over the
estimated useful lives of the individual assets of five years. Amortization is
computed on a straight-line basis over the estimated useful lives of the assets
or the lease term, whichever is shorter.

Income Taxes -- The Company is a Subchapter S Corporation and, accordingly,
is not subject to corporate-level federal income tax. Income generated by the
Company is taxed to the stockholder. Accordingly, no income tax expense has been
recorded in the financial statements.

2. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
1996
------------
<S> <C>
Computers, equipment and software........................... $39,233
Furniture, fixtures and equipment........................... 18,438
-------
Total....................................................... 57,671
Less accumulated depreciation and amortization.............. 38,793
-------

Property and equipment -- net..................... $18,878
=======
</TABLE>

F-72
<PAGE> 122

ZELO GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

3. SHORT-TERM BORROWINGS

The Company has a $175,000 line of credit facility with a commercial bank
for working capital requirements. Borrowings under this facility bear interest
at a rate of 13% per annum and are due on demand.

The Company has promissory notes payable to Madision Management Company in
the aggregate original principal amount of $150,000, with an aggregate balance
of $145,000 at December 31, 1996. The notes have no scheduled repayment terms,
bear interest at rates ranging from 8.75% to 12% per annum and mature on March
31, 1998.

4. OPERATING LEASES

The Company leases various equipment and its office facility under
noncancelable operating lease arrangements extending through 2001. Rental
expense was $24,230 for the year ended December 31, 1996, and is included in
selling, general and administrative expense in the statements of operations.

Minimum future lease payments under noncancelable operating leases at
December 31, 1996 are as follows:

<TABLE>
<S> <C>
Year ending December 31:
1997.................................................... $ 92,919
1998.................................................... 141,436
1999.................................................... 96,364
2000.................................................... 90,145
2001.................................................... 39,067
--------
Total........................................... $459,931
========
</TABLE>

In March 1997, the Company began leasing computer equipment under capital
lease arrangements extending through 2001. Future minimum lease payments
required under these noncancelable leases are as follows:

<TABLE>
<S> <C>
Year ending December 31:
1997.................................................... $ 24,687
1998.................................................... 34,623
1999.................................................... 23,436
2000.................................................... 21,198
2001.................................................... 7,699
--------
Total........................................... $111,643
========
</TABLE>

6. CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS

Document management services to three major customers accounted for an
aggregate of approximately 44% of the Company's total revenue for the year ended
December 31, 1996. These customers accounted for an aggregate of approximately
53% of the outstanding accounts receivable balance at December 31, 1996.

7. SUBSEQUENT EVENT

In December 1997, the stockholder of the Company entered into an agreement
with BrightStar Information Technology Group, Inc. ("BrightStar") for the
acquisition by BrightStar of all the Company's outstanding common stock. The
consummation of the acquisition is contingent upon BrightStar's initial public
offering of its common stock.

F-73
<PAGE> 123

BIT INVESTORS, LLC

CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1997
(UNAUDITED)

<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................. $ 425,780
Interest receivable....................................... 647
-----------
Total current assets.............................. 426,427
PROPERTY AND EQUIPMENT -- Net............................... 3,933
DEFERRED OFFERING COSTS..................................... 351,086
-----------
TOTAL ASSETS................................................ $ 781,446
===========
LIABILITIES AND MEMBERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable.......................................... $ 344,125
Accrued payroll........................................... 1,271
Short-term borrowings..................................... 490,000
-----------
Total current liabilities......................... 835,396
MEMBERS' DEFICIT............................................ (53,950)
-----------
TOTAL LIABILITIES AND MEMBERS' DEFICIT...................... $ 781,446
===========
</TABLE>

See notes to unaudited consolidated financial statements.

F-74
<PAGE> 124

BIT INVESTORS, LLC

CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)

<TABLE>
<CAPTION>
PERIOD FROM
MAY 1, 1997 TO
SEPTEMBER 30, 1997
------------------
<S> <C>
REVENUE..................................................... $ --
COST OF REVENUE.............................................
-----------
Gross profit..............................................
OPERATING EXPENSES:
Selling, general and administrative....................... 63,883
Compensation expense...................................... 3,606,720
Depreciation and amortization............................. 67
-----------
Total operating expenses.......................... 3,670,670
-----------
LOSS FROM OPERATIONS........................................ (3,670,670)
-----------
NET LOSS.................................................... $(3,670,670)
===========
</TABLE>

See notes to unaudited consolidated financial statements.

F-75
<PAGE> 125

BIT INVESTORS, LLC

CONSOLIDATED STATEMENT OF MEMBERS' DEFICIT
(UNAUDITED)

<TABLE>
<CAPTION>
ADDITIONAL TOTAL
CONTRIBUTED ACCUMULATED MEMBERS'
AMOUNT CAPITAL DEFICIT DEFICIT
------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Original capital contributed............... $100 $ 9,900 $ -- $ 10,000
Issuance of common stock of BITG........... 3,606,720 3,606,720
Net loss................................... (3,670,670) (3,670,670)
---- ---------- ----------- -----------
Balance, September 30, 1997................ $100 $3,616,620 $(3,670,670) $ (53,950)
==== ========== =========== ===========
</TABLE>

See notes to unaudited consolidated financial statements.

F-76
<PAGE> 126

BIT INVESTORS, LLC

CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)

<TABLE>
<CAPTION>
PERIOD FROM
MAY 1, 1997 TO
SEPTEMBER 30, 1997
------------------
(UNAUDITED)
<S> <C>
OPERATING ACTIVITIES:
Net loss.................................................. $(3,670,670)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Depreciation and amortization.......................... 67
Compensation expense................................... 3,606,720
Cash provided by (used in) operating working capital:
Interest receivable.................................. (647)
Accounts payable and accrued liabilities............. 345,396
Deferred offering costs.............................. (351,086)
-----------
Net cash used in operating activities............. (70,220)
-----------
INVESTING ACTIVITIES -- Capital expenditures................ (4,000)
-----------
FINANCING ACTIVITIES:
Short-term borrowings..................................... 490,000
Member contributions...................................... 10,000
-----------
Net cash provided by financing activities......... 500,000
-----------
INCREASE IN CASH AND CASH EQUIVALENTS....................... 425,780
CASH AND CASH EQUIVALENTS:
Beginning of period....................................... --
-----------
End of period............................................. $ 425,780
===========
SUPPLEMENTAL INFORMATION:
Interest paid............................................. $ --
===========
Income taxes paid......................................... $ --
===========
</TABLE>

See notes to unaudited consolidated financial statements.

F-77
<PAGE> 127

BIT INVESTORS, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BUSINESS

BIT Investors, LLC, a Texas limited liability company ("BITI" or the
"Company"), was founded in May 1997 to create a single-source provider of a wide
range of IT services to Fortune 1000 organizations. The Company has entered into
a share exchange agreement with BrightStar Information Technology Group, Inc.
("BrightStar") and senior management of BrightStar to exchange (the "Share
Exchange") all outstanding common stock of BIT Group Services, Inc., a Texas
corporation and a wholly owned subsidiary of BITI ("BITG"), for BrightStar
common stock ("Common Stock"). BrightStar has entered into agreements to acquire
(the "Acquisitions") all of the common stock or substantially all the net assets
of seven established IT service providers (the "Founding Companies")
concurrently with the Share Exchange and the completion of an initial public
offering (the "Offering") of Common Stock. BrightStar was formed in October 1997
as a wholly owned subsidiary of BITG.

The accompanying consolidated financial statements include the accounts of
BITI and BITG. All significant intercompany accounts and transactions have been
eliminated in consolidation.

The Company has not conducted any operations, other than payment of salary
to certain officers, and all activities to date have related to the Offering and
the Acquisitions. The Company's cash balances were provided from advances from
its members. The Company is dependent upon the Offering to execute the pending
Acquisitions. There is no assurance that the pending Acquisitions or the
Offering will be completed or that the Company will be able to generate future
operating revenue.

These interim financial statements as of September 30, 1997, and for the
period from May 1, 1997 (date of inception) to September 30, 1997, are
unaudited, and certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been omitted. In the opinion of management of BITI, all
adjustments, consisting only of normal recurring adjustments, necessary to
fairly present the financial position, results of operations and cash flows with
respect to the interim financial statements have been included. The results of
operations for the interim periods are not necessarily indicative of the results
to be achieved for the entire fiscal year.

2. SIGNIFICANT ACCOUNTING POLICIES

Cash Equivalents -- The Company's cash equivalents consist of liquid
financial instruments with original maturities of three months or less.

Property and Equipment -- The Company's various items of property and
equipment are stated at cost less accumulated depreciation. Depreciation is
provided using the straight-line method over the estimated useful lives of the
assets of primarily five years.

Deferred Offering Costs -- The Company's deferred offering costs primarily
consist of costs incurred for the Offering. These costs, which include legal,
accounting and financial advisory fees, have been deferred and will be charged
against the proceeds of the Offering.

3. STOCK COMPENSATION

In July 1997, BITG issued 41,958 shares of common stock (which will be
exchanged for 346,800 shares of BrightStar common stock in connection with the
Offering) to certain members of management. In connection with these stock
issuances, compensation expense totaling $3,606,720 was recognized during the
period ended September 30, 1997.

* * * * * *

F-78
<PAGE> 128
===========================================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFERING OTHER
THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH OTHER
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED ON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR BY ANY OF THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES
OTHER THAN THE SHARES OF COMMON STOCK TO WHICH IT RELATES OR AN OFFER TO SELL,
OR A SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION IN WHICH
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY, OR
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT, AS OF ANY DATE SUBSEQUENT TO
THE DATE OF THIS PROSPECTUS.
---------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary...................... 3
Risk Factors............................ 7
The Company............................. 13
Use of Proceeds......................... 16
Dividend Policy......................... 16
Capitalization.......................... 17
Dilution................................ 18
Selected Financial Information.......... 19
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................ 20
Business................................ 26
Management Security Ownership of Certain
Beneficial Owners and Management...... 37
Certain Transactions.................... 38
Description of Capital Stock............ 41
Shares Eligible for Future Sale......... 43
Underwriting............................ 45
Legal Matters........................... 47
Experts................................. 47
Additional Information.................. 47
Index to Financial Statements........... F-1
</TABLE>

------------------
Until , 1998 (25 days after the date of this Prospectus), all
dealers effecting transactions in the Common Stock offered hereby, whether or
not participating in this distribution, may be required to deliver a Prospectus.
This requirement is in addition to the obligations of dealers to deliver a
Prospectus when acting as Underwriters and with respect to their unsold
allotments or subscriptions.
===========================================================================

===========================================================================

3,750,000 SHARES

BRIGHTSTAR
INFORMATION
TECHNOLOGY
GROUP, INC.

COMMON STOCK
---------------------------
PROSPECTUS
, 1998
---------------------------

LEHMAN BROTHERS

CIBC OPPENHEIMER

RAUSCHER PIERCE REFSNES, INC.

===========================================================================
<PAGE> 129

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the costs and expenses (other than
underwriting discounts and commissions) payable by the Registrant in connection
with the issuance and distribution of the securities being registered. All
amounts are estimates except for the fees payable to the SEC.

<TABLE>
<S> <C>
SEC Registration Fee........................................ $ 17,811
NASD Filing Fee............................................. 6,538
NASDAQ Listing Fee.......................................... 35,880
Legal Fees and Expenses..................................... 600,000
Accounting Fees and Expenses................................ 600,000
Blue sky fees and expenses (including counsel fees)......... 10,000
Printing Costs.............................................. 250,000
Transfer Agent and Registrar fees and expenses.............. 10,000
Financial Advisory Fees..................................... 1,460,000
Miscellaneous............................................... 109,771
----------
Total............................................. $3,100,000
==========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

BrightStar's Certificate of Incorporation, as amended, and Bylaws
incorporate substantially the provisions of the Delaware General Corporation Law
("DGCL") providing for indemnification of directors and officers of BrightStar
against expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred in connection with any proceeding arising by reason of the
fact that such person is or was an officer or director of BrightStar or is or
was serving at the request of BrightStar as a director, officer or employee of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise.

As permitted by Section 102 of the DGCL, BrightStar's Certificate of
Incorporation, as amended, contains provisions eliminating a director's personal
liability for monetary damages to BrightStar and its stockholders arising from a
breach of a director's fiduciary duty except for liability (a) for any breach of
the director's duty of loyalty to BrightStar or its stockholders, (b) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (c) under Section 174 of the DGCL, or (d) for any
transaction from which the director derived an improper personal benefit.

Section 145 of the DGCL provides generally that a person sued as a
director, officer, employee or agent of a corporation may be indemnified by the
corporation for reasonable expenses, including attorneys' fees, if in the case
of other than derivative suits such person has acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation (and, in the case of a criminal proceeding, had no
reasonable cause to believe that such person's conduct was unlawful). In the
case of a derivative suit, an officer, employee or agent of the corporation
which is not protected by the Certificate of Incorporation may be indemnified by
the corporation for reasonable expenses, including attorneys' fees, if such
person has acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the corporation, except that no
indemnification shall be made in the case of a derivative suit in respect of any
claim as to which an officer, employee or agent has been adjudged to be liable
to the corporation unless that person is fairly and reasonably entitled to
indemnity for proper expenses. Indemnification is mandatory in the case of a
director, officer, employee, or agent who is successful on the merits in defense
of a suit against such person.

The Company intends to purchase liability insurance policies covering
directors and officers in certain circumstances.

II-1
<PAGE> 130

Under Section 8 of the Underwriting Agreement filed as Exhibit 1.1 to this
Registration Statement, the Underwriters have agreed to indemnify, under certain
conditions, BrightStar, its officers and directors, and persons who control
BrightStar, within the meaning of the Securities Act of 1933, as amended,
against certain liabilities.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Set forth below is certain information concerning all sales of securities
by BrightStar that were not registered under the Securities Act.

Effective October 17, 1997, BrightStar issued and sold 100 shares of Common
Stock to BITG for $1,000.

Concurrently with the closing of the Offering and pursuant to the Share
Exchange Agreement dated as of December 15, 1997, (i) the Company will issue to
BITI an aggregate of 826,550 shares of Common Stock in exchange for all the
shares of common stock of BITG held by BITI and (ii) the Company will issue up
to an aggregate of 346,800 shares of Common Stock in exchange for all the shares
of common stock of BITG held by members of BrightStar's management, as follows:
42,900 shares to George M. Siegel; 70,000 shares to Marshall G. Webb; 60,000
shares to Thomas A. Hudgins; 60,000 shares to Daniel M. Cofall; 60,000 shares to
Michael A. Sooley; 33,900 shares to Tarrant Hancock; and 20,000 shares to Mark
D. Diggs. In connection with the Share Exchange, BrightStar assumed all
obligations of the issuer pursuant to the MG Warrant, which provides for the
purchase of up to 50,000 shares of Common Stock, at a per share exercise price
equal to the lesser of $6.00 or 60% of the initial public offering price per
share of the Common Stock (the "IPO Price"), and all obligations of the issuer
pursuant to the BGCA Option, which provides for the purchase of up to a number
of shares of Common Stock equal to the amount obtained by dividing $100,000 by
the IPO Price, at an exercise price of $6.00 per share.

Concurrently with the closing of the Offering, the Company will issue to
SCS America, SCS Australia and the Stockholders of the other Founding Companies
an aggregate of 2,415,385 shares of Common Stock in connection with the
Acquisitions in consideration of substantially all the assets of SCS America and
SCS Australia and all of the outstanding capital stock of the other Founding
Companies.

The sales and issuances of the securities by BrightStar, by BITG to BITI
and to BrightStar's management and by BITI to its members, referenced above were
or will be, as applicable, exempt from registration under the Securities Act
pursuant to Section 4(2) thereof as transactions not involving any public
offerings, with the recipients representing their intentions to acquire the
securities for their own accounts and not with a view to the distribution
thereof.

See "Certain Transactions" for a discussion of the issuance of shares of
Common Stock in connection with the Acquisitions.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

<TABLE>
<S> <S>
*1.1 -- Form of Underwriting Agreement.
*3.1 -- Certificate of Incorporation.
3.2 -- Bylaws.
*4.1 -- Specimen Common Stock Certificates.
*4.2 -- Share Exchange Agreement dated December 15, 1997 among
BrightStar, BITG, BITI and the holders of the outstanding
capital stock of BITG.
*4.3 -- Warrant dated as of August 14, 1997 issued to McFarland,
Grossman and Company, Inc.
*4.4 -- Option Agreement dated as of September 26, 1997 between
BrightStar and Brewer-Gruenert Capital Advisors, LLC.
*5.1 -- Opinion of Chamberlain, Hrdlicka, White, Williams &
Martin as to the legality of the securities being
registered.
</TABLE>

II-2
<PAGE> 131

<TABLE>
<S> <S>
*10.1 -- BrightStar 1997 Stock Option Plan.
10.2 -- Agreement and Plan of Exchange by and among BrightStar
and the holders of the outstanding capital stock of Brian
R. Blackmarr and Associates, Inc.
10.3 -- Agreement and Plan of Exchange by and among BrightStar
and the holders of the outstanding capital stock of
Integrated Controls, Inc.
10.4 -- Agreement and Plan of Exchange by and among BrightStar
and the holders of the outstanding capital stock of
Mindworks Professional Education Group, Inc.
10.5 -- Agreement and Plan of Exchange by and among BrightStar,
Software Consulting Services America, LLC and the holders
of the outstanding ownership interests of Software
Consulting Services America, LLC.
10.6 -- Agreement and Plan of Exchange by and among BrightStar
and Software Consulting Services Pty. Ltd. in its
capacity as Trustee of the Software Consulting Services
Unit Trust and the holders of all of the outstanding
ownership interests in the Software Consultants Unit
Trust.
10.7 -- Agreement and Plan of Exchange by and among BrightStar
and the holders of the outstanding capital stock of
Software Innovators, Inc.
10.8 -- Agreement and Plan of Exchange by and among BrightStar
and the holder of the outstanding capital stock of Zelo
Group, Inc. and Joel Rayden.
*10.9 -- Form of Employment Agreement between BrightStar and
Marshall G. Webb, Thomas A. Hudgins, Daniel M. Cofall,
George M. Siegel and Mark D. Diggs.
*10.10 -- Form of Employment Agreement between Brian R. Blackmarr
and Associates, Inc. and Brian R. Blackmarr.
10.11 -- Letter Agreement dated August 14, 1997 between BITG and
McFarland, Grossman and Company, Inc.
10.12 -- Letter Agreement dated September 26, 1997 between BITG
and Brewer-Gruenert Capital Advisors, LLC, and amended as
of December 15, 1997.
*10.13 -- Loan Agreement dated October 15, 1997 between BITI and
BITG.
*10.14 -- Form of Stock Repurchase Agreement executed by and
between BrightStar and Marshall G. Webb.
*10.15 -- Form of Stock Repurchase Agreement executed by and
between BrightStar and Daniel M. Cofall.
*10.16 -- Form of Stock Repurchase Agreement executed by and
between BrightStar and Thomas A. Hudgins.
*10.17 -- Form of Stock Repurchase Agreement executed by and
between BrightStar and Michael A. Sooley.
*21.1 -- List of Subsidiaries of the Company.
23.1 -- Consent of Deloitte & Touche, LLP.
23.2 -- Consent of Deloitte Touche Tohmatsu.
*23.3 -- Consent of Chamberlain, Hrdlicka, White, Williams &
Martin (included in Exhibit 5.1).
23.4 -- Consent of Brian R. Blackmarr to be named as a director.
*24.1 -- Power of Attorney (included on the signature page
hereof).
*27.1 -- Financial Data Schedule.
</TABLE>

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

* To be filed by Amendment.

(b) Financial Statement Schedules

All schedules are omitted because they are not applicable or because the
required information is contained in the Financial Statements or Notes thereto.

II-3
<PAGE> 132

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

The undersigned registrant hereby undertakes:

(1) That for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared
effective.

(2) That for the purposes of determining any liability under the
Securities Act of 1933, each posteffective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.

(3) To provide to the Underwriters at the closing specified in the
underwriting agreement certificates in such denominations and registered in
such names as required by the underwriters to permit prompt delivery to
each purchaser.

II-4
<PAGE> 133
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston, State of Texas
on December 23, 1997.

BRIGHTSTAR INFORMATION
TECHNOLOGY GROUP, INC.

By: /s/ MARSHALL G. WEBB
-----------------------------------
Marshall G. Webb
President and
Chief Executive Officer

Each individual whose signature appears below constitutes and appoints
George M. Siegel, Marshall G. Webb and Daniel M. Cofall, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and any subsequent registration statements filed
by the Registrant pursuant to Rule 462(b) of the Securities Act of 1933, which
relates to this Registration Statement, and to file same, with all exhibits
thereto, and all documents in connection therewith, with the Securities and
Exchange Commission, granting unto such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that such attorney-in-fact and agents, or his or their substitutes, may lawfully
do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>

/s/ GEORGE M. SIEGEL Chairman of the Board of December 23, 1997
- ----------------------------------------------------- Directors
George M. Siegel

/s/ MARSHALL G. WEBB President, Chief December 23, 1997
- ----------------------------------------------------- Executive Officer,
Marshall G. Webb Director (Principal
Executive Officer)

/s/ DANIEL M. COFALL Executive Vice December 23, 1997
- ----------------------------------------------------- President, Chief
Daniel M. Cofall Financial Officer and
Treasurer (Principal
Financial and
Accounting Officer)
</TABLE>

II-5
<PAGE> 134

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBITS DESCRIPTION
-------- -----------
<C> <S>
*1.1 -- Form of Underwriting Agreement.
*3.1 -- Certificate of Incorporation.
3.2 -- Bylaws.
*4.1 -- Specimen Common Stock Certificates.
*4.2 -- Share Exchange Agreement dated December 15, 1997 among
BrightStar, BITG, BITI and the holders of the outstanding
capital stock of BITG.
*4.3 -- Warrant dated as of August 14, 1997 issued to McFarland,
Grossman and Company, Inc.
*4.4 -- Option Agreement dated as of September 26, 1997 between
BrightStar and Brewer-Gruenert Capital Advisors, LLC.
*5.1 -- Opinion of Chamberlain, Hrdlicka, White, Williams &
Martin as to the legality of the securities being
registered.
*10.1 -- BrightStar 1997 Stock Option Plan.
10.2 -- Agreement and Plan of Exchange by and among BrightStar
and the holders of the outstanding capital stock of Brian
R. Blackmarr and Associates, Inc.
10.3 -- Agreement and Plan of Exchange by and among BrightStar
and the holders of the outstanding capital stock of
Integrated Controls, Inc.
10.4 -- Agreement and Plan of Exchange by and among BrightStar
and the holders of the outstanding capital stock of
Mindworks Professional Education Group, Inc.
10.5 -- Agreement and Plan of Exchange by and among BrightStar,
Software Consulting Services America, LLC and the holders
of the outstanding ownership interests of Software
Consulting Services America, LLC.
10.6 -- Agreement and Plan of Exchange by and among BrightStar
and Software Consulting Services Pty. Ltd. in its
capacity as Trustee of the Software Consulting Services
Unit Trust and the holders of all of the outstanding
ownership interests in the Software Consultants Unit
Trust.
10.7 -- Agreement and Plan of Exchange by and among BrightStar
and the holders of the outstanding capital stock of
Software Innovators, Inc.
10.8 -- Agreement and Plan of Exchange by and among BrightStar
and the holder of the outstanding capital stock of Zelo
Group, Inc. and Joel Rayden.
*10.9 -- Form of Employment Agreement between BrightStar and
Marshall G. Webb, Thomas A. Hudgins, Daniel M. Cofall,
George M. Siegel and Mark D. Diggs.
*10.10 -- Form of Employment Agreement between Brian R. Blackmarr
and Associates, Inc. and Brian R. Blackmarr.
10.11 -- Letter Agreement dated August 14, 1997 between BITG and
McFarland, Grossman and Company, Inc.
10.12 -- Letter Agreement dated September 26, 1997 between BITG
and Brewer-Gruenert Capital Advisors, LLC, and amended as
of December 15, 1997.
*10.13 -- Loan Agreement dated October 15, 1997 between BITI and
BITG.
*10.14 -- Form of Stock Repurchase Agreement executed by and
between BrightStar and Marshall G. Webb.
*10.15 -- Form of Stock Repurchase Agreement executed by and
between BrightStar and Daniel M. Cofall.
*10.16 -- Form of Stock Repurchase Agreement executed by and
between BrightStar and Thomas A. Hudgins.
*10.17 -- Form of Stock Repurchase Agreement executed by and
between BrightStar and Michael A. Sooley.
*21.1 -- List of Subsidiaries of the Company.
23.1 -- Consent of Deloitte & Touche, LLP.
</TABLE>
<PAGE> 135
<TABLE>
<CAPTION>
EXHIBITS DESCRIPTION
-------- -----------
<C> <S>
23.2 -- Consent of Deloitte Touche Tohmatsu.
*23.3 -- Consent of Chamberlain, Hrdlicka, White, Williams &
Martin (included in Exhibit 5.1).
23.4 -- Consent of Brian R. Blackmarr to be named as a director.
*24.1 -- Power of Attorney (included on the signature page
hereof).
*27.1 -- Financial Data Schedule.
</TABLE>

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

* To be filed by Amendment.

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EXHIBIT 3.2

BYLAWS

BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
<PAGE> 2
TABLE OF CONTENTS

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ARTICLE 1. Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Principal Offices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Registered Offices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.3 Other Offices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE 2. Stockholder's Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2.1 Annual Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2.2 Special Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2.3 Notices of Meetings and Adjourned Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.4 Voting Lists. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.5 Quorum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.6 Organization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.7 Voting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.8 Stockholders Entitled to Vote. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.9 Order of Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.10 Action by Written Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.11 Authorization of Proxies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.12 Inspectors and Voting Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

ARTICLE 3. Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.1 Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.2 Number and Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.3 Quorum and Manner of Action. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.4 Vacancies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.5 Resignations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.6 Removals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.7 Annual Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.8 Regular Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.9 Special Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.10 Organization of Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.11 Place of Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.12 Compensation of Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.13 Action by Unanimous Written Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.14 Participation in Meetings by Telephone. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE 4. Committees of the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.1 Membership and Authorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.2 Minutes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.3 Vacancies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.4 Telephone Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.5 Action Without Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
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<TABLE>
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SECTION 5. Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.1 Number and Title. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.2 Term of Office; Vacancies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5.3 Removal of Elected officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5.4 Resignations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5.5 The Chairman of the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5.6 Chief Executive Officer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5.7 President. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 5.8 Vice Presidents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 5.9 Secretary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 5.10 Assistant Secretaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 5.11 Treasurer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 5.12 Assistant Treasurers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.13 Subordinate Officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.14 Salaries and Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

ARTICLE 6. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 6.1 Indemnification of Directors and Officers. . . . . . . . . . . . . . . . . . . . . . . . . 12

ARTICLE 7. Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 7.1 Certificates of Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 7.2 Lost Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 7.3 Fixing Date for Determination of Stockholders of Record for Certain Purposes. . . . . . . . 14
Section 7.4. Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 7.5. Registered Stockholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 7.6. Transfer of Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

ARTICLE 8. Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 8.1. Corporate Seal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 8.2. Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 8.3. Checks, Drafts, Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 8.4. Notice and Waiver of Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 8.5. Examination of Books and Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

ARTICLE 9. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 9.1. Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
<PAGE> 4
BYLAWS
OF
BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.

ARTICLE 1.

Offices

Section 1.1 Principal Offices.

The principal office of the Corporation shall be in the City of
Houston, Texas.

Section 1.2 Registered Offices.

The registered office of the Corporation required to be maintained in
the State of Delaware by the General Corporation Laws of the State of Delaware
may be, but need not be, identical with the Corporation's principal office, and
the address of the registered office may be changed from time to time by the
Board of Directors.

Section 1.3 Other Offices.

The Corporation may also have offices at such other places both within
and without the State of Delaware as the Board of Directors may from time to
time determine or the business of the Corporation may require.

ARTICLE 2.

Stockholder's Meetings

Section 2.1 Annual Meeting.

The annual meeting of the holders of shares of each class or series of
stock as are entitled to notice thereof and to vote thereat pursuant to
applicable law and the Corporation's Certificate of Incorporation for the
purpose of electing directors and transacting such other proper business as may
come before it shall be held in each year, at such time, on such day and at
such place, within or without the State of Delaware, as may be designated by
the Board of Directors.

Section 2.2 Special Meetings.

In addition to such special meetings as are provided by law or the
Corporation's Certificate of Incorporation, special meetings of the holders of
any class or series or of all classes or series of the Corporation's stock for
any purpose or purposes, may be called at any time by the Board of Directors
or the President of the Corporation and may be held on such day, at such time
and at such

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place, within or without the State of Delaware, as shall be designated by the
Board of Directors or the President of the Corporation.

Section 2.3 Notices of Meetings and Adjourned Meetings.

Except as otherwise provided by law, written notice of any meeting of
Stockholders (i) shall be given either by personal delivery or by mail to each
Stockholder of record entitled to vote thereat, (ii) shall be in such forms as
approved by the Board of Directors, and (iii) shall state the date, place and
hour of the meeting, and, in the case of a special meeting, the purpose for
which the meeting is called. Unless otherwise provided by law, such written
notice shall be given not less than ten (10) nor more than sixty (60) days
before the date of the meeting. Except when a Stockholder attends a meeting
for the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business on the ground that the meeting is not lawfully
called or convened, presence in person or by proxy of a Stockholder shall
constitute a waiver of notice of such meeting. Further, a written waiver of
any notice required by law or by these Bylaws, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Except as otherwise provided by law, the business that
may be transacted at any such meeting shall be limited to and consist of the
purpose or purposes stated in such notice. If a meeting is adjourned to
another time or place, notice need not be given of the adjourned meeting if the
time and place thereof are announced at the meeting at which the adjournment is
taken; provided, however, that if the adjournment is for more than thirty (30)
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each Stockholder
of record entitled to vote at the meeting.

Section 2.4 Voting Lists.

The officer or agent having charge of the stock transfer books for
shares of the Corporation shall keep a complete list of Stockholders entitled
to vote at meetings or any adjournments thereof, arranged in alphabetical
order, in accordance with applicable law and shall make same available prior to
and during each Stockholders' meeting for inspection by the Corporation's
Stockholders as required by law. The Corporation's original stock transfer
books shall be prima facie evidence as to who are the Stockholders entitled to
examine such list or transfer books or to vote at any meeting of Stockholders.

Section 2.5 Quorum.

Except as otherwise provided by law or by the Corporation's
Certificate of Incorporation, the holders of a majority of the Corporation's
stock issued and outstanding and entitled to vote at a meeting, present in
person or represented by proxy, without regard to class or series, shall
constitute a quorum at all meetings of the Stockholders for the transaction of
business. If, however, such quorum shall not be present or represented at any
meeting of the Stockholders, the holders of a majority of such shares of stock,
present in person or represented by proxy, may adjourn any meeting from time to
time without notice other than announcement at the meeting, except as otherwise
required by these Bylaws, until a quorum shall be present or represented. At
any such adjourned

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meeting at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
called.

Section 2.6 Organization.

Meetings of the Stockholders shall be presided over by the Chairman of
the Board of Directors, if one shall be elected, or in his absence, by the
President or by any Vice President, or, in the absence of any such officers, by
a chairman to be chosen by a majority of the Stockholders entitled to vote at
the meeting who are present in person or by proxy. The Secretary, or, in his
absence, any Assistant Secretary or any person appointed by the individual
presiding over the meeting, shall act as secretary at meetings of the
Stockholders.

Section 2.7 Voting.

Each Stockholder of record, as determined pursuant to Section 2.8, who
is entitled to vote in accordance with the terms of the Corporation's
Certificate of Incorporation and in accordance with the provisions of these
Bylaws, shall be entitled to one vote, in person or by proxy, for each share of
stock registered in his name on the books of the Corporation. Every
Stockholder entitled to vote at any Stockholders' meeting may authorize another
person or persons to act for him by proxy pursuant to Section 2.11, provided
that no such proxy shall be voted or acted upon after three years from its
date, unless the proxy provides for a longer period. A duly executed proxy
shall be irrevocable if it states that it is irrevocable and if, and only as
long as, it is coupled with an interest sufficient in law to support an
irrevocable power. A Stockholder's attendance at any meeting shall not have
the effect of revoking a previously granted proxy unless such Stockholder shall
in writing so notify the Secretary of the meeting prior to the voting of the
proxy. Unless otherwise provided by law, no vote on the election of directors
or any question brought before the meeting need be by ballot unless the
chairman of the meeting shall determine that it shall be by ballot or the
holders of a majority of the shares of stock present in person or by proxy and
entitled to participate in such vote shall so demand. In a vote by ballot,
each ballot shall state the number of shares voted and the name of the
Stockholder or proxy voting. Except as otherwise provided by law, by the
Corporation's Certificate of Incorporation or these Bylaws, all elections of
directors and all other matters before the Stock-holders shall be decided by
the vote of the holders of a majority of the shares of stock present in person
or by proxy at the meeting and entitled to vote in the election or on the
question. In the election of directors, votes may not be cumulated.

Section 2.8 Stockholders Entitled to Vote.

The Board of Directors may fix a date not more than sixty (60) days
nor less than ten (10) days prior to the date of any meeting of Stockholders,
or, in the case of corporate action by written consent in accordance with the
terms of Section 2.10, not more than sixty (60) days prior to such action, as a
record date for the determination of the Stockholders entitled to notice of and
to vote at such meeting and any adjournment thereof, or to act by written
consent, and in such case such Stockholders and only such Stockholders as shall
be Stockholders of record on the date so fixed shall be entitled to notice of
and to vote at such meeting and any adjournment thereof, or to act by written

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consent, as the case may be, notwithstanding any transfer of any stock on the
books of the Corporation after such record date fixed as aforesaid.

Section 2.9 Order of Business.

The order of business at all meetings of Stockholders shall be as
determined by the chairman of the meeting or as is otherwise determined by the
vote of the holders of a majority of the shares of stock present in person or
by proxy and entitled to vote without regard to class or series at the meeting.

Section 2.10 Action by Written Consent.

Unless otherwise provided by law or the Corporation's Certificate of
Incorporation, any action required or permitted to be taken by the Stockholders
of the Corporation may be taken without prior notice and an actual meeting if a
consent in writing setting forth the action so taken shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted. Except as provided
above, no action shall be taken by the Stockholders by written consent. Prompt
notice of the taking of any corporate action without a meeting by less than
unanimous written consent shall be given to those Stockholders who have not
consented in writing.

Section 2.11 Authorization of Proxies.

Without limiting the manner in which a Stockholder may authorize
another person or persons to act for him as proxy, the following are valid
means of granting such authority. A Stockholder may execute a writing
authorizing another person or persons to act for him as proxy. Execution may
be accomplished by the Stockholder or his authorized officer, director,
employee or agent signing such writing or causing his or her signature to be
affixed to such writing by any reasonable means including, but not limited to,
by facsimile signature. A Stockholder may also authorize another person or
persons to act for him as proxy by transmitting or authorizing the transmission
of a telegram, cablegram, or other means of electronic transmission to the
person who will be the holder of the proxy or to a proxy solicitation firm,
proxy support service organization or like agent duly authorized by the person
who will be the holder of the proxy to receive such transmission, provided that
any such telegram or other means of electronic transmission must either set
forth or be submitted with information from which it can be determined that the
telegram, cablegram or other electronic transmission was authorized by the
Stockholder. If it is determined that such telegrams, cablegrams or other
electronic transmissions are valid, the inspectors or, if there are no
inspectors, such other persons making that determination shall specify the
information upon which they relied. Any copy, facsimile telecommunication or
other reliable reproduction of the writing or transmission created pursuant to
this Section may be substituted or used in lieu of the original writing or
transmission for any and all purposes for which the writing or transmission
could be used, provided that such copy, facsimile telecommunication or other
reproduction shall be a complete reproduction of the entire original writing or
transmission.

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Section 2.12 Inspectors and Voting Procedures.

(a) The Corporation shall, in advance of any meeting of
Stockholders, appoint one or more inspectors to act at the meeting and
make a written report thereof. The Corporation may designate one or
more persons as alternate inspectors to replace any inspector who
fails to act. If no inspector or alternate is able to act at a
meeting of Stockholders, the person presiding at the meeting shall
appoint one or more inspectors to act at the meeting. Each inspector,
before entering upon the discharge of his duties, shall take and sign
an oath faithfully to execute the duties of inspector with strict
impartiality and according to the best of his ability.

(b) The inspectors shall (i) ascertain the number of
shares outstanding and the voting power of each, (ii) determine the
shares represented at a meeting and the validity of proxies and
ballots, (iii) count all votes and ballots, (iv) determine and retain
for a reasonable period a record of the disposition of any challenges
made to any determination by the inspectors, and (v) certify their
determination of the number of shares represented at the meeting, and
their count of all votes and ballots. The inspectors may appoint or
retain other persons or entities to assist the inspectors in the
performance of the duties of the inspectors.

(c) The date and time of the opening and closing of the
polls for each matter upon which the Stockholders will vote at a
meeting shall be announced at the meeting. No ballot, proxies or
votes, nor any revocations thereof or changes thereto, shall be
accepted by the inspectors after the closing of the polls unless the
Court of Chancery upon application by a Stockholder shall determine
otherwise.

(d) In determining the validity and counting of proxies
and ballots, the inspectors may examine and consider such records or
factors as allowed by the General Corporation Laws of the State of
Delaware.

ARTICLE 3.

Directors

Section 3.1 Management.

The property, affairs and business of the Corporation shall be managed
by or under the direction of the Board of Directors.

Section 3.2 Number and Term.

The number of directors may be fixed from time to time by resolution
of the Board of Directors adopted by the affirmative vote of a majority of the
members of the entire Board of Directors, but shall consist of not less than
one (1) member who shall be elected annually by the Stockholders except as
provided in Section 3.4. Directors need not be Stockholders. No decrease

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<PAGE> 9
in the number of directors shall have the effect of shortening the term of
office of any incumbent director.

Section 3.3 Quorum and Manner of Action.

At all meetings of the Board of Directors a majority of the total
number of directors holding office shall constitute a quorum for the
transaction of business and the act of a majority of the directors present at
any meeting at which there is a quorum shall be the act of the Board of
Directors, except as may be otherwise specifically provided by law, by the
Corporation's Certificate of Incorporation or these Bylaws. When the Board of
Directors consists of one director, the one director shall constitute a
majority and a quorum. If at any meeting of the Board of Directors there shall
be less than a quorum present, a majority of those present may adjourn the
meeting from time to time until a quorum is obtained, and no further notice
thereof need be given other than by announcement at such adjourned meeting.
Attendance by a director at a meeting shall constitute a waiver of notice of
such meeting except where a director attends a meeting for the express purpose
of objecting, at the beginning of the meeting, to the transaction of any
business on the ground that the meeting is not lawfully called or convened.

Section 3.4 Vacancies.

Except as otherwise provided by law or the Corporation's Certificate
of Incorporation, in the case of any increase in the authorized number of
directors or of any vacancy in the Board of Directors, however created, the
additional director or directors may be elected, or, as the case may be, the
vacancy or vacancies may be filled by majority vote of the directors remaining
on the whole Board of Directors although less than a quorum, or by a sole
remaining director. In the event one or more directors shall resign, effective
at a future date, such vacancy or vacancies shall be filled by a majority of
the directors who will remain on the whole Board of Directors, although less
than a quorum, or by a sole remaining director. Any director elected or chosen
as provided herein shall serve until the sooner of: (i) the unexpired term of
the directorship to which he is appointed; (ii) until his successor is elected
and qualified; or (iii) until his earlier resignation or removal.

Section 3.5 Resignations.

A director may resign at any time upon written notice of resignation
to the Corporation. Any resignation shall be effective immediately unless a
certain effective date is specified therein, in which event it will be
effective upon such date and acceptance of any resignation shall not be
necessary to make it effective.

Section 3.6 Removals.

Any director or the entire Board of Directors may be removed, with
cause, and another person or persons may be elected to serve for the remainder
of his or their term by the holders of a majority of the shares of the
Corporation entitled to vote in the election of directors. In case any vacancy
so created shall not be filled by the Stockholders at such meeting, such
vacancy may be filled by the directors as provided in Section 3.4.

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Section 3.7 Annual Meetings.

The annual meeting of the Board of Directors shall be held, if a
quorum be present, immediately following each annual meeting of the
Stockholders at the place such meeting of Stockholders took place, for the
purpose of organization and transaction of any other business that might be
transacted at a regular meeting thereof, and no notice of such meeting shall be
necessary. If a quorum is not present, such annual meeting may be held at any
other time or place that may be specified in a notice given in the manner
provided in Section 3.9 for special meetings of the Board of Directors or in a
waiver of notice thereof.

Section 3.8 Regular Meetings.

Regular meetings of the Board of Directors may be held without notice
at such places and times as shall be determined from time to time by resolution
of the Board of Directors. Except as otherwise provided by law, any business
may be transacted at any regular meeting of the Board of Directors.

Section 3.9 Special Meetings.

Special meetings of the Board of Directors may be called by the
President, or by the Secretary on the written request of one-third ( 1/3) of
the members of the whole Board of Directors stating the purpose or purposes of
such meeting. Notices of special meetings, if mailed, shall be mailed to each
director not later than two (2) days before the day of the meeting is to be
held or if otherwise given in the manner permitted by these Bylaws, not later
than the day before such meeting. Neither the business to be transacted at,
nor the purpose of, any special meetings need be specified in any notice or
written waiver of notice unless so required by the Corporation's Certificate of
Incorporation or by these Bylaws. Any and all business may be transacted at a
special meeting, unless limited by law, the Corporation's Certificate of
Incorporation or by these Bylaws.

Section 3.10 Organization of Meetings.

At any meeting of the Board of Directors, business shall be transacted
in such order and manner as such Board of Directors may from time to time
determine, and all matters shall be determined by the vote of a majority of the
directors present at any meeting at which there is a quorum, except as
otherwise provided by these Bylaws or required by law.

Section 3.11 Place of Meetings.

The Board of Directors may hold their meetings and have one or more
offices, and keep the books of the Corporation, outside the State of Delaware,
at any office or offices of the Corporation, or at any other place as they may
from time to time by resolution determine.

7
<PAGE> 11
Section 3.12 Compensation of Directors.

Directors shall not receive any stated salary for their services as
directors, but by resolution of the Board of Directors a fixed honorarium or
fees and expenses, if any, of attendance may be allowed for attendance at each
meeting. Nothing herein contained shall be construed to preclude any director
from serving the Corporation in any other capacity and receiving compensation
therefor. Members of special or standing committees may be allowed like
compensation for attending such committee meetings.

Section 3.13 Action by Unanimous Written Consent.

Unless otherwise restricted by law, the Corporation's Certificate of
Incorporation or these Bylaws, any action required or permitted to be taken at
any meeting of the Board of Directors or of any committee thereof may be taken
without a meeting if all members of the Board of Directors or of such
committee, as the case may be, consent thereto in writing and the writing or
writings are filed with the minutes of proceedings of the Board of Directors of
the committee.

Section 3.14 Participation in Meetings by Telephone.

Unless otherwise restricted by the Corporation's Certificate of
Incorporation or these Bylaws, members of the Board of Directors or of any
committee thereof may participate in a meeting of such Board of Directors or
committee by means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other.
Participation in a meeting in such manner shall constitute presence in person
at such meeting, except where a person participates in the meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business on the grounds that the meeting is not lawfully
called or convened.

ARTICLE 4.

Committees of the Board

Section 4.1 Membership and Authorities.

The Board of Directors may, by resolution or resolutions passed by a
majority of the whole Board of Directors, designate one(1) or more Directors to
constitute an Executive Committee and such other committees as the Board of
Directors may determine, each of which committees to the extent provided in
said resolution or resolutions or in these Bylaws, shall have and may exercise
all the powers of the Board of Directors in the management of the business and
affairs of the Corporation, except in those cases where the authority of the
Board of Directors is specifically denied to the Executive Committee or such
other committee or committees by law, the Corporation's Certificate of
Incorporation or these Bylaws, and may authorize the seal of the Corporation to
be affixed to all papers that may require it. The designation of an Executive
Committee or other committee and the delegation thereto of authority shall not
operate to relieve the Board of Directors, or any member thereof, of any
responsibility imposed upon it or him by law.

8
<PAGE> 12
Section 4.2 Minutes.

Each committee designated by the Board of Directors shall keep regular
minutes of its proceedings and report the same to the Board of Directors when
required.

Section 4.3 Vacancies.

The Board of Directors may designate one (1) or more of its members as
alternate members of any committee who may replace any absent or disqualified
member at any meeting of such committee. If no alternate members have been
appointed, the committee member or members thereof present at any meeting and
not disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any absent or disqualified member. The Board of
Directors shall have the power at any time to fill vacancies in, to change the
membership of, and to dissolve, any committee.

Section 4.4 Telephone Meetings.

Members of any committee designated by the Board of Directors may
participate in or hold a meeting by use of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other. Participation in a meeting pursuant to this
Section 4.4 shall constitute presence in person at such meeting, except where a
person participates in the meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business on the ground that
the meeting is not lawfully called or convened.

Section 4.5 Action Without Meeting.

Any action required or permitted to be taken at a meeting of any
committee designated by the Board of Directors may be taken without a meeting
if a consent in writing, setting forth the action so taken, is signed by all
the members of the committee and filed with the minutes of the committee
proceedings. Such consent shall have the same force and effect as a unanimous
vote at a meeting.

SECTION 5.

Officers

Section 5.1 Number and Title.

The elected officers of the Corporation shall be chosen by the Board
of Directors and shall be a Chief Executive Officer, a President, a Vice
President, a Secretary and a Treasurer. The Board of Directors may also choose
a Chairman of the Board, who must be a Board member of the Board of Directors,
and additional Vice Presidents, Assistant Secretaries and/or Assistant
Treasurers. One person may hold any two or more of these offices and any one
or more of the Vice Presidents may be designated as an Executive Vice President
or Senior Vice President.

9
<PAGE> 13
Section 5.2 Term of Office; Vacancies.

So far as is practicable, all elected officers shall be elected by the
Board of Directors at the annual meeting of the Board of Directors each year,
and except as otherwise provided in this Article 5, shall hold office until the
next such meeting of the Board of Directors in the subsequent year and until
their respective successors are elected and qualified or until their earlier
resignation or removal. All appointed officers shall hold office at the
pleasure of the Board of Directors. If any vacancy shall occur in any office,
the Board of Directors may elect or appoint a successor to fill such vacancy
for the remainder of the term.

Section 5.3 Removal of Elected officers.

Any elected officer may be removed at any time, with or without cause,
by affirmative vote of a majority of the whole Board of Directors, at any
regular meeting or at any special meeting called for such purpose.

Section 5.4 Resignations.

Any officer may resign at any time upon written notice of resignation
to the President, Secretary or Board of Directors of the Corporation. Any
resignation shall be effective immediately unless a date certain is specified
for it to take effect, in which event it shall be effective upon such date, and
acceptance of any resignation shall not be necessary to make it effective,
irrespective of whether the resignation is tendered subject to such acceptance.

Section 5.5 The Chairman of the Board.

The Chairman of the Board, if one shall be elected, shall preside at
all meetings of the Stockholders and Board of Directors. In addition, the
Chairman of the Board shall perform whatever duties and shall exercise all
powers that are given to him by the Board of Directors.

Section 5.6 Chief Executive Officer.

The Chief Executive Officer shall be the most senior executive officer
of the Corporation; shall (in the absence of the Chairman of the Board, if one
be elected) preside at meetings of the Stockholders and Board of Directors;
shall be ex officio a member of all standing committees; shall have general and
active management of business of the Corporation; shall implement the general
directives, plans and policies formulated by the Board of Directors; and shall
further have such duties, responsibilities and authorities as may be assigned
to him by the Board of Directors. He may sign, with any other proper officer,
certificates for shares of the Corporation and any deeds, bonds, mortgages,
contracts and other documents which the Board of Directors has authorized to be
executed, except where required by law to be otherwise signed and executed and
except where the signing and execution thereof shall be expressly delegated by
the Board of Directors or these Bylaws, to some other officer or agent of the
corporation. In the absence of the Chief Executive Officer, his duties shall
be performed and his authority may be exercised by the President of the
Corporation.

10
<PAGE> 14
Section 5.7 President.

The President shall, after the Chief Executive Officer, be the most
senior executive officer of the corporation and shall, subject to the authority
of the Chief Executive Officer, implement the general plans and directives of
the Board of Directors and perform such other duties as may be assigned to him
by the Board of Directors.

Section 5.8 Vice Presidents.

The several Vice Presidents shall have such powers and duties as may
be assigned to them by these Bylaws and as may from time to time be assigned to
them by the Board of Directors and may sign, with any other proper officer,
certificates for shares of the Corporation.

Section 5.9 Secretary.

The Secretary, if available, shall attend all meetings of the Board of
Directors and all meetings of the Stockholders and record the proceedings of
the meetings in a book to be kept for that purpose and shall perform like
duties for any committee of the Board of Directors as shall designate him to
serve. He shall give, or cause to be given, notice of all meetings of the
Stockholders and meetings of the Board of Directors and committees thereof and
shall perform such other duties incident to the office of secretary or as may
be prescribed by the Board of Directors or the President, under whose
supervision he shall be. He shall have custody of the corporate seal of the
Corporation and he, or any Assistant Secretary, or any other person whom the
Board of Directors may designate, shall have authority to affix the same to any
instrument requiring it, and when so affixed it may be attested by his
signature or by the signature of any Assistant Secretary or by the signature of
such other person so affixing such seal.

Section 5.10 Assistant Secretaries.

Each Assistant Secretary shall have the usual powers and duties
pertaining to his office, together with such other powers and duties as may be
assigned to him by the Board of Directors, the President or the Secretary. The
Assistant Secretary or such other person as may be designated by the President
shall exercise the powers of the Secretary during that officer's absence or
inability to act.

Section 5.11 Treasurer.

The Treasurer shall have the custody of and be responsible for the
corporate funds and securities, shall keep full and separate accounts of
receipts and disbursements in the books belonging to the Corporation and shall
deposit all monies and other valuable effects in the name and the credit of the
Corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the Corporation as may be ordered by
the Board of Directors, taking proper vouchers for such disbursements, and
shall render to the President and the Board of Directors, at its regular
meetings, or when the Board of Directors so requires, an account of all his
transactions as Treasurer and of the financial condition of the Corporation and
he shall perform all other duties

11
<PAGE> 15
incident to the position of Treasurer, or as may be prescribed by the Board of
Directors or the President. If required by the Board of Directors, he shall
give the Corporation a bond in such sum and with such surety or sureties as
shall be satisfactory to the Board of Directors for the faithful performance of
the duties of his office and for the restoration to the Corporation, in case of
his death, resignation, retirement or removal from office, of all books,
papers, vouchers, money and other property of whatever kind in his possession
or under his control belonging to the Corporation

Section 5.12 Assistant Treasurers.

Each Assistant Treasurer shall have the usual powers and duties
pertaining to his office, together with such other powers and duties as may be
assigned to him by the Board of Directors, the President or the Treasurer. The
Assistant Treasurer or such other person designated by the President shall
exercise the power of the Treasurer during that officer's absence or inability
to act.

Section 5.13 Subordinate Officers.

The Board of Directors may (i) appoint such other subordinate officers
and agents as it shall deem necessary who shall hold their offices for such
terms, have such authority and perform such duties as the Board of Directors
may from time to time determine, or (ii) delegate to any committee or officer
the power to appoint any such subordinate officers or agents.

Section 5.14 Salaries and Compensation.

The salary or other compensation of officers shall be fixed from time
to time by the Board of Directors. The Board of Directors may delegate to any
committee or officer the power to fix from time to time the salary or other
compensation of subordinate officers and agents appointed in accordance with
the provisions of Section 5.13.

ARTICLE 6.

Indemnification

Section 6.1 Indemnification of Directors and Officers.

The corporation shall indemnify its current or former directors,
officers, employees and agents or any person who served or is serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise from and
against any and all expenses, liabilities or other matters to the fullest
extent permitted by the General Corporation Law of Delaware, as the same exists
or may hereafter be amended. Such indemnification shall not be deemed
exclusive of any other rights to which such person may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall inure to the benefit of
the heirs, executors and administrators of such person.

12
<PAGE> 16
ARTICLE 7.

Capital Stock

Section 7.1 Certificates of Stock.

Certificates of stock shall be issued to each Stockholder certifying
the number of shares owned by him in the Corporation and shall be in a form not
inconsistent with the Certificate of Incorporation and as approved by the Board
of Directors. The certificates shall be signed by the Chairman of the Board,
the President or a Vice President and by the Secretary or an Assistant
Secretary, or the Treasurer or an Assistant Treasurer and may be sealed with
the seal of the Corporation or a facsimile thereof. Any or all of the
signatures on the certificate may be a facsimile. In case any officer,
transfer agent or registrar who has signed or whose facsimile signature has
been placed upon a certificate is issued, it may be issued by the Corporation
with the same effect as if he were such officer, transfer agent or registrar at
the date of issue.

Section 7.2 Lost Certificates.

The Board of Directors may direct a new certificate to be issued in
place of any certificate theretofore issued by the Corporation alleged to have
been lost, stolen or destroyed, upon the making of an affidavit of that fact by
the owner of such certificate, or his legal representative. When authorizing
the issuance of a new certificate, the Board of Directors may in its
discretion, as a condition precedent to the issuance thereof, require the
owner, or his legal representative, to give a bond in such form and substance
with such surety as it may direct, to indemnify the Corporation against any
claim that may be made on account of the alleged loss, theft or destruction of
such certificate or the issuance of such new certificate.

Section 7.3 Fixing Date for Determination of Stockholders of
Record for Certain Purposes.

(a) In order that the Corporation may determine the
Stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of capital
stock or for the purpose of any other lawful action, the Board of
Directors may fix, in advance, a record date, which shall not be more
than sixty (60) days prior to the date of payment of such dividend or
other distribution or allotment of such rights or the date when any
such rights in respect of any change, conversion or exchange of stock
may be exercised or the date of such other action. In such a case,
only Stockholders of record on the date so fixed shall be entitled to
receive any such dividend or other distribution or allotment of rights
or to exercise such rights or for any other purpose, as the case may
be, notwithstanding any transfer of any stock on the books of the
Corporation after any such record date fixed as aforesaid.

(b) If no record date is fixed, the record date for
determining Stockholders for any such purpose shall be at the close of
business on the day on which the Board of Directors adopts the
resolution relating thereto.

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<PAGE> 17
Section 7.4. Dividends.

Subject to the provisions of the Corporation's Certificate of
Incorporation, if any, and except as otherwise provided by law, the directors
may declare dividends upon the capital stock of the Corporation as and when
they deem it to be expedient. Such dividends may be paid in cash, in property
or in shares of the Corporation's capital stock. Before declaring any dividend
there may be set apart out of the funds of the Corporation available for
dividends, such sum or sums as the directors from time to time in their
discretion think proper for working capital or as a reserve fund to meet
contingencies or for equalizing dividends, or for such other purposes as the
directors shall think conducive to the interests of the Corporation and the
directors may modify or abolish any such reserve in the manner in which it was
created.

Section 7.5. Registered Stockholders.

Except as expressly provided by law, the Corporation's Certificate of
Incorporation or these Bylaws, the Corporation shall be entitled to treat
registered Stockholders as the only holders and owners in fact of the shares
standing in their respective names and the Corporation shall not be bound to
recognize any equitable or other claim to or interest in such shares on the
part of any other person, regardless of whether it shall have express or other
notice thereof.

Section 7.6. Transfer of Stock.

Transfers of shares of the capital stock of the Corporation shall be
made only on the books of the Corporation by the registered owners thereof, or
by their legal representatives or their duly authorized attorneys. Upon any
such transfers the old certificates shall be surrendered to the Corporation by
the delivery thereof to the person in charge of the stock transfer books and
ledgers, by whom they shall be canceled and new certificates shall thereupon be
issued.

ARTICLE 8.

Miscellaneous Provisions

Section 8.1. Corporate Seal.

If one is adopted, the corporate seal shall have inscribed thereon the
name of the Corporation and shall be in such form as may be approved by the
Board of Directors. Said seal may be used by causing it or a facsimile thereof
to be impressed or affixed or in any manner reproduced.

Section 8.2. Fiscal Year.

The fiscal year of the Corporation shall be fixed by resolution of the
Board of Directors.

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<PAGE> 18
Section 8.3. Checks, Drafts, Notes.

All checks, drafts or other orders tor the payment of money, notes or
other evidences of indebtedness issued in the name of the Corporation shall be
signed by such officer or officers, agent or agents of the Corporation, and in
such manner as shall from time to time be determined by resolution (whether
general or special) of the Board of Directors or may be prescribed by any
officer or officers, or any officer and agent jointly, thereunto duly
authorized by the Board of Directors.

Section 8.4. Notice and Waiver of Notice.

Whenever notice is required to be given to any director or Stockholder
under the provisions of applicable law, the Corporation's Certificate of
Incorporation or these Bylaws, such notice shall be in writing and delivered
whether (i) personally, or (ii) by registered or certified mail, or (iii) by
telegram, telecopy, or similar facsimile means (delivered during the
recipient's regular business hours). Such notice shall be sent to such
director or Stockholder at the address or telecopy number as it appears on the
records of the Corporation, unless prior to the sending of such notice he has
designated, in a written request to the Secretary of the Corporation, another
address or telecopy number to which notices are to be sent. Notices shall be
deemed given when received, if sent by telegram, telex, telecopy or similar
facsimile means (confirmation of such receipt by confirmed facsimile
transmission being deemed receipt of communications sent by telex, telecopy or
other facsimile means); and when delivered and receipted for (or upon the date
of attempted delivery where delivery is refused), if hand delivered, sent by
express courier or delivery service, or sent by certified or registered mail.
Whenever notice is required to be given under any provision of law, the
Corporation's Certificate of Incorporation or these Bylaws, a waiver thereof
in writing, by telegraph, cable or other form of recorded communication, signed
by the person or persons entitled to said notice, whether before or after the
time stated therein, shall be deemed equivalent to notice. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, except
when the person attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business on the grounds
that the meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
Stockholders, directors, or members of a committee of directors need be
specified in any written waiver of notice unless so required by the
Corporation's Certificate of Incorporation or these Bylaws.

Section 8.5. Examination of Books and Records.

The Board of Directors shall determine from time to time whether, and
if allowed, when and under what conditions and regulations the accounts and
books of the Corporation (except such as may be statute be specifically opened
to inspection) or any of them shall be open to inspection by the Stockholders,
and the Stockholders' rights in this respect are and shall be restricted and
limited accordingly.

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<PAGE> 19
ARTICLE 9.

Amendments

Section 9.1. Amendments.

In furtherance and not in limitation of the powers conferred by the
laws of the State of Delaware, the Board of Directors of the corporation is
expressly authorized to adopt, amend or repeal the bylaws of the corporation
subject to the power of the stockholders of the corporation to alter or repeal
any bylaw whether adopted by them or otherwise.

<PAGE> 1

EXHIBIT 10.2

AGREEMENT AND PLAN OF EXCHANGE

BY AND AMONG

BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.

AND

THE HOLDERS OF THE
OUTSTANDING CAPITAL STOCK
OF
BRIAN R. BLACKMARR AND ASSOCIATES, INC.

DECEMBER 18, 1997
<PAGE> 2

<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C> <C>
1. AGREEMENT FOR EXCHANGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Exchange of Shares and Other Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Aggregate Consideration from Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2.1 Exchange Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2.2 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Payment of Exchange Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.3.1 Closing Before Receipt of the 1997 Audit Report . . . . . . . . . . . . . . . . . . . . . . 3
1.3.2 Closing After Receipt of the 1997 Audit Report. . . . . . . . . . . . . . . . . . . . . . . 3
1.3.3 No Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

2. THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Delivery of Company Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2.1 Assignments of Company Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2.2 Payment In Full Satisfaction of All Rights . . . . . . . . . . . . . . . . . . . . . . . . 4

3. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.1 Stock Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.2 Shareholder Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.3 Shareholder Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.4 Organization, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.5 Capitalization of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.6 Company Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.7 Company Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.8 Intellectual Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.9 Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.10 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.11 Other Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.12 Investment Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.13 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.14 Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.15 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.16 Full Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.17 Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.18 Company Contracts, Company Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.19 Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.20 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.21 Subsidiaries; Predecessors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.22 Affiliate Relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.23 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.24 Company Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>

3.25 Restricted Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

4. REPRESENTATIONS AND WARRANTIES OF THE PARENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.2 Capitalization of the Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.3 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.4 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.5 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.6 Investment Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.7 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.8 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.9 Full Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.10 Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.11 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.12 Parent Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

5. CERTAIN COVENANTS AND AGREEMENTS OF SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.1 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.2 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.3 Filings, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.4 Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.5 Satisfaction of Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.6 Capital Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.7 Exclusivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.8 Agreements of Shareholders to be Effective Upon Closing . . . . . . . . . . . . . . . . . . . . . . 21
5.8.1 Covenant Not to Compete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.8.2 Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.9 Shareholder Indebtedness and Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

6. CERTAIN AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.1 Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.2 Company Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.3 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.4 Tax-Free Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.5 Certain Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.5.1 Tax Periods Ending on or Before the IPO Closing Date . . . . . . . . . . . . . . . . . . . 24
6.5.2 Cooperation on Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.5.3 Tax Sharing Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.6 Sale of Motor Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.7 Positions of Mr. Blackmarr . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.8 Release of Certain Assets and Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.9 Parent Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.10 Parent Stock Option Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.11 Continuation of Company Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
</TABLE>

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7. CONDITIONS PRECEDENT; CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.1 Conditions Precedent to the Obligations of the Parent . . . . . . . . . . . . . . . . . . . . . . . 26
7.1.1 Accuracy of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . 26
7.1.2 Performance of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.1.3 Legal Actions or Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.1.4 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.1.5 Closing Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.1.6 No Loss or Damage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.1.7 Licenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.1.8 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.1.9 Certain Corporate Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.2 Conditions Precedent to the Obligations of the Shareholders and the Company . . . . . . . . . . . . 27
7.2.1 Accuracy of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . 27
7.2.2 Performance of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.2.3 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.2.4 Closing Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.3 Deliveries by the Shareholders at the Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.3.1 Closing Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.3.2 Stock Transfer Restriction Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.3.3 Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.3.4 Opinion of Counsel for the Shareholders and the Company . . . . . . . . . . . . . . . . . . 28
7.3.5 Documents, Stock Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.4 No Waiver by Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.5 Deliveries by the Parent at the Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.5.1 Closing Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.5.2 Opinion of Counsel for the Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.5.3 Exchange Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.6 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.7 Conditions Precedent to Completion of the Closing . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.7.1 Legal Actions or Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.7.2 IPO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.8 Delivery of Exchange Consideration on the IPO Closing Date . . . . . . . . . . . . . . . . . . . . . 29

8. SURVIVAL, INDEMNIFICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.2.1 Parent Indemnified Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.2.2 Minimum Losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.2.3 Parent Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.3 Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.4 Procedures for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.4.1 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.4.2 Legal Defense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.4.3 Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.4.4 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
</TABLE>

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<TABLE>
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8.5 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.1 Grounds for Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.1.1 Prior to Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.1.2 After the Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.1 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.2 Further Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.3 Assignability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.4 Exhibits and Schedules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.5 Sections and Articles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.6 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.8 CONTROLLING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.9 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.10 No Third Party Beneficiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.11 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.12 No Employee Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.13 No Personal Liability of Representatives of Parent . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.14 When Effective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.15 Takeover Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.16 Number and Gender of Words . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.17 Invalid Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.18 Multiple Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.19 No Rule of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.20 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.21 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.22 Section 351 Plan of Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

</TABLE>

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<S> <C>
Exhibit 1.1 List of Shareholders
Exhibit 2.1 Escrow Agreement
Exhibit 2.2 Letter of Transmittal from Shareholders
Exhibit 5.6 Budgeted Capital Expenditures of Company
Exhibit 6.8 Assets of Shareholders to be Released from Certain Company Obligations
Exhibit 7.3.2 Stock Transfer Restriction Agreement
Exhibit 7.3.3 Certain Employees of the Company
Exhibit 7.3.3A Employment Agreement
Exhibit 7.3.4 Opinion of Counsel for the Shareholders and the Company
Exhibit 7.5.2 Opinion of Counsel for the Parent
Exhibit 10.22 Section 351 Plan of Exchange
</TABLE>

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<PAGE> 6
AGREEMENT AND PLAN OF EXCHANGE

This AGREEMENT AND PLAN OF EXCHANGE (this "Agreement") made effective
as of December 18, 1997, by and among BRIGHTSTAR INFORMATION TECHNOLOGY
GROUP, INC., a Delaware corporation (the "Parent"), AND THE UNDERSIGNED HOLDERS
(the "Shareholders") OF ALL OF THE OUTSTANDING CAPITAL STOCK OF BRIAN R.
BLACKMARR AND ASSOCIATES, INC., a Texas corporation (the "Company").

WHEREAS, Parent and the Shareholders desire to provide for the
transfer by the Shareholders to Parent of the outstanding shares of capital
stock of the Company in exchange for common stock and cash of Parent (the
"Exchange");

WHEREAS, the Exchange is one of several related transactions involving
the assignment of property to Parent in exchange for common stock and cash of
Parent as part of an overall plan that includes an initial public offering of
parent common stock ("Parent Common Stock"); and for federal income tax
purposes, it is intended that this Exchange and the other related exchange
transactions with Parent shall qualify as exchanges under the provisions of
Section 351 of the Internal Revenue Code of 1986, as amended (the "Code").

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

1. AGREEMENT FOR EXCHANGE

1.1 Exchange of Shares and Other Consideration. Shareholders
agree to assign, transfer and deliver to Parent all right, title and interest
in and to all of the outstanding shares of common stock of the Company
("Company Common Stock") in exchange for the Exchange Consideration (as defined
below) which Parent hereby agrees to pay, assign, transfer and deliver to the
Shareholders in accordance with this Agreement, and among them in proportion to
the number of shares of Company Common Stock owned by the Shareholders and
assigned to Parent by the Shareholders as set forth in Exhibit 1.1 hereto.

1.2 Aggregate Consideration from Parent. The aggregate
consideration to be delivered to the Shareholders by the Parent shall be an
amount equal to the sum of the Exchange Consideration as defined below.

1.2.1 Exchange Consideration. The Exchange Consideration
shall be equal to the amount of revenue recognized by the Company, less
allowances for doubtful accounts (giving due consideration to the normal
payment practices of customers) and sales returns, as determined in accordance
with GAAP (as defined below) with respect to the period from January 1, 1997
through December 31, 1997, reduced by: (i) Long-Term Debt (as defined below)
of the Company at the Closing Date; (ii) federal, state or local income taxes
payable by the Company with respect to all periods prior to the Closing Date
not included in Long-Term Debt; and (iii) the amount of any reduction in the
Company's Net Working Capital (as defined below) from September 30, 1997 to the
Closing Balance Sheet Date (as defined below); provided that obligations of the
Company arising out of the transactions for the issuance of common stock of the
Company effective March 11, 1997,
<PAGE> 7
reasonably acknowledged and agreed to in amounts by both the Parent and the
Company, shall not be included in Long-Term Debt or Current Liabilities of the
Company for the purposes of the foregoing adjustment provisions of this Section
1.2.1.

1.2.2 Certain Definitions. The following terms shall have
the meaning ascribed below for purposes of this Agreement:

(i) "Closing Balance Sheet Date" means the end of the
most recent monthly accounting period of the Company preceding the
Closing Date.

(ii) "Current Assets" means the current assets of the
Company determined as of the Closing Balance Sheet Date in accordance
with GAAP.

(iii) "Current Liabilities" means the current liabilities
of the Company determined as of the Closing Balance Sheet Date in
accordance with GAAP excluding those current liabilities included in
Long-Term Debt and federal, state and local income taxes payable by
the Company with respect to all periods prior to Closing not included
in Long-Term Debt, and expressed as a positive number; provided,
however, that all expenses of the Company or the Shareholders incurred
in connection with the transactions contemplated hereby which are
payable by the Company shall be included in Current Liabilities.

(iv) "GAAP" means U.S. generally accepted accounting
principles consistently applied.

(v) "IPO" means the Parent's first underwritten public
offering of Parent Common Stock resulting in net cash proceeds
sufficient to fund the use of proceeds of such offering as described
in the PPM (and any supplements thereto) referenced in Section 3.25
herein (other than any offering pursuant to any registration statement
(i) relating to any capital stock of Parent or options, warrants or
other rights to acquire any such capital stock issued or to be issued
primarily to directors, officers or employees of the Parent or any of
its subsidiaries, (ii) relating to any employee benefit plan or
interest therein, (iii) relating principally to any preferred stock or
debt securities of the Parent, or (iv) filed pursuant to Rule 145
under the Securities Act of 1933, as amended ("Securities Act"), or
any successor or similar provision).

(vi) "IPO Closing Date" means the date that the Parent
receives funds in consideration for the sale of its securities in the
IPO.

(vii) "IPO Price" means the initial price per share to the
public for shares of Parent Common Stock in IPO.

(viii) "Long-Term Debt" means all long-term liabilities of
the Company as of the Closing Date, including capitalized lease
obligations other than those listed on Schedule 1.2.2(viii), as
applicable to a corporation taxable under Subchapter C of the Code, as
determined under GAAP, plus current portions of such long-term
liabilities and pre-payment penalties as of the Closing Date; and
Long-Term Debt does not include the Company's Operating Line of Credit
with CoAmerica Bank or another financial institution.

2
<PAGE> 8
(ix) "Net Working Capital" means the Current Assets of the
Company minus the Current Liabilities of the Company as of the Closing
Balance Sheet Date, all as determined under GAAP.

1.3 Payment of Exchange Consideration. Parent shall deliver
payment of the Exchange Consideration by delivery of cash and Parent Common
Stock such that 20% of the Exchange Consideration (and any installment thereof)
is delivered to the Shareholders in cash and 80% of the Exchange Consideration
(and any installment thereof) is delivered in Parent Common Stock. For
purposes of this Section 1.3, such shares of Parent Common Stock shall have a
per share value equal to the IPO Price. The Exchange Consideration shall be
paid as follows:

1.3.1 Closing Before Receipt of the 1997 Audit Report. If
the IPO Closing Date occurs prior to receipt by the Parent and the Company of
the 1997 Audit Report (defined below), then the Exchange Consideration shall be
paid by the Parent in two installments.

(i) The first installment of Exchange
Consideration shall be paid and delivered to the Shareholders on the
IPO Closing Date and shall be equal to that portion of the Exchange
Consideration payable with respect to the period from January 1, 1997
through December 31, 1997, based on revenue recognized by the Company,
less adjustments as provided in Section 1.2.1, as reported on the
Company's unaudited Balance Sheet and Income Statement, prepared in
accordance with GAAP, as of and for the year ending December 31, 1997
(the "Unaudited Financial Statements").

(ii) The second installment of the Exchange
Consideration shall be paid within ten days after receipt by the
Parent and the Company from the independent certified public
accountants for the Company of an audit report (the "1997 Audit
Report") on the Balance Sheet and Income Statement of the Company as
of December 31, 1997 and for the year then ended ("1997 Financial
Statements"), certifying that such Balance Sheet and Income Statement
are in accordance with GAAP. The second installment of the Exchange
Consideration shall be equal to the difference between (A) the
Exchange Consideration based on the 1997 Financial Statements (for the
period from January 1, 1997 through December 31, 1997, including
adjustments as provided in Section 1.2.1), reduced by (B) the amount
of the first installment of the Exchange Consideration actually paid
to the Shareholders pursuant to Subsection 1.3.1(i) above. In the
event that the second installment is a positive number, then Parent
shall pay and deliver such amount to the Shareholders, and in the
event that the second installment is a negative number, the
Shareholders shall pay and deliver, pro-rata in accordance with their
percentage ownership of the Company, the absolute value of such amount
to the Parent.

1.3.2 Closing After Receipt of the 1997 Audit Report. If
the Closing occurs after receipt of the 1997 Audit Report by Parent and the
Company, all of the Exchange Consideration shall be paid and delivered by the
Parent to the Shareholders on the IPO Closing Date based on revenue recognized
by the Company, less adjustments as provided in Section 1.2.1, as reported on
the Company's audited 1997 Financial Statements.

3
<PAGE> 9
1.3.3 No Fractional Shares. Notwithstanding the
foregoing, no fractional shares of Parent Common Stock will be issued pursuant
to this Section 1.3, and if any Shareholder would be entitled hereunder to
receive a fractional share of Parent Common Stock but for this paragraph, that
Shareholder will be entitled to receive a cash payment for and in lieu thereof
in the amount (rounded upward to the nearest whole cent) equal to that
Shareholder's fractional interest in a share of Parent Common Stock multiplied
by the IPO Price.

2. THE CLOSING

2.1 Closing. A closing into Escrow ("Closing") will take place at
the offices of Chamberlain, Hrdlicka, White, Williams & Martin in Houston,
Texas at the time and on the day that the Parent and its underwriters agree on
the IPO Price for shares of Parent Common Stock offered in the Parent's IPO
(the "Pricing Date") as set forth in an executed underwriting agreement, but in
no event later than April 23, 1998 (the "Closing Date"); provided that each of
the conditions precedent to the obligations of the parties to effect the
Closing are then satisfied or waived by the applicable party. The parties may
agree in writing on another date, time or place for the Closing. At the
Closing, the parties will deliver or cause to be delivered into escrow with the
escrow agent ("Escrow Agent") under the Escrow Agreement set forth in Exhibit
2.1 hereto, the documents described in Sections 7.3 and 7.5 below. On the IPO
Closing Date, such documents shall be delivered out of escrow to the parties
designated to receive such documents under this Agreement in accordance with
the Escrow Agreement, and Parent shall pay and deliver the Exchange
Consideration to the Shareholders as prescribed in this Agreement.

2.2 Delivery of Company Common Stock. Prior to the Closing, the
Parent will deliver to each of the Shareholders a Letter of Transmittal, in
substantially the form attached hereto as Exhibit 2.2, to be used by each
Shareholder for surrendering to Parent certificates representing all the
Company Common Stock in exchange for the right to receive the Exchange
Consideration. On the Closing Date, certificates for all of the Company Common
Stock held by each Shareholder will be delivered by such Shareholder to the
Escrow Agent in accordance with the Escrow Agreement for the benefit of the
Parent together with properly completed and executed Letters of Transmittal.

2.2.1 Assignments of Company Common Stock. It is agreed
that no assignment, transfer or other disposition of record or beneficial
ownership of any shares of Company Common Stock may be made on or after the
date hereof other than as provided herein.

2.2.2 Payment In Full Satisfaction of All Rights. The
delivery of the Exchange Consideration to the Shareholders with respect to
their shares shall be deemed to be payment in full satisfaction of all rights
pertaining to the outstanding shares.

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<PAGE> 10
3. REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDERS

Each Shareholder separately, and with respect only to his matters and
circumstances, hereby represents and warrants to the Parent that the following
statements in Sections 3.1 through 3.3 and 3.25 are true and correct; and Brian
R. Blackmarr unqualifiedly, and each of the other Shareholders to the best of
their knowledge, hereby represent and warrant to the Parent that the following
statements in Sections 3.4 through 3.24 are true and correct.

3.1 Stock Ownership. Exhibit 1.1 accurately sets forth the names
of each Shareholder, the number of shares of Company Common Stock owned by each
Shareholder, and the percentage of total outstanding shares of Company Common
Stock owned by each Shareholder. Each Shareholder owns, beneficially and of
record, with full power to vote, transfer and assign the number of shares of
Company Common Stock set forth beside such Shareholder's name on Exhibit 1.1
and such shares are so held by the Shareholders free and clear of all liens,
encumbrances and adverse claims whatsoever except as set forth on Exhibit 1.1.

3.2 Shareholder Authority. Each Shareholder has full right,
power, legal capacity and authority to (i) execute, deliver and perform this
Agreement, and all other documents and instruments referred to herein or
contemplated hereby to be executed, delivered and/or performed by the
Shareholders (each a "Shareholder Related Document") and (ii) consummate the
transactions contemplated herein and thereby. This Agreement has been duly
executed and delivered by each Shareholder and constitutes, and each
Shareholder Related Document, when duly executed and delivered by each
Shareholder who is a party thereto will constitute, legal, valid and binding
obligations of such Shareholder enforceable against such Shareholder in
accordance with their respective terms and conditions, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity (whether applied in a proceeding
at law or in equity).

3.3 Shareholder Consents. Except as provided on Schedule 3.3 and
Exhibit 1.1, no approval, consent, order or action of or filing with any court,
administrative agency, governmental authority or other third party is required
for the execution, delivery or performance by the Shareholders of this
Agreement or any Shareholder Related Document other than filings related to the
IPO. The execution, delivery and performance by each Shareholder of this
Agreement and the Shareholder Related Documents do not violate any mortgage,
indenture, contract, agreement, lease or commitment or other instrument of any
kind to which such Shareholder is a party or by which such Shareholder or such
Shareholder's assets or properties may be bound or affected or any law, rule or
regulation applicable to such Shareholder or any court injunction, order or
decree or any valid and enforceable order of any governmental agency in effect
as of the date hereof having jurisdiction over such Shareholder.

3.4 Organization, Etc. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas and is duly qualified or licensed as a foreign corporation authorized to
do business in all other states in which any of its assets or properties may be
situated or where the business of the Company is conducted except where the
failure to obtain

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such qualification or license will not have a Company Material Adverse Effect
(as defined in Section 3.24 below). Except as disclosed on Schedule 3.4 of the
Disclosure Schedule previously provided to the Parent by the Company
("Disclosure Schedule"), the Company does not own, of record or beneficially,
directly or indirectly, any of the outstanding capital stock, voting interests
or ownership interests in any corporation, partnership, joint venture, limited
liability company, trust, limited partnership or other entity.

3.5 Capitalization of the Company. The total authorized capital
stock of the Company is 100,000 shares of Company Common Stock, no par value,
of which 13,068 shares are issued and outstanding and held of record and
beneficially by the Shareholders as set forth on Exhibit 1.1 hereto and none of
which are held in the treasury of the Company. Each issued and outstanding
share of Company Common Stock is duly and validly authorized and issued, fully
paid and non-assessable, and was not issued in violation of the preemptive
rights of any past or present shareholder. Except for the shares of Company
Common Stock owned beneficially and of record by the Shareholders as set forth
on Exhibit 1.1 hereto, there are no outstanding shares of capital stock,
convertible or exchangeable securities, subscriptions, calls, options,
warrants, rights or other agreements or commitments of any character relating
to the issuance or sale of any shares of capital stock of, or other equity
ownership interest in, the Company. Except as set forth in Exhibit 1.1, the
Company has no liability, contingent or otherwise, to any person or entity in
connection with preemptive or contractual subscription rights or the offer,
sale, purchase, surrender or cancellation of any shares of capital stock,
warrants, options or other equity or voting interests or securities of the
Company.

3.6 Company Authority. The Company has full right, power, legal
capacity and authority to execute, deliver and perform all documents and
instruments referred to herein or contemplated hereby to be executed, delivered
and/or performed by the Company (the "Company Related Documents") and to
consummate the transactions contemplated thereby. All of the Company Related
Documents, when duly executed and delivered by the Company, will constitute,
legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity (whether applied in a proceeding at law or in
equity).

3.7 Company Consents. No approval, consent, order or action of or
filing with any court, administrative agency, governmental authority or other
third party is required for the execution, delivery or performance by the
Company of the Company Related Documents.

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<PAGE> 12
services and products sold by the Company. Each item of such Intellectual
Property will be owned or licensed to be used and available for use by the
Company after the IPO Closing Date on the same terms and conditions as prior to
Closing except that several of the licenses owned by the Company will terminate
upon a change of the Company's name. None of the ownership, access to, or use
of the Intellectual Property by the Company infringes on the rights of any
other party and the Company's rights to the Intellectual Property are valid and
enforceable. No person has interfered with, infringed upon, misappropriated or
otherwise come into conflict with the Intellectual Property rights of the
Company. The Company has not interfered with, infringed upon, misappropriated
or otherwise come into conflict with any intellectual property rights of
others, and the Company has not received any charge, complaint, demand or
notice alleging any such interference, infringement, misappropriation or
conflict.

3.9 Title. Except as set forth in Schedule 3.9 of the Disclosure
Schedule, the Company owns outright, and has full legal and beneficial title to
all of its assets free and clear of all liens, pledges, mortgages, security
interests, conditional sales contracts and encumbrances, including good and
marketable title to all of its real property interests, free and clear of any
mortgages, security agreements, liens or encumbrances.

3.10 Defaults. Except as set forth on Schedule 3.10 of the
Disclosure Schedule, neither the Company nor any Company Plan (as defined
below) is in default under or in violation of, and the execution and delivery
of the Agreement, the Company Related Documents and the Shareholder Related
Documents and the consummation of the transactions contemplated hereby and
thereby will not result in a default by the Company or any Company Plan under
or a violation of (i) any mortgage, indenture, charter or bylaw provision,
provision of any Company Plan, contract, agreement, lease, commitment or other
instrument of any kind to which the Company or any Company Plan is a party or
by which the Company or any Company Plan or any of its properties or assets may
be bound or affected or (ii) any law, rule or regulation applicable to the
Company or any Company Plan or any court injunction, order or decree, or any
valid and enforceable order of any governmental agency in effect having
jurisdiction over the Company or any Company Plan, which default or violation
could adversely affect the ability of the Company to consummate the
transactions contemplated hereby or will have a Company Material Adverse
Effect.

3.11 Other Disclosures. The following disclosures pertaining to
the Company are set forth in Schedule 3.11 of the Disclosure Schedule. Such
disclosures are complete and accurate.

(i) Schedule 3.11(i) is a list of the products of the
Company and all product registrations used by the Company, including all
products licensed by the Company to customers and products licensed to the
Company from licensors, and a description of the parties to and principal terms
of such license arrangements, and a list of all material safety data sheets,
toxicology studies and environmental studies of the Company.

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<PAGE> 13
the twelve months prior to the date hereof, and the last date on which each
employee received (a) any change in annual salary or hourly wage and (b) any
bonus or additional compensation or benefits.

(iii) Schedule 3.11(iii) includes the legal descriptions of
all real property owned in fee or leased as lessee by the Company and a list of
documents reflecting any other real property interests owned of record or
beneficially or leased as lessee by the Company.

(iv) Schedule 3.11(iv) includes (a) a list of assets owned
by the Company as of the date hereof which have been capitalized and have an
unamortized value of $5,000 or more, including vehicles and rolling stock, (b)
a list of all leased equipment of the Company, including leased vehicles and
rolling stock and (c) the Company's most recent depreciation schedule with
respect to the assets of the Company. The Shareholders represent and warrant
that all of the machinery, equipment, vehicles and rolling stock of the Company
are in good working order and condition, ordinary wear and tear excepted.

(v) Schedule 3.11(v) is a list of raw materials or other
property located at any property owned or leased as lessee by the Company, that
has been consigned to the Company, or is otherwise owned by a third party, and
has a market value exceeding $5,000.

(vi) Attached to and listed on Schedule 3.11(vi) is each
policy of insurance maintained by the Company together with information on
premiums, coverages, insurers, expiration dates and deductibles, an accurate
list of all insurance loss runs and workers' compensation claims received for
the past three policy years. The Shareholders represent and warrant that (a)
such insurance is currently in full force and effect, (b) the Company's
insurance has never been canceled, (c) the Company has never been denied
coverage or experienced a substantial increase in premiums or a substantial
reduction in coverage from one policy period to the next policy period, (d)
such coverage is adequate in character and amount and (e) such coverage is
placed with financially sound and reputable insurers unaffiliated with either
the Shareholders or the Company.

(vii) Schedule 3.11(vii) is a list of each bank, brokerage
firm, trust company or other financial institution in which the Company has an
account and the identity of each such account, and each bank in which the
Company has a safe deposit box, together with the names of all persons
authorized to draw on any such account or have access to any such safe deposit
box.

(viii) Schedule 3.11(viii) is a list and summary description
of, or copies of, all governmental licenses and permits of the Company.

(ix) Schedule 3.11(ix) is a list of each debt, note,
mortgage, security agreement, pledge agreement, guaranty, bond, letter of
credit, lease or other instrument creating any debt or contingent obligation of
the Company or a lien or claim on any of its assets (other than unsecured trade
accounts payable incurred in the ordinary course of business) and each claim,
lawsuit, investigation, audit or legal proceeding involving the Company or any
of its assets.

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<PAGE> 14
(x) Schedule 3.11(x) is a list of all of the Company's
Intellectual Property and a description of all license fees and royalties
(including the basis of calculation thereof) required to be paid now or in the
future by the Company for the use of any of its Intellectual Property.

(xi) Schedule 3.11(xi) is a list naming each Company
Contract (as defined below). The Shareholders represent and warrant that: (a)
none of the Company's customers or suppliers have canceled or substantially
reduced, or are currently attempting or threatening to cancel or substantially
reduce, service or products; (b) except to the extent set forth on Schedule
3.11(xi), the Company has complied with all commitments and obligations and is
not in default under any such contracts and agreements, no notice of default
has been received by the Company, and the Company is not aware of any defaults
by customers, suppliers and other parties to such contracts and agreements; (c)
the Company has not experienced labor interruptions over the past three years
and the Shareholders consider the relationship between the Company and its
employees to be good; and (d) the Company has never been a party to any
governmental contracts subject to price redetermination or renegotiation. The
term "Company Contract" means each contract, lease, undertaking, commitment,
mortgage, indenture, note, security agreement, license and other agreement of
the Company in effect on the date hereof (a) involving the expenditure or
receipt of more than $10,000 over the term thereof, (b) containing provisions
calling for the sale or purchase of raw materials, products or services at
prices that vary from the market prices of such raw materials, products or
services generally prevailing in customary third party markets, (c) which
include "take or pay", "meet or release", "most favored nations" or similar
pricing or delivery arrangements, (d) requiring the Company to indemnify or
hold harmless any other person or entity, (e) evidencing any warranty
obligation of the Company with respect to goods, services or products sold or
leased by it, (other than warranties given in the ordinary course of business),
(f) imposing on the Company any confidentiality, non-disclosure or non-compete
obligation or containing any acceleration or termination provisions effective
upon a change of control of the Company, or a merger of the Company into
another entity, or (g) involving collective bargaining or agreements with any
labor union or employee group.

(xii) Schedule 3.11(xii) is a list of all powers of
attorney presently in effect granted by the Company and all investments of the
Company in any equity securities, partnership interests, indebtedness or other
interests in any other corporation, or any person, partnership, joint venture,
limited liability company, trust, limited partnership or other legal entity.

(xiii) Schedule 3.11(xiii) is a list of all obligations,
contingent or otherwise, covering any of the Company's employees under any
employment or consulting agreement or under any executive or employee's
compensation plan, agreement or arrangement including, without limitation, any
"employee welfare benefit plan" as defined in Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), "employee pension
benefit plan" as defined in Section 3(2) of ERISA or any other pension,
retirement, profit sharing, stock option, stock purchase, bonus, fringe
benefit, incentive, vacation, savings plan, health, welfare or other employee
or former employee benefit plan, program, policy or arrangement (collectively
referred to as "Company Plans").

3.12 Investment Company. The Company is not an "investment
company" or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of

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<PAGE> 15
1940, as amended, or a "holding company", a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company" or a "public utility" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.

3.13 Financial Statements. The Shareholders have listed on
Schedule 3.13 of the Disclosure Schedule and have delivered to the Parent
copies of the following audited financial statements of the Company: Balance
Sheets as of September 30, 1996 and 1997, and Statements of Operations,
Stockholders Deficit and Cash Flows for the years ended September 30, 1995,
1996 and 1997. Such financial statements are collectively referred to herein
as "Company Financial Statements". September 30, 1997 is herein referred to as
the "Balance Sheet Date." The Company Financial Statements, except as
described in the notes thereto, have been prepared from the Company's records
in accordance with GAAP. The Company Financial Statements present accurately
and fairly in all material respects the financial condition of the Company as
of the dates indicated thereon, and present accurately and fairly in all
respects the results of the Company's operations for the periods indicated
thereon. The Company Financial Statements do not omit any liabilities or
obligations of a type which should be included in or reflected in such
financial statements in accordance with GAAP, whether related to tax or non-tax
matters, accrued or contingent, due or not yet due, liquidated or unliquidated,
or otherwise, except as and to the extent disclosed or reflected in the Company
Financial Statements, or in Schedule 3.14 of the Disclosure Schedule.

3.14 Undisclosed Liabilities. To the best knowledge of
Shareholders and the Company, except as and to the extent disclosed in Schedule
3.14 of the Disclosure Schedule or in the Company Financial Statements, the
Company has no liabilities or obligations of any nature (whether absolute,
contingent or otherwise). In the case of any liabilities which are not fixed,
an estimate of the maximum amount which may be payable is set forth on Schedule
3.14 of the Disclosure Schedule.

3.15 Tax Matters.

(i) All federal, state, local and foreign tax returns
required to be filed by the Company (and, if applicable, its subsidiaries)
prior to the date hereof have been filed on a timely basis with the appropriate
governmental authorities in all jurisdictions in which such tax returns are
required to be filed, and all such returns are correct and complete. The
Shareholders have delivered to Parent, and Schedule 3.15(i) of the Disclosure
Schedule includes, correct and complete copies of all federal, state, local and
foreign income tax returns filed by, examination reports received by, and
statements of deficiencies asserted against or agreed to by the Company (and,
if applicable, its subsidiaries) since January 1, 1991. The Company (including
any of its subsidiaries) is not currently the subject of any audit, examination
or any similar investigation by any governmental authority. Schedule 3.15(i)
of the Disclosure Schedule sets forth all audits, examinations or similar
investigations of the Company (including any of its subsidiaries) by any
governmental authority.

(ii) All federal, state, local and foreign income,
franchise, sales, use, property, and all other taxes, fees, assessments, or
other governmental charges (including withholding taxes), and all interest and
penalties thereon (all of the foregoing collectively, "Taxes") due from or
properly accruable by the Company (including any of its subsidiaries) have been
fully and timely paid or, in the cases of Taxes for which payment is not yet
required, properly and fully accrued for on the Company

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Financial Statements with respect to all taxable periods ending on or prior to
the date hereof and interim periods through the date hereof.

(iii) The Company (including any of its subsidiaries) has
not filed a consent under Section 341(f) of the Internal Revenue Code of 1986
("Code") concerning collapsible corporations. The Company (including any of
its subsidiaries) and each of the Shareholders is not a party to any agreement,
contract or arrangement that would, by reason of the consummation of any of the
transactions contemplated by this Agreement, individually or in the aggregate,
result in the payment of any "excess parachute payment" within the meaning of
Section 280G of the Code. None of the assets of the Company (including any of
its subsidiaries) is required to be treated as being owned by any other person
pursuant to the "safe harbor" leasing provisions of Section 168 of the Internal
Revenue Code of 1954, as in effect prior to the repeal of such provisions.

(iv) The Company (including any of its subsidiaries) is
not a party to any Tax allocation or sharing agreement. The Company (including
any of its subsidiaries): (A) has not been a member of an affiliated group
filing a consolidated federal income tax return (other than a group the common
parent of which was the Company); and (B) does not have any liability for the
taxes of any person (other than the Company or any of its subsidiaries) under
Treas. Reg. Section 1.1502-6 (or any similar provision of state, local, or
foreign law), as a transferee or successor, by contract, or otherwise.

(v) Schedule 3.15(v) of the Disclosure Schedule sets
forth the following information with respect to the Company (including any of
its subsidiaries) as of the most recent practicable date: (A) the basis of the
Company (and any of its subsidiaries) in its assets; (B) the basis of the
stockholder(s) of any subsidiary of the Company in its stock of the subsidiary
(or the amount of any excess loss account); (C) the amount of any net operating
loss, net capital loss, unused investment or other credit, unused foreign tax,
or excess charitable contribution allocable to the Company (and any of its
subsidiaries); and (D) the amount of any deferred gain or loss allocable to the
Company (or any of its subsidiaries) arising out of any Deferred Intercompany
Transaction (as defined in Treas. Reg. Section 1.1502-13).

(vi) The Company (including any of its subsidiaries) has
not waived any statute of limitations, or agreed to any extension of time with
respect to an assessment or deficiency, with respect to any Taxes.

(vii) The amount of Company's (including any of its
subsidiaries) liability for unpaid Taxes for all periods ending on or before
the date of this Agreement do not, in the aggregate, exceed the amount of the
current liability accruals for Taxes (other than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) solely
with respect to Company as of the date of this Agreement, and the amount of
Company's liability for unpaid Taxes for all periods ending on or before the
IPO Closing Date shall not, in the aggregate, exceed the amount of the current
liability accruals for Taxes (other than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) as such
accruals are reflected on the face of the Company Financial Statements.

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<PAGE> 17

(viii) With respect to the qualification of the Exchange as
an exchange transaction within the meaning of Section 351 of the Code, there is
no specific plan or intention on the part of any Shareholders to sell, exchange
or otherwise dispose of any shares of Parent Common Stock received in the
Exchange.

3.16 Full Authority. The Company has full power, authority and
legal right and has all licenses, permits, qualifications, and other
documentation (including permits required under applicable Environmental Law
(as defined below)) necessary to own and/or operate its businesses, properties
and assets and to carry on its businesses as being conducted on the date
hereof, and such businesses are now being conducted and such assets and
properties are being owned and/or operated, and the Company Plans have been
implemented and maintained, in compliance with all applicable laws (including
Environmental Law), ordinances, rules and regulations of any governmental
agency of the United States, any state or political subdivision thereof, or any
foreign jurisdiction, all applicable court or administrative agency decrees,
awards and orders and all such licenses, permits, qualifications and other
documentation, except where the failure to comply will not have a Company
Material Adverse Effect, and there is no existing condition or state of facts
which would give rise to a violation thereof or a liability or default
thereunder, except where a violation, liability or default will not have a
Company Material Adverse Effect. The term "Environmental Law" means any law,
rule, regulation, approval, decision, decree, ordinance, by-law having the
force of law or order of any federal, state or local executive, legislative,
judicial, regulatory or administrative agency, board or authority, which relate
to (i) noise; (ii) pollution or protection of the air, surface water, ground
water or land; (iii) solid, gaseous or liquid waste generation, treatment,
storage, use, processing, disposal or transportation; (iv) exposure to
hazardous or toxic substances; (v) the safety or health of employees or (vi)
regulation of the manufacture, processing, distribution in commerce, use, or
storage of chemical substances.

3.17 Legal Actions. Except as described in Schedule 3.17 of the
Disclosure Schedule, no legal action, suit, audit, investigation, unfair labor
practice charge, complaint, claim, grievance, or proceeding by or before any
court, arbitration panel, governmental authority or third party is pending or,
to the best knowledge of the Company or the Shareholders threatened, which
involves or may involve the Company or its now or previously owned or operated
assets, operations, properties or businesses.

3.18 Company Contracts, Company Plans. Neither the Company nor any
other party thereto is in default under or in violation of any Company Contract
or Company Plan.

3.19 Access. The Company has cooperated fully in permitting the
Parent and the Parent's lenders, underwriters and placement agents and their
respective representatives to make a full investigation of the properties,
operations and financial condition of the Company; and afforded the Parent and
the Parent's lenders, underwriters and placement agents and their respective
representatives reasonable access to the offices, buildings, real properties,
machinery and equipment, inventory and supplies, records, files, books of
account, tax returns, agreements and commitments and personnel of the Company.

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<PAGE> 18

3.20 No Material Adverse Change. Except as specifically set forth
on Schedule 3.20 of the Disclosure Schedule, since the Balance Sheet Date,
there has not been: (a) any change in the Company's Articles of Incorporation
or Bylaws, (b) any material adverse change of any nature whatsoever in the
financial condition, assets, liabilities (contingent or otherwise), income,
business or prospects of the Company; (c) any damage, destruction or loss
(whether or not covered by insurance) materially adversely affecting the
properties or business of the Company; (d) any change in the authorized capital
of the Company or in its securities outstanding or any change in its ownership
interests; (e) any declaration or payment of any dividend or distribution in
respect of the capital stock or any direct or indirect redemption, purchase or
other acquisition of any of the capital stock of the Company; (f) any contract
or commitment entered into by the Company or any incurrence by the Company or
agreement by the Company to incur any liability or make any capital
expenditures in excess of $3,000, except in the normal course of business; (g)
any increase in the compensation, bonus, sales commissions or fee arrangement
payable or to become payable by the Company to any of its officers, directors,
stockholders, employees, consultants or agents; (h) any work interruptions,
labor grievances or claims filed, proposed law or regulation (the existence of
which is known, or under the normal course of business should be known, to the
Shareholder) or any event or condition of any character materially adversely
affecting the business of future prospects of the Company; (i) any creation,
assumption or permitting to exist any mortgage, pledge or other lien or
encumbrance upon any assets or properties whether now owned or hereafter
acquired, except as set forth in Schedules 3.11(ix), 3.11(xi) and 3.14 of the
Disclosure Schedule; (j) any sale or transfer, or any agreement to sell or
transfer, any material assets, properties or rights of the Company to any
person, including, without limitation, the Shareholders and their respective
affiliates; (k) any cancellation, or agreement to cancel, any indebtedness or
other obligation owing to the Company, including, without limitation, any
indebtedness or obligation of the Shareholders or any of their affiliates; (1)
any plan, agreement or arrangement granting any preferential rights to purchase
or acquire any interest in any of the assets, properties or rights of the
Company or requiring consent of any party to the transfer and assignment of any
such assets, properties or rights; (m) any purchase or acquisition, or
agreement, plan or arrangement to purchase or acquire, any property, rights or
assets of the Company; (n) any negotiation for the acquisition of any business
or start-up of any new business; (o) any merger or consolidation or agreement
to merge or consolidate with or into any other corporation (except the
transactions contemplated by this Agreement); (p) any waiver of any material
rights or claims of the Company; (q) any breach, amendment or termination of
any material contract, agreement, license, permit, permit application or other
right to which the Company is a party; (r) any discharge, satisfaction,
compromise or settlement of any claim, lien, charge or encumbrance or payment
of any obligation or liability, contingent or otherwise, other than current
liabilities as of the Balance Sheet Date, current liabilities incurred since
the Balance Sheet Date in the ordinary course of business and prepayments of
obligations in accordance with normal and customary past practices; or (s) any
transaction by the Company outside the ordinary course of its business or
prohibited hereunder.

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by the Company, free and clear of all liens, encumbrances or adverse claims of
every kind. All such shares are duly and validly authorized and issued, fully
paid and nonassessable, and were not issued in violation of the preemptive
rights of any past or present stockholder. Also set forth in Schedule 3.21 of
the Disclosure Schedule is a listing of all names under which the Company has
done business as well as the names of all predecessors of the Company,
including the names of any entities from which the Company previously acquired
significant assets.

3.22 Affiliate Relationships.

(i) Except as set forth on Schedule 3.22 of the
Disclosure Schedule, neither the Shareholders nor any affiliate of the
Shareholders, and no director, officer or employee of or consultant to the
Company owns, directly or indirectly, in whole or in part, any property, assets
or right, tangible or intangible, which is associated with any property, asset
or right owned by the Company or which the Company is operating or using or the
use of which is necessary for its business. Also included in Schedule 3.22 of
the Disclosure Schedule is the disclosure of any relationships which any
Shareholder or any director, officer, employee, agent or consultant of the
Company has with any other corporation, partnership, firm, association or
business organization, entity or enterprise which is a competitor, potential
competitor (based upon the nature of such potential competitor's business as of
the Closing Date), supplier or customer of the Company.

(ii) The term "affiliate" means with respect to any
person, any other person which directly or indirectly, by itself or through one
or more intermediaries, controls, or is controlled by, or is under direct or
indirect common control with, such person. The term "control" means the
possession, directly or indirectly, of the power to direct, or cause the
direction of, the management and policies of a person, whether through the
ownership of voting securities, by contract or otherwise.

3.23 Disclosure. No representation or warranty by the Company or
any Shareholder in the Agreement (including the Exhibits hereto) and no
statement contained in the Disclosure Schedule or any certificate delivered by
the Company or the Shareholders to the Parent pursuant to the Agreement,
contains or will contain any untrue statement of a material fact or omits or
will omit any material fact necessary in order to make the statements herein or
therein, in light of the circumstances under which they are or were made, not
misleading.

3.24 Company Material Adverse Effect. The term "Company Material
Adverse Effect" shall mean an adverse effect on the properties, assets,
financial position, results of operations, long-term debt, other indebtedness,
cash flows or contingent liabilities of the Company in an amount of $25,000 or
more.

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<PAGE> 20
3.25 Restricted Securities.

(1) Each Shareholder acknowledges that the shares of
Parent Common Stock to be acquired by the Shareholder hereunder have
not been registered under the Securities Act of 1933, as amended (the
"Securities Act"), and are being acquired for the Shareholder's own
account for investment and not with a view to the distribution
thereof, and the Parent Common Stock will be subject to the Stock
Transfer Restriction Agreement in Exhibit 7.3.2 hereto.

(2) Each Shareholder and its representatives have the
knowledge and experience in financial and business matters to enable
them to evaluate the merits and risks of entering this Agreement and
the transactions contemplated hereby and acquiring shares of Parent
Common Stock.

(3) Each Shareholder is able to bear the economic risks
of its investment in the Parent Common Stock, including the risk of a
loss of the value of the Parent Common Stock.

(4) Each Shareholder has been represented by legal
counsel in this transaction and such Shareholder and its
representatives, including such counsel, have been given the
opportunity to ask questions of, and receive answers from, the
officers of the Parent concerning the terms of the transactions
contemplated by this Agreement and the affairs and the business and
financial condition of the Parent.

(5) Each Shareholder has received a Confidential Private
Placement Memorandum ("PPM") concerning the Parent and an investment
in shares of Parent Common Stock, and such Shareholder and its
representatives have been given such access to all documents, books
and additional information concerning Parent which they have requested
regarding Parent.

(6) Each Shareholder and its representatives have
conducted such investigations in making a decision to approve this
Agreement and the transactions contemplated hereby as they have deemed
necessary and advisable.

(7) Each Shareholder acknowledges and agrees that the
Parent Common Stock to be issued to such Shareholder may not be
disposed of except in accordance with the requirements of the
Securities Act and any applicable state securities laws and the Stock
Transfer Restriction Agreement in Exhibit 7.3.2 hereto.

4. REPRESENTATIONS AND WARRANTIES
OF THE PARENT

The Parent hereby represents and warrants to the Shareholders as
follows:

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<PAGE> 21
situated or where its business is conducted except where the failure to obtain
such qualification or license would not have a Parent Material Adverse Effect
(as defined in Section 4.12 below).

4.3 Authority. The Parent has the requisite, power and authority
to execute, deliver and perform this Agreement and all documents and
instruments referred to herein or contemplated hereby (the "Parent Related
Documents") and to consummate the transactions contemplated herein and thereby.
This Agreement has been duly executed and delivered by the Parent and
constitutes, and all the Parent Related Documents, when executed and delivered
by the Parent will constitute, legal, valid and binding obligations of the
Parent, enforceable in accordance with their respective terms and conditions
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (whether
applied in a proceeding at law or in equity).

4.4 Consents. No approval, consent, order or action of or filing
with any court, administrative agency, governmental authority or other third
party is required for the execution, delivery or performance by the Parent of
this Agreement or the Parent Related Documents or the consummation by the
Parent of the transactions contemplated hereby, except as may be described in
the PPM and except for the filing of the Parent's registration statement with
respect to the IPO ("Registration Statement") with the U.S. Securities and
Exchange Commission ("SEC") pursuant to the Securities Act and the SEC's
declaration of effectiveness of such Registration Statement and the completion
of all necessary filings required under, and the obtaining of all necessary
consents and approvals required pursuant to, state securities or "blue sky"
laws in connection with the IPO.

4.5 Defaults. The Parent is not in default under or in violation
of, and the execution, delivery and performance of this Agreement and the
Parent Related Documents and the consummation by the Parent of the transactions
contemplated hereby and thereby will not result in a default under or in
violation of (i) any mortgage, indenture, charter or bylaw provision, contract,
agreement, lease, commitment or other instrument of any kind to which the
Parent is a party or by which the Parent or any of its properties or assets may
be bound or affected or (ii) any law, rule or regulation applicable to the
Parent or any court injunction, order or decree, or any valid and enforceable
order of any governmental agency in effect as of the date hereof having
jurisdiction over the Parent, which default or violation prevents the Parent
from consummating the transactions contemplated hereby or is reasonably likely
to have a Parent Material Adverse Effect.

4.6 Investment Company. The Parent is not an "investment company"
or a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "holding company," a
"subsidiary company" of a "holding company" or an "affiliate" of a "holding
company" or a "public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.

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<PAGE> 22

4.7 Financial Statements. The Parent has provided certain
financial statements to the Shareholders in the PPM ("Parent Financial
Statements") and such Parent Financial Statements have been prepared in
accordance with GAAP and fairly present the consolidated financial position,
results of operations and cash flows of the Parent and its then existing
consolidated subsidiaries as of the dates and for the periods indicated,
subject to normal year-end adjustments and any other adjustments described
therein or in the notes or schedules thereto. The books and records of the
Parent have been kept in reasonable detail and accurately and fairly reflect
the transactions of the Parent.

4.8 Taxes. The Parent has either accrued, discharged or caused to
be discharged, as the same have become due, or the Parent Financial Statements
contain adequate accruals and reserves for, all taxes, interest thereon, fines
and penalties of every kind and character for such taxes, attributable or
relating to the properties and business of the Parent.

4.9 Full Authority. The Parent has the corporate power and
authority and has obtained all licenses, permits, qualifications, and other
documentation (including permits required under applicable environmental law)
necessary to own and/or operate its businesses, properties and assets and to
carry on its businesses as being conducted on the date of this Agreement,
except such licenses, permits, qualifications or other documentation, the
failure to obtain which is not reasonably likely to result in a Parent Material
Adverse Effect, and such businesses are now being conducted and such assets and
properties are being owned and/or operated in compliance with all applicable
laws (including environmental law), ordinances, rules and regulations of any
governmental agency of the United States, any state or political subdivision
thereof, or any foreign jurisdiction, all applicable court or administrative
agency decrees, awards and orders and all such licenses, permits,
qualifications and other documentation, except where the failure to comply will
not have a Parent Material Adverse Effect, and there is no existing condition
or state of facts that would give rise to a violation thereof or a liability or
default thereunder that is reasonably likely to have a Parent Material Adverse
Effect.

4.10 Access. The Parent has cooperated fully in permitting the
Shareholders and their representatives to make a full investigation of the
properties, operations and financial condition of the Parent and has afforded
the Shareholders and their representatives reasonable access to the offices,
buildings, real properties, machinery and equipment, inventory and supplies,
records, files, books of account, tax returns, agreements and commitments and
personnel of Parent.

4.11 Disclosure. No representation or warranty by the Parent in
this Agreement, and no statement contained in any certificate delivered by the
Parent to the Shareholders pursuant to this Agreement, contains any untrue
statement of a material fact or omits any material fact necessary in order to
make the statements herein or therein, in light of the circumstances under
which they are or were made, not misleading.

4.12 Parent Material Adverse Effect. The term "Parent Material
Adverse Effect" shall mean an adverse effect on the properties, assets,
financial position, results of operations, long-term debt, other indebtedness,
cash flows or contingent liabilities of the Parent and its consolidated
subsidiaries, taken as a whole in an amount of $25,000 or more.

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<PAGE> 23

5. CERTAIN COVENANTS AND AGREEMENTS OF SHAREHOLDERS

The Shareholders further jointly and severally agree with the Parent
that from the date hereof through the Closing Date:

5.1 Conduct of Business. The Shareholders shall cause the Company
to conduct its operations according to its ordinary and usual course of
business to preserve substantially intact its business organization, keep
available the services of its officers and employees, and maintain its present
relationships with licensors, suppliers, distributors, customers and others
having significant business relationships with it. The Shareholders agree to
cause representatives of the Company to confer with representatives of the
Parent to keep it informed with respect to the general status of the on-going
operations of the business of the Company. Without limiting the generality of
the foregoing, and except as otherwise contemplated herein or agreed to in
writing by Parent, the Shareholders will cause the Company to:

(i) carry on its business in substantially the same
manner as heretofore carried on and not introduce any material new
method of management, operation or accounting, nor provide discounted
services outside the ordinary course of business;

(ii) maintain its properties, facilities, equipment and
other assets, including those held under leases, in good working
order, condition and repair, ordinary wear and tear excepted;

(iii) perform all of its obligations under all debt and
lease instruments and other agreements (including the Company
Contracts) relating to or affecting its business, assets, properties,
equipment and rights, and pay all vendors, suppliers, and other third
parties (including mechanics and materialmen) as and when their bills
are due consistent with past practices in the ordinary and prudent
course of business and pay in full all payroll obligations when due;

(iv) keep in full force and effect its present insurance
policies or other comparable insurance coverage;

(v) use its best efforts to maintain and preserve its
business organization intact, retain its present employees and
maintain its relationship with suppliers, customers and other having
business relations with the Company;

(vi) refrain from effecting any change in the capital
structure of the Company and from incurring any expenditures outside
the ordinary course of business;

(vii) refrain from starting or acquiring any new
businesses;

(viii) refrain from adding or deleting personnel outside the
ordinary course of business and maintain its present salaries and
commission levels for all officers, directors, employees or agents,
except for the usual and customary merit increases for employees;

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<PAGE> 24

(x) promptly notify the Parent of the receipt by it or
any Shareholder of any notice or claim, written or oral, of (a)
default or breach by the Company under, or of any termination (other
than at the end of the stated term thereof) or cancellation, or threat
of termination (other than at end of the stated term thereof) of
cancellation, of any Company Contract, (b) any loss of, damage to or
disposition of, any of the properties, assets or the products of the
Company of a value of $10,000 or more, singly or in the aggregate
(other than the sale or use of inventories in the ordinary course of
business), (c) any claim or litigation threatened or instituted, or
any other adverse event or occurrence involving or affecting the
Company or any of its assets, properties, operations, businesses or
employees, and (d) any proposal made by any third party received by
the Company or of which any Shareholder obtains knowledge in respect
of any sale or other disposition, direct or indirect, of the assets
(other than the sale or use of inventories in the ordinary course of
business), businesses or outstanding capital stock or other ownership
or voting interests of the Company;

(xi) comply with and cause to be complied with all
applicable laws, rules, regulations and orders of all federal, state
and local governments or governmental agencies affecting or relating
to the Company or its assets, properties, operations, businesses or
employees except where the failure to comply will not have a Company
Material Adverse Effect;

(xii) refrain from any sale, disposition, distribution or
encumbrance of any of its properties or assets and refrain from
entering into any agreement or commitment with respect to any such
sale, disposition, distribution or encumbrance (other than the sale or
use of inventories in the ordinary course of business);

(xiii) refrain from any purchase or redemption of any
capital stock, other ownership interest or other voting interest of
the Company and refrain from issuing any capital stock or other
ownership interest;

(xiv) refrain from making any change in any accounting
principle, classification, policy or practice;

(xv) refrain from effecting any amendment to the
certificate or articles of incorporation or bylaws or other governing
instruments of the Company;

(xvi) refrain from entering into or agreeing to enter into
any merger or consolidation by the Company with or into, and refrain
from acquiring all or substantially all of the assets, capital stock
or business of, any person, corporation, partnership, association or
other business organization or division of any thereof;

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<PAGE> 25

(xvii) maintain and comply with its debt and lease
agreements and instruments (except those that expire on their stated
maturity or lease termination dates); refrain from entering into any
amendment thereto or new debt or lease agreements or instruments
except for the renewal of existing agreements or the replacement
thereof with agreements with similar or more favorable terms; refrain
from increasing any indebtedness for borrowed money or issuing or
selling any debt securities or letters of credit; and refrain from
making any payments of any indebtedness or interest or other amounts
thereon or with respect thereto (other than regularly scheduled
principal and interest payments and payments of principal, interest
and fees under revolving lines of credit);

(xviii) manage working capital in the ordinary course
consistent with past practice and refrain from introducing any new
method of management or operation, providing any discounted services
or products, discounting any receivables or taking any action to
accelerate payment of any receivable prior to its due date (except in
the ordinary course of business consistent with past practices); and

(xix) refrain from entering into any contract, lease,
undertaking, commitment, mortgage, indenture, note, security
agreement, license or other agreement (a) involving the receipt or
expenditure of more than $25,000 over the term thereof (other than
consulting or service contracts with customers entered in the ordinary
course of business), (b) containing provisions calling for the sale or
purchase of raw materials, product or service at prices that vary from
the market prices of such raw materials, products or services
generally prevailing in customary third-party markets, (c) which
include "take or pay", "meet or release", "most favored nations" or
similar pricing or delivery arrangements, (d) with any officer,
director, shareholder or affiliate of the Company, (e) requiring the
Company to indemnify or hold harmless any other person or entity
(other than consulting or service contracts with customers entered in
the ordinary course of business), (f) evidencing any warranty
obligation of the Company with respect to goods, services or products
sold or leased by it (other than warranties given in the normal course
of business containing substantially the same terms as those presently
in effect), or (g) imposing on the Company any confidentiality,
non-disclosure or non- compete obligation (other than consulting or
service contracts with customers entered in the ordinary course of
business).

5.2 Cooperation. Each Shareholder will cooperate fully with the
Parent, and will cause the Company to cooperate fully with the Parent, as to
arrangements for the consummation of the transactions contemplated hereby in an
orderly fashion.

5.3 Filings, Etc. Each Shareholder will make, and cause the
Company to make, all filings which are required to be made by them to lawfully
consummate the transactions contemplated hereby.

5.4 Access. The Shareholders will, and will cause the Company to,
cooperate fully in permitting the Parent and the Parent's lenders, underwriters
and placement agents and their respective

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<PAGE> 26
representatives, advisers, consultants, appraisers, auditors, engineers and
other experts to make a full investigation of the properties, operations and
financial condition of the Company and will afford the Parent and the Parent's
lenders, underwriters and placement agents and their respective
representatives, advisers, consultants, appraisers, auditors, engineers and
other experts reasonable access to the offices, buildings, real properties,
machinery and equipment, inventory and supplies, records, files, books of
account, tax returns, agreements and commitments and personnel of the Company.
Without limitation of the foregoing, the Shareholders and the Company shall
provide the Parent with such reasonably available financial information (and
schedules with respect thereto) with respect to the Company as the Parent may
reasonably request and will cooperate with and assist representatives of the
Parent in the preparation of such financial information (and any opinions or
reports with respect thereto) with respect to the Company as the Parent may
reasonably request. Notwithstanding the above, the Parent and its respective
lenders, underwriters and placement agents and their respective
representatives, advisers, consultants, appraisers, engineers and other experts
shall incur no liability with respect to control, operation or management (or
alleged control, operation or management) of the Company as a result of the
covenants in this Section 5.4.

5.5 Satisfaction of Conditions. The Shareholders shall (i) use
their reasonable efforts to obtain, as soon as possible, all governmental
approvals required to be obtained by the Company and make, as soon as possible,
all filings with any governmental authority required on the part of the Company
to consummate the transactions contemplated hereby, (ii) use their reasonable
efforts to obtain, as soon as possible, all other consents to and approvals
required to be obtained by the Company to consummate the transactions
contemplated hereby, and (iii) otherwise use their reasonable efforts to
satisfy the conditions set forth in this Agreement to the extent that such
satisfaction is within their control; provided, however, that this Section 5.5
shall not be construed to limit the rights of the Company to terminate this
Agreement as provided in Article 9 of this Agreement.

5.6 Capital Budget. Exhibit 5.6 hereto contains the budgeted
capital expenditures of the Company from July 1, 1997 through December 31,
1998. Unless otherwise consented to by the Parent, the Company will make
capital expenditures in accordance with such budget and shall not make any
additional capital expenditures.

5.7 Exclusivity. The Shareholders shall not (i) solicit,
initiate, or encourage the submission of any proposal or offer from any person
or entity relating to the acquisition of any capital stock or other voting
securities, or any substantial portion of the assets of the Company (including
any acquisition structured as a merger, consolidation, or share exchange) or
(ii) participate in any negotiations or discussions regarding, furnishing any
information with respect to, assist or participate in, or facilitate in any
other manner any effort or attempt by any person or entity in favor of any such
acquisition. The Shareholders will (and shall cause the Company to) promptly
notify the Parent if any person or entity makes any proposal, offer, inquiry,
or contact with respect to any of the foregoing.

5.8 Agreements of Shareholders to be Effective Upon Closing.
Effective upon Closing, and without further action on the part of any party or
other person, each Shareholder covenants and agrees as follows:

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<PAGE> 27

5.8.1 Covenant Not to Compete.

(i) For the consideration specified in this Agreement and
in recognition that the covenants by the Shareholders in this Section
are a material inducement to the Parent to enter into and perform this
Agreement, (a) each Shareholder who is not an employee of the Company
prior to the date hereof agrees that during the one- year period after
the Closing Date, Shareholder will comply with the provisions of
Section 5.8.1(ii) below, and (b) each Shareholder who is an employee
of the Company agrees to comply with the provisions of Section
5.8.1(ii) below until the date which is the later to occur of two
years after the Closing Date or one year from and after the date of
termination of such Shareholder's employment by the Company regardless
of the reason for such termination.

(ii) Each Shareholder agrees that for the applicable time
period in Section 5.8.1(i) above ("Restricted Period"), such
Shareholder will not represent, engage in or carry on, directly or
indirectly, any business with any person or entity who was a customer
or client of the Company during the one year period preceding the
beginning of the Restricted Period (or any customer or client of an
affiliate of the Company for which the Shareholder has materially
assisted such affiliate in serving such customer or client ("Assisted
Affiliate")) or any business within 100 miles of the city or county
limits of any city or county in the United States or foreign countries
where the Company or any Assisted Affiliates has an office or in which
the Company provides services which produce Company revenues of an
amount equal to 2% or more of the Company's revenues for the twelve
complete calendar months preceding the time of termination, which
business competes with any business, services or products produced,
sold, conducted, developed, or in the process of development by the
Company or jointly by the Company and an Assisted Affiliate, including
any business that involves the furnishing of information technology
services that are the type of services furnished by the Company,
either for himself, as a member or equity owner of a partnership or
limited liability company, or as a shareholder (other than as a
shareholder of less than one percent (1%) of the issued and
outstanding stock of a publicly- held company whose gross revenues
exceed $100 million), investor, owner, officer, or director of a
company or other entity, or as an employee, agent, trustee, manager,
associate or consultant of any person, partnership, corporation or
other entity.

(iii) Each Shareholder agrees that the limitations set
forth herein on such Shareholder's rights to compete with the Parent
and its affiliates as set forth above are reasonable and necessary for
the protection of Parent and its affiliates. In this regard, each
Shareholder specifically agrees that the limitations as to period of
time and geographic area, as well as all other restrictions on the
Shareholder's activities specified herein, are reasonable and
necessary for the protection of the Parent and its affiliates. Each
Shareholder agrees that, in the event that the provisions of this
Section should ever be deemed to exceed the scope of business, time or
geographic limitations permitted by applicable law, such provisions
shall be and are hereby reformed to the maximum scope of business,
time or geographic limitations permitted by applicable law.

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<PAGE> 28

(iv) Each Shareholder agrees that the remedy at law for
any breach by such Shareholder of this Section 5.8.1 will be
inadequate and that the Parent shall be entitled to injunctive relief.

5.8.2 Release. Effective as of the Closing Date, the
Shareholders do hereby (i) release, acquit and forever discharge the Company
from any and all liabilities, obligations, claims, demands, actions or causes
of action arising from or relating to any event, occurrence, act, omission or
condition occurring or existing on or prior to the Closing Date, including,
without limitation, any claim for indemnity or contribution from the Company in
connection with the obligations or liabilities of the Shareholders hereunder,
except for salary and benefits payable to a Shareholder as an employee in the
ordinary course of business; (ii) waive all breaches, defaults or violations of
any agreement applicable to the Company Common Stock and agree that any and all
such agreements are terminated as of the Closing Date, and (iii) waive any and
all preemptive or other rights to acquire any shares of capital stock of the
Company and release any and all claims arising in connection with any prior
default, violation or failure to comply with or satisfy any such preemptive or
other rights.

6. CERTAIN AGREEMENTS

The parties hereto further agree as follows:

6.1 Audit. Prior to Closing, at the expense of Parent, Deloitte &
Touche LLP may complete an audit of the Company through December 31, 1997, and
such additional review work as may be requested by the Parent through and
including the Closing Date (or other periods subsequent to December 31, 1997),
and provide its report to the Parent and the Shareholders.

6.2 Company Plans. Except as otherwise provided in this
Agreement, the Company Plans (within the meaning of Section 3.11 (xiii)
hereto), in effect at the date of this Agreement, shall remain in effect unless
otherwise determined by Parent after the Closing Date.

6.3 Confidentiality. Prior to the Closing Date, none of the
Parent, the Company or the Shareholders will disclose the terms of this
Agreement or the Exchange to any person other than their respective directors,
officers, agents or representatives, except as otherwise provided herein or
unless required by law. The Company may make appropriate disclosures of the
general nature of the Exchange to its employees, vendors and customers to
protect the Company's goodwill and to facilitate the Closing. The Parent may
disclose pertinent information regarding the Exchange to its existing and
prospective investors, lenders, or investment bankers or financial advisors for
the purpose of obtaining financing, including, without limitation, financing
related to the IPO or other offerings of its securities may describe this
Agreement and the transactions contemplated hereby in any registration
statement filed by the Parent under the Securities Act and in reports filed by
the Parent under the Securities Exchange Act of 1934, and may file this
Agreement as an exhibit to any

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<PAGE> 29
thereof. The Parent may also make appropriate disclosures of the general
nature of the Exchange and the identity, nature and scope of the Company's
operations to prospective acquisition candidates in connection with the
Parent's efforts to effect additional acquisitions. Each party will have
mutual approval rights with respect to written employee presentations
concerning the prospective Exchange.

6.4 Tax-Free Exchange. Unless the other parties shall otherwise
agree in writing, none of the Shareholders, the Parent or the Company shall
knowingly take or fail to take any action, which action or failure to act would
jeopardize the qualification of the Exchange as an exchange within the meaning
of Section 351 of the Code.

6.5 Certain Tax Matters.

6.5.1 Tax Periods Ending on or Before the IPO Closing Date.
Parent shall prepare or cause to be prepared and file or cause to be filed all
returns, declarations, reports, claims for refund, or information returns or
statements relating to Taxes, including any schedule, attachment, or amendment
thereto ("Tax Returns") for the Company (including any of its subsidiaries) for
all periods ending on or prior to the IPO Closing Date which are filed after
the IPO Closing Date. Parent shall permit Shareholders to review and comment
on each such Tax Return described in the preceding sentence prior to filing and
shall make such revisions to such Tax Returns as are reasonably requested by
Shareholders. Shareholders shall reimburse Parent for Taxes of the Company
(including any of its subsidiaries) with respect to such periods within fifteen
(15) days after payment by Parent or the Company (including any of its
subsidiaries) of such Taxes to the extent such Taxes are not reflected in the
reserve for Tax liability (other than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) shown on
the face of the Company Financial Statements.

6.5.2 Cooperation on Tax Matters.

(i) Parent, Company (including any of its subsidiaries)
and Shareholders shall cooperate fully, as and to the extent
reasonably requested by the other party, in connection with the filing
of Tax Returns pursuant to this Section and any audit, litigation or
other proceeding with respect to Taxes. Such cooperation shall include
the retention and (upon the other party's request) the provision of
records and information which are reasonably relevant to any such
audit, litigation or other proceeding and making employees available
on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. Company (and any of
its subsidiaries) and Shareholders agree: (A) to retain all books and
records with respect to Tax matters pertinent to Company (including
any of its subsidiaries) relating to any taxable period beginning
before the IPO Closing Date until the expiration of the statute of
limitations (and, to the extent notified by Parent or Shareholders,
any extensions thereof) of the respective taxable periods, and to
abide by all record retention agreements entered into with any taxing
authority; and (B) to give the other party reasonable written notice
prior to transferring, destroying or discarding any such books and
records and, if the other party so requests, Company (including any of
its subsidiaries) or Shareholders, as the case may be, shall allow the
other party to take possession of such books and records.

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<PAGE> 30
(ii) Parent and Shareholders further agree, upon request,
to use their best efforts to obtain any certificate or other document
from any governmental authority or any other person as may be
necessary to mitigate, reduce or eliminate any Taxes that could be
imposed (including, but not limited to, with respect to the
transactions contemplated hereby).

(iii) The Company and each of the Shareholders shall
cooperate fully in the preparation and delivery to Parent and its
counsel of tax certificates, representations, or similar documents
that may be reasonably necessary or appropriate in connection with the
preparation of tax opinions or other items regarding the tax matters
impacting this Agreement, the Parent, or the Company that are
prepared with respect to the IPO.

6.5.3 Tax Sharing Agreements. All tax sharing agreements
or similar agreements with respect to or involving Company (including any of
its subsidiaries) shall be terminated as of the IPO Closing Date and, after the
IPO Closing Date, Company (including any of its subsidiaries) shall not be
bound thereby or have any liability thereunder.

6.6 Sale of Motor Vehicles. The Shareholders agree to cause the
Company to effect the sale of any Company-owned motor vehicle primarily used
by an executive management employee to such employee prior to the Closing at a
price equal to the depreciated book value of the vehicle as included in the
Company financial statements at the time of purchase.

6.7 Positions of Mr. Blackmarr. The parties hereto shall take
such steps as are appropriate to cause Brian R. Blackmarr to continue as
President and Chief Executive Officer of the Company in accordance with the
terms of an Employment Agreement between the Company and Mr. Blackmarr pursuant
to Section 7.3.3 hereof. Parent shall use its commercially reasonable efforts
to influence the shareholders of Parent to elect Mr. Blackmarr to Parent's
Board of Directors as promptly as reasonably possible after the Closing.

6.8 Release of Certain Assets and Guaranties. As soon as
reasonably possible after the Closing and in any event not later than six
months thereafter, Parent shall take such steps as are necessary to release the
assets of the Shareholders or the personal guaranties of the Shareholders as
described on Exhibit 6.8 hereto from any security interest granted in such
assets or any guaranty to secure the performance of obligations of the Company
as such security interests, guaranties and obligations are described on Exhibit
6.8 hereto; and until such releases are acquired, Parent shall indemnify the
Shareholder from any loss, payment, cost or expense incurred by the
Shareholders with respect to paying any obligations to the secured party or
guaranteed party based on such security interests or guaranties.

6.9 Parent Insurance. Prior to the Closing, Parent and its Board
of Directors shall obtain and put in place reasonable and customary insurance
coverage for errors, omissions and/or negligence covering the actions and
activities of its officers and directors.

6.10 Parent Stock Option Plan. Prior to or within six (6) months
of the IPO Closing Date, Parent shall use its commercially reasonable efforts
to adopt an employee stock option plan in which key Company employees may
participate.

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6.11 Continuation of Company Name. For at least one year from the
IPO Closing Date and if Brian R. Blackmarr is employed by the Company or the
Parent, the name of the Company shall remain as Brian R. Blackmarr and
Associates, Inc. Within two months after the date that Brian R. Blackmarr is
no longer employed by Company or Parent, the name of the Company shall be
changed so as not to use the name "Blackmarr."

7. CONDITIONS PRECEDENT; CLOSING DELIVERIES

7.1 Conditions Precedent to the Obligations of the Parent. The
obligations of the Parent to effect the Closing under this Agreement are
subject to the satisfaction of each of the following conditions, unless waived
by Parent in writing to the extent permitted by applicable law. Provisions in
this Section 7.1 requiring the delivery of documents and certificates to Parent
shall be deemed satisfied by the delivery of such materials to the Escrow Agent
for later release to Parent upon satisfaction of the conditions contained in
the Escrow Agreement.

7.1.1 Accuracy of Representations and Warranties. The
representations and warranties of the Shareholders contained in this Agreement,
and the Disclosure Schedule referred to herein and the Exhibits provided by the
Shareholders pursuant to this Agreement or in any closing certificate or
document delivered to the Parent pursuant hereto shall be true and correct at
and as of the Closing Date as though made at and as of that time other than
such representations and warranties as are specifically made as of another
date, and the Shareholders shall have delivered to the Parent a certificate to
that effect.

7.1.2 Performance of Covenants. The Shareholders shall
have performed and complied with all covenants of this Agreement to be
performed or complied with by them at or prior to the Closing Date, and the
Shareholders shall each have delivered to the Parent a certificate to that
effect.

7.1.3 Legal Actions or Proceedings. No legal action or
proceeding shall have been instituted after the date hereof against the Company
or the Shareholders which is reasonably likely (i) to restrain, prohibit or
invalidate the consummation of the transactions contemplated by this Agreement,
(ii) to have a Company Material Adverse Effect or (iii) to have a Parent
Material Adverse Effect after giving effect to the consummation of the
transactions contemplated by this Agreement, and the Shareholders shall each
have delivered to the Parent a certificate to that effect.

7.1.4 Approvals. The Shareholders shall have procured all
of the consents, approvals and waivers of third parties or any regulatory body
or authority, whether required contractually or by applicable law or otherwise
necessary for the execution, delivery and performance of this Agreement
(including the Company Related Documents and the Shareholder Related Documents)
by the Shareholders prior to the Closing Date, and Shareholders shall have
delivered to the Parent a certificate to that effect.

7.1.5 Closing Deliveries. All documents required to be
executed or delivered at Closing by the Shareholders pursuant to Section 7.3 of
this Agreement shall have been so executed and delivered.

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7.1.6 No Loss or Damage. No loss or damage which could
reasonably be expected to have a Company Material Adverse Effect shall have
occurred on or prior to the Closing Date to any of the properties or assets of
the Company.

7.1.7 Licenses, etc. The Company shall have obtained all
such licenses and permits as are legally required for the continued operation
of the business after the IPO Closing Date, except such licenses and permits,
the absence of which will not have a Company Material Adverse Effect.

7.1.8 No Material Adverse Change. Since the Balance Sheet
Date, there shall not have been any event that in the reasonable judgment of
the Parent adversely affects the properties, assets, financial condition,
results of operations, cash flows, businesses or prospects of the Company.

7.1.9 Certain Corporate Actions. All necessary director
and shareholder resolutions, waivers and consents required to consummate the
transactions contemplated hereunder shall have been executed and delivered.

7.2 Conditions Precedent to the Obligations of the Shareholders
and the Company. The obligations of the Shareholders to effect the Closing
under this Agreement are subject to the satisfaction of each of the following
conditions, unless waived in writing by Brian R. Blackmarr. Provisions in this
Section 7.2 requiring the delivery of documents and certificates to the
Shareholders shall be deemed satisfied by the delivery of such materials to the
Escrow Agent for later release to Shareholders upon satisfaction of the
conditions contained in the Escrow Agreement.

7.2.1 Accuracy of Representations and Warranties. The
representations and warranties of the Parent contained in this Agreement or in
any closing certificate or document delivered to the Shareholders pursuant
hereto shall be true and correct on and as of the Closing Date as though made
at and as of that date other than such representations and warranties as are
specifically made as of another date, and the Parent shall have delivered to
the Shareholders a certificate to that effect.

7.2.2 Performance of Covenants. The Parent shall have
performed and complied with all covenants of this Agreement to be performed or
complied with by them at or prior to the Closing Date and the Parent shall have
delivered to the Shareholders a certificate to such effect.

7.2.3 Approvals. The Parent shall have procured prior to
the Closing Date all of the consents, approvals and waivers required of it for
entering into this Agreement without violating any requirements to which it is
subject, and the Parent shall deliver to the Shareholders a certificate to that
effect.

7.2.4 Closing Deliveries. All documents and payments
required to be executed, delivered or tendered at Closing by the Parent
pursuant to Section 7.5 of this Agreement shall have been so executed,
delivered or tendered.

7.3 Deliveries by the Shareholders at the Closing. In accordance
with Section 2.1 above, at the Closing, simultaneously with the deliveries by
the Parent specified in Section 7.5 below, and

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in addition to any deliveries required to be made by the Shareholders pursuant
to any other transaction document at the Closing, the Shareholders shall
deliver or cause to be delivered to the Escrow Agent the following:

7.3.1 Closing Certificates. The Shareholders shall deliver
the certificates required pursuant to Sections 7.1.1, 7.1.2, 7.1.3 and 7.1.4.

7.3.2 Stock Transfer Restriction Agreement. Each
Shareholder shall execute and deliver a Stock Transfer Restriction Agreement on
the Closing Date substantially in the form set forth in Exhibit 7.3.2.

7.3.3 Employment Agreements. Each employee of the Company
specified on Exhibit 7.3.3. shall execute and deliver an Employment Agreement
with the Company on the Closing Date substantially in the form of the
applicable form of the three forms of Employment Agreement set forth in Exhibit
7.3.3A, as stated by employee's name on Exhibit 7.3.3.

7.3.4 Opinion of Counsel for the Shareholders and the
Company. The Shareholders shall deliver the favorable opinion of Hill &
Metzger, PLLC, counsel to the Shareholders and the Company, dated as of the
Closing Date, substantially in the form and to the effect set forth in Exhibit
7.3.4 attached hereto.

7.3.5 Documents, Stock Certificates. The Shareholders
shall execute and deliver, and shall cause the Company to execute and deliver,
the documents, certificates, opinions, instruments and agreements required to
be executed and delivered by the Company or its officers or directors or any
Shareholder at the Closing as contemplated hereby or as may be reasonably
requested by the Parent and shall deliver or cause to be delivered the
documents and evidence required under this Agreement. Stock Certificates
representing all of the outstanding Company Common Stock and properly executed
and completed Letters of Transmittal shall be delivered by the Shareholders to
the Escrow Agent.

7.4 No Waiver by Parent. The consummation of the Closing shall
not be deemed to be a waiver by the Parent or the Company of any of their
rights or remedies against the Shareholders hereunder for any breach of
warranty, covenant or agreement by the Shareholders herein irrespective of any
knowledge of or investigation made by or on behalf of the Parent; provided,
however, that if the Shareholders shall disclose in writing to the Parent prior
to the Closing Date a specified breach of a specifically identified
representation, warranty, covenant or agreement of the Shareholder herein, and
requests a waiver thereof by the Parent, and the Parent shall waive any such
specifically identified breach in writing prior to the Closing Date, the Parent
and the Company, for themselves and for each Parent Indemnified Party (as
defined below) shall be deemed to have waived their respective rights and
remedies hereunder for, and the Shareholders shall have no liability with
respect to, any such specifically identified breach, to the extent so
identified by the Shareholders and so waived by the Parent.

7.5 Deliveries by the Parent at the Closing. In accordance with
Section 2.1 above, at the Closing, simultaneously with the deliveries by the
Shareholders specified in Section 7.3 above, and

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in addition to any other deliveries to be made by the Parent pursuant to any
other transaction document at the Closing, the Parent shall deliver or cause to
be delivered to the Escrow Agent the following:

7.5.1 Closing Certificates. The Parent shall deliver the
certificates required pursuant to Sections 7.2.1, 7.2.2, and 7.2.3.

7.5.2 Opinion of Counsel for the Parent. The Parent shall
deliver the favorable opinion of Chamberlain, Hrdlicka, White, Williams &
Martin, counsel to the Parent, dated as of the Closing Date, substantially in
the form and to the effect set forth in Exhibit 7.5.2.

7.5.3 Exchange Consideration. Parent shall execute and
deliver this Agreement as evidence of its obligation to deliver the Exchange
Consideration to the Shareholders at the IPO Closing Date.

7.6 No Waiver. The consummation of the Closing shall not be
deemed to be a waiver by the Shareholders of any of their rights or remedies
hereunder for breach of any warranty, covenant or agreement herein by the
Parent irrespective of any knowledge of or investigation with respect thereto
made by or on behalf of any Shareholder; provided, however, that if the Parent
shall disclose in writing to the Shareholders prior to the Closing a specified
breach of a specifically identified representation, warranty, covenant or
agreement of the Parent contained herein by the Parent, and requests a waiver
thereof by the Shareholders, and the Shareholders shall waive any such
specifically identified breach in writing prior to the Closing, the
Shareholders shall be deemed to have waived their rights and remedies hereunder
for, and the Parent shall have no liability or obligation to the Shareholders
with respect to, any such specifically identified breach, to the extent so
identified by the Parent and waived the Shareholders.

7.7 Conditions Precedent to Completion of the Closing. The
obligations of the parties to consummate the share exchange transaction under
this Agreement on the IPO Closing Date are subject to the satisfaction of each
of the following conditions (unless waived by each of the parties in writing):

7.7.1 Legal Actions or Proceedings. No legal action or
proceeding shall have been instituted after the date hereof against the Company
or the Shareholders which is reasonably likely (i) to restrain, prohibit or
invalidate the consummation of the transactions contemplated by this Agreement,
(ii) to have a Company Material Adverse Effect or (iii) to have a Parent
Material Adverse Effect after giving effect to the consummation of the
transactions contemplated by this Agreement.

7.7.2 IPO. The Parent shall have completed the IPO on
terms described in the Registration Statement, and the net proceeds thereof
shall have been received by the Parent.

7.8 Delivery of Exchange Consideration on the IPO Closing Date.
On the IPO Closing Date, the Parent shall deliver the portion of the Exchange
Consideration due to the Shareholders at that time, and the Escrow Agent shall
release and deliver all documents and certificates held in escrow to the
appropriate parties.

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8. SURVIVAL, INDEMNIFICATIONS

8.1 Survival. The representations and warranties set forth in
this Agreement and the other documents, instruments and agreements contemplated
hereby shall survive after the date hereof to the extent provided herein. The
representations and warranties of the Shareholders and the Company herein and
in the Shareholder Related Documents and the Company Related Documents, other
than those in Sections 3.9 and 3.15, shall survive for a period of 24 months
after the date hereof and the representations and warranties of the
Shareholders and the Company contained in Sections 3.9 and 3.15 shall survive
for the maximum period permitted by applicable law. The representations and
warranties of the Parent herein and in the Parent Related Documents shall
survive for a period of 24 months after the date hereof. The periods of
survival of the representations and warranties as stated above in this Section
8.1 are referred to herein as the "Survival Period." The liabilities of the
parties under their respective representations and warranties shall expire as
of the expiration of the applicable Survival Period and no claim for
indemnification may be made with respect to any breach of any representation or
warranty, the applicable Survival Period of which shall have expired, except to
the extent that written notice of such breach shall have been given to the
party against which such claim is asserted on or before the date of such
expiration. The covenants and agreements of the parties herein and in other
documents and instruments executed and delivered in connection with the closing
of the transactions contemplated hereby shall survive for the maximum period
permitted by law.

8.2 Indemnification.

8.2.1 Parent Indemnified Parties. Subject to the
provisions of Sections 8.1 and 8.3 hereof, the Shareholders shall indemnify,
save and hold harmless the Parent, the Company and any of their assignees
(including lenders) and all of their respective officers, directors, employees,
representatives, agents, advisors and consultants and all of their respective
heirs, legal representatives, successors and assigns (collectively the "Parent
Indemnified Parties") from and against any and all damages, liabilities,
losses, claims, deficiencies, penalties, interest, expenses, fines,
assessments, charges and costs, including reasonable attorneys' fees and court
costs (collectively "Losses") arising from, out of or in any manner connected
with or based on:

(i) any breach of any covenant of any Shareholder or the
Company or the failure by any Shareholder or the Company to perform
any obligation of any Shareholder or the Company contained herein or in
any Company Related Document or Shareholder Related Document;

(ii) any inaccuracy in or breach of any representation or
warranty of any Shareholder contained herein or in any Shareholder
Related Document;

(iii) any inaccuracy in or breach of any representation or
warranty of the Company contained herein or in any Company Related
Document;

(iv) indemnification payments made by the Company to the
Company's present or former officers, directors, employees, agents,
consultants, advisors or representatives in respect of actions taken
or omitted to be taken prior to the Closing; and

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(v) any act, omission, occurrence, event, condition or
circumstance occurring or existing at any time on or before the
Closing Date and involving or related to the assets, properties,
business or operations now or previously owned or operated by the
Company and not (a) disclosed in the Disclosure Schedule or (b)
disclosed in the Company Financial Statements excluding liability for
decisions made in the exercise of the Company's reasonable business
judgement and in the ordinary course of business.

Notwithstanding the foregoing, the foregoing indemnities shall not apply to the
extent that such Losses are reimbursed to the Parent Indemnified Parties under
provisions of any errors and omissions or professional liability insurance
policy containing waiver of subrogation provisions applicable to claims
relating to such Losses. The foregoing indemnities shall not limit or
otherwise adversely affect the Shareholder Indemnified Parties' rights of
indemnity for Losses under Section 8.2.3

8.2.2 Minimum Losses. For purposes of this Section 8.2.2,
Losses shall be calculated with respect to any inaccuracy or breach of any
representation or warranty of any Shareholder contained herein or in any
Shareholder Related Document without giving effect to any clause which would
permit such inaccuracy or breach up to an amount which would be deemed a
Company Material Adverse Effect. The Shareholders shall have no obligation
under Section 8.2.1 until the aggregate amount of all such Losses equal or
exceed $75,000 (whether or not resulting in a Company Material Adverse Effect),
at which time the Shareholders shall be subject to the provisions of Section
8.2.1 with respect to all Losses of the Parent Indemnified Parties in excess of
the first $75,000 of Losses.

8.2.3 Parent Indemnity. Subject to the provisions of
Sections 8.1 and 8.3, the Parent shall indemnify, save and hold harmless the
Shareholders and the Shareholders' heirs, legal representatives, successors and
assigns (the "Shareholder Indemnified Parties") from and against all Losses
arising from, out of or in any manner connected with or based on:

(i) any breach of any covenant of the Parent or the
failure by the Parent to perform any of its obligations contained
herein or in the Parent Related Documents;

(ii) any inaccuracy in or breach of any representation or
warranty of the Parent contained herein or in the Parent Related
Documents; and

(iii) any act, omission, event, condition or circumstance
occurring or existing at any time after (but not on or before) the
Closing Date and involving or relating to the assets, properties,
businesses or operations of the Company; provided, however, that this
clause (iii) shall not apply to any Losses to the extent that such
Losses result from any Shareholder's acts or omissions after the
Closing Date as an officer, director and/or employee of the Parent,
the Surviving Corporation and/or any other affiliate of the Parent.

The foregoing indemnities shall not limit or otherwise adversely affect the
Parent Indemnified Parties' rights of indemnity for Losses under Section 8.2.1.

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8.3 Limitations. The aggregate liability of each Shareholder
under Section 8.2.1 shall not exceed the amount equal to the portion of the
Exchange Consideration payable to such Shareholder, with the Parent Common
Stock being valued at the IPO Price for such purpose. The aggregate liability
of the Parent under Section 8.2.3 shall not exceed the amount of the Exchange
Consideration paid with Parent Common Stock.

8.4 Procedures for Indemnification.

8.4.1 Notice. The party (the "Indemnified Party") that may
be entitled to indemnity hereunder shall give prompt notice to the party
obligated to give indemnity hereunder (the "Indemnifying Party") of the
assertion of any claim, or the commencement of any suit, action or proceeding
in respect of any Losses for which indemnity may be sought hereunder, and
Parent shall give such notice to Brian R. Blackmarr of any Loss claim by it
that would apply against the $75,000 allowance in Section 8.2.2 above ("$75,000
Allowance"). Any failure on the part of any Indemnified Party to give the
notice described in this Section 8.4.1 shall relieve the Indemnifying Party of
its obligations under this Article 8 only to the extent that such Indemnifying
Party has been prejudiced by the lack of timely and adequate notice (except
that the Indemnifying Party shall not be liable for any expenses incurred by
the Indemnified Party during the period in which the Indemnified Party failed
to give such notice). Thereafter, the Indemnified Party shall deliver to the
Indemnifying Party, promptly (and in any event within 10 days thereof) after
the Indemnified Party's receipt thereof, copies of all notices and documents
(including court papers) received by the Indemnified Party relating to such
claim, action, suit or proceeding.

8.4.2 Legal Defense. The Parent shall have the obligation
to assume the defense or settlement of any third-party claim, suit, action or
proceeding in respect of which indemnity may be sought hereunder or that would
apply against the $75,000 Allowance; provided that the Shareholders shall have
the first right, but not the obligation, to undertake the defense of any such
third-party claim, suit, action or proceeding, and in such event, the Parent
shall have the right to participate in such defense. Brian R. Blackmarr shall
give notice to Parent of Shareholder election to defend said claim within 10
days of the notice under Section 8.4.1. If the Parent assumes the defense, the
Shareholders shall have the right to participate therein.

8.4.3 Settlement. The Indemnifying Party shall not be
required to indemnify the Indemnified Party with respect to any amounts paid in
settlement of any third-party suit, action, proceeding or investigation entered
into without the written consent of the Indemnifying Party; provided, however,
that if the Indemnified Party is a Parent Indemnified Party, such third-party
suit, action, proceeding or investigation may be settled without the consent of
the Indemnifying Party on 10 days' prior written notice to the Indemnifying
Party if such third-party suit, action, proceeding or investigation is then
unreasonably interfering with the business or operations of the Company and the
settlement is commercially reasonable under the circumstances; and provided
further, that if the Indemnifying Party gives 10 days' prior written notice to
the Indemnified Party of a settlement offer which the Indemnifying Party
desires to accept and to pay all Losses with respect thereto ("Settlement
Notice") and the Indemnified Party fails or refuses to consent to such
settlement within 10 days after delivery of the Settlement Notice to the
Indemnified Party, and such settlement otherwise complies with the provisions
of this Section 8.4, the Indemnifying Party shall not be liable for Losses
arising

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from such third-party suit, action, proceeding or investigation in excess of
the amount proposed in such settlement offer. Notwithstanding the foregoing,
no Indemnifying Party will consent to the entry of any judgment or enter into
any settlement without the consent of the Indemnified Party, if such judgment
or settlement imposes any obligation or liability upon the Indemnified Party
other than the execution, delivery or approval thereof and customary releases
of claims with respect to the subject matter thereof.

8.4.4 Cooperation. The parties shall cooperate in
defending any such third-party suit, action, proceeding or investigation, and
the parties shall have reasonable access to the books and records, and
personnel in the possession or control of the Indemnified Party that are
pertinent to the defense. The Indemnified Party may join the Indemnifying
Party in any suit, action, claim or proceeding brought by a third party, as to
which any right of indemnity created by this Agreement would or might apply,
for the purpose of enforcing any right of the indemnity granted to such
Indemnified Party pursuant to this Agreement.

8.5 Subrogation. Each Indemnifying Party hereby waives for itself
and its affiliates any rights to subrogation against any Indemnified Party or
its insurers for Losses arising from any third-party claims for which it is
liable or against which it indemnifies any Indemnified Party and, if necessary,
each Indemnifying Party shall obtain waivers of such subrogation from its, his
or her insurers.

9. TERMINATION

9.1 Grounds for Termination. This Agreement may be terminated
only as provided below.

9.1.1 Prior to Closing. The parties may terminate this
Agreement at any time prior to the Closing only as provided below:

(i) Mutual Consent. Parent and Brian R. Blackmarr
("Mr. Blackmarr") may terminate this Agreement by mutual
written consent at any time prior to the Closing;

(ii) Termination by Parent. Parent may terminate
this Agreement by giving written notice thereof to Mr.
Blackmarr at any time prior to the Closing: (a) in the event
that the Shareholders or the Company has breached any
material representation, warranty, or covenant contained in
this Agreement in any material respect, Parent has notified
Mr. Blackmarr of the breach, and the breach has continued
without cure until the earlier of 20 days after the notice of
such breach or the Closing Date, whichever is earlier, (b) if
the Registration Statement for the IPO has not been filed with
the Securities and Exchange Commission on or before December
31, 1997, or (c) if the IPO Closing Date shall not have
occurred on or before April 30, 1998, by reason of the failure
of any condition precedent under Section 7.1 hereof (unless
the failure results primarily from Parent itself materially
breaching any material representation, warranty, or covenant
contained in this Agreement); and

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(iii) Termination by Mr. Blackmarr. Mr. Blackmarr
may terminate this Agreement by giving written notice thereof
to Parent at any time prior to the Closing: (a) in the event
the Parent has breached any material representation,
warranty, or covenant contained in this Agreement in any
material respect, the Shareholders have notified Parent of the
breach, and the breach has continued without cure until the
earlier of 20 days after the notice of such breach or the
Closing Date, whichever is earlier, (b) if the Registration
Statement for the IPO has not been filed with the Securities
and Exchange Commission on or before December 31, 1997, or (c)
if the IPO Closing Date shall not have occurred on or before
April 30, 1998 by reason of the failure of any condition
precedent under Section 7.2 hereof (unless the failure results
primarily from any Shareholder materially breaching any
material representation, warranty, or covenant contained in
this Agreement).

9.1.2 After the Closing Date. This agreement may be
terminated after the Closing only as follows:

(i) Termination of Underwriting Agreement. Upon
termination, prior to the successful completion of the IPO, of
the agreement between Parent and certain investment banking
firms (the "Underwriting Agreement") under which such firms
agree to purchase shares of Parent Common Stock from Parent on
a firm commitment basis for resale to the public initially at
the IPO Price, Parent or the Shareholders may each terminate
this Agreement by providing written notice to the other.

(ii) Automatic Termination. This Agreement shall
terminate automatically and without action on the part of any
party hereto if the IPO is not consummated within 10 business
days after the Closing.

9.2 Effect of Termination. If this Agreement is terminated as
permitted under Section 9.1, such termination shall be without liability of any
party to any other party, except that such termination shall be without
prejudice to any and all remedies the parties may have against each other for
breach of this Agreement. Upon termination, documents delivered by one party
to another party pursuant hereto shall be promptly returned.

10. MISCELLANEOUS

10.1 Notice. Any notice, delivery or communication required or
permitted to be given under this Agreement shall be in writing, and shall be
mailed, postage prepaid, or delivered, to the addresses given below, or sent by
telecopy to the telecopy numbers set forth below, as follows:

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To the Shareholders:

Brian R. Blackmarr
Chateau Plaza, Suite 1700
2515 McKinney Avenue, LB-17
Dallas, Texas 75201
Telecopy: (214) 922-8118

Copy to:

Shannon W. Webb
Hill & Metzger, P.L.L.C.
Attorneys at Law
One Turtle Creek Village
3878 Oak Lawn Avenue, Suite 500
Dallas, Texas 75219-4498
Telecopy: (214) 523-3929

To the Parent:

BrightStar Information Technology Group, Inc.
Attn: President
10375 Richmond Avenue, Suite 1620
Houston, Texas 77042
Telecopy: (713) 361-2501

Copy to:

Robert J. Viguet, Jr.
Chamberlain, Hrdlicka, White, Williams & Martin
1200 Smith Street, Suite 1400
Houston, Texas 77002-4310
Telecopy: (713) 658-2553

or other such address as shall be furnished in writing by any such party to the
other party, and such notice shall be effective and be deemed to have been
given as of the date actually received.

To the extent any notice provision in any other agreement, instrument
or document required to be executed or executed by the parties in connection
with the transactions contemplated herein contains a notice provision which is
different from the notice provision contained in this Section 10.1 with respect
to matters arising under such other agreement, instrument or document, the
notice provision in such other agreement, instrument or document shall control.

10.2 Further Documents. Each party shall, at any time and from
time to time after the date hereof, upon reasonable request by another party
and without further consideration, execute and

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deliver such instruments or other documents and take such further action as may
be reasonably required in order to perfect any other undertaking made by the
party hereunder.

10.3 Assignability. No Shareholder shall assign this Agreement in
whole or in part without the prior written consent of the Parent, except by the
operation of law. The Parent may not assign its rights under this Agreement,
the Company Related Documents and the Shareholder Related Documents prior to
six months after the IPO Closing Date without the consent of Brian R.
Blackmarr. Any effectuated assignment in violation of the preceding sentence
shall cause this Agreement and the agreements effected ancillary hereto, to be
revocable at the option of the Shareholders in addition to any other remedies
available to the Shareholders at law or in equity. After the expiration of the
above time period, the Company may assign its rights under this Agreement, the
Company Related Documents and the Shareholder Related Documents without the
consent of any of the Shareholders.

10.4 Exhibits and Schedules. The Exhibits and Schedules (and any
appendices thereto) referred to in this Agreement are and shall be incorporated
herein and made a part hereof.

10.5 Sections and Articles. Unless the context otherwise requires,
all Sections, Articles and Exhibits referred to herein are, respectively,
sections and articles of, and exhibits to, this Agreement and all Schedules
referred to herein are schedules constituting a part of the Disclosure
Schedule.

10.6 Entire Agreement. This Agreement constitutes the full
understanding of the parties, a complete allocation of risks between them and a
complete and exclusive statement of the terms and conditions of their agreement
relating to the subject matter hereof and supersedes any and all prior
agreements, whether written or oral, that may exist between the parties with
respect thereto. Except as otherwise specifically provided in this Agreement,
no conditions, usage of trade, course of dealing or performance, understanding
or agreement purporting to modify, vary, explain or supplement the terms or
conditions of this Agreement shall be binding unless hereafter made in writing
and signed by the party to be bound, and no modification shall be effected by
the acknowledgment or acceptance of documents containing terms or conditions at
variance with or in addition to those set forth in this Agreement. No waiver
by any party with respect to any breach or default or of any right or remedy
and no course of dealing shall be deemed to constitute a continuing waiver of
any other breach or default or of any other right or remedy, unless such waiver
be expressed in writing signed by the party to be bound. Failure of a party to
exercise any right shall not be deemed a waiver of such right or rights in the
future.

10.7 Headings. Headings as to the contents of particular articles
and sections are for convenience only and are in no way to be construed as part
of this Agreement or as a limitation of the scope of the particular articles or
sections to which they refer.

10.8 CONTROLLING LAW. THE VALIDITY, INTERPRETATION AND PERFORMANCE
OF THIS AGREEMENT AND ANY DISPUTE CONNECTED HEREWITH SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS EXCEPT TO THE
EXTENT THE APPLICABLE CORPORATE LAW MANDATORILY APPLIES WITH RESPECT THERETO.

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10.9 Public Announcements. No Shareholder shall make any press
release, public announcement, or public confirmation or disclose any other
information regarding this Agreement or the contents hereof.

10.10 No Third Party Beneficiaries. Except as set forth in Article
8, no person or entity not a party to this Agreement shall have rights under
this Agreement as a third party beneficiary or otherwise.

10.11 Amendments and Waivers. This Agreement may be amended by the
Parent and the Shareholders; provided that all amendments to this Agreement
must be by an instrument in writing signed on behalf of the Parent and the
Shareholders. Any term or provision of this Agreement (other than the
requirements for shareholder approvals) may be waived in writing at any time by
the party which is, or whose shareholders are, entitled to the benefits
thereof.

10.12 No Employee Rights. Nothing herein expressed or implied shall
confer upon any employee of the Company, any other employee or legal
representatives or beneficiaries of any thereof any rights or remedies,
including any right to employment or continued employment for any specified
period, of any nature or kind whatsoever under or by reason of this Agreement,
or shall cause the employment status of any employee to be other than
terminable at will.

10.13 No Personal Liability of Representatives of Parent. No
recourse for the payment of any amounts due hereunder or for any claim based on
this Agreement or the transactions contemplated hereby or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Parent in this Agreement shall be had against any incorporator, organizer,
promoter, shareholder, officer, director, employee or representative as such
(other than the Shareholders as set forth herein), past, present or future, of
the Parent or of any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by enforcement of any assessment or
penalty or otherwise; it being expressly understood that all such obligations
are those of the Parent as a separate corporate entity.

10.14 When Effective. This Agreement shall become effective only
upon the execution and delivery of one or more counterparts of this Agreement
by each of the Parent and the Shareholders.

10.15 Takeover Statutes. If any "fair price," "moratorium,"
"control share acquisition" or other form of anti-takeover statute or
regulation shall become applicable to the transactions contemplated hereby,
Parent and the Company and their respective members of their Boards of
Directors shall grant such approvals and take such actions as are necessary so
that the transactions contemplated by this Agreement may be consummated as
promptly as practicable on the terms contemplated herein and otherwise act to
eliminate or minimize the effects of such statute or regulation on the
transactions contemplated herein.

10.16 Number and Gender of Words. Whenever herein the singular
number is used, the same shall include the plural where appropriate and words
of any gender shall include each other gender where appropriate.

37
<PAGE> 43

10.17 Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid, or unenforceable under present or future laws,
such provisions shall be fully severable as if such invalid or unenforceable
provisions had never comprised a part of the Agreement; and the remaining
provisions of the Agreement shall remain in full force and effect and shall not
be affected by the illegal, invalid or unenforceable provision or by its
severance from this Agreement. Furthermore, in lieu of such illegal, invalid
or unenforceable provision, there shall be automatically as a part of this
Agreement, a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.

10.18 Multiple Counterparts. This Agreement may be executed in a
number of identical counterparts. If so executed, each of such counterparts is
to be deemed an original for all purposes and all such counterparts shall,
collectively, constitute one agreement, but, in making proof of this Agreement,
it shall not be necessary to produce or account for more than one such
counterpart.

10.19 No Rule of Construction. All of the parties hereto have been
represented by counsel in the negotiations and preparation of this Agreement;
therefore, this Agreement will be deemed to be drafted by each of the parties
hereto, and no rule of construction will be invoked respecting the authorship
of this Agreement.

10.20 Expenses. Each of the parties shall bear all of their own
expenses in connection with the negotiation and closing of this Agreement and
the transactions contemplated hereby; provided that the Company shall pay the
costs of any attorney engaged by the Shareholders; and provided further that
all fees, costs and expenses incurred or payable by the Company (other than
accounting and auditing fees and expenses) in connection with the negotiation
and closing of this Agreement and the transactions contemplated hereby and the
costs of any such attorney shall be included in current liabilities for
purposes of determining Net Working Capital.

10.21 No Brokers. Each party represents and warrants to the other
party that such representing party has not engaged a broker, finder or similar
party in connection with this Agreement and the transactions contemplated
hereunder, and each representing party will indemnify the other party for any
costs or expenses resulting from the representing party's misrepresentation in
this section.

10.22 Section 351 Plan of Exchange. Simultaneously with the
execution hereof, the parties hereto shall execute the Section 351 Plan of
Exchange in the form set forth in Exhibit 10.22 hereto.

38
<PAGE> 44
IN WITNESS WHEREOF, this Agreement and Plan of Exchange has been duly
executed and delivered effective as of the date first hereinabove written.

PARENT:

BRIGHTSTAR INFORMATION
TECHNOLOGY GROUP, INC.

By: /s/ MARSHALL G. WEBB
----------------------------------
Marshall G. Webb, President

SHAREHOLDERS:

/s/ BRIAN R. BLACKMARR
-------------------------------------
Brian R. Blackmarr

/s/ ROBERT A. ROWE
-------------------------------------
Robert A. Rowe

/s/ MARK A. HALL
-------------------------------------
Mark A. Hall

/s/ SALEH IGAL
-------------------------------------
Saleh Igal

/s/ JEFF MARGOLESE
-------------------------------------
Jeff Margolese

/s/ STEPHEN ARMISTEAD
-------------------------------------
Stephen Armistead

/s/ JERRY B. CLARK
-------------------------------------
Jerry B. Clark

<PAGE> 1
EXHIBIT 10.3

AGREEMENT AND PLAN OF EXCHANGE

by and among

BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.

and

THE HOLDERS OF THE
OUTSTANDING CAPITAL STOCK
OF
INTEGRATED CONTROLS, INC.

DECEMBER 19, 1997

<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C> <C> <C>
1. AGREEMENT FOR EXCHANGE........................................................................................1
1.1 Exchange of Shares and Other Consideration......................................................1
1.2 Aggregate Consideration from Parent.............................................................1
1.2.1 Exchange Consideration.................................................................1
1.2.2 Certain Definitions....................................................................2
1.3 Payment of Exchange Consideration...............................................................3
1.3.1 Closing Before Receipt of the 1997 Audit Report........................................3
1.3.2 Closing After Receipt of the 1997 Audit Report.........................................3
1.3.3 Specific Form of Consideration Payable to Each Shareholder.............................3
1.3.4 No Fractional Shares...................................................................4

2. THE CLOSING...................................................................................................4
2.1 Closing.........................................................................................4
2.2 Delivery of Company Common Stock................................................................4
2.2.1 Assignments of Company Common Stock....................................................4
2.2.2 Payment In Full Satisfaction of All Rights.............................................4

3. REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDERS......................................................................................5
3.1 Stock Ownership.................................................................................5
3.2 Shareholder Authority...........................................................................5
3.3 Shareholder Consents............................................................................5
3.4 Organization, Etc...............................................................................6
3.5 Capitalization of the Company...................................................................6
3.6 Company Authority...............................................................................6
3.7 Company Consents................................................................................6
3.8 Intellectual Property...........................................................................6
3.9 Title...........................................................................................7
3.10 Defaults........................................................................................7
3.11 Other Disclosures...............................................................................7
3.12 Investment Company..............................................................................9
3.13 Financial Statements...........................................................................10
3.14 Undisclosed Liabilities........................................................................10
3.15 Tax Matters....................................................................................10
3.16 Full Authority.................................................................................12
3.17 Legal Actions..................................................................................12
3.18 Company Plans..................................................................................12
3.19 Access.........................................................................................12
3.20 No Material Adverse Change.....................................................................12
3.21 Subsidiaries; Predecessors.....................................................................13
3.22 Affiliate Relationships........................................................................14
3.23 Disclosure.....................................................................................14
</TABLE>

<PAGE> 3

<TABLE>
<S> <C> <C> <C>
3.24 Company Material Adverse Effect................................................................14
3.25 Restricted Securities..........................................................................14

4. REPRESENTATIONS AND WARRANTIES
OF THE PARENT...........................................................................................15
4.1 Organization...................................................................................15
4.2 Capitalization of the Parent...................................................................15
4.3 Authority......................................................................................16
4.4 Consents.......................................................................................16
4.5 Defaults.......................................................................................16
4.6 Investment Company.............................................................................16
4.7 Financial Statements...........................................................................16
4.8 Taxes..........................................................................................17
4.9 Full Authority.................................................................................17
4.10 Access.........................................................................................17
4.11 Disclosure.....................................................................................17
4.12 Parent Material Adverse Effect.................................................................17

5. CERTAIN COVENANTS AND AGREEMENTS OF SHAREHOLDERS.............................................................18
5.1 Conduct of Business............................................................................18
5.2 Cooperation....................................................................................20
5.3 Filings, Etc...................................................................................20
5.4 Access.........................................................................................20
5.5 Satisfaction of Conditions.....................................................................21
5.6 Capital Budget.................................................................................21
5.7 Exclusivity....................................................................................21
5.8 Agreements of Shareholders to be Effective Upon Closing........................................21
5.8.1 Covenant Not to Compete...............................................................21
5.8.2 Release...............................................................................22
5.9 Shareholder Indebtedness and Receivables.......................................................23

6. CERTAIN AGREEMENTS...........................................................................................23
6.1 Audit..........................................................................................23
6.2 Company Plans..................................................................................23
6.3 Confidentiality................................................................................23
6.4 Tax-Free Exchange..............................................................................24
6.5 Certain Tax Matters............................................................................24
6.5.1 Tax Periods Ending on or Before the IPO Closing Date..................................24
6.5.2 Cooperation on Tax Matters............................................................24
6.5.3 Tax Sharing Agreements................................................................25
6.6 Sale of Motor Vehicles.........................................................................25
6.7 Release of Certain Assets and Guaranties.......................................................25
6.8 Insurance......................................................................................25
6.9 Parent Stock Option Plan.......................................................................25

7. CONDITIONS PRECEDENT; CLOSING DELIVERIES.....................................................................25
</TABLE>

<PAGE> 4

<TABLE>
<S> <C> <C> <C>
7.1 Conditions Precedent to the Obligations of the Parent..........................................25
7.1.1 Accuracy of Representations and Warranties............................................26
7.1.2 Performance of Covenants..............................................................26
7.1.3 Legal Actions or Proceedings..........................................................26
7.1.4 Approvals.............................................................................26
7.1.5 Closing Deliveries....................................................................26
7.1.6 No Loss or Damage.....................................................................26
7.1.7 Licenses, etc.........................................................................26
7.1.8 No Material Adverse Change............................................................26
7.1.9 Certain Corporate Actions.............................................................27
7.2 Conditions Precedent to the Obligations of the Shareholders and the Company....................27
7.2.1 Accuracy of Representations and Warranties............................................27
7.2.2 Performance of Covenants..............................................................27
7.2.3 Approvals.............................................................................27
7.2.4 Closing Deliveries....................................................................27
7.3 Deliveries by the Shareholders at the Closing..................................................27
7.3.1 Closing Certificates..................................................................27
7.3.2 Stock Transfer Restriction Agreement..................................................27
7.3.3 Employment Agreements.................................................................28
7.3.4 Opinion of Counsel for the Shareholders and the Company...............................28
7.3.5 Documents, Stock Certificates.........................................................28
7.4 No Waiver by Parent............................................................................28
7.5 Deliveries by the Parent at the Closing........................................................28
7.5.1 Closing Certificates..................................................................28
7.5.2 Opinion of Counsel for the Parent.....................................................28
7.6 No Waiver......................................................................................29
7.7 Conditions Precedent to Completion of the Closing..............................................29
7.7.1 Legal Actions or Proceedings..........................................................29
7.7.2 IPO...................................................................................29
7.8 Delivery of the Exchange Consideration at Closing..............................................29

8. SURVIVAL, INDEMNIFICATIONS...................................................................................29
8.1 Survival.......................................................................................29
8.2 Indemnification................................................................................30
8.2.1 Parent Indemnified Parties............................................................30
8.2.2 Minimum Losses........................................................................31
8.2.3 Parent Indemnity......................................................................31
8.3 Limitations....................................................................................31
8.4 Procedures for Indemnification.................................................................32
8.4.1 Notice................................................................................32
8.4.2 Legal Defense.........................................................................32
8.4.3 Settlement............................................................................32
8.4.4 Cooperation...........................................................................32
8.5 Subrogation....................................................................................33
</TABLE>

iii

<PAGE> 5

<TABLE>
<S> <C> <C> <C>
9. TERMINATION..................................................................................................33
9.1 Grounds for Termination........................................................................33
9.1.1 Prior to Closing......................................................................33
9.1.2 After the Closing Date................................................................34
9.2 Effect of Termination..........................................................................34

10. MISCELLANEOUS...............................................................................................34
10.1 Notice.........................................................................................34
10.2 Further Documents..............................................................................35
10.3 Assignability..................................................................................35
10.4 Exhibits and Schedules.........................................................................36
10.5 Sections and Articles..........................................................................36
10.6 Entire Agreement...............................................................................36
10.7 Headings.......................................................................................36
10.8 CONTROLLING LAW................................................................................36
10.9 Public Announcements...........................................................................36
10.10 No Third Party Beneficiaries...................................................................36
10.11 Amendments and Waivers.........................................................................36
10.12 No Employee Rights.............................................................................37
10.13 No Personal Liability of Representatives of Parent.............................................37
10.14 When Effective.................................................................................37
10.15 Takeover Statutes..............................................................................37
10.16 Number and Gender of Words.....................................................................37
10.17 Invalid Provisions.............................................................................37
10.18 Multiple Counterparts..........................................................................38
10.19 No Rule of Construction........................................................................38
10.20 Expenses.......................................................................................38
10.21 No Brokers.....................................................................................38
10.22 Section 351 Plan of Exchange...................................................................38
</TABLE>

Exhibit 1.1 List of Shareholders
Exhibit 2.1 Escrow Agreement
Exhibit 2.2 Letter of Transmittal from Shareholders
Exhibit 5.6 Budgeted Capital Expenditures of Company
Exhibit 6.7 Release of Certain Assets and Guaranties
Exhibit 7.3.2 Stock Transfer Restriction Agreement
Exhibit 7.3.3 Certain Employees of the Company
Exhibit 7.3.3A Employment Agreement
Exhibit 7.3.4 Opinion of Counsel for the Shareholders and the
Company
Exhibit 7.5.2 Opinion of Counsel for the Parent
Exhibit 10.22 Section 351 Plan of Exchange

<PAGE> 6

AGREEMENT AND PLAN OF EXCHANGE

This AGREEMENT AND PLAN OF EXCHANGE (this "Agreement") made effective
as of December 19, 1997, by and among BrightStar Information Technology Group,
Inc., a Delaware corporation (the "Parent"), and the undersigned holders (the
"Shareholders") of all of the outstanding capital stock of Integrated Controls,
Inc., a Louisiana corporation (the "Company").

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

1. AGREEMENT FOR EXCHANGE

1.1 Exchange of Shares and Other Consideration. Shareholders agree to
assign, transfer and deliver to Parent all right, title and interest in and to
all of the outstanding shares of common stock of the Company ("Company Common
Stock") in exchange for the Exchange Consideration (as defined below) which
Parent hereby agrees to pay, assign, transfer and deliver to the Shareholders
in accordance with this Agreement, and among them in proportion to the number
of shares of Company Common Stock owned by the Shareholders and assigned to
Parent by the Shareholders as set forth in Exhibit 1.1 hereto, but in the
specific form of Exchange Consideration as provided in Section 1.3 below.

1.2.1 Exchange Consideration. The Exchange Consideration
shall be equal to the amount of revenue recognized by the Company, less
allowances for doubtful accounts and sales returns, as determined in accordance
with GAAP (as defined below) with respect to the period from January 1, 1997
through December 31, 1997, reduced by: (i) Long-Term Debt (as defined below) of
the Company at the Closing Date; (ii) federal, state or local income taxes
payable by the Company with respect to all periods prior to December 31, 1997;
and (iii) the amount of any reduction in the Company's Net Working Capital (as
defined below) from September 30, 1997 to the Closing Balance Sheet Date (as
defined below).

<PAGE> 7

1.2.2 Certain Definitions. The following terms shall have
the meaning ascribed below for purposes of this Agreement:

(i) "Closing Balance Sheet Date" means the end of the most
recent monthly accounting period of the Company preceding the Closing
Date.

(ii) "Current Assets" means the current assets of the Company
determined as of the Closing Balance Sheet Date in accordance with
GAAP.

(iii) "Current Liabilities" means the current liabilities of
the Company determined as of the Closing Balance Sheet Date in
accordance with GAAP excluding those current liabilities included in
Long-Term Debt and federal, state and local income taxes payable by
the Company with respect to all periods prior to December 31, 1997,
and expressed as a positive number; provided, however, that all
expenses of the Company or the Shareholders incurred in connection
with the transactions contemplated hereby which are payable by the
Company shall be included in Current Liabilities.

(iv) "GAAP" means U.S. generally accepted accounting principles
consistently applied.

(vi) "IPO Closing Date" means the date that the Parent
receives funds in consideration for the sale of its securities in the
IPO.

(vii) "IPO Price" means the initial price per share to the
public for shares of Parent Common Stock in IPO.

(viii) "Long-Term Debt" means all long-term liabilities of
the Company as of Closing Date, including capitalized lease
obligations, as applicable to a corporation taxable under Subchapter C
of the Code, as determined under GAAP, plus current portions of such
long-term liabilities and pre-payment penalties as of the Closing Date
and excluding any deferred tax liability accruing for periods after
December 31, 1997.

(ix) "Net Working Capital" means the Current Assets of the
Company minus the Current Liabilities of the Company as of the Closing
Balance Sheet Date, all as determined under GAAP.

<PAGE> 8

1.3 Payment of Exchange Consideration. Parent shall deliver payment
of the Exchange Consideration by delivery of cash and Parent Common Stock such
that 60% of the aggregate Exchange Consideration (and any installment thereof)
is delivered in cash and 40% of the aggregate Exchange Consideration (and any
installment thereof) is delivered in Parent Common Stock. The specific form of
the Exchange Consideration to be paid to each Shareholder is described in
Section 1.3.3 below. For purposes of this Section 1.3, the shares of Parent
Common Stock shall have a per share value equal to the IPO Price. The Exchange
Consideration shall be paid as follows:

1.3.1 Closing Before Receipt of the 1997 Audit Report. If the
IPO Closing Date occurs prior to receipt by the Parent and the Company of the
1997 Audit Report (defined below), then the Exchange Consideration shall be
paid by the Parent in two installments.

(i) The first installment of Exchange Consideration
shall be paid and delivered to the Shareholders on the IPO Closing
Date and shall be equal to that portion of the Exchange Consideration
payable with respect to the period from January 1, 1997 through
December 31, 1997 based on revenue recognized by the Company, less
adjustments as provided in Section 1.2.1, as reported on the Company's
unaudited Balance Sheet and Income Statement, prepared in accordance
with GAAP, as of and for the year ending December 31, 1997 (the
"Unaudited Financial Statements").

1.3.2 Closing After Receipt of the 1997 Audit Report. If the
Closing occurs after receipt of the 1997 Audit Report by Parent and the
Company, all of the Exchange Consideration shall be paid and delivered by the
Parent to the Shareholders on the IPO Closing Date based on revenue recognized
by the Company, less adjustments as provided in Section 1.2.1, as reported on
the Company's audited 1997 Financial Statements.

1.3.3 Specific Form of Consideration Payable to Each
Shareholder. Each Shareholder on Exhibit 1.1 hereto who holds less than 2% of
the outstanding shares of Company Common Stock shall receive his portion of the
Exchange Consideration all in cash. After such cash payments, the balance of
the cash portion of the Exchange Consideration, and the Parent Common

<PAGE> 9

Stock portion of the Exchange Commission, shall each be divided among and paid
to the other Shareholders pro rata to their ownership of Company Common Stock
among their group.

1.3.4 No Fractional Shares. Notwithstanding the foregoing, no
fractional shares of Parent Common Stock will be issued pursuant to this
Section 1.3, and if any Shareholder would be entitled hereunder to receive a
fractional share of Parent Common Stock but for this paragraph, that
Shareholder will be entitled hereunder to receive a cash payment for and in
lieu thereof in the amount (rounded upward to the nearest whole cent) equal to
that Shareholder's fractional interest in a share of Parent Common Stock
multiplied by the IPO Price.

2. THE CLOSING

2.1 Closing. A closing into Escrow ("Closing") will take place at the
offices of Chamberlain, Hrdlicka, White, Williams & Martin in Houston, Texas at
the time and on the day that the Parent and its underwriters agree on the IPO
Price for shares of Parent Common Stock offered in the Parent's IPO (the
"Pricing Date") as set forth in an executed underwriting agreement, but in no
event later than April 23, 1998 (the "Closing Date"); provided that each of the
conditions precedent to the obligations of the parties to effect the Closing
are then satisfied or waived by the applicable party. The parties may agree in
writing on another date, time or place for the Closing. At the Closing, the
parties will deliver or cause to be delivered into escrow with the escrow agent
("Escrow Agent") under the Escrow Agreement set forth in Exhibit 2.1 hereto,
the documents described in Sections 7.3 and 7.5 below. On the IPO Closing Date,
such documents shall be delivered out of escrow to the parties designated to
receive such documents under this Agreement in accordance with the Escrow
Agreement, and Parent shall pay and deliver the Closing Exchange Consideration
to the Shareholders as prescribed in this Agreement.

2.2.1 Assignments of Company Common Stock. It is agreed that
no assignment, transfer or other disposition of record or beneficial ownership
of any shares of Company Common Stock may be made on or after the date hereof
other than as provided herein.

<PAGE> 10

3. REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDERS

Each Shareholder separately, and with respect only to his matters and
circumstances, hereby represents and warrants to the Parent that the following
statements in Sections 3.1 through 3.3 (and 3.25 if the Shareholder is to
receive Parent Common Stock) are true and correct; and Lawrence T. Amy, Michael
A. Johnson and Clarence L. Hawkins ("Controlling Shareholders") unqualifiedly,
and each of the other Shareholders to the best of their knowledge, hereby
represent and warrant to the Parent that the following statements in Sections
3.4 through 3.24 are true and correct:

3.1 Stock Ownership. Exhibit 1.1 accurately sets forth the names of
each Shareholder, the number of shares of Company Common Stock owned by each
Shareholder, and the percentage of total outstanding shares of Company Common
Stock owned by each Shareholder. Each Shareholder owns, beneficially and of
record, with full power to vote, transfer and assign the number of shares of
Company Common Stock set forth beside such Shareholder's name on Exhibit 1.1
and such shares are so held by the Shareholders free and clear of all liens,
encumbrances and adverse claims whatsoever except for the Shareholders
Agreement of Integrated Controls, Inc. dated May 24, 1994, a copy of which has
been furnished to Parent.

3.2 Shareholder Authority. Each Shareholder has full right, power,
legal capacity and authority to (i) execute, deliver and perform this
Agreement, and all other documents and instruments referred to herein or
contemplated hereby to be executed, delivered and/or performed by the
Shareholders (each a "Shareholder Related Document") and (ii) consummate the
transactions contemplated herein and thereby. This Agreement has been duly
executed and delivered by each Shareholder and constitutes, and each
Shareholder Related Document, when duly executed and delivered by each
Shareholder who is a party thereto will constitute, legal, valid and binding
obligations of such Shareholder enforceable against such Shareholder in
accordance with their respective terms and conditions, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity (whether applied in a proceeding
at law or in equity), and except for the uncertainty of enforceability of any
covenant not to compete or any covenant against the use of confidential
information.

3.3 Shareholder Consents. Except as provided on Schedule 3.3, no
approval, consent, order or action of or filing with any court, administrative
agency, governmental authority or other third party is required for the
execution, delivery or performance by the Shareholders of this Agreement or any
Shareholder Related Document other than filings related to the IPO. The
execution, delivery and performance by each Shareholder of this Agreement and
the Shareholder Related Documents do not violate any mortgage, indenture,
contract, agreement, lease or commitment or other instrument of any kind to
which such Shareholder is a party or by which such Shareholder or such
Shareholder's assets or properties may be bound or affected or any law, rule or
regulation applicable to such Shareholder or any court injunction, order or
decree or any valid and enforceable order of any governmental agency in effect
as of the date hereof having jurisdiction over such Shareholder.

<PAGE> 11

3.4 Organization, Etc. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Louisiana
and is duly qualified or licensed as a foreign corporation authorized to do
business in all other states in which any of its assets or properties may be
situated or where the business of the Company is conducted except where the
failure to obtain such qualification or license will not have a Company
Material Adverse Effect (as defined in Section 3.24 below). Except as disclosed
on Schedule 3.4 of the Disclosure Schedule previously provided to the Parent by
the Company ("Disclosure Schedule"), the Company does not own, of record or
beneficially, directly or indirectly, any of the outstanding capital stock,
voting interests or ownership interests in any corporation, partnership, joint
venture, limited liability company, trust, limited partnership or other entity.

3.5 Capitalization of the Company. The total authorized capital
stock of the Company is 600,000 shares of Company Common Stock, no par value,
of which 328,130 shares are issued and outstanding and held of record and
beneficially by the Shareholders as set forth on Exhibit 1.1 hereto and none of
which are held in the treasury of the Company. Each issued and outstanding
share of Company Common Stock is duly and validly authorized and issued, fully
paid and non-assessable, and was not issued in violation of the preemptive
rights of any past or present shareholder. Except for the shares of Company
Common Stock owned beneficially and of record by the Shareholders as set forth
on Exhibit 1.1 hereto, there are no outstanding shares of capital stock,
convertible or exchangeable securities, subscriptions, calls, options,
warrants, rights or other agreements or commitments of any character relating
to the issuance or sale of any shares of capital stock of, or other equity
ownership interest in, the Company. The Company has no liability, contingent or
otherwise, to any person or entity in connection with preemptive or contractual
subscription rights or the offer, sale, purchase, surrender or cancellation of
any shares of capital stock, warrants, options or other equity or voting
interests or securities of the Company.

3.6 Company Authority. The Company has full right, power, legal
capacity and authority to deliver all documents and instruments referred to
herein or contemplated hereby to be delivered by the Company (the "Company
Related Documents") and to consummate the transactions contemplated thereby.

3.7 Company Consents. No approval, consent, order or action of or
filing with any court, administrative agency, governmental authority or other
third party is required of the Company for the delivery or performance of the
Company Related Documents.

<PAGE> 12

Intellectual Property. Each item of such Intellectual Property will be owned or
licensed to be used and available for use by the Company after the IPO Closing
Date on the same terms and conditions as prior to Closing. None of the
ownership, access to, or use of the Intellectual Property by the Company
infringes on the rights of any other party and the Company's rights to the
Intellectual Property are valid and enforceable. No person has interfered with,
infringed upon, misappropriated or otherwise come into conflict with the
Intellectual Property rights of the Company. The Company has not interfered
with, infringed upon, misappropriated or otherwise come into conflict with any
intellectual property rights of others, and the Company has not received any
charge, complaint, demand or notice alleging any such interference,
infringement, misappropriation or conflict.

3.9 Title. Except as set forth in Schedule 3.9 of the Disclosure
Schedule, the Company owns outright, and has full legal and beneficial title to
all of the property that it owns including real, personal, tangible and
intangible property, free and clear of all liens, pledges, mortgages, security
interests, conditional sales contracts and encumbrances, including good and
marketable title to all of its real property interests, free and clear of any
mortgages, security agreements, liens or encumbrances.

3.10 Defaults. Neither the Company nor any Company Plan (as defined
below) is in default under or in violation of, and the execution and delivery
of the Agreement, the Company Related Documents and the Shareholder Related
Documents and the consummation of the transactions contemplated hereby and
thereby will not result in a default by the Company or any Company Plan under
or a violation of (i) any mortgage, indenture, charter or bylaw provision,
provision of any Company Plan, contract, agreement, lease, commitment or other
instrument of any kind to which the Company or any Company Plan is a party or
by which the Company or any Company Plan or any of its properties or assets may
be bound or affected or (ii) any law, rule or regulation applicable to the
Company or any Company Plan or any court injunction, order or decree, or any
valid and enforceable order of any governmental agency in effect having
jurisdiction over the Company or any Company Plan, which default or violation
could adversely affect the ability of the Company to consummate the
transactions contemplated hereby or will have a Company Material Adverse
Effect.

3.11 Other Disclosures. The following disclosures pertaining to the
Company are set forth in Schedule 3.11 of the Disclosure Schedule. Such
disclosures are complete and accurate.

(i) Schedule 3.11(i) is a list of the products of the Company
and all product registrations used by the Company, including all products
licensed by the Company to customers and products licensed to the Company from
licensors, and a description of the parties to and principal terms of such
license arrangements, and a list of all material safety data sheets, toxicology
studies and environmental studies of the Company.

(ii) Schedule 3.11(ii) is a list of the names, titles, start
dates and current annual salary and wage rates of all salaried and hourly
regular full-time and part-time employees of the Company as of the date hereof,
together with a summary of the bonuses, additional compensation and other like
benefits and any decrease in compensation, if any, paid or payable to each
employee during the twelve months prior to the date hereof, and the last date
on which each employee received (a) any change in annual salary or hourly wage
and (b) any bonus or additional compensation or benefits.

<PAGE> 13

(iv) Schedule 3.11(iv) includes (a) a list of assets owned by
the Company as of the date hereof which have been capitalized and have an
unamortized value of $5,000 or more, including vehicles and rolling stock, (b)
a list of all leased equipment of the Company, including leased vehicles and
rolling stock and (c) the Company's most recent depreciation schedule with
respect to the assets of the Company. The Shareholders represent and warrant
that all of the machinery, equipment, vehicles and rolling stock of the Company
are in good working order and condition, ordinary wear and tear excepted.

(viii) Schedule 3.11(viii) is a list and summary description
of, or copies of, all governmental licenses and permits of the Company.

(x) Schedule 3.11(x) is a list of all of the Company's
Intellectual Property and a description of all license fees and royalties
(including the basis of calculation thereof) required to be paid now or in the
future by the Company for the use of any of its Intellectual Property.

<PAGE> 14

(xi) Schedule 3.11(xi) is a list naming each Company Contract
(as defined below). The Shareholders represent and warrant that: (a) none of
the Company's customers or suppliers have canceled or substantially reduced, or
are currently attempting or threatening to cancel or substantially reduce,
service or products; (b) except to the extent set forth on Schedule 3.11(xi),
the Company has complied with all commitments and obligations and is not in
default under any such contracts and agreements, no notice of default has been
received by the Company, and the Company is not aware of any defaults by
customers, suppliers and other parties to such contracts and agreements; (c)
the Company has not experienced labor interruptions over the past three years
and the Shareholders consider the relationship between the Company and its
employees to be good; and (d) the Company has never been a party to any
governmental contracts subject to price redetermination or renegotiation. The
term "Company Contract" means each contract, lease, undertaking, commitment,
mortgage, indenture, note, security agreement, license and other agreement of
the Company in effect on the date hereof (a) involving the expenditure or
receipt of more than $10,000 over the term thereof, (b) containing provisions
calling for the sale or purchase of raw materials, products or services at
prices that vary from the market prices of such raw materials, products or
services generally prevailing in customary third party markets, (c) which
include "take or pay", "meet or release", "most favored nations" or similar
pricing or delivery arrangements, (d) requiring the Company to indemnify or
hold harmless any other person or entity, (e) evidencing any warranty
obligation of the Company with respect to goods, services or products sold or
leased by it, (other than warranties given in the ordinary course of business),
(f) imposing on the Company any confidentiality, non-disclosure or non-compete
obligation or containing any acceleration or termination provisions effective
upon a change of control of the Company, or a merger of the Company into
another entity, or (g) involving collective bargaining or agreements with any
labor union or employee group.

(xii) Schedule 3.11(xii) is a list of all powers of attorney
presently in effect granted by the Company and all investments of the Company
in any equity securities, partnership interests, indebtedness or other
interests in any other corporation, or any person, partnership, joint venture,
limited liability company, trust, limited partnership or other legal entity.

3.12 Investment Company. The Company is not an "investment company" or
a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "holding company", a
"subsidiary company" of a "holding company" or an "affiliate" of a "holding
company" or a "public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.

9
<PAGE> 15

3.13 Financial Statements. The Shareholders have listed in Schedule
3.13 of the Disclosure Schedule and have delivered to the Parent copies of the
following audited financial statements of the Company: Balance Sheets as of
December 31, 1995 and 1996, and as of June 30, 1997, and Statements of Income,
Stockholders Equity and Cash Flows for the years ended December 31, 1994, 1995
and 1996 and for the six month period ended June 30, 1997; plus the unaudited
Balance Sheet as of September 30, 1997 ("Balance Sheet Date") and Statements of
Income and Cash Flows for the nine months ended September 30, 1996 and 1997.
Such financial statements are collectively referred to herein as "Company
Financial Statements". The Company Financial Statements, except as described in
the notes thereto, have been prepared from the Company's records in accordance
with GAAP. The Company Financial Statements present accurately and fairly in
all material respects the financial condition of the Company as of the dates
indicated thereon, and present accurately and fairly in all respects the
results of the Company's operations for the periods indicated thereon. The
Company Financial Statements do not omit any liabilities or obligations of a
type which should be included in or reflected in such financial statements in
accordance with GAAP, whether related to tax or non-tax matters, accrued or
contingent, due or not yet due, liquidated or unliquidated, or otherwise,
except as and to the extent disclosed or reflected in the Company Financial
Statements, or in Schedule 3.14 of the Disclosure Schedule.

3.14 Undisclosed Liabilities. To the best knowledge of Shareholders
and the Company, except as and to the extent disclosed in Schedule 3.14 of the
Disclosure Schedule or in the Company Financial Statements, the Company has no
liabilities or obligations of any nature (whether absolute, contingent or
otherwise). In the case of any liabilities which are not fixed, an estimate of
the maximum amount which may be payable is set forth on Schedule 3.14 of the
Disclosure Schedule.

3.15 Tax Matters.

(i) All federal, state, local and foreign tax returns
required to be filed by the Company (and, if applicable, its subsidiaries)
prior to the date hereof have been filed on a timely basis with the appropriate
governmental authorities in all jurisdictions in which such tax returns are
required to be filed, and all such returns are correct and complete. The
Shareholders have delivered to Parent, and Schedule 3.15(i) of the Disclosure
Schedule includes, correct and complete copies of all federal, state, local and
foreign income and franchise tax returns filed by, examination reports received
by, and statements of deficiencies asserted against or agreed to by the Company
(and, if applicable, its subsidiaries) since January 1, 1991. The Company
(including any of its subsidiaries) is not currently the subject of any audit,
examination or any similar investigation by any governmental authority.
Schedule 3.15(i) of the Disclosure Schedule sets forth all audits, examinations
or similar investigations of the Company (including any of its subsidiaries) by
any governmental authority.

(ii) All federal, state, local and foreign income, franchise,
sales, use, property, and all other taxes, fees, assessments, or other
governmental charges (including withholding taxes), and all interest and
penalties thereon (all of the foregoing collectively, "Taxes") due from or
properly accruable by the Company (including any of its subsidiaries) have been
fully and timely paid or, in the cases of Taxes for which payment is not yet
required, properly and fully accrued for on the Company Financial Statements
with respect to all taxable periods ending on or prior to the date hereof and
interim periods through the date hereof.

<PAGE> 16

(iii) The Company (including any of its subsidiaries) has not
filed a consent under Section 341(f) of the Internal Revenue Code of 1986
("Code") concerning collapsible corporations. The Company (including any of its
subsidiaries) and each of the Shareholders is not a party to any agreement,
contract or arrangement that would, by reason of the consummation of any of the
transactions contemplated by this Agreement, individually or in the aggregate,
result in the payment of any "excess parachute payment" within the meaning of
Section 280G of the Code. None of the assets of the Company (including any of
its subsidiaries) is required to be treated as being owned by any other person
pursuant to the "safe harbor" leasing provisions of Section 168 of the Internal
Revenue Code of 1954, as in effect prior to the repeal of such provisions.

(iv) The Company (including any of its subsidiaries) is not a
party to any Tax allocation or sharing agreement. The Company (including any of
its subsidiaries): (A) has not been a member of an affiliated group filing a
consolidated federal income tax return (other than a group the common parent of
which was the Company); and (B) does not have any liability for the taxes of
any person (other than the Company or any of its subsidiaries) under Treas.
Reg. Section 1.1502-6 (or any similar provision of state, local, or foreign
law), as a transferee or successor, by contract, or otherwise.

(v) Schedule 3.15(v) of the Disclosure Schedule sets forth
the following information with respect to the Company (including any of its
subsidiaries) as of the most recent practicable date: (A) the basis of the
Company (and any of its subsidiaries) in its assets; (B) the basis of the
stockholder(s) of any subsidiary of the Company in its stock of the subsidiary
(or the amount of any excess loss account); (C) the amount of any net operating
loss, net capital loss, unused investment or other credit, unused foreign tax,
or excess charitable contribution allocable to the Company (and any of its
subsidiaries); and (D) the amount of any deferred gain or loss allocable to the
Company (or any of its subsidiaries) arising out of any Deferred Intercompany
Transaction (as defined in Treas. Reg. Section 1.1502-13).

(vi) The Company (including any of its subsidiaries) has not
waived any statute of limitations, or agreed to any extension of time with
respect to an assessment or deficiency, with respect to any Taxes.

(viii) With respect to the qualification of the Exchange as
an exchange transaction within the meaning of Section 351 of the Code, there is
no specific plan or intention on the part of

<PAGE> 17

any Shareholders to sell, exchange or otherwise dispose of any shares of Parent
Common Stock received in the Exchange.

3.16 Full Authority. The Company has full power, authority and legal
right and has all licenses, permits, qualifications, and other documentation
(including permits required under applicable Environmental Law (as defined
below)) necessary to own and/or operate its businesses, properties and assets
and to carry on its businesses as being conducted on the date hereof, and such
businesses are now being conducted and such assets and properties are being
owned and/or operated, and the Company Plans have been implemented and
maintained, in compliance with all applicable laws (including Environmental
Law), ordinances, rules and regulations of any governmental agency of the
United States, any state or political subdivision thereof, or any foreign
jurisdiction, all applicable court or administrative agency decrees, awards and
orders and all such licenses, permits, qualifications and other documentation,
except where the failure to comply will not have a Company Material Adverse
Effect, and there is no existing condition or state of facts which would give
rise to a violation thereof or a liability or default thereunder, except where
a violation, liability or default will not have a Company Material Adverse
Effect. The term "Environmental Law" means any law, rule, regulation, approval,
decision, decree, ordinance, by-law having the force of law or order of any
federal, state or local executive, legislative, judicial, regulatory or
administrative agency, board or authority, which relate to (i) noise; (ii)
pollution or protection of the air, surface water, ground water or land; (iii)
solid, gaseous or liquid waste generation, treatment, storage, use, processing,
disposal or transportation; (iv) exposure to hazardous or toxic substances; (v)
the safety or health of employees or (vi) regulation of the manufacture,
processing, distribution in commerce, use, or storage of chemical substances.

3.18 Company Plans. Neither the Company nor any other party thereto
is in default under or in violation of any Company Plan.

3.19 Access. The Company has cooperated fully in permitting the Parent
and the Parent's lenders, underwriters and placement agents and their
respective representatives to make a full investigation of the properties,
operations and financial condition of the Company; and afforded the Parent and
the Parent's lenders, underwriters and placement agents and their respective
representatives reasonable access to the offices, buildings, real properties,
machinery and equipment, inventory and supplies, records, files, books of
account, tax returns, agreements and commitments and personnel of the Company.

<PAGE> 18

whatsoever in the financial condition, assets, liabilities (contingent or
otherwise), income, business or prospects of the Company; (c) any damage,
destruction or loss (whether or not covered by insurance) materially adversely
affecting the properties or business of the Company; (d) any change in the
authorized capital of the Company or in its securities outstanding or any
change in its ownership interests; (e) any declaration or payment of any
dividend or distribution in respect of the capital stock or any direct or
indirect redemption, purchase or other acquisition of any of the capital stock
of the Company; (f) any contract or commitment entered into by the Company or
any incurrence by the Company or agreement by the Company to incur any
liability or make any capital expenditures in excess of $3,000, except in the
normal course of business; (g) any increase in the compensation, bonus, sales
commissions or fee arrangement payable or to become payable by the Company to
any of its officers, directors, stockholders, employees, consultants or agents;
(h) any work interruptions, labor grievances or claims filed, proposed law or
regulation (the existence of which is known, or under the normal course of
business should be known, to the Shareholder) or any event or condition of any
character materially adversely affecting the business of future prospects of
the Company; (i) any creation, assumption or permitting to exist any mortgage,
pledge or other lien or encumbrance upon any assets or properties whether now
owned or hereafter acquired, except as set forth in Schedules 3.11(ix),
3.11(xi) and 3.14 of the Disclosure Schedule; (j) any sale or transfer, or any
agreement to sell or transfer, any material assets, properties or rights of the
Company to any person, including, without limitation, the Shareholders and
their respective affiliates; (k) any cancellation, or agreement to cancel, any
indebtedness or other obligation owing to the Company, including, without
limitation, any indebtedness or obligation of the Shareholders or any of their
affiliates; (1) any plan, agreement or arrangement granting any preferential
rights to purchase or acquire any interest in any of the assets, properties or
rights of the Company or requiring consent of any party to the transfer and
assignment of any such assets, properties or rights; (m) any purchase or
acquisition, or agreement, plan or arrangement to purchase or acquire, any
property, rights or assets of the Company; (n) any negotiation for the
acquisition of any business or start-up of any new business; (o) any merger or
consolidation or agreement to merge or consolidate with or into any other
corporation (except the transactions contemplated by this Agreement); (p) any
waiver of any material rights or claims of the Company; (q) any breach,
amendment or termination of any material contract, agreement, license, permit,
permit application or other right to which the Company is a party; (r) any
discharge, satisfaction, compromise or settlement of any claim, lien, charge or
encumbrance or payment of any obligation or liability, contingent or otherwise,
other than current liabilities as of the Balance Sheet Date, current
liabilities incurred since the Balance Sheet Date in the ordinary course of
business and prepayments of obligations in accordance with normal and customary
past practices; or (s) any transaction by the Company outside the ordinary
course of its business or prohibited hereunder.

3.21 Subsidiaries; Predecessors. Schedule 3.21 of the Disclosure
Schedule lists the name of the Company's subsidiaries and the securities of any
other corporation, partnership, firm, association or business organization,
entity or enterprise owned by the Company or any of the Company's subsidiaries.
Except as disclosed in Schedule 3.21 of the Disclosure Schedule, all the issued
shares of the capital stock of the subsidiaries of the Company are directly or
ultimately owned by the Company, free and clear of all liens, encumbrances or
adverse claims of every kind. All such shares are duly and validly authorized
and issued, fully paid and nonassessable, and were not issued in violation of
the preemptive rights of any past or present stockholder. Also set forth in
Schedule

<PAGE> 19

3.21 of the Disclosure Schedule is a listing of all names under which the
Company has done business as well as the names of all predecessors of the
Company, including the names of any entities from which the Company previously
acquired significant assets.

3.22 Affiliate Relationships.

(i) Except as set forth on Schedule 3.22 of the Disclosure
Schedule, neither Lawrence I. Amy, Michael A. Johnson or Clarence L. Hawkins,
nor any affiliate of such persons, and no director or officer of the Company
owns, directly or indirectly, in whole or in part, any property, assets or
right, tangible or intangible, which is associated with any property, asset or
right owned by the Company or which the Company is operating or using or the
use of which is necessary for its business. Also included in Schedule 3.22 of
the Disclosure Schedule is the disclosure of any relationships which any of the
persons in the preceding sentence has with any other corporation, partnership,
firm, association or business organization, entity or enterprise which is a
competitor, potential competitor (based upon the nature of such potential
competitor's business as of the Closing Date), supplier or customer of the
Company.

(ii) The term "affiliate" means with respect to any person,
any other person which directly or indirectly, by itself or through one or more
intermediaries, controls, or is controlled by, or is under direct or indirect
common control with, such person. The term "control" means the possession,
directly or indirectly, of the power to direct, or cause the direction of, the
management and policies of a person, whether through the ownership of voting
securities, by contract or otherwise.

3.23 Disclosure. No representation or warranty by the Company or any
Shareholder in the Agreement (including the Exhibits hereto) and no statement
contained in the Disclosure Schedule or any certificate delivered by the
Company or the Shareholders to the Parent pursuant to the Agreement, contains
or will contain any untrue statement of a material fact or omits or will omit
any material fact necessary in order to make the statements herein or therein,
in light of the circumstances under which they are or were made, not
misleading.

3.25 Restricted Securities.

(1) Each Shareholder acknowledges that the shares of Parent
Common Stock to be acquired by the Shareholder hereunder have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), and are being acquired for the Shareholder's own
account for investment and not with a view to the distribution
thereof, and the Parent Common Stock will be subject to the Stock
Transfer Restriction Agreement in Exhibit 7.3.2 hereto.

<PAGE> 20

(3) Each Shareholder is able to bear the economic risks of
its investment in the Parent Common Stock, including the risk of a
loss of the value of the Parent Common Stock.

(4) Each Shareholder has been represented by legal counsel in
this transaction and such Shareholder and its representatives,
including such counsel, have been given the opportunity to ask
questions of, and receive answers from, the officers of the Parent
concerning the terms of the transactions contemplated by this
Agreement and the affairs and the business and financial condition of
the Parent.

(6) Each Shareholder and its representatives have conducted
such investigations in making a decision to approve this Agreement and
the transactions contemplated hereby as they have deemed necessary and
advisable.

(7) Each Shareholder acknowledges and agrees that the Parent
Common Stock to be issued to such Shareholder may not be disposed of
except in accordance with the requirements of the Securities Act and
any applicable state securities laws and the Stock Transfer
Restriction Agreement in Exhibit 7.3.2 hereto.

4. REPRESENTATIONS AND WARRANTIES
OF THE PARENT

The Parent hereby represents and warrants to the Shareholders as
follows:

4.1 Organization. The Parent is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
The Parent is duly qualified or licensed as a foreign corporation authorized to
do business in all states in which any of its assets or properties may be
situated or where its business is conducted except where the failure to obtain
such qualification or license would not have a Parent Material Adverse Effect
(as defined in Section 4.12 below).

4.2 Capitalization of the Parent. The total authorized capital stock
of Parent is as set forth and described in Parent's Confidential Private
Placement Memorandum ("PPM") delivered to Shareholders in connection with the
transactions contemplated by this Agreement. The outstanding shares of Parent
Common Stock have been duly and validly issued and are fully paid and
non-assessable. The Parent Common Stock to be issued to Shareholders under this
Agreement will be duly and validly issued in compliance with its applicable
corporate governance documents and state

<PAGE> 21

and federal law. The Parent will have complied with all state and federal
securities laws in issuing the Parent Common Stock.

4.3 Authority. The Parent has the requisite, power and authority to
execute, deliver and perform this Agreement and all documents and instruments
referred to herein or contemplated hereby (the "Parent Related Documents") and
to consummate the transactions contemplated herein and thereby. This Agreement
has been duly executed and delivered by the Parent and constitutes, and all the
Parent Related Documents, when executed and delivered by the Parent will
constitute, legal, valid and binding obligations of the Parent, enforceable in
accordance with their respective terms and conditions except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity (whether applied in a proceeding
at law or in equity).

4.4 Consents. No approval, consent, order or action of or filing with
any court, administrative agency, governmental authority or other third party
is required for the execution, delivery or performance by the Parent of this
Agreement or the Parent Related Documents or the consummation by the Parent of
the transactions contemplated hereby, except as may be described in the PPM and
except for the filing of the Parent's registration statement with respect to
the IPO ("Registration Statement") with the U.S. Securities and Exchange
Commission ("SEC") pursuant to the Securities Act and the SEC's declaration of
effectiveness of such Registration Statement and the completion of all
necessary filings required under, and the obtaining of all necessary consents
and approvals required pursuant to, state securities or "blue sky" laws in
connection with the IPO.

4.5 Defaults. The Parent is not in default under or in violation of,
and the execution, delivery and performance of this Agreement and the Parent
Related Documents and the consummation by the Parent of the transactions
contemplated hereby and thereby will not result in a default under or in
violation of (i) any mortgage, indenture, charter or bylaw provision, contract,
agreement, lease, commitment or other instrument of any kind to which the
Parent is a party or by which the Parent or any of its properties or assets may
be bound or affected or (ii) any law, rule or regulation applicable to the
Parent or any court injunction, order or decree, or any valid and enforceable
order of any governmental agency in effect as of the date hereof having
jurisdiction over the Parent, which default or violation prevents the Parent
from consummating the transactions contemplated hereby or is reasonably likely
to have a Parent Material Adverse Effect.

4.7 Financial Statements. The Parent has provided certain financial
statements to the Shareholders in the PPM ("Parent Financial Statements") and
such Parent Financial Statements have been prepared in accordance with GAAP and
fairly present the consolidated financial position, results of operations and
cash flows of the Parent and its then existing consolidated subsidiaries as of
the dates and for the periods indicated, subject to normal year-end adjustments
and any other adjustments

<PAGE> 22

described therein or in the notes or schedules thereto. The books and records
of the Parent have been kept in reasonable detail and accurately and fairly
reflect the transactions of the Parent.

4.8 Taxes. The Parent has either accrued, discharged or caused to be
discharged, as the same have become due, or the Parent Financial Statements
contain adequate accruals and reserves for, all taxes, interest thereon, fines
and penalties of every kind and character for such taxes, attributable or
relating to the properties and business of the Parent.

4.9 Full Authority. The Parent has the corporate power and authority
and has obtained all licenses, permits, qualifications, and other documentation
(including permits required under applicable Environmental Law) necessary to
own and/or operate its businesses, properties and assets and to carry on its
businesses as being conducted on the date of this Agreement, except such
licenses, permits, qualifications or other documentation, the failure to obtain
which is not reasonably likely to result in a Parent Material Adverse Effect,
and such businesses are now being conducted, and will be conducted, and such
assets and properties are being owned and/or operated, and will be owned and
operated, in compliance with all applicable laws (including Environmental Law),
ordinances, rules and regulations of any governmental agency of the United
States, any state or political subdivision thereof, or any foreign
jurisdiction, all applicable court or administrative agency decrees, awards and
orders and all such licenses, permits, qualifications and other documentation,
except where the failure to comply will not have a Parent Material Adverse
Effect, and there is no existing condition or state of facts that would give
rise to a violation thereof or a liability or default thereunder that is
reasonably likely to have a Parent Material Adverse Effect.

4.11 Disclosure. No representation or warranty by the Parent in this
Agreement, and no statement contained in any certificate delivered by the
Parent to the Shareholders pursuant to this Agreement, contains any untrue
statement of a material fact or omits any material fact necessary in order to
make the statements herein or therein, in light of the circumstances
under which they are or were made, not misleading.

4.12 Parent Material Adverse Effect. The term "Parent Material Adverse
Effect" shall mean an adverse effect on the properties, assets, financial
position, results of operations, long-term debt, other indebtedness, cash flows
or contingent liabilities of the Parent and its consolidated subsidiaries,
taken as a whole in an amount of $25,000 or more.

<PAGE> 23

5. CERTAIN COVENANTS AND AGREEMENTS OF SHAREHOLDERS

The Shareholders agree with the Parent that from the date hereof
through the Closing Date, but only to the extent of their authority in their
positions with the Company:

5.1 Conduct of Business. The Shareholders shall cause the Company to
conduct its operations according to its ordinary and usual course of business
to preserve substantially intact its business organization, keep available the
services of its officers and employees, and maintain its present relationships
with licensors, suppliers, distributors, customers and others having
significant business relationships with it. The Shareholders agree to cause
representatives of the Company to confer with representatives of the Parent to
keep it informed with respect to the general status of the on-going operations
of the business of the Company. Without limiting the generality of the
foregoing, and except as otherwise contemplated herein or agreed to in writing
by Parent, the Shareholders will cause the Company to:

(i) carry on its business in substantially the same manner as
heretofore carried on and not introduce any material new method of
management, operation or accounting, nor provide discounted services
outside the ordinary course of business;

(ii) maintain its properties, facilities, equipment and other
assets, including those held under leases, in good working order,
condition and repair, ordinary wear and tear excepted;

(iii) perform all of its obligations under all debt and lease
instruments and other agreements (including the Company Contracts)
relating to or affecting its business, assets, properties, equipment
and rights, and pay all vendors, suppliers, and other third parties
(including mechanics and materialmen) as and when their bills are due
and pay in full all payroll obligations when due subject to
withholding payments pending resolution of a good faith dispute;

(iv) keep in full force and effect its present insurance
policies or other comparable insurance coverage;

(vi) refrain from effecting any change in the capital
structure of the Company and from incurring any expenditures outside
the ordinary course of business;

(vii) refrain from starting or acquiring any new businesses;

<PAGE> 24

(x) promptly notify the Parent of the receipt by it or any
Shareholder of any notice or claim, written or oral, of (a) default or
breach by the Company under, or of any termination (other than at the
end of the stated term thereof) or cancellation, or threat of
termination (other than at end of the stated term thereof) of
cancellation, of any Company Contract, (b) any loss of, damage to or
disposition of, any of the properties, assets or the products of the
Company of a value of $10,000 or more, singly or in the aggregate
(other than the sale or use of inventories in the ordinary course of
business), (c) any claim or litigation threatened or instituted, or
any other adverse event or occurrence involving or affecting the
Company or any of its assets, properties, operations, businesses or
employees, and (d) any proposal made by any third party received by
the Company or of which any Shareholder obtains knowledge in respect
of any sale or other disposition, direct or indirect, of the assets
(other than the sale or use of inventories in the ordinary course of
business), businesses or outstanding capital stock or other ownership
or voting interests of the Company;

(xi) comply with and cause to be complied with all applicable
laws, rules, regulations and orders of all federal, state and local
governments or governmental agencies affecting or relating to the
Company or its assets, properties, operations, businesses or employees
except where the failure to comply will not have a Company Material
Adverse Effect;

(xiii) refrain from any purchase or redemption of any capital
stock, other ownership interest or other voting interest of the
Company and refrain from issuing any capital stock or other ownership
interest;

(xiv) refrain from making any change in any accounting
principle, classification, policy or practice;

(xv) refrain from effecting any amendment to the certificate
or articles of incorporation or bylaws or other governing instruments
of the Company;

<PAGE> 25

(xvii) maintain and comply with its debt and lease agreements
and instruments (except those that expire on their stated maturity or
lease termination dates); refrain from entering into any amendment
thereto or new debt or lease agreements or instruments; refrain from
increasing any indebtedness for borrowed money or issuing or selling
any debt securities or letters of credit; and refrain from making any
payments of any indebtedness or interest or other amounts thereon or
with respect thereto (other than regularly scheduled principal and
interest payments and payments of principal, interest and fees under
revolving lines of credit);

(xix) refrain from entering into any contract, lease,
undertaking, commitment, mortgage, indenture, note, security
agreement, license or other agreement (a) involving the receipt or
expenditure of more than $25,000 over the term thereof (other than
consulting or service contracts with customers entered in the ordinary
course of business), (b) containing provisions calling for the sale or
purchase of raw materials, product or service at prices that vary from
the market prices of such raw materials, products or services
generally prevailing in customary third-party markets, (c) which
include "take or pay", "meet or release", "most favored nations" or
similar pricing or delivery arrangements, (d) with any officer,
director, shareholder or affiliate of the Company, (e) requiring the
Company to indemnify or hold harmless any other person or entity
(other than consulting or service contracts with customers entered in
the ordinary course of business), (f) evidencing any warranty
obligation of the Company with respect to goods, services or products
sold or leased by it (other than warranties given in the normal course
of business containing substantially the same terms as those presently
in effect), or (g) imposing on the Company any confidentiality, non-
disclosure or non-compete obligation (other than consulting or service
contracts with customers entered in the ordinary course of business).

5.3 Filings, Etc. Each Shareholder will make, and cause the Company
to make, all filings which are required to be made by them to lawfully
consummate the transactions contemplated hereby.

<PAGE> 26

records, files, books of account, tax returns, agreements and commitments and
personnel of the Company. Without limitation of the foregoing, the Shareholders
and the Company shall provide the Parent with such reasonably available
financial information (and schedules with respect thereto) with respect to the
Company as the Parent may reasonably request and will cooperate with and assist
representatives of the Parent in the preparation of such financial information
(and any opinions or reports with respect thereto) with respect to the Company
as the Parent may reasonably request. Notwithstanding the above, the Parent and
its respective lenders, underwriters and placement agents and their respective
representatives, advisers, consultants, appraisers, engineers and other experts
shall incur no liability with respect to control, operation or management (or
alleged control, operation or management) of the Company as a result of the
covenants in this Section 5.4.

5.5 Satisfaction of Conditions. The Shareholders shall (i) use their
reasonable efforts to obtain, as soon as possible, all governmental approvals
required to be obtained by the Company and make, as soon as possible, all
filings with any governmental authority required on the part of the Company to
consummate the transactions contemplated hereby, (ii) use their reasonable
efforts to obtain, as soon as possible, all other consents to and approvals
required to be obtained by the Company to consummate the transactions
contemplated hereby, and (iii) otherwise use their reasonable efforts to
satisfy the conditions set forth in this Agreement to the extent that such
satisfaction is within their control; provided, however, that this Section 5.5
shall not be construed to limit the rights of the Company to terminate this
Agreement as provided in Article 9 of this Agreement.

5.6 Capital Budget. Exhibit 5.6 hereto contains the budgeted capital
expenditures of the Company from July 1, 1997 through December 31, 1998. Unless
otherwise consented to by the Parent, the Company will make capital
expenditures in accordance with such budget and shall not make any additional
capital expenditures.

5.7 Exclusivity. The Shareholders shall not (i) solicit, initiate,
or encourage the submission of any proposal or offer from any person or entity
relating to the acquisition of any capital stock or other voting securities, or
any substantial portion of the assets of the Company (including any acquisition
structured as a merger, consolidation, or share exchange) or (ii) participate
in any negotiations or discussions regarding, furnishing any information with
respect to, assist or participate in, or facilitate in any other manner any
effort or attempt by any person or entity in favor of any such acquisition. The
Shareholders will (and shall cause the Company to) promptly notify the Parent
if any person or entity makes any proposal, offer, inquiry, or contact with
respect to any of the foregoing.

5.8.1 Covenant Not to Compete.

<PAGE> 27

Company on the date hereof agrees that during the one-year period
after the Closing Date, Shareholder will comply with the provisions of
Section 5.8.1(ii) below, and (b) if Shareholder is an employee of the
Company, Shareholder will comply with the provisions of Section
5.8.1(ii) below until the date which is the later to occur of two (2)
years after the Closing Date or one year from and after the date of
termination of such Shareholder's employment by the Company regardless
of the reason for such termination.

(ii) Each Shareholder agrees that for the applicable time
period in Section 5.8.1(i) above ("Restricted Period"), such
Shareholder will not represent, engage in or carry on, directly or
indirectly, any business with any person or entity who was a customer
or client of the Company during the one year period preceding the
beginning of the Restricted Period (or any customer or client of an
affiliate of the Company for which the Shareholder has materially
assisted such affiliate in serving such customer or client ("Assisted
Affiliate")) or any business within 100 miles of the city or county
limits of any city or county in the United States or foreign countries
where the Company or any Assisted Affiliates has an office or in which
the Company provides services which produce Company revenues of an
amount equal to 2% or more of the Company's revenues for the twelve
complete calendar months preceding the time of termination, which
business competes with any business, services or products produced,
sold, conducted, developed, or in the process of development by the
Company or jointly by the Company and an Assisted Affiliate, including
any business that involves the furnishing of information technology
services that are the type of services furnished by the Company,
either for himself, as a member or equity owner of a partnership or
limited liability company, or as a shareholder (other than as a
shareholder of less than one percent (1%) of the issued and
outstanding stock of a publicly-held company whose gross revenues
exceed $100 million), investor, owner, officer, or director of a
company or other entity, or as an employee, agent, trustee, manager,
associate or consultant of any person, partnership, corporation or
other entity.

(iii) Each Shareholder agrees that the limitations set forth
herein on such Shareholder's rights to compete with the Parent and its
affiliates as set forth above are reasonable and necessary for the
protection of Parent and its affiliates. In this regard, each
Shareholder specifically agrees that the limitations as to period of
time and geographic area, as well as all other restrictions on the
Shareholder's activities specified herein, are reasonable and
necessary for the protection of the Parent and its affiliates.
Each Shareholder agrees that, in the event that the provisions of this
Section should ever be deemed to exceed the scope of business, time or
geographic limitations permitted by applicable law, such provisions
shall be and are hereby reformed to the maximum scope of business,
time or geographic limitations permitted by applicable law.

(iv) Each Shareholder agrees that the remedy at law for any
breach by such Shareholder of this Section 5.8.1 will be inadequate
and that the Parent shall be entitled to injunctive relief.

5.8.2 Release. Effective as of the Closing Date, the
Shareholders do hereby (i) release, acquit and forever discharge the Company
from any and all liabilities, obligations, claims,

<PAGE> 28

demands, actions or causes of action arising from or relating to any event,
occurrence, act, omission or condition occurring or existing on or prior to the
Closing Date, including, without limitation, any claim for indemnity or
contribution from the Company in connection with the obligations or liabilities
of the Shareholders hereunder, except for salary and benefits payable to a
Shareholder as an employee in the ordinary course of business; (ii) waive all
breaches, defaults or violations of any agreement applicable to the Company
Common Stock and agree that any and all such agreements are terminated as of
the Closing Date, and (iii) waive any and all preemptive or other rights to
acquire any shares of capital stock of the Company and release any and all
claims arising in connection with any prior default, violation or failure to
comply with or satisfy any such preemptive or other rights.

6. CERTAIN AGREEMENTS

The parties hereto further agree as follows:

6.2 Company Plans. Except as otherwise provided in this Agreement,
the Company Plans (within the meaning of Section 3.11 (xiii) hereto), in effect
at the date of this Agreement, shall remain in effect unless otherwise
determined by Parent after the Closing Date.

6.3 Confidentiality. Prior to the Closing Date, none of the Parent,
the Company or the Shareholders will disclose the terms of this Agreement or
the Exchange to any person other than their respective directors, officers,
agents or representatives, except as otherwise provided herein or unless
required by law. The Company may make appropriate disclosures of the general
nature of the Exchange to its employees, vendors and customers to protect the
Company's goodwill and to facilitate the Closing. The Parent may disclose
pertinent information regarding the Exchange to its existing and prospective
investors, lenders, or investment bankers or financial advisors for the purpose
of obtaining financing, including, without limitation, financing related to the
IPO or other offerings of its securities may describe this Agreement and the
transactions contemplated hereby in any registration statement filed by the
Parent under the Securities Act and in reports filed by the Parent under the
Securities Exchange Act of 1934, and may file this Agreement as an exhibit to
any thereof. The Parent may also make appropriate disclosures of the general
nature of the Exchange and the identity, nature and scope of the Company's
operations to prospective acquisition candidates in connection with the
Parent's efforts to effect additional acquisitions. Each party will have mutual
approval rights with respect to written employee presentations concerning the
prospective Exchange.

<PAGE> 29

6.4 Tax-Free Exchange. Unless the other parties shall otherwise agree
in writing, none of the Shareholders, the Parent or the Company shall knowingly
take or fail to take any action, which action or failure to act would
jeopardize the qualification of the Exchange as an exchange within the meaning
of Section 351 of the Code.

6.5 Certain Tax Matters.

6.5.1 Tax Periods Ending on or Before the IPO Closing Date.
Parent shall prepare or cause to be prepared and file or cause to be filed all
returns, declarations, reports, claims for refund, or information returns or
statements relating to Taxes, including any schedule, attachment, or amendment
thereto ("Tax Returns") for the Company (including any of its subsidiaries) for
all periods ending on or prior to the IPO Closing Date which are filed after
the IPO Closing Date. Parent shall permit Shareholders to review and comment on
each such Tax Return described in the preceding sentence prior to filing and
shall make such revisions to such Tax Returns as are reasonably requested by
Shareholders. Shareholders shall reimburse Parent for Taxes of the Company
(including any of its subsidiaries) with respect to periods prior to December
31, 1997, within fifteen (15) days after payment by Parent or the Company
(including any of its subsidiaries) of such Taxes to the extent such Taxes are
not reflected in the reserve for Tax liability (other than any reserve for
deferred Taxes established to reflect timing differences between book and Tax
income) shown on the face of the Company Financial Statements.

6.5.2 Cooperation on Tax Matters.

(i) Parent, Company (including any of its subsidiaries) and
Shareholders shall cooperate fully, as and to the extent reasonably
requested by the other party, in connection with the filing of Tax
Returns pursuant to this Section and any audit, litigation or other
proceeding with respect to Taxes. Such cooperation shall include the
retention and (upon the other party's request) the provision of
records and information which are reasonably relevant to any such
audit, litigation or other proceeding and making employees available
on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. Company (and any of
its subsidiaries) and Shareholders agree: (A) to retain all books and
records with respect to Tax matters pertinent to Company (including
any of its subsidiaries) relating to any taxable period beginning
before the IPO Closing Date until the expiration of the statute of
limitations (and, to the extent notified by Parent or Shareholders,
any extensions thereof) of the respective taxable periods, and to
abide by all record retention agreements entered into with any taxing
authority; and (B) to give the other party reasonable written notice
prior to transferring, destroying or discarding any such books and
records and, if the other party so requests, Company (including any of
its subsidiaries) or Shareholders, as the case may be, shall allow the
other party to take possession of such books and records.

(ii) Parent and Shareholders further agree, upon request, to
use their best efforts to obtain any certificate or other document
from any governmental authority or any other person as may be
necessary to mitigate, reduce or eliminate any Taxes that could be
imposed (including, but not limited to, with respect to the
transactions contemplated hereby).

<PAGE> 30

(iii) The Company and each of the Shareholders shall
cooperate fully in the preparation and delivery to Parent and its
counsel of tax certificates, representations, or similar documents
that may be necessary or appropriate in connection with the
preparation of tax opinions or other items regarding the tax matters
impacting this Agreement, the Parent, or the Company that are prepared
with respect to the IPO.

6.5.3 Tax Sharing Agreements. All tax sharing agreements or
similar agreements with respect to or involving Company (including any of its
subsidiaries) shall be terminated as of the IPO Closing Date and, after the IPO
Closing Date, Company (including any of its subsidiaries) shall not be bound
thereby or have any liability thereunder.

6.6 Sale of Motor Vehicles. The Shareholders agree to cause the
Company to effect the sale of any Company-owned motor vehicle primarily used by
an executive management employee to such employee prior to the Closing at a
price equal to the depreciated book value of the vehicle as included in the
Company financial statements at the time of purchase.

6.7 Release of Certain Assets and Guaranties. As soon as reasonably
possible after the Closing but not later than six months thereafter, Parent
shall take such steps, including the establishment of Parent's corporate
guaranty, as are necessary to release the assets of the Shareholders or the
personal guaranties of the Shareholders as described on Exhibit 6.7 hereto from
any security interest granted in such assets or guaranty to secure the
performance of obligations of the Company, as such security interests,
guaranties and obligations are described on Exhibit 6.7 hereto; and until such
releases are acquired, Parent shall indemnify the Shareholder from any loss,
payment, cost or expense incurred by the Shareholders, including reasonable
attorney's fees, with respect to paying any obligations to the secured party or
guaranteed party based on such security interests or guaranties.

6.8 Insurance. Prior to the Closing, Parent and its Board of
Directors shall obtain and put in place reasonable and customary insurance
coverage for errors, omissions and/or negligence covering the actions and
activities of its officers and directors.

6.9 Parent Stock Option Plan. Prior to or within six (6) months of
the IPO Closing Date, Parent shall use its commercially reasonable efforts to
adopt an employee stock option plan in which key Company employees may
participate.

7. CONDITIONS PRECEDENT; CLOSING DELIVERIES

<PAGE> 31

7.1.2 Performance of Covenants. The Shareholders shall have
performed and complied with all covenants of this Agreement to be performed or
complied with by them at or prior to the Closing Date, and the Shareholders
shall each have delivered to the Parent a certificate to that effect.

7.1.4 Approvals. The Shareholders shall have procured all of
the consents, approvals and waivers of third parties or any regulatory body or
authority, whether required contractually or by applicable law or otherwise
necessary for the execution, delivery and performance of this Agreement
(including the Company Related Documents and the Shareholder Related Documents)
by the Shareholders prior to the Closing Date, and Shareholders shall have
delivered to the Parent a certificate to that effect.

7.1.5 Closing Deliveries. All documents required to be
executed or delivered at Closing by the Shareholders pursuant to Section 7.3 of
this Agreement shall have been so executed and delivered.

7.1.7 Licenses, etc. The Company shall have obtained all such
licenses and permits as are legally required for the continued operation of the
business after the IPO Closing Date, except such licenses and permits, the
absence of which will not have a Company Material Adverse Effect.

<PAGE> 32

7.1.9 Certain Corporate Actions. All necessary director and
shareholder resolutions, waivers and consents required to consummate the
transactions contemplated hereunder shall have been executed and delivered.

7.2 Conditions Precedent to the Obligations of the Shareholders and
the Company. The obligations of the Shareholders to effect the Closing under
this Agreement are subject to the satisfaction of each of the following
conditions, unless waived by the Controlling Shareholders in writing. Provisions
in this Section 7.2 requiring the delivery of documents and certificates to the
Shareholders shall be deemed satisfied by the delivery of such materials to the
Escrow Agent for later release to Shareholders upon satisfaction of the
conditions contained in the Escrow Agreement.

7.2.2 Performance of Covenants. The Parent shall have and
complied with all covenants of this Agreement to be performed or complied with
by them at or prior to the Closing Date and the Parent shall have delivered to
the Shareholders a certificate to such effect.

7.2.3 Approvals. The Parent shall have procured prior to the
Closing Date all of the consents, approvals and waivers required of it for
entering into this Agreement without violating any requirements to which it is
subject, and the Parent shall deliver to the Shareholders a certificate to that
effect.

7.2.4 Closing Deliveries. All documents required to be executed
or delivered at Closing by the Parent pursuant to Section 7.5 of this Agreement
shall have been so executed and delivered.

7.3 Deliveries by the Shareholders at the Closing. In accordance with
Section 2.1 above, at the Closing, simultaneously with the deliveries by the
Parent specified in Section 7.5 below, and in addition to any deliveries
required to be made by the Shareholders pursuant to any other transaction
document at the Closing, the Shareholders shall deliver or cause to be delivered
to the Escrow Agent the following:

7.3.1 Closing Certificates. The Shareholders shall deliver the
certificates required pursuant to Sections 7.1.1, 7.1.2, 7.1.3 and 7.1.4.

7.3.2 Stock Transfer Restriction Agreement. Each Shareholder
shall execute and deliver a Stock Transfer Restriction Agreement on the Closing
Date substantially in the form set forth in Exhibit 7.3.2.

<PAGE> 33

7.3.4 Opinion of Counsel for the Shareholders and the Company.
The Shareholders shall deliver the favorable opinion of Ottinger, Hebert &
Sikes, L.L.P., counsel to the Shareholders and the Company, dated as of the
Closing Date, substantially in the form and to the effect set forth in Exhibit
7.3.4 attached hereto.

7.3.5 Documents, Stock Certificates. The Shareholders shall
execute and deliver, and shall cause the Company to execute and deliver, the
documents, certificates, opinions, instruments and agreements required to be
executed and delivered by the Company or its officers or directors or any
Shareholder at the Closing as contemplated hereby or as may be reasonably
requested by the Parent and shall deliver or cause to be delivered the
documents and evidence required under this Agreement. Stock Certificates
representing all of the outstanding Company Common Stock and properly executed
and completed Letters of Transmittal shall be delivered by the Shareholders to
the Escrow Agent.

7.4 No Waiver by Parent. The consummation of the Closing shall not be
deemed to be a waiver by the Parent or the Company of any of their rights or
remedies against the Shareholders hereunder for any breach of warranty,
covenant or agreement by the Shareholders herein irrespective of any knowledge
of or investigation made by or on behalf of the Parent; provided, however, that
if the Shareholders shall disclose in writing to the Parent prior to the
Closing Date a specified breach of a specifically identified representation,
warranty, covenant or agreement of the Shareholder herein, and requests a
waiver thereof by the Parent, and the Parent shall waive any such specifically
identified breach in writing prior to the Closing Date, the Parent and the
Company, for themselves and for each Parent Indemnified Party (as defined
below) shall be deemed to have waived their respective rights and remedies
hereunder for, and the Shareholders shall have no liability with respect to,
any such specifically identified breach, to the extent so identified by the
Shareholders and so waived by the Parent.

7.5 Deliveries by the Parent at the Closing. In accordance with
Section 2.1 above, at the Closing, simultaneously with the deliveries by the
Shareholders specified in Section 7.3 above, and in addition to any other
deliveries to be made by the Parent pursuant to any other transaction document
at the Closing, the Parent shall deliver or cause to be delivered to the Escrow
Agent the following:

7.5.1 Closing Certificates. The Parent shall deliver the
certificates required pursuant to Sections 7.2.1, 7.2.2, and 7.2.3.

<PAGE> 34

7.6 No Waiver. The consummation of the Closing shall not be deemed to
be a waiver by the Shareholders or the Company of any of their rights or
remedies hereunder for breach of any warranty, covenant or agreement herein by
the Parent irrespective of any knowledge of or investigation with respect
thereto made by or on behalf of any Shareholder or the Company; provided,
however, that if the Parent shall disclose in writing to the Shareholders or
the Company prior to the Closing a specified breach of a specifically
identified representation, warranty, covenant or agreement of the Parent
contained herein by the Parent, and requests a waiver thereof by the
Shareholders or the Company, and the Shareholders or the Company shall waive
any such specifically identified breach in writing prior to the Closing, the
Shareholders or the Company shall be deemed to have waived their rights and
remedies hereunder for, and the Parent shall have no liability or obligation to
the Shareholders or the Company with respect to, any such specifically
identified breach, to the extent so identified by the Parent and waived the
Shareholders or the Company.

7.7.1 Legal Actions or Proceedings. No legal action or
proceeding shall have been instituted after the date hereof against the Parent,
the Company or the Shareholders which is reasonably likely (i) to restrain,
prohibit or invalidate the consummation of the transactions contemplated by
this Agreement, (ii) to have a Company Material Adverse Effect or (iii) to have
a Parent Material Adverse Effect after giving effect to the consummation of the
transactions contemplated by this Agreement.

7.7.2 IPO. The Parent shall have completed the IPO on terms
described in the Registration Statement, and the net proceeds thereof shall
have been received by the Parent.

7.8 Delivery of the Exchange Consideration at Closing. On the IPO
Closing Date, the Parent shall deliver the portion of the Exchange
Consideration due to the Shareholders at that time and the Escrow Agent shall
release and deliver all documents and certificates held in escrow to the
appropriate parties.

8. SURVIVAL, INDEMNIFICATIONS

<PAGE> 35

above in this Section 8.1 are referred to herein as the "Survival Period." The
liabilities of the parties under their respective representations and
warranties shall expire as of the expiration of the applicable Survival Period
and no claim for indemnification may be made with respect to any breach of any
representation or warranty, the applicable Survival Period of which shall have
expired, except to the extent that written notice of such breach shall have
been given to the party against which such claim is asserted on or before the
date of such expiration. The covenants and agreements of the parties herein and
in other documents and instruments executed and delivered in connection with
the closing of the transactions contemplated hereby shall survive for the
maximum period permitted by law.

8.2 Indemnification.

8.2.1 Parent Indemnified Parties. Subject to the provisions
of Sections 8.1 and 8.3 hereof, the Controlling Shareholders shall indemnify,
save and hold harmless the Parent, the Company and any of their assignees
(including lenders) and all of their respective officers, directors, employees,
representatives, agents, advisors and consultants and all of their respective
heirs, legal representatives, successors and assigns (collectively the "Parent
Indemnified Parties") from and against any and all damages, liabilities,
losses, claims, deficiencies, penalties, interest, expenses, fines,
assessments, charges and costs, including reasonable attorneys' fees and court
costs (collectively "Losses") arising from, out of or in any manner connected
with or based on:

(i) any breach of any covenant of any Shareholder or the
Company or the failure by any Shareholder or the Company to perform
any obligation of any Shareholder or the Company contained herein or
in any Company Related Document or Shareholder Related Document;

(ii) any inaccuracy in or breach of any representation or
warranty of any Shareholder contained herein or in any Shareholder
Related Document;

(iii) any inaccuracy in or breach of any representation or
warranty of the Company contained herein or in any Company Related
Document;

<PAGE> 36

claims relating to such Losses. The foregoing indemnities shall not limit or
otherwise adversely affect the Shareholder Indemnified Parties' rights of
indemnity for Losses under Section 8.2.3

8.2.3 Parent Indemnity. Subject to the provisions of Sections
8.1 and 8.3, the Parent shall indemnify, save and hold harmless the Company,
the Shareholders and the Shareholders' heirs, legal representatives, successors
and assigns (the "Shareholder Indemnified Parties") from and against all Losses
arising from, out of or in any manner connected with or based on:

(i) any breach of any covenant of the Parent or the failure
by the Parent to perform any of its obligations contained herein or in
the Parent Related Documents;

(ii) any inaccuracy in or breach of any representation or
warranty of the Parent contained herein or in the Parent Related
Documents; and

The foregoing indemnities shall not limit or otherwise adversely affect the
Parent Indemnified Parties' rights of indemnity for Losses under Section 8.2.1.

8.3 Limitations. The aggregate liability of each Shareholder under
Section 8.2.1 shall not exceed the amount equal to the portion of the Exchange
Consideration payable to such Shareholder, with the Parent Common Stock being
valued at the IPO Price for such purpose. The aggregate liability of the Parent
under Section 8.2.3 shall not exceed the amount of the Exchange Consideration
paid with Parent Common Stock.

<PAGE> 37

8.4 Procedures for Indemnification.

8.4.1 Notice. The party (the "Indemnified Party") that may be
entitled to indemnity hereunder shall give prompt notice to the party obligated
to give indemnity hereunder (the "Indemnifying Party") of the assertion of any
claim, or the commencement of any suit, action or proceeding in respect of
which indemnity may be sought hereunder. Any failure on the part of any
Indemnified Party to give the notice described in this Section 8.4.1 shall
relieve the Indemnifying Party of its obligations under this Article 8 only to
the extent that such Indemnifying Party has been prejudiced by the lack of
timely and adequate notice (except that the Indemnifying Party shall not be
liable for any expenses incurred by the Indemnified Party during the period in
which the Indemnified Party failed to give such notice). Thereafter, the
Indemnified Party shall deliver to the Indemnifying Party, promptly (and in any
event within 10 days thereof) after the Indemnified Party's receipt thereof,
copies of all notices and documents (including court papers) received by the
Indemnified Party relating to such claim, action, suit or proceeding.

8.4.2 Legal Defense. The Parent shall have the obligation to
assume the defense or settlement of any third-party claim, suit, action or
proceeding in respect of which indemnity may be sought hereunder, provided that
(i) the Shareholders shall at all times have the right, at their option, to
participate fully therein, and (ii) if the Parent does not proceed diligently
to defend the third-party claim, suit, action or proceeding within 10 days
after receipt of notice of such third-party claim, suit, action or proceeding,
the Shareholders shall have the right, but not the obligation, to undertake the
defense of any such third-party claim, suit, action or proceeding.

8.4.3 Settlement. The Indemnifying Party shall not be to
indemnify the Indemnified Party with respect to any amounts paid in settlement
of any third-party suit, action, proceeding or investigation entered into
without the written consent of the Indemnifying Party; provided, however, that
if the Indemnified Party is a Parent Indemnified Party, such third-party suit,
action, proceeding or investigation may be settled without the consent of the
Indemnifying Party on 10 days' prior written notice to the Indemnifying Party
if such third-party suit, action, proceeding or investigation is then
unreasonably interfering with the business or operations of the Company and the
settlement is commercially reasonable under the circumstances; and provided
further, that if the Indemnifying Party gives 10 days' prior written notice to
the Indemnified Party of a settlement offer which the Indemnifying Party
desires to accept and to pay all Losses with respect thereto ("Settlement
Notice") and the Indemnified Party fails or refuses to consent to such
settlement within 10 days after delivery of the Settlement Notice to the
Indemnified Party, and such settlement otherwise complies with the provisions
of this Section 8.4, the Indemnifying Party shall not be liable for Losses
arising from such third-party suit, action, proceeding or investigation in
excess of the amount proposed in such settlement offer. Notwithstanding the
foregoing, no Indemnifying Party will consent to the entry of any judgment or
enter into any settlement without the consent of the Indemnified Party, if such
judgment or settlement imposes any obligation or liability upon the Indemnified
Party other than the execution, delivery or approval thereof and customary
releases of claims with respect to the subject matter thereof.

8.4.4 Cooperation. The parties shall cooperate in defending
any such third-party suit, action, proceeding or investigation, and the parties
shall have reasonable access to the books and

<PAGE> 38

records, and personnel in the possession or control of the Indemnified Party
that are pertinent to the defense. The Indemnified Party may join the
Indemnifying Party in any suit, action, claim or proceeding brought by a third
party, as to which any right of indemnity created by this Agreement would or
might apply, for the purpose of enforcing any right of the indemnity granted to
such Indemnified Party pursuant to this Agreement.

9. TERMINATION

9.1 Grounds for Termination. This Agreement may be terminated only
as provided below.

9.1.1 Prior to Closing. The parties may terminate this
Agreement at any time prior to the Closing only as provided below:

(i) Mutual Consent. Parent on the one part and the
Controlling Shareholders on the other part, may terminate
this Agreement by mutual written consent at any time prior to
the Closing;

(ii) Termination by Parent. Parent may terminate this
Agreement by giving written notice thereof to the Controlling
Shareholders at any time prior to the Closing: (a) in the
event that the Shareholders or the Company has breached any
material representation, warranty, or covenant contained in
this Agreement in any material respect, Parent has notified
Controlling Shareholders of the breach, and the breach has
continued without cure until the earlier of 20 days after the
notice of such breach or the Closing Date, whichever is
earlier, (b) if the Registration Statement for the IPO has
not been filed with the Securities and Exchange Commission on
or before December 31, 1997, or (c) if the IPO Closing Date
shall not have occurred on or before April 30, 1998, by
reason of the failure of any condition precedent under
Section 7.1 hereof (unless the failure results primarily from
Parent itself materially breaching any material
representation, warranty, or covenant contained in this
Agreement); and

(iii) Termination by the Controlling Shareholders. The
Controlling Shareholders may terminate this Agreement by
jointly giving written notice thereof to Parent at any time
prior to the Closing: (a) in the event the Parent has
breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, the
Controlling Shareholders have jointly notified Parent of the
breach, and the breach has continued without cure until the
earlier of 20 days after the notice of such breach or the
Closing Date, whichever is earlier, (b) if the Registration
Statement for the IPO has not been filed with the Securities
and Exchange

<PAGE> 39

Commission on or before December 31, 1997, or (c) if the IPO
Closing Date shall not have occurred on or before April 30,
1998, by reason of the failure of any condition precedent
under Section 7.2 hereof (unless the failure results
primarily from the Shareholders materially breaching any
material representation, warranty, or covenant contained in
this Agreement).

9.1.2 After the Closing Date. This agreement may be
terminated after the Closing only as follows:

(i) Termination of Underwriting Agreement. Upon
termination, prior to the successful completion of the IPO,
of the agreement between Parent and certain investment
banking firms (the "Underwriting Agreement") under which such
firms agree to purchase shares of Parent Common Stock from
Parent on a firm commitment basis for resale to the public
initially at the IPO Price, Parent or the Shareholders may
each terminate this Agreement by providing written notice to
the other.

(ii) Automatic Termination. This Agreement shall
terminate automatically and without action on the part of any
party hereto if the IPO is not consummated within 10 business
days after the Closing.

9.2 Effect of Termination. If this Agreement is terminated as
permitted under Section 9.1, such termination shall be without liability of any
party to any other party, except that such termination shall be without
prejudice to any and all remedies the parties may have against each other for
breach of this Agreement. Upon termination, documents delivered by one party to
another party pursuant hereto shall be promptly returned.

10. MISCELLANEOUS

To the Shareholders:

Lawrence J. Amy
Michael A. Johnson
Clarence L. Hawkins
100 Asma Boulevard, Suite 300
Lafayette, Louisiana 70508
Telecopy: (318) 233-6452

<PAGE> 40

Copy to:

Herman E. Garner, Jr.
Ottinger, Hebert & Sikes, L.L.P.
Attorneys at Law
930 Cooledge Boulevard
Lafayette, Louisiana 70503
Telecopy: (318) 232-9867

To the Parent:

BrightStar Information Technology Group, Inc.
Attn: President
10375 Richmond Avenue, Suite 1620
Houston, Texas 77042
Telecopy: (713) 361-2501

Copy to:

Robert J. Viguet, Jr.
Chamberlain, Hrdlicka, White, Williams & Martin
1200 Smith Street, Suite 1400
Houston, Texas 77002-4310
Telecopy: (713) 658-2553

or other such address as shall be furnished in writing by any such party to the
other party, and such notice shall be effective and be deemed to have been
given as of the date actually received.

10.2 Further Documents. Each party shall, at any time and from time to
time after the date hereof, upon reasonable request by another party and
without further consideration, execute and deliver such instruments or other
documents and take such further action as may be reasonably required in order
to perfect any other undertaking made by the party hereunder.

<PAGE> 41

this Agreement, the Company Related Documents and the Shareholder Related
Documents without the consent of any of the Shareholders.

10.4 Exhibits and Schedules. The Exhibits and Schedules (and any
appendices thereto) referred to in this Agreement are and shall be incorporated
herein and made a part hereof.

10.6 Entire Agreement. This Agreement constitutes the full
understanding of the parties, a complete allocation of risks between them and a
complete and exclusive statement of the terms and conditions of their agreement
relating to the subject matter hereof and supersedes any and all prior
agreements, whether written or oral, that may exist between the parties with
respect thereto. Except as otherwise specifically provided in this Agreement,
no conditions, usage of trade, course of dealing or performance, understanding
or agreement purporting to modify, vary, explain or supplement the terms or
conditions of this Agreement shall be binding unless hereafter made in writing
and signed by the party to be bound, and no modification shall be effected by
the acknowledgment or acceptance of documents containing terms or conditions at
variance with or in addition to those set forth in this Agreement. No waiver by
any party with respect to any breach or default or of any right or remedy and
no course of dealing shall be deemed to constitute a continuing waiver of any
other breach or default or of any other right or remedy, unless such waiver be
expressed in writing signed by the party to be bound. Failure of a party to
exercise any right shall not be deemed a waiver of such right or rights in the
future.

10.7 Headings. Headings as to the contents of particular articles and
sections are for convenience only and are in no way to be construed as part of
this Agreement or as a limitation of the scope of the particular articles or
sections to which they refer.

10.8 CONTROLLING LAW. THE VALIDITY, INTERPRETATION AND OF THIS
AGREEMENT AND ANY DISPUTE CONNECTED HEREWITH SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS EXCEPT TO THE EXTENT THE
APPLICABLE CORPORATE LAW MANDATORILY APPLIES WITH RESPECT THERETO.

10.9 Public Announcements. No Shareholder shall make any press
release, public announcement, or public confirmation or disclose any other
information regarding this Agreement or the contents hereof.

10.10 No Third Party Beneficiaries. Except as set forth in Article 8,
no person or entity not a party to this Agreement shall have rights under this
Agreement as a third party beneficiary or otherwise.

10.11 Amendments and Waivers. This Agreement may be amended by the
Parent and the Shareholders; provided that all amendments to this Agreement
must be by an instrument in writing

<PAGE> 42

signed on behalf of the Parent and the Shareholders. Any term or provision of
this Agreement (other than the requirements for shareholder approvals) may be
waived in writing at any time by the party which is, or whose shareholders are,
entitled to the benefits thereof.

10.13 No Personal Liability of Representatives of Parent. No recourse
for the payment of any amounts due hereunder or for any claim based on this
Agreement or the transactions contemplated hereby or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Parent in this Agreement shall be had against any incorporator, organizer,
promoter, shareholder, officer, director, employee or representative as such
(other than the Shareholders as set forth herein), past, present or future, of
the Parent or of any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by enforcement of any assessment or
penalty or otherwise; it being expressly understood that all such obligations
are those of the Parent as a separate corporate entity.

10.14 When Effective. This Agreement shall become effective only upon
the execution and delivery of one or more counterparts of this Agreement by
each of the Parent and the Shareholders.

10.15 Takeover Statutes. If any "fair price," "moratorium," "control
share acquisition" or other form of anti-takeover statute or regulation shall
become applicable to the transactions contemplated hereby, Parent and the
Company and their respective members of their Boards of Directors shall grant
such approvals and take such actions as are necessary so that the transactions
contemplated by this Agreement may be consummated as promptly as practicable on
the terms contemplated herein and otherwise act to eliminate or minimize the
effects of such statute or regulation on the transactions contemplated herein.

10.16 Number and Gender of Words. Whenever herein the singular number
is used, the same shall include the plural where appropriate and words of any
gender shall include each other gender where appropriate.

10.17 Invalid Provisions. If any provision of this Agreement is held
to be illegal, invalid, or unenforceable under present or future laws, such
provisions shall be fully severable as if such invalid or unenforceable
provisions had never comprised a part of the Agreement; and the remaining
provisions of the Agreement shall remain in full force and effect and shall not
be affected by the illegal, invalid or unenforceable provision or by its
severance from this Agreement. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be automatically as a part of this
Agreement, a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.

37
<PAGE> 43

10.20 Expenses. Each of the parties shall bear all of their own
expenses in connection with the negotiation and closing of this Agreement and
the transactions contemplated hereby; provided that the Company shall pay the
costs of any attorney engaged by the Shareholders; and provided further that
all fees, costs and expenses incurred or payable by the Company (other than
accounting and auditing fees and expenses of Deloitte and Touche LLP) in
connection with the negotiation and closing of this Agreement and the
transactions contemplated hereby and the costs of any such attorney shall be
included in current liabilities for purposes of determining Net Working
Capital.

10.22 Section 351 Plan of Exchange. Simultaneously with the execution
hereof, the parties hereto shall execute the Section 351 Plan of Exchange in
the form set forth in Exhibit 10.22 hereto.

38
<PAGE> 44
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered effective as of the date first hereinabove written.

PARENT:

BRIGHTSTAR INFORMATION
TECHNOLOGY GROUP, INC.

By: /s/ MARSHALL G. WEBB
-------------------------------
Marshall G. Webb, President

SHAREHOLDERS:

/s/ LAWRENCE T. AMY
---------------------------------
Lawrence T. Amy

/s/ MICHAEL A. JOHNSON
---------------------------------
Michael A. Johnson

/s/ CLARENCE L. HAWKINS
---------------------------------
Clarence L. Hawkins

/s/ LAWRENCE T. AMY
---------------------------------
Lawrence T. Amy,
Attorney-in-Fact for the
Shareholders listed below,
who hereby execute this
Agreement through their
duly appointed, above
named Attorney-in-Fact

Shareholders Represented by Above Attorney-in-Fact:

<TABLE>

<S> <C> <C>
Jo Ann Amy Claude Corley Dick Ledoux
Clay Ardoin Jeanne Corley Kathy McQueen
Isaac Arias Mark Daigle Billy Mouton
Mike Armentor Paul Darby Ruel Paul
Shane Bernard Michael Dewlen David Peeler
Jeanne Boast Rick Ducote Eldridge Peterman
Steve Bogan Jeannine Gee Hull Alex Phrasavath
Eric Bullara Shawn Gutierrez John Poche
Leslie Bullara Rick Hawkins Robert Romero
Bill Case Chris Hoffpauir Lee Savoy Jr.
Chad Clement Adrian Huval
Andre Clemons Shannon Landry
Bill Colvin David Lannie
Bruce Comeaux
Wayne Constantine
</TABLE>

<PAGE> 1
EXHIBIT 10.4

AGREEMENT AND PLAN OF EXCHANGE

BY AND AMONG

BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.

AND

THE HOLDERS OF THE
OUTSTANDING CAPITAL STOCK
OF
MINDWORKS PROFESSIONAL EDUCATION GROUP, INC.

DECEMBER 18, 1997
<PAGE> 2
TABLE OF CONTENTS
Page

<TABLE>
<S> <C> <C>
1. AGREEMENT FOR EXCHANGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Exchange of Shares and Other Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Exchange Consideration to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.4 Specific Amounts and Payment of Exchange Consideration . . . . . . . . . . . . . . . . . . . . . . . . 2

2. THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Delivery of Company Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2.1 Assignments of Company Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2.2 Payment In Full Satisfaction of All Rights . . . . . . . . . . . . . . . . . . . . . . . . . 3

3. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.1 Stock Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.2 Shareholder Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.3 Shareholder Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.4 Organization, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.5 Capitalization of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.6 Company Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.7 Company Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.8 Intellectual Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.9 Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.10 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.11 Other Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.12 Investment Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.13 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.14 Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.15 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.16 Full Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.17 Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.18 Company Contracts, Company Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.19 Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.20 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.21 Subsidiaries; Predecessors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.22 Affiliate Relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.23 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.24 Company Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.25 Restricted Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

4. REPRESENTATIONS AND WARRANTIES
OF THE PARENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>

i
<PAGE> 3
<TABLE>
<S> <C> <C>
4.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.2 Capitalization of the Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.3 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.4 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.5 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.6 Investment Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.7 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.8 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.9 Full Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.10 Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.11 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.12 Parent Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

5. CERTAIN COVENANTS AND AGREEMENTS OF SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.1 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.2 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.3 Filings, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.4 Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.5 Satisfaction of Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.6 Capital Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.7 Exclusivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.8 Agreements of Shareholders to be Effective Upon Closing . . . . . . . . . . . . . . . . . . . . . . 20
5.8.1 Covenant Not to Compete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.8.2 Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.9 Shareholder Indebtedness and Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

6. CERTAIN AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.1 Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.2 Company Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.3 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.4 Tax-Free Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.5 Certain Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.5.1 Tax Periods Ending on or Before the IPO Closing Date . . . . . . . . . . . . . . . . . . . 22
6.5.2 Cooperation on Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.5.3 Tax Sharing Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.6 Sale of Motor Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.7 Certain Officer and Director Positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.8 Release of Certain Assets and Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.9 Parent Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.10 Parent Stock Option Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

7. CONDITIONS PRECEDENT; CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.1 Conditions Precedent to the Obligations of the Parent . . . . . . . . . . . . . . . . . . . . . . . 24
7.1.1 Accuracy of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . 24
7.1.2 Performance of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.1.3 Legal Actions or Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>

ii
<PAGE> 4
<TABLE>
<S> <C> <C>
7.1.4 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.1.5 Closing Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.1.6 No Loss or Damage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.1.7 Licenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.1.8 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.1.9 Certain Corporate Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.2 Conditions Precedent to the Obligations of the Shareholders and the Company . . . . . . . . . . . . 25
7.2.1 Accuracy of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . 25
7.2.2 Performance of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.2.3 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.2.4 Closing Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.3 Deliveries by the Shareholders at the Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.3.1 Closing Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.3.2 Stock Transfer Restriction Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.3.3 Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.3.4 Opinion of Counsel for the Shareholders and the Company . . . . . . . . . . . . . . . . . . 26
7.3.5 Documents, Stock Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.4 No Waiver by Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.5 Deliveries by the Parent at the Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.5.1 Closing Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.5.2 Opinion of Counsel for the Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.6 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.7 Conditions Precedent to Completion of the Closing . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.7.1 Legal Actions or Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.7.2 IPO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.8 Delivery of Exchange Consideration on the IPO Closing Date . . . . . . . . . . . . . . . . 28

8. SURVIVAL, INDEMNIFICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.2.1 Parent Indemnified Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.2.2 Minimum Losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.2.3 Parent Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.3 Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.4 Procedures for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.4.1 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.4.2 Legal Defense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.4.3 Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.4.4 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.5 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.1 Grounds for Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.1.1 Prior to Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.1.2 After the Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
</TABLE>

iii
<PAGE> 5
<TABLE>
<S> <C> <C>
9.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.1 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.2 Further Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.3 Assignability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.4 Exhibits and Schedules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.5 Sections and Articles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.6 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.8 CONTROLLING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.9 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.10 No Third Party Beneficiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.11 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.12 No Employee Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.13 No Personal Liability of Representatives of Parent . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.14 When Effective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.15 Takeover Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.16 Number and Gender of Words . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.17 Invalid Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.18 Multiple Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.19 No Rule of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.20 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.21 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.22 Section 351 Plan of Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
</TABLE>

Exhibit 1.1 List of Shareholders
Exhibit 1.3(viii) Assumption of Notes Payable
Exhibit 1.4 Exchange Consideration for Each Shareholder
Exhibit 2.1 Escrow Agreement
Exhibit 2.2 Letter of Transmittal from Shareholders
Exhibit 5.6 Budgeted Capital Expenditures of Company
Exhibit 6.8 Release of Certain Assets
Exhibit 7.3.2 Stock Transfer Restriction Agreement
Exhibit 7.3.3 Certain Employees of the Company
Exhibit 7.3.3A Employment Agreement
Exhibit 7.3.4 Opinion of Counsel for the Shareholders and the
Company
Exhibit 7.5.2 Opinion of Counsel for the Parent
Exhibit 10.22 Section 351 Plan of Exchange

iv
<PAGE> 6
AGREEMENT AND PLAN OF EXCHANGE

This AGREEMENT AND PLAN OF EXCHANGE (this "Agreement") made effective
as of December 18, 1997, by and among BRIGHTSTAR INFORMATION TECHNOLOGY GROUP,
INC., a Delaware corporation (the "Parent"), AND THE UNDERSIGNED HOLDERS (the
"Shareholders") OF ALL OF THE OUTSTANDING CAPITAL STOCK OF MINDWORKS
PROFESSIONAL EDUCATION GROUP, INC., an Arizona corporation (the "Company").

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

1. AGREEMENT FOR EXCHANGE

1.2 Exchange Consideration to Shareholders. The Exchange
Consideration to be delivered to the Shareholders by the Parent shall be
$1,500,000 in total value of cash and shares of Parent Common Stock at a per
share value equal to the IPO Price (as defined below), reduced by: (i)
Long-Term Debt (as defined below) of the Company at the Closing Date; and (ii)
the amount of any reduction in the Company's Net Working Capital (as defined
below) from September 30, 1997 to the Closing Balance Sheet Date (as defined
below).

1.3 Certain Definitions. The following terms shall have the
meaning ascribed below for purposes of this Agreement:

(i) "Closing Balance Sheet Date" means the end of the
most recent monthly accounting period of the Company preceding the
Closing Date.

<PAGE> 7
(ii) "Current Assets" means the current assets of the
Company determined as of the Closing Balance Sheet Date in accordance
with GAAP.

(iv) "GAAP" means U.S. generally accepted accounting
principles consistently applied.

(vi) "IPO Closing Date" means the date that the Parent
receives funds in consideration for the sale of its securities in the
IPO.

(vii) "IPO Price" means the initial price per share to the
public for shares of Parent Common Stock in IPO.

(viii) "Long-Term Debt" means all long-term liabilities of
the Company as of Closing Date, including capitalized lease
obligations, as applicable to a corporation taxable under Subchapter C
of the Code, as determined under GAAP, plus current portions of such
long-term liabilities and pre-payment penalties as of the Closing
Date, but excluding the debt described on Exhibit 1.3(viii) hereto.

(ix) "Net Working Capital" means the Current Assets of the
Company minus the Current Liabilities of the Company as of the Closing
Balance Sheet Date, all as determined under GAAP.

1.4 Specific Amounts and Payment of Exchange Consideration.
Parent shall deliver payment of the Exchange Consideration by delivery of cash
and Parent Common Stock to the Shareholders in the respective amounts set forth
by the name of each Shareholder on Exhibit 1.4 hereto on the IPO Closing Date.
Such shares of Parent Common Stock shall have a per share value equal to the
IPO Price. No fractional shares of parent Common Stock will be issued pursuant
to this Section 1.4, and if any Shareholder would be entitled to receive a
fractional share of Parent Common

2
<PAGE> 8
Stock but for this paragraph, that Shareholder shall receive a cash payment for
and in lieu thereof in the amount (rounded upward to the nearest whole cent)
equal to that Shareholder's fractional interest in a share of Parent Common
Stock multiplied by the IPO Price.

2. THE CLOSING

3. REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDERS

Each Shareholder separately, and with respect only to his matters and
circumstances, hereby represents and warrants to the Parent that the following
statements in Sections 3.1 through 3.3 and 3.25 are true and correct; and the
Shareholders, jointly and severally, hereby represent and warrant to the Parent
that the following statements in Sections 3.4 through 3.24 are true and
correct:

3.1 Stock Ownership. Exhibit 1.1 accurately sets forth the names
of each Shareholder, the number of shares of Company Common Stock owned by each
Shareholder, and the percentage

3
<PAGE> 9
of total outstanding shares of Company Common Stock owned by each Shareholder.
Each Shareholder owns, beneficially and of record, with full power to vote,
transfer and assign the number of shares of Company Common Stock set forth
beside such Shareholder's name on Exhibit 1.1 and such shares are so held by
the Shareholders free and clear of all liens, encumbrances and adverse claims
whatsoever.

3.4 Organization, Etc. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Arizona and is duly qualified or licensed as a foreign corporation authorized
to do business in all other states in which any of its assets or properties may
be situated or where the business of the Company is conducted except where the
failure to obtain such qualification or license will not have a Company
Material Adverse Effect (as defined in Section 3.24 below). Except as
disclosed on Schedule 3.4 of the Disclosure Schedule previously provided to the
Parent by the Company ("Disclosure Schedule"), the Company does not own, of
record or beneficially, directly or indirectly, any of the outstanding capital
stock, voting interests or ownership interests in any corporation, partnership,
joint venture, limited liability company, trust, limited partnership or other
entity.

3.5 Capitalization of the Company. The total authorized capital
stock of the Company is 10,000,000 shares of Company Common Stock, $.01 par
value, of which 63,158 shares are issued and outstanding and held of record and
beneficially by the Shareholders as set forth on Exhibit 1.1 hereto and none of
which are held in the treasury of the Company. Each issued and outstanding
share

4
<PAGE> 10
of Company Common Stock is duly and validly authorized and issued, fully paid
and non-assessable, and was not issued in violation of the preemptive rights of
any past or present shareholder. Except for the shares of Company Common Stock
owned beneficially and of record by the Shareholders as set forth on Exhibit
1.1 hereto, there are no outstanding shares of capital stock, convertible or
exchangeable securities, subscriptions, calls, options, warrants, rights or
other agreements or commitments of any character relating to the issuance or
sale of any shares of capital stock of, or other equity ownership interest in,
the Company. The Company has no liability, contingent or otherwise, to any
person or entity in connection with preemptive or contractual subscription
rights or the offer, sale, purchase, surrender or cancellation of any shares of
capital stock, warrants, options or other equity or voting interests or
securities of the Company.

3.8 Intellectual Property. The Company owns or is licensed to
use, and has sufficient rights to use, all trade names, trademarks, logos,
service marks, copyrights, patents, writings, literary works, licenses, mask
works, trade secrets, patented ideas, schematics, sketches, drawings, designs,
notebooks, reports, memoranda, drafts, worksheets, formulas, processes,
inventions, procedures, knowhow, computer software programs, computer
technology, databases, operating systems, source and object codes, flowcharts,
algorithms, coding sheets, routines, sub-routines, compilers, assemblers,
design concepts, plans, documentation, manuals, production processes, marketing
techniques and arrangements, mailing lists, purchasing information, pricing
policies, customer and supplier lists and data and other intellectual property
(collectively "Intellectual Property") necessary for the operation of the
Company's business as presently conducted and the marketing, sale, use and
application of the services and products sold by the Company. Each item of
such Intellectual Property will be owned or licensed to be used and available
for use by the Company after the IPO Closing Date on the same terms and
conditions as prior to Closing. None of the ownership, access to, or use of
the Intellectual Property by the Company infringes on the rights of any other
party and the Company's rights to the Intellectual Property are valid and
enforceable. No person has interfered with, infringed upon, misappropriated or
otherwise come into conflict with the Intellectual Property rights of the
Company. The Company has not interfered with, infringed upon, misappropriated
or otherwise come into conflict with any intellectual property rights of
others, and the Company has not received any charge, complaint, demand or
notice alleging any such interference, infringement, misappropriation or
conflict.

5
<PAGE> 11
3.9 Title. Except as set forth in Schedule 3.9 of the Disclosure
Schedule, the Company owns outright, and has full legal and beneficial title to
all of its assets free and clear of all liens, pledges, mortgages, security
interests, conditional sales contracts and encumbrances, including good and
marketable title to all of its real property interests, free and clear of any
mortgages, security agreements, liens or encumbrances.

3.10 Defaults. Neither the Company nor any Company Plan (as
defined below) is in default under or in violation of, and the execution and
delivery of the Agreement, the Company Related Documents and the Shareholder
Related Documents and the consummation of the transactions contemplated hereby
and thereby will not result in a default by the Company or any Company Plan
under or a violation of (i) any mortgage, indenture, charter or bylaw
provision, provision of any Company Plan, contract, agreement, lease,
commitment or other instrument of any kind to which the Company or any Company
Plan is a party or by which the Company or any Company Plan or any of its
properties or assets may be bound or affected or (ii) any law, rule or
regulation applicable to the Company or any Company Plan or any court
injunction, order or decree, or any valid and enforceable order of any
governmental agency in effect having jurisdiction over the Company or any
Company Plan, which default or violation could adversely affect the ability of
the Company to consummate the transactions contemplated hereby or will have a
Company Material Adverse Effect.

3.11 Other Disclosures. The following disclosures pertaining to
the Company are set forth in Schedule 3.11 of the Disclosure Schedule. Such
disclosures are complete and accurate.

(ii) Schedule 3.11(ii) is a list of the names, titles,
start dates and current annual salary and wage rates of all salaried and hourly
regular full-time and part-time employees of the Company as of the date hereof,
together with a summary of the bonuses, additional compensation and other like
benefits and any decrease in compensation, if any, paid or payable to each
employee during the twelve months prior to the date hereof, and the last date
on which each employee received (a) any change in annual salary or hourly wage
and (b) any bonus or additional compensation or benefits.

6
<PAGE> 12
(v) Schedule 3.11(v) is a list of raw materials or other
property located at any property owned or leased as lessee by the Company, that
has been consigned to the Company, or is otherwise owned by a third party, and
has a market value exceeding $5,000.

(viii) Schedule 3.11(viii) is a list and summary description
of, or copies of, all governmental licenses and permits of the Company.

7
<PAGE> 13
thereof, (b) containing provisions calling for the sale or purchase of raw
materials, products or services at prices that vary from the market prices of
such raw materials, products or services generally prevailing in customary
third party markets, (c) which include "take or pay", "meet or release", "most
favored nations" or similar pricing or delivery arrangements, (d) requiring
the Company to indemnify or hold harmless any other person or entity, (e)
evidencing any warranty obligation of the Company with respect to goods,
services or products sold or leased by it, (other than warranties given in the
ordinary course of business), (f) imposing on the Company any confidentiality,
non-disclosure or non-compete obligation or containing any acceleration or
termination provisions effective upon a change of control of the Company, or
a merger of the Company into another entity, or (g) involving collective
bargaining or agreements with any labor union or employee group.

(xiii) Schedule 3.11(xiii) is a list of all obligations,
contingent or otherwise, covering any of the Company's employees under any
employment or consulting agreement or under any executive or employee's
compensation plan, agreement or arrangement including, without limitation, any
"employee welfare benefit plan" as defined in Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), "employee
pension benefit plan" as defined in Section 3(2) of ERISA or any other
pension, retirement, profit sharing, stock option, stock purchase, bonus,
fringe benefit, incentive, vacation, savings plan, health, welfare or other
employee or former employee benefit plan, program, policy or arrangement
(collectively referred to as "Company Plans").

3.12 Investment Company. The Company is not an "investment
company" or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, or a "holding
company", a "subsidiary company" of a "holding company" or an "affiliate" of
a "holding company" or a "public utility" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.

3.13 Financial Statements. The Shareholders have listed in
Schedule 3.13 of the Disclosure Schedule and have delivered to the Parent
copies of the following audited financial statements of the Company: Balance
Sheets as of December 31, 1996 and June 30, 1997, and Statements of Income,
Shareholders Equity and Cash Flows for the year ended December 31, 1996 and
for the six month period ended June 30, 1997; plus the unaudited Balance Sheet
as of September 30, 1997 (herein referred to as the "Balance Sheet Date") and
Statements of Income and Cash Flows for the nine months ended September 30,
1996 and 1997. Such financial statements are collectively referred to herein
as "Company Financial Statements". The Company Financial Statements, except
as described in the notes thereto, have been prepared from the Company's
records in accordance with GAAP. The Company Financial Statements present
accurately and fairly in all material respects the financial condition of the
Company as of the dates indicated thereon, and present accurately and fairly
in all respects the results of the Company's operations for the periods
indicated thereon. The Company Financial Statements do not omit any
liabilities or obligations of a type which should be included in

<PAGE> 14
or reflected in such financial statements in accordance with GAAP, whether
related to tax or non-tax matters, accrued or contingent, due or not yet due,
liquidated or unliquidated, or otherwise, except as and to the extent disclosed
or reflected in the Company Financial Statements, or in Schedule 3.14 of the
Disclosure Schedule.

3.15 Tax Matters.

(i) All federal, state, local and foreign tax returns
required to be filed by the Company (and, if applicable, its subsidiaries)
prior to the date hereof have been filed on a timely basis with the appropriate
governmental authorities in all jurisdictions in which such tax returns are
required to be filed, and all such returns are correct and complete. The
Shareholders have delivered to Parent, and Schedule 3.15(i) of the Disclosure
Schedule includes, correct and complete copies of all federal, state, local and
foreign income and franchise tax returns filed by, examination reports received
by and statements of deficiencies asserted against or agreed to by the Company
(and, if applicable, its subsidiaries) since January 1, 1991. The Company
(including any of its subsidiaries) is not currently the subject of any audit,
examination or any similar investigation by any governmental authority.
Schedule 3.15(i) of the Disclosure Schedule sets forth all audits, examinations
or similar investigations of the Company (including any of its subsidiaries) by
any governmental authority.

(iv) The Company (including any of its subsidiaries) is
not a party to any Tax allocation or sharing agreement. The Company (including
any of its subsidiaries): (A) has not

9
<PAGE> 15
been a member of an affiliated group filing a consolidated federal income tax
return (other than a group the common parent of which was the Company); and (B)
does not have any liability for the taxes of any person (other than the Company
or any of its subsidiaries) under Treas. Reg. Section 1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee or successor, by
contract, or otherwise.

10
<PAGE> 16
Effect, and there is no existing condition or state of facts which would give
rise to a violation thereof or a liability or default thereunder, except where
a violation, liability or default will not have a Company Material Adverse
Effect. The term "Environmental Law" means any law, rule, regulation,
approval, decision, decree, ordinance, by-law having the force of law or order
of any federal, state or local executive, legislative, judicial, regulatory or
administrative agency, board or authority, which relate to (i) noise; (ii)
pollution or protection of the air, surface water, ground water or land; (iii)
solid, gaseous or liquid waste generation, treatment, storage, use, processing,
disposal or transportation; (iv) exposure to hazardous or toxic substances; (v)
the safety or health of employees or (vi) regulation of the manufacture,
processing, distribution in commerce, use, or storage of chemical substances.

3.18 Company Contracts, Company Plans. Neither the Company nor any
other party thereto is in default under or in violation of any Company Contract
or Company Plan.

11
<PAGE> 17
event or condition of any character materially adversely affecting the business
of future prospects of the Company; (i) any creation, assumption or permitting
to exist any mortgage, pledge or other lien or encumbrance upon any assets or
properties whether now owned or hereafter acquired, except as set forth in
Schedules 3.11(ix), 3.11(xi) and 3.14 of the Disclosure Schedule; (j) any sale
or transfer, or any agreement to sell or transfer, any material assets,
properties or rights of the Company to any person, including, without
limitation, the Shareholders and their respective affiliates; (k) any
cancellation, or agreement to cancel, any indebtedness or other obligation
owing to the Company, including, without limitation, any indebtedness or
obligation of the Shareholders or any of their affiliates; (1) any plan,
agreement or arrangement granting any preferential rights to purchase or
acquire any interest in any of the assets, properties or rights of the Company
or requiring consent of any party to the transfer and assignment of any such
assets, properties or rights; (m) any purchase or acquisition, or agreement,
plan or arrangement to purchase or acquire, any property, rights or assets of
the Company; (n) any negotiation for the acquisition of any business or
start-up of any new business; (o) any merger or consolidation or agreement to
merge or consolidate with or into any other corporation (except the
transactions contemplated by this Agreement); (p) any waiver of any material
rights or claims of the Company; (q) any breach, amendment or termination of
any material contract, agreement, license, permit, permit application or other
right to which the Company is a party; (r) any discharge, satisfaction,
compromise or settlement of any claim, lien, charge or encumbrance or payment
of any obligation or liability, contingent or otherwise, other than current
liabilities as of the Balance Sheet Date, current liabilities incurred since
the Balance Sheet Date in the ordinary course of business and prepayments of
obligations in accordance with normal and customary past practices; or (s) any
transaction by the Company outside the ordinary course of its business or
prohibited hereunder.

3.22 Affiliate Relationships.

12
<PAGE> 18
Company has with any other corporation, partnership, firm, association or
business organization, entity or enterprise which is a competitor, potential
competitor (based upon the nature of such potential competitor's business as of
the Closing Date), supplier or customer of the Company.

3.25 Restricted Securities.

(3) Each Shareholder is able to bear the economic risks
of its investment in the Parent Common Stock, including the risk of a
loss of the value of the Parent Common Stock.

13
<PAGE> 19
(5) Each Shareholder has received a Confidential Private
Placement Memorandum ("PPM") concerning the Parent and an investment
in shares of Parent Common Stock, and such Shareholder and its
representatives have been given such access to all documents, books
and additional information concerning Parent which they have requested
regarding Parent.

4. REPRESENTATIONS AND WARRANTIES
OF THE PARENT

The Parent hereby represents and warrants to the Shareholders as
follows:

14
<PAGE> 20
the PPM and except for the filing of the Parent's registration statement with
respect to the IPO ("Registration Statement") with the U.S. Securities and
Exchange Commission ("SEC") pursuant to the Securities Act and the SEC's
declaration of effectiveness of such Registration Statement and the completion
of all necessary filings required under, and the obtaining of all necessary
consents and approvals required pursuant to, state securities or "blue sky"
laws in connection with the IPO.

15
<PAGE> 21
or administrative agency decrees, awards and orders and all such licenses,
permits, qualifications and other documentation, except where the failure to
comply will not have a Parent Material Adverse Effect, and there is no existing
condition or state of facts that would give rise to a violation thereof or a
liability or default thereunder that is reasonably likely to have a Parent
Material Adverse Effect.

5. CERTAIN COVENANTS AND AGREEMENTS OF SHAREHOLDERS

The Shareholders further jointly and severally agree with the Parent
that from the date hereof through the Closing Date:

(ii) maintain its properties, facilities, equipment and
other assets, including those held under leases, in good working
order, condition and repair, ordinary wear and tear excepted;

16
<PAGE> 22
(iii) perform all of its obligations under all debt and
lease instruments and other agreements (including the Company
Contracts) relating to or affecting its business, assets, properties,
equipment and rights, and pay all vendors, suppliers, and other third
parties (including mechanics and materialmen) as and when their bills
are due and pay in full all payroll obligations when due;

(iv) keep in full force and effect its present insurance
policies or other comparable insurance coverage;

(vi) refrain from effecting any change in the capital
structure of the Company and from incurring any expenditures outside
the ordinary course of business;

(vii) refrain from starting or acquiring any new
businesses;

(ix) refrain from declaring or paying any bonuses, fees,
extraordinary commissions, dividends or any other distributions to the
Shareholders, directors, management, sales agents, employees or other
personnel inconsistent with past practice, provided that the parties
agree that the Company may make cash distributions to each Shareholder
in the amount of the estimated tax liability of each such Shareholder
based on taxable income flowing through the Company to each
Shareholder for 1997 as a result of being taxed under Subchapter S of
the Code;

(x) promptly notify the Parent of the receipt by it or
any Shareholder of any notice or claim, written or oral, of (a) default
or breach by the Company under, or of any termination (other than at
the end of the stated term thereof) or cancellation, or threat of
termination (other than at end of the stated term thereof) of
cancellation, of any Company Contract, (b) any loss of, damage to or
disposition of, any of the properties, assets or the products of the
Company of a value of $10,000 or more, singly or in the aggregate
(other than the sale or use of inventories in the ordinary course of
business), (c) any claim or litigation threatened or instituted, or
any other adverse event or occurrence involving or affecting the
Company or any of its assets, properties, operations, businesses or
employees, and (d) any proposal made by any third party received by
the Company or of which any Shareholder obtains knowledge in respect
of any sale or other disposition, direct or indirect, of the assets
(other than the sale or use of inventories in the ordinary course of
business), businesses or outstanding capital stock or other ownership
or voting interests of the Company;

17
<PAGE> 23
(xi) comply with and cause to be complied with all
applicable laws, rules, regulations and orders of all federal, state
and local governments or governmental agencies affecting or relating
to the Company or its assets, properties, operations, businesses or
employees except where the failure to comply will not have a Company
Material Adverse Effect;

(xiv) refrain from making any change in any accounting
principle, classification, policy or practice;

(xv) refrain from effecting any amendment to the
certificate or articles of incorporation or bylaws or other governing
instruments of the Company;

(xvii) maintain and comply with its debt and lease
agreements and instruments (except those that expire on their stated
maturity or lease termination dates); refrain from entering into any
amendment thereto or new debt or lease agreements or instruments;
refrain from increasing any indebtedness for borrowed money or issuing
or selling any debt securities or letters of credit; and refrain from
making any payments of any indebtedness or interest or other amounts
thereon or with respect thereto (other than regularly scheduled
principal and interest payments and payments of principal, interest
and fees under revolving lines of credit);

18
<PAGE> 24
vary from the market prices of such raw materials, products or
services generally prevailing in customary third-party markets, (c)
which include "take or pay", "meet or release", "most favored nations"
or similar pricing or delivery arrangements, (d) with any officer,
director, shareholder or affiliate of the Company, (e) requiring the
Company to indemnify or hold harmless any other person or entity
(other than consulting or service contracts with customers entered in
the ordinary course of business), (f) evidencing any warranty
obligation of the Company with respect to goods, services or products
sold or leased by it (other than warranties given in the normal course
of business containing substantially the same terms as those presently
in effect), or (g) imposing on the Company any confidentiality,
non-disclosure or non-compete obligation (other than consulting or
service contracts with customers entered in the ordinary course of
business).

5.3 Filings, Etc. Each Shareholder will make, and cause the
Company to make, all filings which are required to be made by them to lawfully
consummate the transactions contemplated hereby.

5.4 Access. The Shareholders will, and will cause the Company to,
cooperate fully in permitting the Parent and the Parent's lenders, underwriters
and placement agents and their respective representatives, advisers,
consultants, appraisers, auditors, engineers and other experts to make a full
investigation of the properties, operations and financial condition of the
Company and will afford the Parent and the Parent's lenders, underwriters and
placement agents and their respective representatives, advisers, consultants,
appraisers, auditors, engineers and other experts reasonable access to the
offices, buildings, real properties, machinery and equipment, inventory and
supplies, records, files, books of account, tax returns, agreements and
commitments and personnel of the Company. Without limitation of the foregoing,
the Shareholders and the Company shall provide the Parent with such reasonably
available financial information (and schedules with respect thereto) with
respect to the Company as the Parent may reasonably request and will cooperate
with and assist representatives of the Parent in the preparation of such
financial information (and any opinions or reports with respect thereto) with
respect to the Company as the Parent may reasonably request. Notwithstanding
the above, the Parent and its respective lenders, underwriters and placement
agents and their respective representatives, advisers, consultants, appraisers,
engineers and other experts shall incur no liability with respect to control,
operation or management (or alleged control, operation or management) of the
Company as a result of the covenants in this Section 5.4.

19
<PAGE> 25
limit the rights of the Company to terminate this Agreement as provided in
Article 9 of this Agreement.

5.8.1 Covenant Not to Compete.

(i) For the consideration specified in this Agreement and
in recognition that the covenants by the Shareholders in this Section
are a material inducement to the Parent to enter into and perform this
Agreement, (a) Jason C. Helmick, who the Shareholders hereby represent
is not an employee of the Company on the date hereof, agrees that
during the period from the date hereof through June 30, 1998, he will
comply with the provisions of Section 5.8.1(ii) below, and (b) each
Shareholder who is an employee of the Company agrees to comply with
the provisions of Section 5.8.1(ii) below until the date which is the
later to occur of two years after the Closing Date or one year from
and after the date of termination of such Shareholder's employment by
the Company regardless of the reason for such termination.

20
<PAGE> 26
the Company and an Assisted Affiliate, including any business that
involves the furnishing of information technology services that are
the type of services furnished by the Company, either for himself, as
a member or equity owner of a partnership or limited liability
company, or as a shareholder (other than as a shareholder of less than
one percent (1%) of the issued and outstanding stock of a
publicly-held company whose gross revenues exceed $100 million),
investor, owner, officer, or director of a company or other entity, or
as an employee, agent, trustee, manager, associate or consultant of
any person, partnership, corporation or other entity.

(iv) Each Shareholder agrees that the remedy at law for
any breach by such Shareholder of this Section 5.8.1 will be
inadequate and that the Parent shall be entitled to injunctive relief.

5.8.2 Release. Effective as of the Closing Date, the
Shareholders do hereby (i) release, acquit and forever discharge the Company
from any and all liabilities, obligations, claims, demands, actions or causes
of action arising from or relating to any event, occurrence, act, omission or
condition occurring or existing on or prior to the Closing Date, including,
without limitation, any claim for indemnity or contribution from the Company in
connection with the obligations or liabilities of the Shareholders hereunder,
except for salary and benefits payable to a Shareholder as an employee in the
ordinary course of business; (ii) waive all breaches, defaults or violations of
any agreement other than this Agreement applicable to the Company Common Stock
and agree that any and all such agreements are terminated as of the Closing
Date, and (iii) waive any and all preemptive or other rights to acquire any
shares of capital stock of the Company and release any and all claims arising
in connection with any prior default, violation or failure to comply with or
satisfy any such preemptive or other rights.

5.9 Shareholder Indebtedness and Receivables. On or prior to
Closing, the Shareholders shall cause to be paid in full in cash all accounts
payable, notes payable and advances payable by any Shareholder to the Company
and the Company shall pay in full in cash all accounts payable, notes payable
and advances payable by the Company to any Shareholder, except that the
$150,000 debt to George M. Siegel shall not be paid prior to Closing and will
be paid in the future as agreed to by the Parent and Mr. Siegel.

21
<PAGE> 27
6. CERTAIN AGREEMENTS

The parties hereto further agree as follows:

6.5 Certain Tax Matters.

22
<PAGE> 28
or the Company (including any of its subsidiaries) of such Taxes to the extent
such Taxes are not reflected in the reserve for Tax liability (other than any
reserve for deferred Taxes established to reflect timing differences between
book and Tax income) shown on the face of the Company Financial Statements.

6.5.2 Cooperation on Tax Matters.

(ii) Parent and Shareholders further agree, upon request,
to use their best efforts to obtain any certificate or other document
from any governmental authority or any other person as may be
necessary to mitigate, reduce or eliminate any Taxes that could be
imposed (including, but not limited to, with respect to the
transactions contemplated hereby).

(iii) The Company and each of the Shareholders shall
cooperate fully in the preparation and delivery to Parent and its
counsel of tax certificates, representations, or similar documents
that may be necessary or appropriate in connection with the
preparation of tax opinions or other items regarding the tax matters
impacting this Agreement, the Parent, or the Company that are
prepared with respect to the IPO.

6.6 Sale of Motor Vehicles. The Shareholders agree to cause the
Company to effect the sale of any Company- owned motor vehicle primarily used
by an executive management employee to such employee prior to the Closing at a
price equal to the depreciated book value of the vehicle as included in the
Company financial statements at the time of purchase.

23
<PAGE> 29
6.7 Certain Officer and Director Positions. The parties hereto
shall take such steps as are appropriate to cause James E. Gardner to continue
as President and Chief Executive Officer of the Company in accordance with the
terms of an Employment Agreement between the Company and Mr. Gardner pursuant
to Section 7.3.3. hereof. Parent shall use its commercially reasonable efforts
to influence the shareholders of Parent to elect Mr. Siegel to, or retain him
on, the Parent's Board of Directors after the date hereof.

6.8 Release of Certain Assets and Guaranties. As soon as
reasonably possible after the Closing, Parent shall take such steps as are
necessary to release the assets of the Shareholders or the personal guaranties
of the Shareholders as described on Exhibit 6.8 hereto from any security
interest granted in such assets or any guaranty to secure the performance of
obligations of the Company as such security interests, guaranties and
obligations are described on Exhibit 6.8 hereto; and until such releases are
acquired, Parent shall indemnify the Shareholder from any loss, payment, cost
or expense incurred by the Shareholders with respect to paying any obligations
to the secured party or guaranteed party based on such security interests or
guaranties.

7. CONDITIONS PRECEDENT; CLOSING DELIVERIES

24
<PAGE> 30
7.1.3 Legal Actions or Proceedings. No legal action or
proceeding shall have been instituted after the date hereof against the Company
or the Shareholders which is reasonably likely (i) to restrain, prohibit or
invalidate the consummation of the transactions contemplated by this Agreement,
(ii) to have a Company Material Adverse Effect or (iii) to have a Parent
Material Adverse Effect after giving effect to the consummation of the
transactions contemplated by this Agreement, and the Shareholders shall each
have delivered to the Parent a certificate to that effect.

7.1.5 Closing Deliveries. All documents required to be
executed or delivered at Closing by the Shareholders pursuant to Section 7.3 of
this Agreement shall have been so executed and delivered.

7.2 Conditions Precedent to the Obligations of the Shareholders
and the Company. The obligations of the Shareholders to effect the Closing
under this Agreement are subject to the satisfaction of each of the following
conditions, unless waived by the Shareholders in writing. Provisions in this
Section 7.2 requiring the delivery of documents and certificates to the
Shareholders shall be deemed satisfied by the delivery of such materials to the
Escrow Agent for later release to Shareholders upon satisfaction of the
conditions contained in the Escrow Agreement.

25
<PAGE> 31
specifically made as of another date, and the Parent shall have delivered to
the Shareholders a certificate to that effect.

7.2.4 Closing Deliveries. All documents required to be
executed or delivered at Closing by the Parent pursuant to Section 7.5 of this
Agreement shall have been so executed and delivered.

7.3 Deliveries by the Shareholders at the Closing. In accordance
with Section 2.1 above, at the Closing, simultaneously with the deliveries by
the Parent specified in Section 7.5 below, and in addition to any deliveries
required to be made by the Shareholders pursuant to any other transaction
document at the Closing, the Shareholders shall deliver or cause to be
delivered to the Escrow Agent the following:

7.3.1 Closing Certificates. The Shareholders shall deliver
the certificates required pursuant to Sections 7.1.1, 7.1.2, 7.1.3 and 7.1.4.

7.3.2 Stock Transfer Restriction Agreement. Each
Shareholder shall execute and deliver a Stock Transfer Restriction Agreement on
the Closing Date substantially in the form set forth in Exhibit 7.3.2.

7.3.4 Opinion of Counsel for the Shareholders and the
Company. The Shareholders shall deliver the favorable opinion of Pitts &
Pitts, counsel to the Shareholders and the Company, dated as of the Closing
Date, substantially in the form and to the effect set forth in Exhibit 7.3.4
attached hereto.

26
<PAGE> 32
properly executed and completed Letters of Transmittal shall be delivered by
the Shareholders to the Escrow Agent.

7.5.1 Closing Certificates. The Parent shall deliver the
certificates required pursuant to Sections 7.2.1, 7.2.2, and 7.2.3.

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<PAGE> 33
7.7.1 Legal Actions or Proceedings. No legal action or
proceeding shall have been instituted after the date hereof against the Company
or the Shareholders which is reasonably likely (i) to restrain, prohibit or
invalidate the consummation of the transactions contemplated by this Agreement,
(ii) to have a Company Material Adverse Effect or (iii) to have a Parent
Material Adverse Effect after giving effect to the consummation of the
transactions contemplated by this Agreement.

7.7.2 IPO. The Parent shall have completed the IPO on
terms described in the Registration Statement, and the net proceeds thereof
shall have been received by the Parent.

7.8 Delivery of Exchange Consideration on the IPO Closing Date.
On the IPO Closing Date, the Parent shall deliver the Exchange Consideration to
the Shareholders, and the Escrow Agent shall release and deliver all documents
and certificates held in escrow to the appropriate parties.

8. SURVIVAL, INDEMNIFICATIONS

8.2 Indemnification.

8.2.1 Parent Indemnified Parties. Subject to the
provisions of Sections 8.1 and 8.3 hereof, the Shareholders, jointly and
severally, shall indemnify, save and hold harmless the Parent, the Company and
any of their assignees (including lenders) and all of their respective
officers, directors, employees, representatives, agents, advisors and
consultants and all of their respective heirs, legal representatives,
successors and assigns (collectively the "Parent Indemnified Parties") from and
against any and all damages, liabilities, losses, claims, deficiencies,
penalties, interest, expenses, fines, assessments, charges and costs, including
reasonable attorneys' fees and court costs (collectively "Losses") arising
from, out of or in any manner connected with or based on:

28
<PAGE> 34
(i) any breach of any covenant of any Shareholder or the
Company or the failure by any Shareholder or the Company to perform
any obligation of any Shareholder or the Company contained herein or
in any Company Related Document or Shareholder Related Document;

(ii) any inaccuracy in or breach of any representation or
warranty of any Shareholder contained herein or in any Shareholder
Related Document;

(iii) any inaccuracy in or breach of any representation or
warranty of the Company contained herein or in any Company Related
Document;

(i) any breach of any covenant of the Parent or the
failure by the Parent to perform any of its obligations contained
herein or in the Parent Related Documents;

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<PAGE> 35
(ii) any inaccuracy in or breach of any representation or
warranty of the Parent contained herein or in the Parent Related
Documents; and

The foregoing indemnities shall not limit or otherwise adversely affect the
Parent Indemnified Parties' rights of indemnity for Losses under Section 8.2.1.

8.4 Procedures for Indemnification.

8.4.1 Notice. The party (the "Indemnified Party") that may
be entitled to indemnity hereunder shall give prompt notice to the party
obligated to give indemnity hereunder (the "Indemnifying Party") of the
assertion of any claim, or the commencement of any suit, action or proceeding
in respect of which indemnity may be sought hereunder. Any failure on the part
of any Indemnified Party to give the notice described in this Section 8.4.1
shall relieve the Indemnifying Party of its obligations under this Article 8
only to the extent that such Indemnifying Party has been prejudiced by the lack
of timely and adequate notice (except that the Indemnifying Party shall not be
liable for any expenses incurred by the Indemnified Party during the period in
which the Indemnified Party failed to give such notice). Thereafter, the
Indemnified Party shall deliver to the Indemnifying Party, promptly (and in any
event within 10 days thereof) after the Indemnified Party's receipt thereof,
copies of all notices and documents (including court papers) received by the
Indemnified Party relating to such claim, action, suit or proceeding.

8.4.2 Legal Defense. The Parent shall have the obligation
to assume the defense or settlement of any third-party claim, suit, action or
proceeding in respect of which indemnity may be sought hereunder, provided that
(i) the Shareholders shall at all times have the right, at their option, to
participate fully therein, and (ii) if the Parent does not proceed diligently
to defend the third-party claim, suit, action or proceeding within 10 days
after receipt of notice of such third-party claim, suit, action or proceeding,
the Shareholders shall have the right, but not the obligation, to undertake the
defense of any such third-party claim, suit, action or proceeding.

30
<PAGE> 36
provided, however, that if the Indemnified Party is a Parent Indemnified Party,
such third-party suit, action, proceeding or investigation may be settled
without the consent of the Indemnifying Party on 10 days' prior written notice
to the Indemnifying Party if such third-party suit, action, proceeding or
investigation is then unreasonably interfering with the business or operations
of the Company and the settlement is commercially reasonable under the
circumstances; and provided further, that if the Indemnifying Party gives 10
days' prior written notice to the Indemnified Party of a settlement offer which
the Indemnifying Party desires to accept and to pay all Losses with respect
thereto ("Settlement Notice") and the Indemnified Party fails or refuses to
consent to such settlement within 10 days after delivery of the Settlement
Notice to the Indemnified Party, and such settlement otherwise complies with
the provisions of this Section 8.4, the Indemnifying Party shall not be liable
for Losses arising from such third-party suit, action, proceeding or
investigation in excess of the amount proposed in such settlement offer.
Notwithstanding the foregoing, no Indemnifying Party will consent to the entry
of any judgment or enter into any settlement without the consent of the
Indemnified Party, if such judgment or settlement imposes any obligation or
liability upon the Indemnified Party other than the execution, delivery or
approval thereof and customary releases of claims with respect to the subject
matter thereof.

8.4.4 Cooperation. The parties shall cooperate in
defending any such third-party suit, action, proceeding or investigation, and
the defending party shall have reasonable access to the books and records, and
personnel in the possession or control of the Indemnified Party that are
pertinent to the defense. The Indemnified Party may join the Indemnifying
Party in any suit, action, claim or proceeding brought by a third party, as to
which any right of indemnity created by this Agreement would or might apply,
for the purpose of enforcing any right of the indemnity granted to such
Indemnified Party pursuant to this Agreement.

9. TERMINATION

9.1 Grounds for Termination. This Agreement may be terminated
only as provided below.

9.1.1 Prior to Closing. The parties may terminate this
Agreement at any time prior to the Closing only as provided below:

(i) Mutual Consent. Parent and the Shareholders
acting jointly may terminate this Agreement by mutual written
consent at any time prior to the Closing;

(ii) Termination by Parent. Parent may terminate
this Agreement by giving written notice thereof to the
Shareholders at any time prior to the Closing: (a) in the
event that any Shareholder or the Company has breached any
material representation, warranty, or covenant contained in
this Agreement in any material respect, Parent has

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<PAGE> 37
notified the Shareholders of the breach, and the breach has
continued without cure until the earlier of 20 days after the
notice of such breach or the Closing Date, whichever is
earlier, (b) if the Registration Statement for the IPO has not
been filed with the Securities and Exchange Commission on or
before December 31, 1997, or (c) if the IPO Closing Date shall
not have occurred on or before April 30, 1998, by reason of
the failure of any condition precedent under Section 7.1
hereof (unless the failure results primarily from Parent
itself materially breaching any material representation,
warranty, or covenant contained in this Agreement); and

(iii) Termination by the Shareholders . The
Shareholders acting jointly may terminate this Agreement by
jointly giving written notice thereof to Parent at any time
prior to the Closing: (a) in the event the Parent has
breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, the
Shareholders have notified Parent of the breach, and the
breach has continued without cure until the earlier of 20 days
after the notice of such breach or the Closing Date, whichever
is earlier, (b) if the Registration Statement for the IPO has
not been filed with the Securities and Exchange Commission on
or before December 31, 1997, or (c) if the IPO Closing Date
shall not have occurred on or before April 30, 1998 by reason
of the failure of any condition precedent under Section 7.2
hereof (unless the failure results primarily from the
Shareholders materially breaching any material representation,
warranty, or covenant contained in this Agreement).

9.1.2 After the Closing Date. This agreement may be
terminated after the Closing only as follows:

(ii) Automatic Termination. This Agreement shall
terminate automatically and without action on the part of any
party hereto if the IPO is not consummated within 10 business
days after the Closing.

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10. MISCELLANEOUS

To the Shareholders:

George Siegel Jason C. Helmick
Thomas Hagen c/o Michael J. Tucker
James Gardner Polese, Pietzsch, Williams & Nolan
Ronald Brown A Professional Association
1525 North Hayden, Suite F7 Attorneys
Arizona 85257 2702 North Third Street, Suite 3000
Telecopy: (602) 990-0081 Phoenix, Arizona 85004-4607
Telecopy: (602) 279-5107
Copy to:

William D. Pitts
Pitts & Pitts
Attorneys at Law
2999 North 44th Street, Suite 525
Phoenix, Arizona 85018
Telecopy: (602) 840-1373

To the Parent:

BrightStar Information Technology Group, Inc.
Attn: President
10375 Richmond Avenue, Suite 1620
Houston, Texas 77042
Telecopy: (713) 361-2501

Copy to:

Robert J. Viguet, Jr.
Chamberlain, Hrdlicka, White, Williams & Martin
1200 Smith Street, Suite 1400
Houston, Texas 77002-4310
Telecopy: (713) 658-2553

or other such address as shall be furnished in writing by any such party to the
other party, and such notice shall be effective and be deemed to have been
given as of the date actually received.

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<PAGE> 39
To the extent any notice provision in any other agreement, instrument
or document required to be executed or executed by the parties in connection
with the transactions contemplated herein contains a notice provision which is
different from the notice provision contained in this Section 10.1 with respect
to matters arising under such other agreement, instrument or document, the
notice provision in such other agreement, instrument or document shall control.

10.2 Further Documents. Each Party shall, at any time and from
time to time after the date hereof, upon reasonable request by another party
and without further consideration, execute and deliver such instruments or
other documents and take such further action as may be reasonably required in
order to perfect any other undertaking made by the party hereunder.

10.3 Assignability. No Shareholder shall assign this Agreement in
whole or in part without the prior written consent of the Parent, except by the
operation of law. The Parent may assign its rights under this Agreement, the
Company Related Documents and the Shareholder Related Documents without the
consent of either Shareholder; provided, however, that no such assignment shall
affect the Shareholders right to receive the Exchange Consideration. After the
Closing Date, the Company may assign its rights under this Agreement, the
Company Related Documents and the Shareholder Related Documents without the
consent of any of the Shareholders.

10.4 Exhibits and Schedules. The Exhibits and Schedules (and any
appendices thereto) referred to in this Agreement are and shall be incorporated
herein and made a part hereof.

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10.8 CONTROLLING LAW. THE VALIDITY, INTERPRETATION AND PERFORMANCE
OF THIS AGREEMENT AND ANY DISPUTE CONNECTED HEREWITH SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS EXCEPT TO THE
EXTENT THE APPLICABLE CORPORATE LAW MANDATORILY APPLIES WITH RESPECT THERETO.

10.9 Public Announcements. No Shareholder shall make any press
release, public announcement, or public confirmation or disclose any other
information regarding this Agreement or the contents hereof.

10.14 When Effective. This Agreement shall become effective only
upon the execution and delivery of one or more counterparts of this Agreement
by each of the Parent and the Shareholders.

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<PAGE> 41
contemplated herein and otherwise act to eliminate or minimize the effects of
such statute or regulation on the transactions contemplated herein.

10.22 Section 351 Plan of Exchange. Simultaneously with the
execution hereof, the parties hereto shall execute the Section 351 Plan of
Exchange in the form set forth in Exhibit 10.22 hereto.

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<PAGE> 42
IN WITNESS WHEREOF, this Agreement and Plan of Exchange has been duly
executed and delivered effective as of the date first hereinabove written.

PARENT:

BRIGHTSTAR INFORMATION
TECHNOLOGY GROUP, INC.

By: /S/ MARSHALL G. WEBB
--------------------------------
Marshall G. Webb, President

SHAREHOLDERS:

/S/ GEORGE M. SIEGEL
------------------------------------
George M. Siegel

/S/ JAMES E. GARDNER
------------------------------------
James E. Gardner

/S/ TOM HAGEN
------------------------------------
Tom Hagen

/S/ JASON C. HELMICK
------------------------------------
Jason C. Helmick

/S/ RONALD BROWN
------------------------------------
Ronald Brown

<PAGE> 1
EXHIBIT 10.5

AGREEMENT AND PLAN OF EXCHANGE

by and among

BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.

and

SOFTWARE CONSULTING SERVICES AMERICA, LLC AND
THE UNDERSIGNED HOLDERS OF ALL
OF THE OUTSTANDING OWNERSHIP INTERESTS
OF SOFTWARE CONSULTING SERVICES AMERICA, LLC

December 19, 1997
<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
1. THE EXCHANGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Purchase and Sale. . . . . . . . . . . . . . . . . . . . . 1
1.1.1 Tangible Personal Property . . . . . . . . . . . . 2
1.1.2 Personal Property Leases . . . . . . . . . . . . . 2
1.1.3 Real Property . . . . . . . . . . . . . . . . . . . 2
1.1.4 Real Property Leases . . . . . . . . . . . . . . . 2
1.1.5 Cash and Accounts Receivable . . . . . . . . . . . 2
1.1.6 Acquired Contracts . . . . . . . . . . . . . . . . 2
1.1.7 Business Records . . . . . . . . . . . . . . . . . 2
1.1.8 Licenses . . . . . . . . . . . . . . . . . . . . . 3
1.1.9 Intellectual Property . . . . . . . . . . . . . . . 3
1.1.10 Ownership Interests in Other Entities . . . . . . . 3
1.1.11 General Intangibles and Rights of the Company . . . 3
1.1.12 Prepaid Items . . . . . . . . . . . . . . . . . . . 3
1.1.13 Telephone Numbers . . . . . . . . . . . . . . . . . 4
1.1.14 Company Name and Goodwill . . . . . . . . . . . . . 4
1.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . 4
1.3 Assumption of Obligations and Liabilities . . . . . . . . . 4
1.4 Certain Definitions . . . . . . . . . . . . . . . . . . . . 4
1.5 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . 5
1.6 Successor Operating Company . . . . . . . . . . . . . . . . 5
1.7 Payment of Purchase Price . . . . . . . . . . . . . . . . . 5
1.8 No Fractional Shares . . . . . . . . . . . . . . . . . . . . 6

2. THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 No Other Assignments of Company Assets or Common Stock . . . 6

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE MEMBERS . . . . . . 6
3.1 Organization of the Company . . . . . . . . . . . . . . . . 6
3.2 Capitalization of the Company . . . . . . . . . . . . . . . 7
3.3 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.4 Title of Acquired Assets . . . . . . . . . . . . . . . . . . 7
3.5 Condition of the Acquired Assets . . . . . . . . . . . . . . 7
3.5.1 Tangible Personal Property . . . . . . . . . . . . 7
3.5.2 Leases . . . . . . . . . . . . . . . . . . . . . . 7
3.5.3 Accounts Receivable . . . . . . . . . . . . . . . . 8
3.5.4 Acquired Contracts . . . . . . . . . . . . . . . . 8
3.5.5 Licenses . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>

-i-
<PAGE> 3
<TABLE>
<S> <C>
3.5.6 Intellectual Property . . . . . . . . . . . . . . . . 9
3.5.7 Prepaid Items . . . . . . . . . . . . . . . . . . . . 9
3.5.8 Completeness of Acquired Assets . . . . . . . . . . . 9
3.6 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.7 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.8 Financial Statements . . . . . . . . . . . . . . . . . . . . . 10
3.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.10 No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.11 Compliance; Legal Actions . . . . . . . . . . . . . . . . . . 11
3.16 Entities Owned . . . . . . . . . . . . . . . . . . . . . . . . 12
3.17 Affiliate Relationships . . . . . . . . . . . . . . . . . . . 12
3.18 Investment Company . . . . . . . . . . . . . . . . . . . . . 13
3.19 No Material Adverse Change . . . . . . . . . . . . . . . . . . 13
3.20 Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.21 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.22 Company Material Adverse Effect . . . . . . . . . . . . . . . 14
3.23 Restricted Securities . . . . . . . . . . . . . . . . . . . . 14

4. REPRESENTATIONS AND WARRANTIES OF PURCHASER . . . . . . . . . . . . . . . . 15
4.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.2 Capitalization of Purchaser. . . . . . . . . . . . . . . . . . 15
4.3 Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.4 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.5 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.6 Financial Statements. . . . . . . . . . . . . . . . . . . . . 16
4.7 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.8 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.9 Investment Company . . . . . . . . . . . . . . . . . . . . . . 17
4.11 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.12 Purchaser Material Adverse Effect. . . . . . . . . . . . . . . 17

5. CERTAIN OTHER ACTIONS, COVENANTS AND DOCUMENTS . . . . . . . . . . . . . . . 17
5.1 Conduct of Business. . . . . . . . . . . . . . . . . . . . . . 17
5.2 Cooperation. . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.3 Filings, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 20
5.4 Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.5 Satisfaction of Conditions . . . . . . . . . . . . . . . . . . 20
5.6 Capital Budget . . . . . . . . . . . . . . . . . . . . . . . . 21
5.7 Exclusivity. . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.8 Covenant Not to Compete. . . . . . . . . . . . . . . . . . . . 21
5.9 Limitation on Assignments to Purchaser . . . . . . . . . . . . 22
5.10 Release. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

6. CERTAIN AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.1 Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
</TABLE>

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<PAGE> 4
<TABLE>
<S> <C>
6.2 Confidentiality . . . . . . . . . . . . . . . . . . . . . . 23
6.3 Company Plans . . . . . . . . . . . . . . . . . . . . . . . 23
6.4 Tax-Free Exchange . . . . . . . . . . . . . . . . . . . . . 23
6.5 Sale of Motor Vehicles . . . . . . . . . . . . . . . . . . . 23

7. CONDITIONS PRECEDENT; CLOSING DELIVERIES . . . . . . . . . . . . . . . . 23
7.1 Conditions Precedent to the Obligations of the Purchaser . . 23
7.1.1 Accuracy of Representations and Warranties . . . . 23
7.1.2 Performance of Covenants . . . . . . . . . . . . . 24
7.1.3 Legal Actions or Proceedings . . . . . . . . . . . 24
7.1.4 Approvals . . . . . . . . . . . . . . . . . . . . . 24
7.1.5 Closing Deliveries . . . . . . . . . . . . . . . . 24
7.1.6 No Loss or Damage . . . . . . . . . . . . . . . . . 24
7.1.7 Licenses, etc. . . . . . . . . . . . . . . . . . . 24
7.1.8 No Material Adverse Change . . . . . . . . . . . . 24
7.1.9 IPO . . . . . . . . . . . . . . . . . . . . . . . . 24
7.1.10 Certain Corporate Actions . . . . . . . . . . . . . 24
7.2 Conditions Precedent to the Obligations of the Members and
the Company . . . . . . . . . . . . . . . . . . . . 25
7.2.1 Accuracy of Representations and Warranties . . . . 25
7.2.2 Performance of Covenants . . . . . . . . . . . . . 25
7.2.3 Approvals . . . . . . . . . . . . . . . . . . . . . 25
7.2.4 Closing Deliveries . . . . . . . . . . . . . . . . 25
7.3 Deliveries by the Company or the Members at the Closing . . 25
7.3.1 Closing Certificates . . . . . . . . . . . . . . . 25
7.3.2 Instruments of Transfer . . . . . . . . . . . . . . 25
7.3.3 Stock Transfer Restriction Agreement . . . . . . . 26
7.3.4 Employment Agreements . . . . . . . . . . . . . . . 26
7.3.5 Opinion of Counsel for the Members and the Company 26
7.3.6 Documents. . . . . . . . . . . . . . . . . . . . . 26
7.5 Deliveries by the Purchaser at the Closing . . . . . . . . . 26
7.5.1 Closing Certificates . . . . . . . . . . . . . . . 27
7.5.2 Instruments of Transfer . . . . . . . . . . . . . . 27
7.5.3 Opinion of Counsel for the Purchaser . . . . . . . 27
7.5.4 Closing Consideration . . . . . . . . . . . . . . . 27
7.7 Conditions Precedent to Completion of the Closing . . . . . 27
7.7.1 Legal Actions or Proceedings . . . . . . . . . . . 27
7.7.2 IPO . . . . . . . . . . . . . . . . . . . . . . . . 28
7.8 Delivery of the Closing Consideration . . . . . . . . . . . 28

8. SURVIVAL; INDEMNIFICATIONS . . . . . . . . . . . . . . . . . . . . . . . . 28
8.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . 28
8.2.1 Purchaser Indemnified Parties . . . . . . . . . . . 28
8.2.2 Minimum Losses . . . . . . . . . . . . . . . . . . 29
8.2.3 Purchaser Indemnity . . . . . . . . . . . . . . . . 29
</TABLE>

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<PAGE> 5
<TABLE>
<S> <C>
8.3 Limitations . . . . . . . . . . . . . . . . . . . . 30
8.4 Procedures for Indemnification . . . . . . . . . . . 30
8.4.1 Notice . . . . . . . . . . . . . . . . . . 30
8.4.2 Legal Defense. . . . . . . . . . . . . . . 30
8.4.3 Settlement . . . . . . . . . . . . . . . . 30
8.4.4 Cooperation . . . . . . . . . . . . . . . . 31
8.5 Subrogation . . . . . . . . . . . . . . . . . . . . 31

9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.1 Grounds for Termination . . . . . . . . . . . . . . 31
9.1.1 Prior to Closing . . . . . . . . . . . . . 31
9.1.2 After the Closing Date . . . . . . . . . . 32
9.2 Effect of Termination . . . . . . . . . . . . . . . 32

10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.1 Notice . . . . . . . . . . . . . . . . . . . . . . . 32
10.2 Further Documents . . . . . . . . . . . . . . . . . 33
10.3 Assignability . . . . . . . . . . . . . . . . . . . 34
10.4 Exhibits and Schedules. . . . . . . . . . . . . . . 34
10.5 Entire Agreement . . . . . . . . . . . . . . . . . . 34
10.6 Headings . . . . . . . . . . . . . . . . . . . . . . 34
10.7 CONTROLLING LAW . . . . . . . . . . . . . . . . . . 34
10.8 Public Announcements . . . . . . . . . . . . . . . . 34
10.9 No Third Party Beneficiaries. . . . . . . . . . . . 34
10.10 Amendments and Waivers . . . . . . . . . . . . . . . 34
10.11 No Employee Rights . . . . . . . . . . . . . . . . . 35
10.12 Non-Recourse . . . . . . . . . . . . . . . . . . . . 35
10.13 When Effective . . . . . . . . . . . . . . . . . . . 35
10.14 Takeover Statutes . . . . . . . . . . . . . . . . . 35
10.15 Number and Gender of Words . . . . . . . . . . . . . 35
10.16 Invalid Provisions . . . . . . . . . . . . . . . . . 35
10.17 Multiple Counterparts . . . . . . . . . . . . . . . 36
10.18 No Rule of Construction . . . . . . . . . . . . . . 36
10.19 Expenses . . . . . . . . . . . . . . . . . . . . . . 36
10.20 Broker's Fees . . . . . . . . . . . . . . . . . . . 36
10.21 Section 351 Plan of Exchange . . . . . . . . . . . . 36
</TABLE>

EXHIBITS:

Exhibit 1.2 Excluded Assets
Exhibit 1.3 Assumed Obligations
Exhibit 2.1 Escrow Agreement
Exhibit 5.6 Capital Budget of the Company
Exhibit 7.3.2(i) Conveyance, Transfer, Assignment and Assumption Agreement

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<PAGE> 6
Exhibit 7.3.2(ii) Assignment and Assumption of Real Property Leases
Exhibit 7.3.3 Stock Transfer Restriction Agreement
Exhibit 7.3.4 Certain Employees
Exhibit 7.3.4A Form of Employment Agreements
Exhibit 7.3.5 Opinion of Counsel for Company
Exhibit 7.5.3 Opinion of Counsel for the Purchaser
Exhibit 10.21 Section 351 Plan of Exchange

SCHEDULES:

Schedule 1.1.1 Tangible Personal Property
Schedule 1.1.2 Personal Property Leases
Schedule 1.1.3 Real Property
Schedule 1.1.4 Leased Property
Schedule 1.1.5 Accounts Receivable
Schedule 1.1.6 Acquired Contracts
Schedule 1.1.7 Business Records
Schedule 1.1.8 Licenses
Schedule 1.1.9 Intellectual Property
Schedule 1.1.10 Ownership Interests
Schedule 1.1.11 General Intangibles and Rights of the Company
Schedule 1.1.12 Prepaid Items
Schedule 1.1.13 Telephone Numbers
Schedule 3.2 Member Interests
Schedule 3.3 Company Consents
Schedule 3.4 Encumbrances on Acquired Assets
Schedule 3.8 Financial Statements
Schedule 3.9 Taxes
Schedule 3.11 Compliance; Legal Actions
Schedule 3.12 Legal Descriptions of Real Property Owned by the Company
Schedule 3.13 Employees
Schedule 3.14 Employee Obligations
Schedule 3.15 Safety Matters
Schedule 3.17 Affiliate Relationships
Schedule 3.19 Material Adverse Changes

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<PAGE> 7
AGREEMENT AND PLAN OF EXCHANGE

This AGREEMENT AND PLAN OF EXCHANGE (this "Agreement") made effective
as of December 19, 1997 (the "Effective Date"), by and among BRIGHTSTAR
INFORMATION TECHNOLOGY GROUP, INC., a Delaware corporation (the "Purchaser"),
SOFTWARE CONSULTING SERVICES AMERICA, LLC, a California limited liability
company (the "Company"), and THE UNDERSIGNED HOLDERS OF ALL OF THE OUTSTANDING
OWNERSHIP AND MEMBER INTERESTS ("MEMBER INTERESTS") IN THE COMPANY (the
"Members").

WHEREAS, the Board of Directors of the Purchaser and the Managers of
the Company have each approved the assignment and transfer to Purchaser of
substantially all of the assets of the Company in exchange for cash and shares
of common stock, $.001 par value per share of Purchaser ("Purchaser Common
Stock") and the assumption of certain liabilities of the Company by Purchaser
all as provided herein (the "Exchange");

WHEREAS, the above Exchange is one of several related transactions
involving the assignment of property to Purchaser in exchange for common stock
and cash of Purchaser as part of an overall plan that includes an initial
public offering of Purchaser Common Stock; and for federal income tax purposes,
it is intended that this Exchange and the other related exchange transactions
with Purchaser shall qualify as exchanges under the provisions of Section 351
of the Internal Revenue Code of 1986, as amended (the "Code"); and

WHEREAS, the Exchange has been approved as required by applicable law
and by appropriate action of the Company and Purchaser, and the Exchange has
been approved by the Members as the holders of all of the outstanding Member
Interests of the Company as evidenced by their signatures hereto;

NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties hereto
agree as follows:

1. THE EXCHANGE

1.1 Purchase and Sale. Subject to the terms and conditions of
this Agreement, and in consideration of delivery of the Purchase Price (as
defined below) by Purchaser and the assumption of the Assumed Obligations (as
defined below) by Purchaser, the Company agrees to sell, convey, assign,
transfer, exchange and deliver to Purchaser, and Purchaser agrees to purchase,
exchange and acquire from the Company, all of the assets owned by the Company
as of the date hereof and the Closing Date, of every kind, character and
description, other than the "Excluded Assets" specified under Section 1.2
hereof (the "Acquired Assets"), whether such assets are tangible, intangible,
real, personal or mixed, and wheresoever located, and whether carried on the
books of the Company, including, but not limited to, the assets listed and/or
described as follows and in the Schedules 1.1.1-1.1.13 referenced under this
Section 1.1, free and clear of any and all liens, claims, charges, pledges,
security interests, exceptions or other encumbrances of any kind other than
those described on

1
<PAGE> 8
Exhibit 3.4; and the Company and the Members represent and warrant to the
Purchaser that the following referenced Schedules 1.1.1-1.1.13 hereto are
accurate and complete:

1.1.1 Tangible Personal Property. All tangible personal
property (including computers and computer equipment and hardware, other
equipment, machinery, tools, appliances, products, implements, spare parts,
instruments, furniture, inventories and supplies) owned by the Company
("Tangible Personal Property"), a correct and complete list of which is set
forth on Schedule 1.1.1 hereto;

1.1.2 Personal Property Leases. All of the Company's
rights in, to and under all leases of equipment, machinery, tools, appliances,
implements, spare parts, instruments, furniture, supplies, and other items of
tangible personal property ("Personal Property Leases"), a correct and complete
list of which leased personal property is set forth on Schedule 1.1.2 hereto;

1.1.3 Real Property. All right, title and interests to the
land, buildings, improvements and other real property owned by the Company
("Real Property"), a correct and complete list of which is set forth on
Schedule 1.1.3 hereto;

1.1.4 Real Property Leases. The leasehold estates created
by, and all rights conferred on the Company under or by virtue of, all real
property lease agreements (such real property lease agreements are hereinafter
referred to as "Real Property Leases" and the parcels of real property in which
the Company has a leasehold interest and that are subject to the Real Property
Leases are hereinafter referred to as "Leased Property"), a correct and
complete list of which is set forth on Schedule 1.1.4 hereto, including all
rights, titles and interests, to use all warehouses, storage facilities,
buildings, works, structures, fixtures, landings, constructions in progress,
improvements, betterments, installations and additions constructed or located
on or attached or affixed to the Leased Property;

1.1.5 Cash and Accounts Receivable. All of the Company's
cash and accounts receivable ("Accounts Receivable"), a correct and complete
list of which Accounts Receivable as of the date hereof is set forth on
Schedule 1.1.5 hereto.

1.1.6 Acquired Contracts. All of the Company's rights in,
to and under all contracts, agreements, insurance policies, purchase orders and
commitments, notes, mortgages, security agreements, pledges, guaranties,
warranties, and any other contracts or agreements together with all instruments
and all documents of title representing any of the foregoing, all rights in any
merchandise or goods which any of the same represent, and all rights, title,
security and guaranties in favor of the Company with respect to any of the
foregoing (the "Acquired Contracts"), a correct and complete list of which
contracts is set forth on Schedule 1.1.6 hereto (exclusive of any contracts
that are Excluded Assets);

1.1.7 Business Records. All books and records of the
Company wherever located, including without limitation, all credit records,
payroll records, computer records, computer programs, contracts, agreements,
operating manuals, schedules of assets, accounting and financial records, sales
and property tax records and returns, sales records, customer and supplier
data,

2
<PAGE> 9
blueprints, specifications, plats, maps, surveys, building and machinery
diagrams, maintenance records, personnel and labor relation records, real
estate records, construction records, environmental records and returns, files,
papers, books and all other public and confidential business records (together
the "Business Records"), whether such Business Records are in hard copy form or
are electronically or magnetically stored, excluding only the Company's income
tax records and returns, its corporate Minute Book and stock records;

1.1.8 Licenses. To the extent assignable, all franchises,
licenses, sublicenses, permits, certificates, approvals and other
authorizations from governments and any other entities or persons necessary to
own and/or operate any of the other Acquired Assets (the "Licenses"), a
complete and correct list of which is set forth on the Schedule 1.1.8 hereto;

1.1.9 Intellectual Property. All of the intellectual
property owned by the Company including, but not limited to: (i) United States
and foreign patents, patent applications, trademarks, trademark applications
and registrations, trade dress, brand names, logos, service marks, service mark
applications and registrations, copyrights, copyright applications and
registrations and trade names, fictitious names and assumed names of the
Company including, without limitation, all such rights described on Schedule
1.1.9 hereto; (ii) proprietary data and technical, manufacturing know-how and
information (and all materials embodying such information); (iii) developments,
discoveries, inventions, ideas and trade secrets of the Company; (iv) client
lists and information, marketing plans, business plans, customer and supplier
lists, pricing policies and purchasing information; (v) computer programs and
other software, computer technology, data bases operating systems, source and
object codes, flow charts, algorithms, coding sheets, routines, compilers,
assemblers, design concepts and manuals; and (vi) covenants by others not to
compete, rights and privileges of the Company used in the conduct of its
business, rights to exclusive use and rights to sue for past infringement with
respect to any item described in this Section 1.1.9 (all of the foregoing,
collectively, "Intellectual Property"), a correct and complete list of which is
set forth on Schedule 1.1.9 of hereto;

1.1.10 Ownership Interests in Other Entities. All equity
securities, partnership interests, indebtedness or other interests owned in any
other corporation, partnership, limited partnership, joint venture, limited
liability company, trust, or other entity or person, a correct and complete
list of which is set forth on Schedule 1.1.10 hereto.

1.1.11 General Intangibles and Rights of the Company. All
general intangible property of the Company and all rights in, to and under all
representations, warranties, covenants, guaranties made or provided by third
parties to or for the benefit of the Company, and all rights, privileges,
claims and causes of action of the Company; a correct and complete list of any
claims or causes of action owned by the Company is set forth on Schedule 1.1.11
hereto;

1.1.12 Prepaid Items. All of the Company's prepaid
expenses, prepaid insurance, deposits and other similar items ("Prepaid
Items"), a correct and complete list of which items is set forth on Schedule
1.1.12 hereto;

3
<PAGE> 10
1.1.13 Telephone Numbers. All of the Company' right, title
and interest in, to and under all telephone numbers used by the Company and
Company business telephone numbers used by its employees, a correct and
complete list of which is set forth on Schedule 1.1.13 hereto; and

1.1.14 Company Name and Goodwill. The exclusive right to
own and use the name "Software Consulting Services America" and all goodwill
with respect to the business and operations of the Company.

1.2 Excluded Assets. The Company shall not sell, convey, assign,
transfer or deliver to Purchaser, and Purchaser shall not acquire (or make any
payments or otherwise discharge any liability or obligation of the Company with
respect to), the assets of the Company described on Exhibit 1.2 attached hereto
(the "Excluded Assets").

1.3 Assumption of Obligations and Liabilities. At the Closing,
Purchaser shall assume and agree to pay or perform, promptly as they become
due, only those obligations and liabilities of the Company expressly set forth
on Exhibit 1.3 hereof (the "Assumed Obligations"). Except for the assumption
of Assumed Obligations, Purchaser shall not assume or be deemed to have assumed
and shall not be responsible for any other obligation or liability of the
Company, direct or indirect, known or unknown, choate or inchoate, absolute or
consignment, including without limitation (i) any and all obligations regarding
any foreign, Federal, state or local income, sales, use, franchise or other tax
liabilities, and (ii) any and all obligations or liabilities regarding any of
the Company Plans (as defined herein).

1.4 Certain Definitions. The following terms shall have the
meaning ascribed below for purposes of this Agreement:

(i) "Closing Balance Sheet Date" means the end of the
most recent monthly accounting period of the Company preceding the
Closing Date.

(ii) "Current Assets" means the current assets of the
Company determined as of the Closing Balance Sheet Date in accordance
with GAAP.

(iv) "GAAP" means U.S. generally accepted accounting
principles consistently applied.

(v) "IPO" means the Purchaser's first underwritten public
offering of Purchaser Common Stock resulting in net cash proceeds
sufficient to fund the use of proceeds of such

4
<PAGE> 11
offering as described in the PPM (and any supplements thereto)
referenced in Section 3.23 herein (other than any offering pursuant to
any registration statement (i) relating to any capital stock of
Purchaser or options, warrants or other rights to acquire any such
capital stock issued or to be issued primarily to directors, officers
or employees of the Purchaser or any of its subsidiaries, (ii)
relating to any employee benefit plan or interest therein, (iii)
relating principally to any preferred stock or debt securities of the
Purchaser, or (iv) filed pursuant to Rule 145 under the Securities Act
of 1933, as amended ("Securities Act"), or any successor or similar
provision).

(vi) "IPO Closing Date" means the date that the Purchaser
receives funds in consideration for the sale of its securities in the
IPO.

(vii) "IPO Price" means the initial price per share to the
public for shares of Purchaser Common Stock in the IPO.

(ix) "Net Working Capital" means the Current Assets of the
Company minus the Current Liabilities of the Company as of the
applicable date of determination, all as determined under GAAP.

1.5 Purchase Price. The purchase price for the Acquired Assets
("Purchase Price") shall be the aggregate amount of $16,000,000 with the
Purchase Price payable $11,000,000 in cash and $5,000,000 in Purchaser Common
Stock at a value per share equal to the IPO Price reduced by: (i) the amount
of Long-Term Debt assumed by the Purchaser hereunder; and (ii) the amount of
any reduction in the Company's Net Working Capital from September 30, 1997 to
the Closing Balance Sheet Date.

1.6 Successor Operating Company. The parties hereto acknowledge
and agree that Purchaser shall immediately after the IPO Closing Date (as
defined below) assign all Acquired Assets and all Assumed Obligations and all
of its right, title and interest in and to this Agreement, the related
agreements and documents, and its rights and obligations thereunder and the
products thereof, to a new wholly-owned subsidiary corporation of the Purchaser
to be named Software Consulting Services America, Inc. (or a similar name), a
Delaware corporation ("SCS Delaware"), which shall have no material assets or
liabilities prior to acquiring the Acquired Assets. The Purchaser shall cause
SCS Delaware to receive and assume ownership of such assets, rights and
performance of such obligations and seek to employ the employees previously
employed by the Company so that SCS Delaware may after the IPO Closing Date
conduct the business previously conducted by the Company and seek to further
develop such business.

1.7 Payment of Purchase Price. Purchaser shall deliver payment of
the Purchase Price (other than the Earnout Consideration) on the IPO Closing
Date by delivery to the Company of

5
<PAGE> 12
$11,000,000 in cash less the reduction amounts under Section 1.5, plus
$5,000,000 of Purchaser Common Stock as provided under Section 1.5 (the
"Closing Consideration").

1.8 No Fractional Shares. Notwithstanding the foregoing, no
fractional shares of Purchaser Common Stock will be issued pursuant to this
Section 1, and if the Company would be entitled hereunder to receive a
fractional share of Purchaser Common Stock but for this paragraph, the Company
shall receive a cash payment for and in lieu thereof in the amount (rounded
upward to the nearest whole cent) equal to the fractional interest in a share
of Purchaser Common Stock multiplied by the IPO Price.

2. THE CLOSING

2.1 Closing. A closing into Escrow ("Closing") will take place at
the offices of Chamberlain, Hrdlicka, White, Williams & Martin in Houston,
Texas at the time and on the day that the Purchaser and its underwriters agree
on the IPO Price for shares of Purchaser's Common Stock offered in the IPO as
set forth in an executed underwriting agreement, but in no event later than
April 23, 1998 ("Closing Date"); provided that each of the conditions precedent
to the obligations of the parties to effect the Closing are then satisfied or
waived by the applicable party. The parties may agree in writing on another
date, time or place for the Closing. At the Closing, the parties will deliver
or cause to be delivered into escrow with the escrow agent ("Escrow Agent")
under the Escrow Agreement set forth in Exhibit 2.1 hereto, the documents
described in Sections 7.3 and 7.5 below. On the IPO Closing Date, such
documents shall be delivered out of escrow to the parties designated to receive
such documents under this Agreement in accordance with the Escrow Agreement,
and the payment and delivery by the Purchaser of the portion of the Purchase
Price payable to the Company at Closing shall be made in compliance with
Sections 1.5 and 1.7 of this Agreement.

2.2 No Other Assignments of Company Assets or Common Stock. It is
agreed that no assignment, transfer or other disposition of (i) any assets of
the Company (except in the ordinary course of business consistent with past
practices) or (ii) of record or beneficial ownership of any Member Interests in
the Company, may be made on or after the date hereof other than as provided
herein, except for the issuance of Class B Membership Interests upon exercise
of options as described in Schedule 3.2.

3. REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND THE MEMBERS

The Company and the Members hereby represent and warrant to Purchaser
as follows:

3.1 Organization of the Company. The Company is a California
limited liability company, duly organized, validly existing and in good
standing under the laws of the State of California and is duly qualified and
authorized to do business in all other states where required to be qualified
and authorized, except where the failure to obtain such qualification will not
have a Company Material Adverse Effect (as defined below).

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<PAGE> 13
3.2 Capitalization of the Company. All outstanding Member
Interests in the Company are set forth on Schedule 3.2 hereto and are held of
record and beneficially by the Members in such amounts as are respectively set
forth for each owner by their names on Schedule 3.2 hereto. All such Member
Interests are duly and validly authorized and issued, and were not issued in
violation of the preemptive rights of any past or present owner or Member.
Except for the interests described on Schedule 3.2, there are no outstanding
convertible or exchangeable securities, subscriptions, calls, options,
warrants, rights or other agreements or commitments of any character relating
to the issuance or sale of any ownership, member or management interest in the
Company. Further, the Company has no liability, contingent or otherwise, to
any person or entity in connection with preemptive or contractual subscription
rights or the offer, sale, purchase, surrender or cancellation of any interests
in the Company.

3.3 Consents. Except as provided on Schedule 3.3, no approval,
consent, order or action of or filing with any court, administrative agency,
governmental authority or other third party is required for the execution,
delivery or performance by the Company and the Members, as applicable, of this
Agreement, any Company Related Document or any Member Related Document. If the
required consents listed on Schedule 3.3 hereto are acquired, the execution,
delivery and performance by the Company and each Member of this Agreement, the
Company Related Documents and the Member Related Documents do not violate any
mortgage, indenture, contract, agreement, lease or commitment or other
instrument of any kind to which the Company or any Member is a party or by
which the Company or any Member or any of their respective assets or properties
may be bound or affected or any law, rule or regulation applicable to the
Company or any Shareholder or any court injunction, order or decree or any
valid and enforceable order of any governmental agency in effect as of the date
hereof having jurisdiction over the Company or any Member.

3.4 Title of Acquired Assets. Except as set forth on Schedule 3.4
hereto, the Company owns outright, and has full legal and beneficial title to,
or a valid leasehold interest in, all of the Acquired Assets free and clear of
all liens, pledges, mortgages, security interests, conditional sales contracts,
claims, encumbrances, rights of others and restrictions on transfer, including
good and marketable title to all of the real property interests, free and clear
of any mortgages, security agreements, liens, claims, encumbrances, rights of
others or restrictions on transfer.

3.5 Condition of the Acquired Assets.

3.5.1 Tangible Personal Property. Except as set forth on
Schedule 1.1.1, the Tangible Personal Property is in good operating condition,
working order and repair (normal wear and tear excepted) and is fully-suitable
for the uses for which it is employed in the conduct of the Company's business.
All inventory is fit for the use intended and free from any known defect and is
of a quality and quantity for good use in the ordinary course of business.

3.5.2 Leases. With respect to the Personal Property Leases
and the Real Property Leases, except as set forth on Schedules 1.1.2 and 1.1.4,
respectively;

(1) each lease is legal, valid, binding,
enforceable and in full force and effect;

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<PAGE> 14
(2) each lease will continue to be legal, valid,
binding, enforceable and in full force and effect on the same
terms following the Closing as before;

(3) no party to any such lease is in material
breach or default thereof, and no event has occurred that,
with notice or lapse of time or both, would constitute a
material breach or default or permit termination, modification
or acceleration thereunder;

(4) no party to any such lease has repudiated in
writing any provision thereof;

(5) there are no disputes, oral agreements or
forbearance programs in effect as to such lease;

(6) to the best of the knowledge of the Company
and the Members, the owner of the property leased pursuant to
such lease has good and marketable title to such property free
of any encumbrance that would adversely affect the leasehold
interests of the Company; and

(7) The Company has performed and satisfied in
full each material obligation to be performed by the Company
under such lease as of the date hereof.

3.5.3 Accounts Receivable. The Accounts Receivable
reflected on Schedule 1.1.5, and all Accounts Receivable arising between the
date hereof and the Closing are and will be valid accounts receivable that
arose or will have arisen from bona fide transactions in the ordinary course of
business of the Company; the services involved were or will have been validly
and properly provided to the account obligor, and after the accounts receivable
have been booked, no further services will be required to be provided in order
to complete the sales and to entitle the Company or its assignees to collect
the accounts receivable in full. Except for the allowance for doubtful
accounts in the Company Financial Statements, the Company has no reason to
believe that the Accounts Receivable will not be timely paid. No such account
has been or will be assigned or pledged to any other person, firm or
corporation.

3.5.4 Acquired Contracts. Sellers have attached to
Schedule 1.1.6 a correct and complete copy of the Acquired Contracts all of
which are listed on Schedule 1.1.6. Such Acquired Contracts, along with the
other Acquired Assets, provide sufficient rights for the Purchaser to conduct
business after the Closing in substance the same as business was conducted by
the Company prior to Closing. Except as set forth on Schedule 1.1.6, each of
the Acquired Contracts is legal, valid and enforceable and is in full force and
effect, and there is no material default or existing condition that, with the
giving of notice or the passage of time or both, would constitute such a
default by the Company or by any parties thereto, and by the Closing, the
Company shall have acquired any required consents necessary for the assignment
of the Acquired Contracts hereunder. The Company has performed and satisfied
in full each material obligation required to be performed by the Company under
each Assumed Contract as of the date hereof. If services are to be provided to
the Company

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<PAGE> 15
under any such Assumed Contract, such services have been and are being
performed satisfactorily and timely, substantially in accordance with terms of
such Assumed Contract.

3.5.5 Licenses. The Company holds adequate Licenses or
other rights to conduct its business as now conducted, and the Company's
conduct of business prior to Closing does not conflict with, infringe on, or
otherwise violate any rights of others. The Company has attached to Schedule
1.1.8 correct and complete copies of all such Licenses (as amended to date)
disclosed on Schedule 1.1.8. Each License is legal, valid and enforceable, and
in full force and effect and will continue to be so after the Closing on the
same terms as before the Closing, and by the Closing, the Company shall have
acquired any required consent necessary for the assignment to the Purchase
hereunder of each License, such that the Purchaser may use the Licenses to
conduct business after the Closing the same as business is conducted by the
Company prior to Closing. No party to any License is in breach or default
thereof and no event has occurred which with notice or lapse of time would
constitute a breach or default or permit termination or modification of any
License.

3.5.6 Intellectual Property. The Company has full and
sufficient rights to use all Intellectual Property necessary for the present
operation of its businesses and the marketing, distribution, sale and use of
the materials used, services provided and products sold by the Company. None
of the ownership, access to, use or practice of the Intellectual Property by
the Company infringes on the rights of any other party and all Intellectual
Property rights are valid, enforceable and transferable or assignable to the
Purchaser as contemplated by this Agreement. Schedule 1.1.9 includes a list of
all of the Company's Intellectual Property and a description of any fees and
royalties (or the basis of calculation thereof) required to be paid now or in
the future by the Company for the use and practice of its Intellectual
Property.

3.5.7 Prepaid Items. Each of the Prepaid Items is valid
and represents a credit on the Company's behalf with the payee and may be
transferred to Purchaser without the necessity of obtaining any consent or
approval except as may be set forth on Schedule 3.3.

3.5.8 Completeness of Acquired Assets. The Acquired Assets
including, without limitation, the Licenses described in Schedule 1.1.8,
include all the assets and properties necessary to conduct the business of the
Company by Purchaser following the Closing the same as presently conducted.

3.6 Defaults. Neither the Company, any Member nor any Company
Plan (as defined below) is in default under or in violation of, and the
execution and delivery of this Agreement, the Company Related Documents and the
Member Related Documents and the consummation of the transactions contemplated
hereby and thereby will not result in a default by the Company, any Member or
any Company Plan under or a violation of (i) any Acquired Contract or (ii) any
law, rule or regulation applicable to the Company or any Company Plan or any
court injunction, order or decree, or any valid and enforceable order of any
governmental agency in effect having jurisdiction over the Company or any
Company Plan, which default or violation could adversely affect the ability of
the Company to consummate the transactions contemplated hereby or will have a
Company Material Adverse Effect.

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<PAGE> 16
3.7 Authority. The Company has full right, power, legal capacity
and authority to (i) execute, deliver and perform this Agreement, and all other
documents and instruments referred to herein or contemplated hereby to be
executed, delivered and performed by the Company (each a "Company Related
Document") and (ii) consummate the transactions contemplated herein and
thereby. Each Member has full right, power, legal capacity and authority to
(i) execute, deliver and perform this Agreement, and all other documents and
instruments referred to herein or contemplated hereby to be executed, delivered
and performed by such Member (each a "Member Related Document") and (ii)
consummate the transactions contemplated herein and thereby. This Agreement
has been duly executed and delivered by the Company and by each Member and
constitutes, and each Company Related Document and each Member Related
Document, when duly executed and delivered by each party thereto will
constitute, legal, valid and binding obligations of the Company and each Member
who or which is a party thereto, enforceable against the Company and each
Member, as applicable, in accordance with their respective terms and
conditions, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
(whether applied in a proceeding at law or in equity).

3.8 Financial Statements. The Company has listed in Schedule 3.8
hereto and delivered to the Purchaser copies of the following audited financial
statements of the Company: Balance Sheets as of December 31, 1995 and 1996,
and as of June 30, 1997, and Statements of Income, Members' Equity and Cash
Flows for the period from February 7, 1995 (date of inception) to December 31,
1995, the year ended December 31, 1996 and the six month period ended June 30,
1997; plus the unaudited Balance Sheet as of September 30, 1997 ("Balance Sheet
Date") and Statements of Income and Cash Flows for the nine months ended
September 30, 1996 and 1997. Such financial statements, together with the
Closing Balance Sheet, are collectively referred to herein as ("Company
Financial Statements"). Such financial statements, except as described in the
notes thereto, have been prepared from the Company's records in accordance with
GAAP. Such balance sheets present accurately and fairly in all material
respects the financial condition of the Company as of the date indicated
thereon, and such statements of earnings and retained earnings present
accurately and fairly in all respects the results of the Company's operations
for the periods indicated thereon. Except as set forth in the Company
Financial Statements or in a supplemental description in Schedule 3.8 hereto,
and other than the performance of its obligations under its Contracts, the
Company has no liabilities or obligations of any nature whether absolute,
contingent or otherwise.

3.9 Taxes. The Company has filed all requisite federal and other
tax returns, information returns, declarations and reports for all fiscal
periods ended on or before the Balance Sheet Date; and except as set forth on
Schedule 3.9 hereto, there are no claims (nor is there any matter pending which
may result in a claim) against the Company for federal, state or local income,
sales, use, franchise or other taxes for any period or periods prior to and
including the Balance Sheet Date and no notice of any claim, whether pending or
threatened, for taxes has been received which would create a lien on the
Company's assets or adversely affect the Company. The amounts shown as
accruals for taxes on the Company Financial Statements as of the Balance Sheet
Date delivered to Purchaser as a part of Schedule 3.8 are sufficient for the
payment of all taxes of any kind or nature whatsoever for all fiscal periods
ended on or before that date. Copies of the federal, state and local income
tax returns and franchise tax returns of the Company (collectively, "Tax
Returns") for the last three fiscal years are

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<PAGE> 17
attached to Schedule 3.9 hereto. The Company has not obtained any extensions
of time in which to file any Tax Returns which have not yet been filed. The
Company has not waived any statute of limitations with respect to federal,
state, or local income, sales, use, franchise or other taxes or agreed to any
extensions of time with respect to a tax assessment or deficiency, except for
such waivers or extensions which, by their terms, have lapsed as of the date
hereof.

3.10 No Conflict. The Company has full power, authority and legal
right and has all licenses, permits, qualifications, and other documentation
(including permits required under applicable Environmental Law, as defined
below) necessary to own and/or operate its businesses, properties and assets
and to carry on its businesses as being conducted on the date hereof, and such
businesses are now being conducted and such assets and properties are being
owned and/or operated, and the Company Plans have been implemented and
maintained, in compliance with all applicable laws (including Environmental
Law), ordinances, rules and regulations of any governmental agency of the
United States, any state or political subdivision thereof, or any foreign
jurisdiction, all applicable court or administrative agency decrees, awards and
orders and all such licenses, permits, qualifications and other documentation,
except where the failure to comply will not have a Company Material Adverse
Effect, and there is no existing condition or state of facts which would give
rise to a violation thereof or a liability or default thereunder, except where
a violation, liability or default will not have a Company Material Adverse
Effect. The term "Environmental Law" means any law, rule, regulation,
approval, decision, decree, ordinance, by-law having the force of law or order
of any federal, state or local executive, legislative, judicial, regulatory or
administrative agency, board or authority, which relate to (i) noise; (ii)
pollution or protection of the air, surface water, ground water or land; (iii)
solid, gaseous or liquid waste generation, treatment, storage, use, processing,
disposal or transportation; (iv) exposure to hazardous or toxic substances; (v)
the safety or health of employees or (vi) regulation of the manufacture,
processing, distribution in commerce, use, or storage of chemical substances.

3.11 Compliance; Legal Actions. The Company and the Members have
complied with all applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges thereunder) of
federal, state, local, and foreign governments (and all agencies thereof) with
respect to the Company and its business, and except as may be described in
Schedule 3.11 hereto, no legal action, suit, audit, investigation, unfair labor
practice charge, complaint, claim, grievance, or proceeding by or before any
court, arbitration panel, governmental authority or third party is pending or,
to the best knowledge of the Company or the Members threatened, which involves
or may involve the Company or its now or previously owned or operated assets,
operations, properties or businesses.

3.12 Real Property. Schedule 3.12 includes correct and complete
legal descriptions of all real property owned in fee by the Company and a copy
of the deed and any other material documents reflecting or affecting the real
property interests owned by the Company.

3.13 Employees. Schedule 3.13 is a complete and accurate list of
the names, start dates and current annual salary or hourly wage rates of all
salaried and hourly regular full-time and part-time employees of the Company
together with a summary of the bonuses, additional compensation and other like
benefits, if any, payable to each employee and the last date, if any, on which
each

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<PAGE> 18
employee received (a) a raise in annual salary or hourly wage or (b) a bonus;
and Schedule 3.13 lists any agreement involving the Shareholders and their
affiliates (other than the Company and its subsidiaries).

3.14 Employee Benefit Plans. Schedule 3.14 of the Disclosure
Schedule is a complete and accurate list of all obligations, contingent or
otherwise, covering any of the Company's employees under any employment or
consulting agreement or under any executive or employee's compensation plan,
agreement or arrangement including, without limitation, any "employee welfare
benefit plan" as defined in Section 3(1) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), "employee pension benefit plan" as
defined in Section 3(2) of ERISA or any other pension, retirement, profit
sharing, stock option, stock purchase, bonus, fringe benefit, incentive,
vacation, savings plan, health, welfare or other employee or former employee
benefit plan, program, policy or arrangement (collectively referred to as
"Company Plans").

3.15 Safety Matters. Schedule 3.15 contains a copy of all material
safety data sheets, toxicology studies and environmental studies of the
Company.

3.16 Entities Owned. Schedule 1.1.10 hereto sets forth the name of
any corporation, partnership, firm, association, business organization, entity
or enterprise owned by the Company directly or indirectly. Except as disclosed
in Schedule 1.1.10, all the ownership interests of the Company in such entities
are directly or ultimately owned by the Company, free and clear of all liens,
encumbrances or adverse claims of every kind, and all such ownership interests
are duly and validly authorized and issued, fully paid and nonassessable, and
were not issued in violation of the preemptive rights of any past or present
stockholder.

3.17 Affiliate Relationships.

3.17.1 In this Agreement the term "affiliate" means with
respect to any person, any other person which directly or indirectly, by itself
or through one or more intermediaries, controls, or is controlled by, or is
under direct or indirect common control with, such person. The term "control"
means the possession, directly or indirectly, of the power to direct, or cause
the direction of, the management and policies of a person, whether through the
ownership of voting securities, by contract or otherwise.

3.17.2 Except as set forth on Schedule 3.17 hereto, neither
the Company, the Members nor any affiliate of the Members, and no manager or
employee of or consultant to the Company owns, directly or indirectly, in whole
or in part, any property, assets or right, tangible or intangible, which is
associated with any property, asset or right owned by the Company or which the
Company is operating or using or the use of which is necessary for its
business. Also included in Schedule 3.17 is the disclosure of any
relationships which any Member, affiliate of a Member, director, officer,
employee, agent or consultant of the Company has with any other corporation,
partnership, firm, association or business organization, entity or enterprise
which is a competitor, potential competitor, supplier or customer of the
Company.

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<PAGE> 19
3.18 Investment Company. The Company is not an "investment
company" or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, or a "holding
company," a "subsidiary company" of a "holding company" or an "affiliate" of a
"holding company" or a "public utility" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.

3.19 No Material Adverse Change. Except as specifically set forth
on Schedule 3.19, since the Balance Sheet Date there have not been: (a) any
change in the Company's Articles of Organization or Operating Agreement, (b)
any material adverse change of any nature whatsoever in the financial
condition, assets, liabilities (contingent or otherwise), income, business or
prospects of the Company; (c) any damage, destruction or loss (whether or not
covered by insurance) materially adversely affecting the properties or business
of the Company; (d) any change in the authorized capital of the Company or in
its securities outstanding or any change in its Member Interests; (e) any
declaration or payment of any dividend or distribution in respect of the Member
Interests or any direct or indirect redemption, purchase or other acquisition
of any of the Member Interests of the Company; (f) any contract or commitment
entered into by the Company or any incurrence by the Company or agreement by
the Company to incur any liability or make any capital expenditures in excess
of $3,000, except in the normal course of business; (g) any increase in the
compensation, bonus, sales commissions or fee arrangement payable or to become
payable by the Company to any of its officers, directors, Members, employees,
consultants or agents; (h) any work interruptions, labor grievances or claims
filed, proposed law or regulation (the existence of which is known, or under
the normal course of business should be known, to the Members) or any event or
condition of any character materially adversely affecting the business or
future prospects of the Company; (i) any creation, assumption or permitting to
exist of any mortgage, pledge or other lien or encumbrance upon any assets or
properties whether now owned or hereafter acquired, except as set forth in
Schedule 3.4; (j) any sale or transfer, or any agreement to sell or transfer,
any material assets, properties or rights of the Company to any person,
including, without limitation, the Members and their respective affiliates; (k)
any cancellation, or agreement to cancel, any indebtedness or other obligation
owing to the Company, including, without limitation, any indebtedness or
obligation of the Members or any of their affiliates; (1) any plan, agreement
or arrangement granting any preferential rights to purchase or acquire any
interest in any of the assets, properties or rights of the Company or requiring
consent of any party to the transfer and assignment of any such assets,
properties or rights; (m) any purchase or acquisition, or agreement, plan or
arrangement to purchase or acquire, any property, rights or assets of the
Company; (n) any negotiation for the acquisition of any business or start-up of
any new business; (o) any merger or consolidation or agreement to merge or
consolidate with or into any other corporation (except the transactions
contemplated by this Agreement); (p) any waiver of any material rights or
claims of the Company; (q) any breach, amendment or termination of any material
contract, agreement, license, permit, permit application or other right to
which the Company is a party; (r) any discharge, satisfaction, compromise or
settlement of any claim, lien, charge or encumbrance or payment of any
obligation or liability, contingent or otherwise, other than current
liabilities as of the Balance Sheet Date, current liabilities incurred since
the Balance Sheet Date in the ordinary course of business and prepayments of
obligations in accordance with normal and customary past practices; or (s) any
transaction by the Company outside the ordinary course of its business or
prohibited hereunder.

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<PAGE> 20
3.20 Access. The Company has provided the Purchaser and the
Purchaser's lenders, underwriters and placement agents and their respective
representatives the opportunity to make a full investigation of the properties,
operations and financial condition of the Company and afforded the Purchaser
and the Purchaser's lenders, underwriters and placement agents and their
respective representatives reasonable access to the offices, buildings, real
properties, machinery and equipment, inventory and supplies, records, files,
books of account, tax returns, agreements and commitments and personnel of the
Company to allow for a full investigation by such persons.

3.21 Disclosure. No representation or warranty by the Company or
the Members in this Agreement, the Schedules hereto or any certificate
delivered by the Company or the Shareholders to the Purchaser pursuant to the
Agreement, contains or will contain any untrue statement of a material fact or
omits or will omit any material fact necessary in order to make the statements
herein or therein, in light of the circumstances under which they are or were
made, not misleading.

3.22 Company Material Adverse Effect. The term "Company Material
Adverse Effect" shall mean an adverse effect on the properties, assets,
financial position, results of operations, long-term debt, other indebtedness,
cash flows or contingent liabilities of the Company in an amount of $25,000 or
more.

3.23 Restricted Securities.

(1) The Company and Members acknowledge that the shares
of Purchaser Common Stock to be acquired by the Company hereunder, and
then by the Members by distribution from the Company, have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), and are being acquired for the Company or Members'
own account for investment and not with a view to the distribution
thereof, and the Purchaser Common Stock will be subject to the Stock
Transfer Restriction Agreement in Exhibit 7.3.3 hereto.

(2) The Company and each Member has the knowledge and
experience in financial and business matters to enable it to evaluate
the merits and risks of entering this Agreement and the transactions
contemplated hereby and acquiring shares of Purchaser Common Stock.

(3) The Company and each Member is able to bear the
economic risks of its investment in the Purchaser Common Stock,
including the risk of a loss of the value of the Purchaser Common
Stock.

(4) The Company and the Members has been represented by
legal counsel in this transaction and they and their representatives,
including such counsel, have been given the opportunity to ask
questions of, and receive answers from, the officers of the Purchaser
concerning the terms of the transactions contemplated by this
Agreement and the affairs and the business and financial condition of
the Purchaser.

(5) The Company and each Member has received a
Confidential Private Placement Memorandum ("PPM") concerning the
Purchaser and an investment in shares of Purchaser

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<PAGE> 21
Common Stock, and each of them and their representatives have been
given such access to all documents, books and additional information
concerning Purchaser which they have requested regarding Purchaser.

(6) The Company and each Member and their representatives
have conducted such investigations in making a decision to approve
this Agreement and the transactions contemplated hereby as they have
deemed necessary and advisable.

(7) The Company and each Member acknowledge and agree
that the Purchaser Common Stock to be issued to the Company and
Members may not be disposed of except in accordance with the
requirements of the Securities Act and any applicable state securities
laws and the Stock Transfer Restriction Agreement.

4. REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser hereby represents and warrants to the Company and the
Members as follows:

4.1 Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and is duly qualified and authorized to do business in all other states where
required to be qualified and authorized except where the failure to obtain such
qualification will not have a Purchaser Material Adverse Effect (as defined
below). The only operations of Purchaser prior to the date hereof has been to
coordinate and implement the various steps appropriate for the consolidation of
the ownership of certain founding companies into the Purchaser contingent on
the successful completion of the IPO as described in the PPM.

4.2 Capitalization of Purchaser. The total authorized capital
stock of Purchaser is as set forth and described in the Purchaser's PPM
delivered to the Company and the Members in connection with the transactions
contemplated by this Agreement. The outstanding shares of Purchaser Common
Stock have been duly and validly issued and are fully paid and non-assessable.

4.3 Authority. Purchaser has full right, power, legal capacity
and authority to execute, deliver and perform this Agreement and all documents
and instruments referred to herein or contemplated hereby and to consummate the
transactions contemplated herein and thereby (the "Purchaser Related
Documents"). This Agreement has been duly executed and delivered by Purchaser
and constitutes, and all Purchaser Related Documents, when executed and
delivered by Purchaser will constitute, legal, valid and binding obligations of
Purchaser, enforceable in accordance with their respective terms and conditions
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (whether
applied in a proceeding at law or in equity).

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<PAGE> 22
described in the PPM and except for (i) the filing of the Purchaser's
registration statement with respect to the IPO ("Registration Statement") with
the U.S. Securities and Exchange Commission ("SEC") pursuant to the Securities
Act and the SEC's declaration of effectiveness of such Registration Statement
and the completion of all necessary filings required thereunder, and (ii) the
obtaining of all necessary consents and approvals required pursuant to state
securities or "blue sky" laws in connection with the IPO.

4.5 Defaults. Purchaser is not in default under or in violation
of, and the execution, delivery and performance of this Agreement and Purchaser
Related Documents and the consummation by Purchaser of the transactions
contemplated hereby and thereby will not result in a default under or in
violation of (i) any mortgage, indenture, charter or bylaw provision, contract,
agreement, lease, commitment or other instrument of any kind to which Purchaser
is a party or by which Purchaser or any of its properties or assets may be
bound or affected or (ii) any law, rule or regulation applicable to Purchaser
or any court injunction, order or decree, or any valid and enforceable order of
any governmental agency in effect as of the date hereof having jurisdiction
over Purchaser, which default or violation could adversely affect the ability
of Purchaser to consummate the transactions contemplated hereby or will have a
Purchaser Material Adverse Effect.

4.6 Financial Statements. Purchaser has provided certain
financial statements of the Purchaser to the Members ("Purchaser Financial
Statements") and such Purchaser Financial Statements have been prepared in
accordance with GAAP, are true and correct in all material respects, and are
fair presentations of the consolidated financial position, results of
operations and cash flows of Purchaser and its then existing consolidated
subsidiaries as of the dates and for the periods indicated. The books and
records of Purchaser have been kept in reasonable detail and accurately and
fairly reflect the transactions of Purchaser.

4.7 Taxes. Purchaser has either accrued, discharged or caused to
be discharged, as the same have become due, or the Purchaser Financial
Statements contain adequate accruals and reserves for, all taxes, interest
thereon, fines and penalties of every kind and character, attributable or
relating to the properties and business of Purchaser.

4.8 Compliance. Purchaser has full power, authority and legal
right and has all licenses, permits, qualifications, and other documentation
(including permits required under applicable Environmental Law) necessary to
own and/or operate its businesses, properties and assets and to carry on its
businesses as being conducted on the date of this Agreement, and such
businesses are now being conducted and such assets and properties are being
owned and/or operated in compliance with all applicable laws (including
Environmental Law), ordinances, rules and regulations of any governmental
agency of the United States, any state or political subdivision thereof, or any
foreign jurisdiction, all applicable court or administrative agency decrees,
awards and orders and all such licenses, permits, qualifications and other
documentation, except where the failure to comply will not have a Purchaser
Material Adverse Effect, and there is no existing condition or state of facts
which would give rise to a violation thereof or a liability or default
thereunder, except where a violation, liability or default will not have a
Purchaser Material Adverse Effect.

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4.9 Investment Company. Purchaser is not an "investment company"
or a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "holding company," a
"subsidiary company" of a "holding company" or an "affiliate" of a "holding
company" or a "public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.

4.10 Access. Purchaser has cooperated fully in permitting the
Members and their representatives to make a full investigation of the
properties, operations and financial condition of Purchaser; and afforded the
Shareholders and their representatives reasonable access to the offices,
buildings, real properties, machinery and equipment, inventory and supplies,
records, files, books of account, tax returns, agreements and commitments and
personnel of Purchaser.

4.11 Disclosure. No representation or warranty by Purchaser in
this Agreement and neither the PPM nor any statement contained in any
certificate delivered by Purchaser to the Shareholders pursuant to this
Agreement contains any untrue statement of a material fact or omits any
material fact necessary in order to make the statements herein or therein, in
light of the circumstances under which they are or were made, not misleading.

4.12 Purchaser Material Adverse Effect. The term "Purchaser
Material Adverse Effect" shall mean an adverse effect on the properties,
assets, financial position, results of operations, long-term debt, other
indebtedness, cash flows or contingent liabilities of Purchaser and its
consolidated subsidiaries, taken as a whole, in an amount of $25,000 or more.

5. CERTAIN OTHER ACTIONS, COVENANTS AND DOCUMENTS

The Company and the Members further agree with the Purchaser that from
the date hereof through the Closing Date:

5.1 Conduct of Business. The Members shall cause the Company to,
and the Company shall, conduct its operations according to its ordinary and
usual course of business to preserve substantially intact its business
organization, keep available the services of its officers and employees, and
maintain its present relationships with licensors, suppliers, distributors,
customers and others having significant business relationships with it. The
Company and Members agree to confer with the Purchaser to keep it informed with
respect to the general status of the on-going operations of the business of the
Company. Without limiting the generality of the foregoing, and except as
otherwise contemplated herein or agreed to by Purchaser, the Members will cause
the Company to, and the Company shall:

(1) carry on its business in substantially the same
manner as heretofore carried on and not introduce any material new
method of management, operation or accounting, nor provide discounted
services;

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(2) maintain its properties, facilities, equipment and
other assets, including those held under leases, in good working
order, condition and repair, ordinary wear and tear excepted;

(3) perform all of its obligations under all contracts to
which the Company is a party including all debt and lease instruments
and other agreements (including the Acquired Contracts) relating to or
affecting its business, assets, properties, equipment and rights, and
pay all vendors, suppliers, and other third parties (including
mechanics and materialmen) as and when its bills are due and pay in
full all payroll obligations when due;

(4) keep in full force and effect its present insurance
policies or other comparable insurance coverage;

(5) use its best efforts to maintain and preserve its
business organization intact, retain its present employees and
maintain its relationships with suppliers, customers and others having
business relations with the Company;

(6) refrain from effecting any change in the capital
structure of the Company; refrain from incurring any expenditures
outside the normal course of business, including any capital
expenditures in excess of $10,000, without prior written notification
to the Purchaser;

(7) refrain from starting or acquiring any new businesses
without the prior written consent of the Purchaser;

(8) maintain its present salaries and commission levels
for all officers, directors, employees or agents, except for the usual
and customary merit increases for employees;

(9) refrain from declaring or paying any bonuses, fees,
extraordinary commissions or any other unusual distributions to the
Members, management, sales agents, employees or other personnel
without prior written notification to the Purchaser;

(10) promptly notify the Purchaser of the receipt by the
Company or any Member of any notice or claim, written or oral, of (a)
default or breach by the Company under, or of any termination (other
than at the end of the stated term thereof) or cancellation, or threat
of termination (other than at end of the stated term thereof) of
cancellation, of any company contract, (b) any loss of, damage to or
disposition of, any of the properties, assets or the products of the
Company of a value of $10,000 or more, singly or in the aggregate
(other than the sale or use of inventories in the ordinary course of
business), (c) any claim or litigation threatened or instituted, or
any other adverse event or occurrence involving or affecting the
Company or any of its assets, properties, operations, businesses or
employees, and (d) any proposal made by any third party received by
the Company, or of which any Member obtains knowledge, in respect of
any sale or other disposition, direct or indirect, of the assets
(other than the sale or use of inventories in the ordinary course of
business), businesses or outstanding ownership or voting interests of
the Company;

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<PAGE> 25
(11) comply with and cause to be complied with all
applicable laws, rules, regulations and orders of all federal, state
and local governments or governmental agencies affecting or relating
to the Company or its assets, properties, operations, businesses or
employees except where the failure to comply will not have a Company
Material Adverse Effect;

(12) refrain from any sale, disposition, distribution or
encumbrance of any of its properties or assets and refrain from
entering into any agreement or commitment with respect to any such
sale, disposition, distribution or encumbrance (other than the sale or
use of inventories in the ordinary course of business);

(13) refrain from any purchase or redemption of any
ownership or voting interest of the Company and, refrain from issuing
any ownership interest other than the issuance of Class B Membership
Interests upon exercise of options described in Schedule 3.2;

(14) refrain from making any change in any accounting
principle, classification, policy or practice;

(15) refrain from effecting any amendment to the
organizational and governing instruments of the Company;

(16) refrain from entering into or agreeing to enter into
any merger or consolidation by the Company with or into, and refrain
from acquiring all or substantially all of the assets, capital stock
or business of, any person, corporation, partnership, association or
other business organization or division of any thereof;

(17) maintain its present debt and lease agreements and
instruments (except those that expire on their stated maturity or
lease termination dates); refrain from entering into any amendment
thereto or new debt or lease agreements or instruments; refrain from
increasing any indebtedness for borrowed money or issuing or selling
any debt securities or letters of credit; and refrain from making any
payments of any indebtedness or interest or other amounts thereon or
with respect thereto (other than regularly scheduled principal and
interest payments and payments of principal, interest and fees under
revolving lines of credit);

(18) manage working capital in the ordinary course
consistent with past practice and refrain from introducing any new
method of management or operation, providing any discounted services
or products, discounting any receivables or taking any action to
accelerate payment of any receivable prior to its due date; and

(19) except for customer contracts entered into in the
ordinary course of business, refrain from entering into any contract,
lease, undertaking, commitment, mortgage, indenture, note, security
agreement, license or other agreement (a) involving the receipt or
expenditure of more than $25,000 over the term thereof, (b) containing
provisions calling for the sale or purchase of raw materials, product
or service at prices that vary from the market prices of such raw
materials, products or services generally prevailing in customary
third-party

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<PAGE> 26
markets, (c) which include "take or pay", "meet or release", "most
favored nations" or similar pricing or delivery arrangements, (d) with
any officer, director, Member or affiliate of the Company, (e)
requiring the Company to indemnify or hold harmless any other person
or entity, (f) evidencing any warranty obligation of the Company with
respect to goods, services or products sold or leased by it (other
than warranties given in the normal course of business containing
substantially the same terms as those presently in effect), or (g)
imposing on the Company any confidentiality, non-disclosure or
non-compete obligation.

5.2 Cooperation. The Company and each Member will cooperate fully
with the Purchaser as to arrangements for the consummation of the transactions
contemplated hereby in an orderly fashion. The Company and the Members will
use their reasonable efforts to obtain, as soon as possible, all required
consents or approvals, and will take all other reasonable action which is
necessary or desirable to effect the assignment to Purchaser of the Licenses,
Personal Property Leases, Assumed Contracts, Real Property Leases, Real
Property, and Prepaid Items, as well as the telephone numbers and goodwill of
the Company and other rights of the Company related to the Acquired Assets.

5.3 Filings, Etc. Each Member and the Company will make all
filings which are required to be made by them to lawfully consummate the
transactions contemplated hereby.

5.4 Access. The Members and the Company will cooperate fully in
permitting the Purchaser and the Purchaser's lenders, underwriters and
placement agents and their respective representatives, advisers, consultants,
appraisers, auditors, engineers and other experts to make a full investigation
of the properties, operations and financial condition of the Company and will
afford the Purchaser and the Purchaser's lenders, underwriters and placement
agents and their respective representatives, advisers, consultants, appraisers,
auditors, engineers and other experts reasonable access to the offices,
buildings, real properties, machinery and equipment, inventory and supplies,
records, files, books of account, tax returns, agreements and commitments and
personnel of the Company. Without limitation of the foregoing, the Members and
the Company shall provide the Purchaser with such reasonably available
financial information (and schedules with respect thereto) with respect to the
Company as the Purchaser may reasonably request and will cooperate with and
assist representatives of the Purchaser in the preparation of such financial
information (and any opinions or reports with respect thereto) with respect to
the Company as the Purchaser may reasonably request. Notwithstanding the
above, the Purchaser and its respective lenders, underwriters and placement
agents and their respective representatives, advisers, consultants, appraisers,
engineers and other experts shall incur no liability with respect to control,
operation or management (or alleged control, operation or management) of the
Company as a result of the covenants in this Section 5.4.

5.5 Satisfaction of Conditions. The Company and the Members shall
(i) use all reasonable efforts to obtain, as soon as possible, all governmental
approvals required to be obtained by the Company and make, as soon as possible,
all filings with any governmental authority required on the part of the Company
to consummate the transactions contemplated hereby, (ii) use their reasonable
efforts to obtain, as soon as possible, all other consents to and approvals
required to be obtained by the Company to consummate the transactions
contemplated hereby, and (iii) otherwise use their

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<PAGE> 27
reasonable efforts to satisfy the conditions set forth in Section 7 of this
Agreement to the extent that such satisfaction is within their control.

5.6 Capital Budget. Exhibit 5.6 attached hereto contains the
capital expenditures budget of the Company from August 31, 1997 through
December 31, 1998, if any. Unless otherwise consented to by the Purchaser,
prior to the Closing, the Company will make capital expenditures only in
accordance with such budget.

5.7 Exclusivity. The Company and the Members shall not (i)
solicit, initiate, or encourage the submission of any proposal or offer from
any person or entity relating to the acquisition of any capital stock or other
voting securities, or any substantial portion of the assets of the Company
(including any acquisition structured as a merger, consolidation, or share
exchange) or (ii) participate in any negotiations or discussions regarding,
furnishing any information with respect to, assist or participate in, or
facilitate in any other manner any effort or attempt by any person or entity in
favor of any such acquisition. The Members and the Company will promptly
notify the Purchaser if any person or entity makes any proposal, offer,
inquiry, or contact with respect to any of the foregoing.

5.8 Covenant Not to Compete.

(i) Effective upon Closing for the considerations
specified in this Agreement and in recognition that the covenants by
the Members and the Company in this Section are a material inducement
to Purchaser to enter into and perform this Agreement, the Company and
each Member agrees that for the period (the "Restricted Period") from
the date hereof to (a) the date which is one year after the Closing
Date with respect to Members who are not employees of the Company and
(b) with respect to Members who are employees of the Company, the date
which is the later to occur of two years after the Closing Date or one
year following termination of such Member's employment regardless of
the reason for such termination, such Member will not represent,
engage in, carry on, directly or indirectly, any business with any
person or entity who was a customer or client of the Company during
the one year period preceding the beginning of the Restricted Period
(or any customer or client of an affiliate of the Company for which
the Shareholder has materially assisted such affiliate in serving such
customer or client ("Assisted Affiliate")) or any business within 100
miles of the city or county limits of any city or county in the United
States or foreign countries where the Company or any Assisted
Affiliates has an office or in which the Company provides services
which produce Company revenues of an amount equal to 2% or more of the
Company's revenues for the twelve complete calendar months preceding
the time of termination, which business competes with any business,
services or products produced, sold, conducted, developed, or in the
process of development by the Company or jointly by the Company and an
Assisted Affiliate, including any business that involves the
furnishing of information technology services that are the type of
services furnished by the Company, either for himself, as a member or
equity owner of a partnership or limited liability company, or as a
shareholder (other than as a shareholder of less than one percent (1%)
of the issued and outstanding stock of a publicly-held company whose
gross revenues exceed $100 million), investor, owner, officer, or
director of a company or other entity, or as an employee, agent,

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<PAGE> 28
trustee, manager, associate or consultant of any person, partnership,
corporation or other entity.

(ii) The Company and each Member agree that the
limitations set forth herein on their rights to compete with Purchaser
and its affiliates as set forth above are reasonable and necessary for
the protection of Purchaser and its affiliates. In this regard, each
Member specifically agrees that the limitations as to period of time
and geographic area, as well as all other restrictions on the
activities of the Member specified herein, are reasonable and
necessary for the protection of Purchaser and its affiliates. Each
Member agrees that, in the event that the provisions of this Section
should ever be deemed to exceed the scope of business, time or
geographic limitations permitted by applicable law, such provisions
shall be and are hereby reformed to the maximum scope of business,
time or geographic limitations permitted by applicable law.

(iii) Each Member agrees that the remedy at law for any
breach by such Member of this Section 5.8 will be inadequate and that
Purchaser shall be entitled to injunctive relief.

5.9 Limitation on Assignments to Purchaser. Notwithstanding
anything herein contained to the contrary, this Agreement shall not constitute
nor require an assignment to the Purchaser of any claim, lease, easement,
permit, license, contract or other right if an attempted assignment of the same
without the consent of any party would constitute a breach thereof unless and
unless and until such consent shall have been obtained. In the case of any
such claim, lease, easement, permit license, contract or other right which
cannot effectively be transferred to Purchaser without such consent, the
Members and the Company will each use all reasonable efforts to obtain such
consent promptly and if such consent is not obtained, the Company and the
Purchaser agree to enter into such reasonable arrangements as may be
appropriate to provide Purchaser with benefits purported to be vested in
Purchaser pursuant to the terms of this Agreement had such consent been
obtained.

5.10 Release. The Members and the Company do hereby release,
acquit and discharge Purchaser from any and all liabilities, obligations,
claims, demands, actions or causes of action arising from or relating to the
Acquired Assets, prior to the Closing Date other than those based on
obligations of Purchaser under this Agreement, including, without limitation,
any claim arising from any event, occurrence, act, omission or condition
relating to the Acquired Assets occurring or existing on or prior to the
Closing Date.

6. CERTAIN AGREEMENTS

The parties hereto further agree as follows:

6.1 Audit. Prior to Closing and at Purchaser's expense, Deloitte
and Touche, L.L.P. may complete an audit of the Company through December 31,
1997, and such additional review work as may be requested by the Purchaser
through and including the Closing Date (or other periods subsequent to December
31, 1997), and provide its report to the Purchaser and the Members.

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<PAGE> 29
6.2 Confidentiality. Prior to Closing, none of the Purchaser, the
Company nor the Member will disclose the terms of this Agreement to any person
other than their respective directors, officers, agents or representatives,
except as otherwise provided herein or unless required by law. The Company may
make appropriate disclosures of the general nature of the Exchange to its
employees, vendors and customers to protect the Company's goodwill and to
facilitate the Closing. The Purchaser may disclose pertinent information
regarding the Exchange to its existing and prospective investors, lenders, or
investment bankers or financial advisors for the purpose of obtaining
financing, including, without limitation, financing related to the IPO or other
offerings of its securities. The Purchaser may describe this Agreement and the
transactions contemplated hereby in any registration statement filed by the
Purchaser under the Securities Act and in reports filed by the Purchaser under
the Securities Exchange Act of 1934, and may file this Agreement as an exhibit
to any thereof. The Purchaser may also make appropriate disclosures of the
general nature of the Exchange and the identity, nature and scope of the
Company's operations to prospective acquisition candidates in connection with
the Purchaser's efforts to effect additional acquisitions.

6.3 Company Plans. Except as otherwise provided in this
Agreement, the Company Plans (within the meaning of Section 3.14 hereto), in
effect at the date of this Agreement, shall remain in effect at least until
Closing.

6.4 Tax-Free Exchange. None of the Members, the Purchaser or the
Company shall knowingly take or fail to take any action, which action or
failure to act would jeopardize the qualification of the Exchange as an
exchange within the meaning of Section 351 of the Code.

6.5 Sale of Motor Vehicles. The Members and the Company agree to
effect the sale of any Company-owned motor vehicle primarily used by an
executive management employee to such employee prior to the Closing at a price
equal to the depreciated book value of the vehicle as included in the Company
Financial Statements.

7. CONDITIONS PRECEDENT; CLOSING DELIVERIES

7.1 Conditions Precedent to the Obligations of the Purchaser. The
obligations of the Purchaser to effect the Exchange under this Agreement are
subject to the satisfaction of each of the following conditions, unless waived
by the Purchaser in writing to the extent permitted by applicable law.
Provisions in this Section 7.1 requiring the delivery of documents and
certificates to Purchaser shall be deemed satisfied by delivery of such
materials to the Escrow Agent for later release to Purchaser upon satisfaction
of the conditions contained in the Escrow Agreement.

7.1.1 Accuracy of Representations and Warranties. The
representations and warranties of the Members and the Company contained in this
Agreement, the Schedules and Exhibits hereto, or in any closing certificate or
document delivered to the Purchaser pursuant hereto shall be true and correct
at and as of the Closing Date as though made as of that time, other than such
representations and warranties as are specifically made as of another date, and
the Members and the Company shall each have delivered to the Purchaser a
certificate to that effect.

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7.1.2 Performance of Covenants. The Members and the
Company shall have performed and complied with all covenants of this Agreement
to be performed or complied with by them at or prior to the Closing Date, and
the Members and the Company shall each have delivered to the Purchaser a
certificate to that effect.

7.1.3 Legal Actions or Proceedings. No legal action or
proceeding shall have been instituted after the date hereof against the Company
or any Member or against the Purchaser arising by reason of the Exchange or any
of the transactions contemplated by this Agreement, which is reasonably likely
(i) to restrain, prohibit or invalidate the consummation of the transactions
contemplated by this Agreement, (ii) to have a Company Material Adverse Effect
or (iii) to have a Purchaser Material Adverse Effect after giving effect to the
consummation of the transactions contemplated by this Agreement, and the
Members and the Company shall each have delivered to the Purchaser a
certificate to that effect.

7.1.4 Approvals. The Company and the Members shall have
acquired all of the consents, approvals and waivers of third parties and of any
regulatory body or authority, whether required contractually or by applicable
law or otherwise, necessary for the execution, delivery and performance of this
Agreement (including the Company Related Documents and the Member Related
Documents) by the Company and the Members prior to the Closing Date, and the
Members and the Company shall each have delivered to the Purchaser a
certificate to that effect.

7.1.5 Closing Deliveries. All documents required to be
executed or delivered at Closing by the Members or the Company pursuant to
Section 7.3 of this Agreement shall have been so executed and delivered.

7.1.6 No Loss or Damage. No material loss or damage shall
have occurred on or prior to the Closing Date to any of the properties or
assets of the Company.

7.1.7 Licenses, etc. The Purchaser shall have obtained, or
will obtain under this Agreement, all such licenses and permits as are legally
required for the continued operation of the business of the Company after the
Closing Date, substantially the same as before.

7.1.8 No Material Adverse Change. Since the Balance Sheet
Date there shall not have been any event that in the reasonable judgment of the
Purchaser, adversely affects the properties, assets, financial condition,
results of operations, cash flows, businesses or prospects of the Company to a
material extent.

7.1.9 IPO. The Purchaser shall have completed the IPO on
terms acceptable to it, and the net proceeds thereof shall have been received
by the Purchaser.

7.1.10 Certain Corporate Actions. All necessary owner and
manager resolutions, waivers and consents required by the Company to consummate
the transactions contemplated hereunder shall have been executed and delivered.

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7.2 Conditions Precedent to the Obligations of the Members and the
Company. The obligations of the Members and the Company under this Agreement
are subject to the satisfaction of each of the following conditions, unless
waived by the Members and the Company in writing. Provisions in this Section
7.2 requiring the delivery of documents and certificates to the Company and the
Members shall be deemed satisfied by delivery of such materials to the Escrow
Agent for later release to the Company and the Members upon satisfaction of the
conditions contained in the Escrow Agreement.

7.2.1 Accuracy of Representations and Warranties. The
representations and warranties of the Purchaser contained in this Agreement or
in any closing certificate or document delivered to the Members or the Company
pursuant hereto shall be true and correct on and as of the Closing Date as
though made at and as of that date other than such representations and
warranties as are specifically made as of another date, and the Purchaser shall
have delivered to the Members and the Company a certificate to that effect.

7.2.2 Performance of Covenants. The Purchaser shall have
performed and complied with all covenants of this Agreement to be performed or
complied with by them at or prior to the Closing Date and the Purchaser shall
have delivered to the Members and the Company a certificate to such effect.

7.2.3 Approvals. Purchaser shall have acquired all of the
consents, approvals and waivers specified under Section 4.4 prior to the
Closing Date, and Purchaser shall deliver to the Members and the Company a
certificate to that effect.

7.2.4 Closing Deliveries. All documents required to be
executed or delivered at Closing by Purchaser pursuant to Section 7.5 of this
Agreement shall have been so executed and delivered.

7.3 Deliveries by the Company or the Members at the Closing. At
the Closing, simultaneously with the deliveries by the Purchaser specified in
Section 7.5 below, and in addition to any deliveries required to be made by the
Members and the Company pursuant to any other transaction document at the
Closing, the Company or the Members, as applicable, shall deliver or cause to
be delivered to the Escrow Agent the following:

7.3.1 Closing Certificates. The Members and the Company
shall execute and deliver the Escrow Agreement in the form of Exhibit 2.1 and
the certificates and documents required pursuant to Sections 7.1.1, 7.1.2,
7.1.3, 7.1.4 and 7.1.5.

7.3.2 Instruments of Transfer. At the Closing, the Company
shall deliver executed landlord's estoppel letters in a form satisfactory to
Purchaser with respect to all Real Property Leases, and the Company shall
execute and deliver to Purchaser the following documents:

(i) a general Conveyance, Transfer, Assignment
and Assumption Agreement, in the form attached as Exhibit 7.3.2(i)
hereto, conveying all of the Acquired Assets other than the Real
Property Leases to Purchaser;

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<PAGE> 32
(ii) an Assignment and Assumption of the Real
Property Leases, in the form attached as Exhibit 7.3.2(ii) hereto; and

(iii) such other instruments of transfer as shall
be reasonably necessary or appropriate to vest in Purchaser good and
indefeasible title to the Acquired Assets and to evidence the
assignment by the Company and the Assumption by Purchaser of the
Assumed Obligations.

7.3.3 Stock Transfer Restriction Agreement. The Company and
the Members shall execute and deliver a Stock Transfer Restriction Agreement,
effective as of the Closing Date, substantially in the form set forth in
Exhibit 7.3.3.

7.3.4 Employment Agreements. Each Employee of the Company
specified on Exhibit 7.3.4 hereto shall execute and deliver an Employment
Agreement with SCS Delaware, effective as of the Closing Date, substantially in
the form of the applicable form of the three forms of Employment Agreement set
forth in Exhibit 7.3.4A, as stated by each employee's name on Exhibit 7.3.4.

7.3.5 Opinion of Counsel for the Members and the Company.
The Members and the Company shall deliver the favorable opinion of Cohen &
Ostler, dated as of the Closing Date, substantially in the form and to the
effect set forth in Exhibit 7.3.5 attached hereto.

7.3.6 Documents.. The Company and the Members shall
execute and deliver, the documents, certificates, opinions, instruments and
agreements required to be executed and delivered by the Company or any Member
at the Closing as contemplated hereby or as may be reasonably requested by the
Purchaser.

7.4 No Waiver. The consummation of the Closing shall not be
deemed to be a waiver by the Purchaser of any of its rights or remedies against
the Members or the Company hereunder for any breach of warranty, covenant or
agreement by the Company or the Members herein irrespective of any knowledge of
or investigation made by or on behalf of the Purchaser; provided, however, that
if the Company shall disclose in writing to the Purchaser prior to the Closing
Date a specified breach of a specifically identified representation, warranty,
covenant or agreement of the Company or a Member herein by the Company or a
Member, and requests a waiver thereof by the Purchaser, and the Purchaser shall
waive any such specifically identified breach in writing prior to the Closing
Date, the Purchaser, for themselves and for each Purchaser Indemnified Party
(as defined below) shall be deemed to have waived their respective rights and
remedies hereunder for, and the Members and the Company shall have no liability
with respect to any such specifically identified breach to the extent so
identified by the Company and so waived by the Purchaser.

7.5 Deliveries by the Purchaser at the Closing. At the Closing,
simultaneously with the deliveries by the Members specified in Section 7.3
above, and in addition to any other deliveries to be made by the Purchaser
pursuant to any other transaction document at the Closing, the Purchaser, as
applicable, shall deliver or cause to be delivered to the Members and the
Company the following:

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7.5.1 Closing Certificates. The Purchaser shall execute
and deliver the Escrow Agreement in the form of Exhibit 2.1, the certificates
and documents required pursuant to Sections 7.2.1, 7.2.2, 7.2.3 and 7.2.4.

7.5.2 Instruments of Transfer. At the Closing, the
Purchaser shall execute and deliver to the Company the following documents:

(i) the general Conveyance, Transfer, Assignment
and Assumption Agreement, in the form attached as Exhibit 7.5.2(i)
hereto;

(ii) the Assignment and Assumption of the Real
Property Leases, in the form attached as Exhibit 7.5.2(ii) hereto; and

(iii) such other instruments or documents as shall
be reasonably necessary or appropriate to vest in Purchaser good and
indefeasible title to the Acquired Assets and to evidence the
Assumption by Purchaser of the Assumed Obligations.

7.5.3 Opinion of Counsel for the Purchaser. The Purchaser
shall deliver the favorable opinion of its legal counsel dated as of the
Closing Date, substantially in the form and to the effect set forth in Exhibit
7.5.3.

7.5.4 Closing Consideration. The Purchaser shall deliver
the Closing Consideration to the Company as set forth in Section 1.5 hereof.

7.6 No Waiver. The consummation of the Closing shall not be
deemed to be a waiver by the Members or the Company of any of their rights or
remedies hereunder for breach of any warranty, covenant or agreement herein by
the Purchaser irrespective of any knowledge of or investigation with respect
thereto made by or on behalf of any Member or the Company; provided, however,
that if the Purchaser shall disclose in writing to the Members prior to the
Closing a specified breach of a specifically identified representation,
warranty, covenant or agreement of the Purchaser contained herein by the
Purchaser, and requests a waiver thereof by the Company and the Members, and
the Company and the Members shall waive any such specifically identified breach
in writing prior to the Closing, the Company and the Members shall be deemed to
have waived their rights and remedies hereunder for, and the Purchaser shall
have no liability or obligation to the Members or the Company with respect to,
any such specifically identified breach, to the extent so identified by the
Purchaser and waived by the Company and the Members.

7.7 Conditions Precedent to Completion of the Closing. The
obligations of the parties to consummate the Exchange under this Agreement on
the IPO Closing Date are subject to the satisfaction of each of the following
conditions (unless waived by each of the parties in writing):

7.7.1 Legal Actions or Proceedings. No legal action or
proceeding shall have been instituted after the date hereof against the Company
or the Members which is reasonably likely (i) to restrain, prohibit or
invalidate the consummation of the transactions contemplated by this Agreement,

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<PAGE> 34
(ii) to have a Company Material Adverse Effect or (iii) to have a Purchaser
Material Adverse Effect after giving effect to the consummation of the
transactions contemplated by this Agreement.

7.7.2 IPO. The Purchaser shall have completed the IPO on
terms described in the Registration Statement for the IPO, and the net proceeds
thereof shall have been received by the Purchaser.

7.8 Delivery of the Closing Consideration. On the IPO Closing
Date, the Purchaser shall deliver the Closing Consideration to the Company and
the Escrow Agent shall release and deliver all documents and certificates held
in escrow to the appropriate parties.

8. SURVIVAL; INDEMNIFICATIONS

8.1 Survival. The representations and warranties set forth in
this Agreement and the other documents, instruments and agreements contemplated
hereby shall survive after the date hereof to the extent provided herein. The
representations and warranties of the Members and the Company in the Member
Related Documents and the Company Related Documents other than those of the
Members in Sections 3.4 and 3.9, shall survive for a period of twenty-four (24)
months after the date hereof and the representations and warranties of the
Members contained in Sections 3.4 and 3.9 shall survive for the maximum period
permitted by applicable law. The representations and warranties of Purchaser
herein and in the Purchaser Related Documents shall survive for a period of
twenty-four (24) months after the date hereof. The periods of survival of the
representations and warranties as stated above in this Section 8.1 are referred
to herein as the "Survival Period." The liabilities of the parties under their
respective representations and warranties shall expire as of the expiration of
the applicable Survival Period and no claim for indemnification may be made
with respect to any breach of any representation or warranty, the applicable
Survival Period of which shall have expired, except to the extent that written
notice of such breach shall have been given to the party against which such
claim is asserted on or before the date of such expiration. The covenants and
agreements of the parties herein and in other documents and instruments
executed and delivered in connection with the closing of the transactions
contemplated hereby shall survive for the maximum period permitted by law.

8.2 Indemnification.

8.2.1 Purchaser Indemnified Parties. Subject to the
provisions of Sections 8.1 and 8.3 hereof, the Company and the Members, jointly
and severally, shall indemnify, save and hold harmless Purchaser and any of its
assignees (including lenders) and all of their respective officers, directors,
employees, representatives, agents, advisors and consultants and all of their
respective heirs, legal representatives, successors and assigns (collectively,
the "Purchaser Indemnified Parties") from and against any and all damages,
liabilities, losses, claims, deficiencies, penalties, interest, expenses,
fines, assessments, charges and costs, including reasonable attorneys' fees and
court costs (collectively "Losses") arising from, out of or in any manner
connected with or based on:

28
<PAGE> 35
(i) the breach of any covenant of the Company or any
Member or the failure by the Company or the Members to perform any
obligation of any Member or the Company contained herein or in any
Company Related Document or Member Related Document;

(ii) any inaccuracy or breach of any representation or
warranty of any Member contained herein or in any Member Related
Document;

(iii) any inaccuracy or breach of any representation or
warranty of the Company contained in any Company Related Document;

(iv) any act, omission, occurrence, event, condition or
circumstance occurring or existing at any time on, before or after the
Closing and involving or related to the Excluded Assets; and

(v) any act, omission, occurrence, event, condition or
circumstance occurring or existing at any time on or before the IPO
Closing Date and involving or related to the Acquired Assets or the
properties, business or operations now or previously owned or operated
by the Company.

8.2.2 Minimum Losses. For purposes of this Section 8.2.2,
Losses shall be calculated with respect to any inaccuracy or breach of any
representation or warranty without giving effect to any clause which would
permit such inaccuracy or breach up to an amount which would be deemed a
Company or Purchaser Material Adverse Effect. The Company and the Members
shall have no obligation under Section 8.2.1 until the aggregate amount of all
such Losses equal or exceed $75,000 (whether or not any particular loss
resulted in a Company Material Adverse Effect), at which time the Company and
the Members shall be subject to the provisions of Section 8.2.1 with respect to
any Losses of the Purchaser Indemnified Parties above the $75,000 allowance.

8.2.3 Purchaser Indemnity. Subject to the provisions of
Sections 8.1 and 8.3, Purchaser shall indemnify, save and hold harmless the
Company, the Members and all of their respective heirs, legal representatives,
successors and assigns from and against all Losses arising from, out of or in
any manner connected with or based on:

(i) any breach of any covenant of Purchaser or the
failure by Purchaser to perform any of its obligations contained
herein or in the Purchaser Related Documents;

(ii) any inaccuracy or breach of any representation or
warranty of Purchaser contained herein or in the Purchaser Related
Documents; and

(iii) any act, omission, event, condition or circumstance
occurring or existing at any time after (but not on or before) the IPO
Closing Date that involve or relate to the Acquired Assets or the
Assumed Obligations; provided, however, that this clause (iii) shall
not apply to any Losses to the extent that such Losses result from

29
<PAGE> 36
any Member's acts or omissions after the date hereof as an officer,
director and/or employee of Purchaser or its affiliates.

8.3 Limitations. The aggregate liability of the Members and the
Company under Section 8.2.1 shall not exceed the aggregate Purchase Price.
Each Member's individual liability under Section 8.2.1 shall not exceed the pro
rata portion of the Purchase Price attributable to such Member's Member
Interest based on the ratios for sharing of distributions under the Company's
Articles of Organization and Operating Agreement. The aggregate liability of
the Purchaser under Section 8.2.3 shall not exceed the amount of the aggregate
Purchase Price paid with Purchaser Common Stock. Neither the Company's nor a
Member's indemnity obligation under Section 8.2.1 shall extend to any breach by
another Member of any covenant, or to a failure by another Member to perform
any obligation, under such other Member's Member Related Document.

8.4 Procedures for Indemnification.

8.4.1 Notice. The party (the "Indemnified Party") that may
be entitled to indemnity hereunder shall give prompt notice to the party
obligated to give indemnity hereunder (the "Indemnifying Party") of the
assertion of any claim, or the commencement of any suit, action or proceeding
in respect of which indemnity may be sought hereunder. Any failure on the part
of any Indemnified Party to give the notice described in this Section 8.4.1
shall relieve the Indemnifying Party of its obligations under this Article 6
only to the extent that such Indemnifying Party has been prejudiced by the lack
of timely and adequate notice (except that the Indemnifying Party shall not be
liable for any expenses incurred by the Indemnified Party during the period in
which the Indemnified Party failed to give such notice). Thereafter, the
Indemnified Party shall deliver to the Indemnifying Party, promptly (and in any
event within 10 days thereof) after the Indemnified Party's receipt thereof,
copies of all notices and documents (including court papers) received by the
Indemnified Party relating to such claim, action, suit or proceeding.

8.4.2 Legal Defense. The Purchaser shall have the
obligation to assume the defense or settlement of any third-party claim, suit,
action or proceeding in respect of which indemnity may be sought hereunder,
provided that (i) the Members and the Company shall at all times have the
right, at their option, to participate fully therein, and (ii) if the Purchaser
does not proceed diligently to defend the third-party claim, suit, action or
proceeding within 10 days after receipt of notice of such third-party claim,
suit, action or proceeding, the Members and the Company shall have the right,
but not the obligation, to undertake the defense of any such third-party claim,
suit, action or proceeding.

30
<PAGE> 37
which the Indemnifying Party desires to accept and to pay all Losses with
respect thereto ("Settlement Notice") and the Indemnified Party fails or
refuses to consent to such settlement within 10 days after delivery of the
Settlement Notice to the Indemnified Party, and such settlement otherwise
complies with the provisions of this Section 8.4, the Indemnifying Party shall
not be liable for Losses arising from such third-party suit, action, proceeding
or investigation in excess of the amount proposed in such settlement offer.
Notwithstanding the foregoing, no Indemnifying Party will consent to the entry
of any judgment or enter into any settlement without the consent of the
Indemnified Party, if such judgment or settlement imposes any obligation or
liability upon the Indemnified Party other than the execution, delivery or
approval thereof and customary releases of claims with respect to the subject
matter thereof.

9. TERMINATION

9.1 Grounds for Termination. This Agreement may be terminated
only as provided below.

9.1.1 Prior to Closing. The parties may terminate this
Agreement at any time prior to the Closing only as provided below:

(i) Mutual Consent. Purchaser and the Company may
terminate this Agreement by mutual written consent at any time prior
to the Closing;

(ii) Termination by Purchaser. Purchaser may terminate
this Agreement by giving written notice thereof to the Company at any
time prior to the Closing: (a) in the event that the Members or the
Company has breached any material representation, warranty, or
covenant contained in this Agreement in any material respect,
Purchaser has notified the Members and the Company of the breach, and
the breach has continued without cure until the earlier of 20 days
after the notice of such breach or the Closing Date, whichever is
earlier, (b) if the Registration Statement for the IPO has not been
filed with the Securities and Exchange Commission on or before
December 31, 1997, or (c) if the IPO Closing Date shall not have
occurred on or before April 30, 1998, by reason of the failure of any
condition

31
<PAGE> 38
precedent under Section 7.1 hereof (unless the failure results
primarily from Purchaser itself breaching any representation,
warranty, or covenant contained in this Agreement); and

(iii) Termination by the Company. The Company may
terminate this Agreement by giving written notice thereof to Purchaser
at any time prior to the Closing: (a) in the event the Purchaser has
breached any material representation, warranty, or covenant contained
in this Agreement in any material respect, the Company has notified
Purchaser of the breach, and the breach has continued without cure
until the earlier of 20 days after the notice of such breach or the
Closing Date, whichever is earlier, (b) if the Registration Statement
for the IPO has not been filed with the Securities and Exchange
Commission on or before December 31, 1997, or (c) if the IPO Closing
Date shall not have occurred on or before April 30, 1998, by reason of
the failure of any condition precedent under Section 7.2 hereof
(unless the failure results primarily from the Company and the Member
breaching any representation, warranty, or covenant contained in this
Agreement).

9.1.2 After the Closing Date. This agreement may be
terminated after the Closing only as follows:

(i) Termination of Underwriting Agreement. Upon
termination, prior to the successful completion of the IPO, of the
agreement between Purchaser and certain investment banking firms (the
"Underwriting Agreement") under which such firms agree to purchase
shares of Purchaser Common Stock from Purchaser on a firm commitment
basis for resale to the public initially at the IPO Price, Purchaser
or the Company may each terminate this Agreement by providing written
notice to the other.

(ii) Automatic Termination. This Agreement shall
terminate automatically and without action on the part of any party
hereto if the IPO is not consummated within 10 business days after the
Closing.

10. MISCELLANEOUS

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<PAGE> 39
To the Company or the Members:

Michael A. Ober
Software Consulting Services America, LLC
950 Tower Lane, Suite 1850
Foster City, California 94404
Telecopy: (415) 578-6530

Copy to:

Mark R. Ostler
Cohen & Ostler
Attorneys at Law
525 University Ave., Suite 410
Palo Alto, California 94301
Telecopy: (415) 321-0171

To the Purchaser:

BrightStar Information Technology Group, Inc.
Attn: President
10375 Richmond Avenue, Suite 1620
Houston, Texas 77042
Telecopy: (713) 361-2501

Copy to:

Robert J. Viguet, Jr.
Chamberlain, Hrdlicka, White, Williams & Martin
1200 Smith Street, Suite 1400
Houston, Texas 77002-4310
Telecopy: (713) 658-2553

or other such address as shall be furnished in writing by any such party to the
other party, and such notice shall be effective and be deemed to have been
given as of the date actually received.

10.2 Further Documents. The Members and the Company shall, at any
time and from time to time after the date hereof, upon request by the Purchaser
and without further consideration, execute and deliver such instruments or
other documents and take such further action as may be

33
<PAGE> 40
reasonably required in order to perfect any other undertaking made by the
Members or the Company hereunder.

10.3 Assignability. Neither the Company nor any Member shall
assign this Agreement in whole or in part without the prior written consent of
the Purchaser, except by the operation of law. The Purchaser may assign its
rights under this Agreement, the Company Related Documents and the Member
Related Documents without the consent of any of the Members or the Company.

10.4 Exhibits and Schedules. The Exhibits and Schedules (and any
appendices thereto) referred to in this Agreement are and shall be incorporated
herein and made a part hereof.

10.5 Entire Agreement. This Agreement constitutes the full
understanding of the parties, a complete allocation of risks between them and a
complete and exclusive statement of the terms and conditions of their agreement
relating to the subject matter hereof and supersedes any and all prior
agreements, whether written or oral, that may exist between the parties with
respect thereto. Except as otherwise specifically provided in this Agreement,
no conditions, usage of trade, course of dealing or performance, understanding
or agreement purporting to modify, vary, explain or supplement the terms or
conditions of this Agreement shall be binding unless hereafter made in writing
and signed by the party to be bound, and no modification shall be effected by
the acknowledgment or acceptance of documents containing terms or conditions at
variance with or in addition to those set forth in this Agreement. No waiver
by any party with respect to any breach or default or of any right or remedy
and no course of dealing shall be deemed to constitute a continuing waiver of
any other breach or default or of any other right or remedy, unless such waiver
be expressed in writing signed by the party to be bound. Failure of a party to
exercise any right shall not be deemed a waiver of such right or rights in the
future.

10.6 Headings. Headings as to the contents of particular articles
and sections are for convenience only and are in no way to be construed as part
of this Agreement or as a limitation of the scope of the particular articles or
sections to which they refer.

10.7 CONTROLLING LAW. THE VALIDITY, INTERPRETATION AND PERFORMANCE
OF THIS AGREEMENT AND ANY DISPUTE CONNECTED HEREWITH SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

10.8 Public Announcements. Neither the Company nor any Member
shall make any press release, public announcement, or public confirmation or
disclose any other information regarding this Agreement or the contents hereof
without the consent of the Purchaser.

10.9 No Third Party Beneficiaries. Except as set forth in Article
8, no person or entity not a party to this Agreement shall have rights under
this Agreement as a third party beneficiary or otherwise.

10.10 Amendments and Waivers. This Agreement may be amended only by
the Purchaser, the Company, and the Members, by an instrument in writing signed
on behalf of each such party. Any

34
<PAGE> 41
term or provision of this Agreement (other than any requirements for Member
approvals) may be waived in writing at any time by the party which is, or whose
owners are, entitled to the benefits thereof.

10.11 No Employee Rights. Nothing herein expressed or implied shall
confer upon any employee of the Company, any other employee or legal
representatives or beneficiaries of any thereof any rights or remedies,
including any right to employment or continued employment for any specified
period, of any nature or kind whatsoever under or by reason of this Agreement,
or shall cause the employment status of any employee to be other than
terminable at will.

10.12 Non-Recourse. No recourse for the payment of any amounts due
hereunder or for any claim based on this Agreement or the transactions
contemplated hereby or otherwise in respect thereof, and no recourse under or
upon any obligation, covenant or agreement of the Purchaser in this Agreement
shall be had against any incorporator, organizer, promoter, shareholder,
officer, director, employee or representative as such (other than the Members
as set forth herein), past, present or future, of the Purchaser or of any
successor corporation, whether by virtue of any constitution, statute or rule
of law, or by enforcement of any assessment or penalty or otherwise; it being
expressly understood that all such obligations are those of the Purchaser as a
corporate entity.

10.13 When Effective. This Agreement shall become effective only
upon the execution and delivery of one or more counterparts of this Agreement
by each of the Purchaser, the Company and the Members.

10.14 Takeover Statutes. If any "fair price," "moratorium,"
"control share acquisition" or other form of anti-takeover statute or
regulation shall become applicable to the transactions contemplated hereby,
Purchaser, and the Company and its Members shall grant such approvals and take
such actions as are necessary so that the transactions contemplated by this
Agreement may be consummated as promptly as practicable on the terms
contemplated herein and otherwise act to eliminate or minimize the effects of
such statute or regulation on the transactions contemplated herein.

10.15 Number and Gender of Words. Whenever herein the singular
number is used, the same shall include the plural where appropriate and words
of any gender shall include each other gender where appropriate.

10.16 Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid, or unenforceable under present or future laws,
such provisions shall be fully severable as if such invalid or unenforceable
provisions had never comprised a part of the Agreement; and the remaining
provisions of the Agreement shall remain in full force and effect and shall not
be affected by the illegal, invalid or unenforceable provision or by its
severance from this Agreement. Furthermore, in lieu of such illegal, invalid
or unenforceable provision, there shall be automatically as a part of this
Agreement, a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.

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<PAGE> 42
10.17 Multiple Counterparts. This Agreement may be executed in a
number of identical counterparts. If so executed, each of such counterparts is
to be deemed an original for all purposes and all such counterparts shall,
collectively, constitute one agreement, but, in making proof of this Agreement,
it shall not be necessary to produce or account for more than one such
counterpart.

10.18 No Rule of Construction. All of the parties hereto have been
represented by counsel in the negotiations and preparation of this Agreement;
therefore, this Agreement will be deemed to be drafted by each of the parties
hereto, and no rule of construction will be invoked respecting the authorship
of this Agreement.

10.19 Expenses. Each of the parties shall bear all of their own
expenses in connection with the negotiation and closing of this Agreement and
the transactions contemplated hereby; provided that Purchaser shall pay all
expenses associated with the accounting and auditing fees and expenses of
Deloitte and Touche, L.L.P. and the reasonable legal fees of the Company
relating to this Agreement; provided further that all fees, costs and expenses
(other than the fees and expenses of Deloitte & Touche, L.L.P.) incurred by the
Company and payable by the Purchaser in connection with the negotiation and
closing of this Agreement and the transactions contemplated hereby shall be
included in Current Liabilities of the Company for purposes of determining Net
Working Capital.

10.20 Broker's Fees. Any broker's, finder's or similar fees
incurred by the Company or the Members shall be paid by the Company and/or the
Members, and the Company and the Members will indemnify the Purchaser from any
liability or costs respecting the same.

10.21 Section 351 Plan of Exchange. Simultaneously with the
execution hereof, the parties hereto shall execute the Section 351 Plan of
Exchange in the form set forth in Exhibit 10.22 hereto.

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<PAGE> 43
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered on the date first hereinabove written.

PURCHASER:

BRIGHTSTAR INFORMATION
TECHNOLOGY GROUP, INC.

By: /s/ MARSHALL G. WEBB
---------------------------
Marshall G. Webb, President

COMPANY:

SOFTWARE CONSULTING SERVICES
AMERICA, LLC

By: /s/ MICHAEL OBER
---------------------------

MEMBERS:

WELLINGTON INVESTMENTS

By: /s/ ROBERT S. LANGFORD
---------------------------

Name: ROBERT S. LANGFORD
-------------------------

Title: DIRECTOR
------------------------

/s/ MICHAEL OBER
------------------------------
MICHAEL OBER

/s/ PHILIP LABARBERA
------------------------------
PHILIP LaBARBERA

/s/ DANIEL ARRA
------------------------------
DANIEL ARRA

/s/ THOMAS O'GORMAN
------------------------------
THOMAS O'GORMAN

<PAGE> 1
EXHIBIT 10.6

AGREEMENT AND PLAN OF EXCHANGE

BY AND AMONG

BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.

AND

SOFTWARE CONSULTING SERVICES PTY. LTD.
IN ITS CAPACITY AS TRUSTEE OF THE
SCS UNIT TRUST AND
THE UNDERSIGNED HOLDERS OF ALL
OF THE OUTSTANDING OWNERSHIP INTERESTS
IN THE SCS UNIT TRUST

AND DATA COLLECTION SYSTEMS INTEGRATION
(DCSI) PTY LTD (ACN 080 412 166)

December 20, 1997

<PAGE> 2

AGREEMENT AND PLAN OF EXCHANGE

This AGREEMENT AND PLAN OF EXCHANGE (this "Agreement") is effective as
of December 20, 1997 (the "Effective Date"), between:

BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC., a Delaware corporation of 10375
Richmond Avenue, Suite 1620, Houston, Texas, USA, 77042 (the "Purchaser");

SOFTWARE CONSULTING SERVICES PTY. LTD., (ACN 005 931 886) of c/-Cugley
Ciravolo Bordin Pty Ltd, 8-10 Flintoff Street, Greensborough, Victoria, 3088 in
its capacity as trustee of the Trust ("Company");

KENTCOM PTY LTD (ACN 065 369 440) in its own right and in its capacity as
trustee of the Fazio Family Trust and SALVATORE FAZIO both of 7 Henricks Court,
Mill Park, Victoria, 3082 and PEPPER TREE PTY LTD (ACN 007 342 538) in its own
right and in its capacity as trustee of the Banks Trust and CHRISTOPHER RICHARD
BANKS both of 61 Seaward Loop, Sorrento, WA, 6020 and CEDARMAN PTY LTD (ACN 067
279 850) in its own right and in its capacity as trustee of the Caswell Trust
and STEPHEN DONALD CASWELL both of 50 Green Street, Ivanhoe, Victoria, 3079 and
QUICKTREND PTY LTD (ACN 067 596 801) in its own right and in its capacity as
trustee of the Lock Trust and DESMOND JOHN LOCK both of 24 Bradleys Lane,
Warrandyte, Victoria, 3133, and KULLAMURRA PTY LTD (ACN 066 512 534) in its own
right and in its capacity as trustee of the Kullamurra Trust and ROBERT STEPHEN
LANGFORD both of 7 Rosehill Road, Lower Plenty, Victoria, 3113 and KPMG
INFORMATION SOLUTIONS PTY LTD (ACN 065 410 746) in its own right of Level 5,
161 Collins Street, Melbourne, Victoria, 3000 (together, the "Owners"); and

DATA COLLECTION SYSTEMS INTEGRATION PTY LTD (ACN 080 412 166) of 8-10 Flintoff
Street, Greensborough, Victoria ("DCSI").

WHEREAS, Purchaser, the Company, and the Owners have each approved the
assignment and transfer to Purchaser of substantially all of the assets of the
Company in exchange for cash and shares of common stock, US$.001 par value per
share of Purchaser ("Purchaser Common Stock") and the assumption of certain
liabilities of the Company as provided herein (the "Exchange");

WHEREAS, the Exchange is one of several related transactions involving
the assignment of property to Purchaser in exchange for common stock and cash
of Purchaser as part of an overall plan that includes an initial public
offering of Purchaser Common Stock; and for United States (U.S.) income tax
purposes, it is intended that this Exchange and the other related exchange
transactions with Purchaser shall qualify as exchanges under the provisions of
Section 351 of the U.S. Internal Revenue Code of 1986, as amended (the "Code");

WHEREAS, the Exchange has been approved as required by applicable law
and by appropriate action of the Company, the Trust, the Owners and Purchaser,
and the Exchange has been approved by the Owners as the holders of all of the
outstanding ownership interests of the Trust and Company as evidenced by their
signatures hereto; and

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<PAGE> 3
WHEREAS:

(1) the Company owns 40% of the equity in the TCS Discretionary
Unit Trust ("TCS Trust"), being a trust constituted by trust
deed dated 26 June 1996 with Technology Consulting and
Solutions Pty Ltd (ACN 074 527 325) as trustee and the Company
as trustee for the Trust, Kullamurra Pty Ltd as trustee for
the Kullamurra Trust and Investment Technology Solutions Pty
Ltd (ACN 073 110 693) as trustee for the Technology Investment
Trust as original unit holders;

(2) the TCS Trust owns 70% of the equity in the ASAP Discretionary
Unit Trust, being a trust constituted by trust deed with
Australian Solutions & People Pty Ltd (ACN 072 496 247)
("ASAP") as trustee and Robert Langford, Steve Caswell,
Technology Consulting and Solutions Pty Ltd, Peter James Boyd
and Foligo Pty Ltd (ACN 074 103 763) as original unit holders;
and

(3) the Company owns 100% of the equity in DCSI.

NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties hereto
agree as follows:

1. THE EXCHANGE

1.1 Purchase and Sale. Subject to the terms and conditions of this
Agreement, and in consideration of delivery of the Purchase Price (as defined
below) by Purchaser and the assumption of the Assumed Obligations (as defined
below) by Purchaser, the Company agrees to sell, convey, assign, transfer,
exchange and deliver to Purchaser, and Purchaser agrees to purchase, exchange
and acquire from the Company, all of the assets owned by the Company as at the
Closing Date (as that term is defined in section 2.1), of every kind, character
and description, other than the "Excluded Assets" specified under Section 1.2
hereof (the "Acquired Assets"), whether such assets are tangible, intangible,
real, personal or mixed, and wheresoever located, and whether carried on the
books of the Company, including, but not limited to, the assets listed and/or
described as follows and in the Schedules 1.1.1-1.1.14 referenced under this
Section 1.1, free and clear of any and all liens, claims, charges, pledges,
security interests, exceptions or other encumbrances of any kind other than
those described on Schedule 3.4; and the Company and the Owners represent and
warrant to the Purchaser that the following referenced Schedules 1.1.1-1.1.13
hereto are accurate and complete:

1.1.2 Personal Property Leases. To the extent assignable,
all of the Company's rights in, to and under all leases of equipment,
machinery, tools, appliances, implements, spare parts, instruments, furniture,
supplies, and other items of tangible personal property ("Personal Property
Leases"), a correct and complete list of which leased personal property is set
forth on Schedule 1.1.2 hereto;

2
<PAGE> 4
1.1.3 Real Property. All right, title and interests to the
land, buildings, improvements and other real property owned by the Company
("Real Property"), a correct and complete list of which is set forth on
Schedule 1.1.3 hereto;

1.1.4 Real Property Leases. To the extent assignable, the
leasehold estates created by, and all rights conferred on the Company under or
by virtue of, all real property lease agreements (such real property lease
agreements are hereinafter referred to as "Real Property Leases" and the
parcels of real property in which the Company has a leasehold interest and that
are subject to the Real Property Leases are hereinafter referred to as "Leased
Property"), a correct and complete list of which is set forth on Schedule 1.1.4
hereto, including all rights, titles and interests, to use all warehouses,
storage facilities, buildings, works, structures, fixtures, landings,
constructions in progress, improvements, betterments, installations and
additions constructed or located on or attached or affixed to the Leased
Property;

1.1.5 Cash and Accounts Receivable. All of the Company's
cash and accounts receivable as at the IPO Closing Date , being the accounts
receivable as of 30 September 1997 as identified in schedule 1.1.5 hereto as
adjusted between 30 September 1997 and the IPO Closing Date in the ordinary
course of business and consistent with the Company's past practices ("Accounts
Receivable") less any amounts paid out to the Owners pursuant to section 8.

1.1.6 Acquired Contracts. To the extent assignable, all of
the Company's rights in, to and under all contracts, agreements, insurance
policies, purchase orders and commitments, notes, mortgages, security
agreements, pledges, guarantees, warranties, and any other contracts or
agreements (excluding employment contracts) together with all instruments and
all documents of title representing any of the foregoing, all rights in any
merchandise or goods which any of the same represent, and all rights, title,
security and guarantees in favor of the Company with respect to any of the
foregoing (the "Acquired Contracts"), and a correct and complete list of the
material contracts which form part of the Acquired Contracts is set forth on
Schedule 1.1.6 hereto (exclusive of any contracts that are Excluded Assets);

1.1.7 Licenses. To the extent assignable, all material
franchises, licenses (including intellectual property licenses), sublicenses,
permits, certificates, approvals and other authorizations from governments and
any other entities or persons necessary to own and/or operate any of the other
Acquired Assets (the "Licenses"), a complete and correct list of which is set
forth on the Schedule 1.1.8 hereto;

1.1.8 Intellectual Property. All of the intellectual
property owned by the Company including, but not limited to: (i) United States,
Australian and foreign patents, patent applications, trademarks, trademark
applications and registrations, trade dress, brand names, logos, service marks,
service mark applications and registrations, copyrights, copyright applications
and registrations and trade names, fictitious names and assumed names of the
Company including, without limitation, all such rights described on Schedule
1.1.9 hereto; (ii) proprietary data and technical, manufacturing know-how and
information (and all materials embodying such information); (iii) developments,
discoveries, inventions, ideas and trade secrets of the Company; (iv) client
lists and information, marketing plans, business plans, customer and supplier
lists, pricing policies and purchasing information; (v) computer programs and
other software, computer technology, data bases operating systems, source and
object codes, flow charts, algorithms, coding sheets, routines, compilers,

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<PAGE> 5
assemblers, design concepts and manuals; and (vi) covenants by others not to
compete, rights and privileges of the Company used in the conduct of its
business, rights to exclusive use and rights to sue for past infringement with
respect to any item described in this section (all of the foregoing which is
referred to in the remainder of this Agreement as the "Intellectual Property"),
an indicative list of which is set forth on Schedule 1.1.9 hereto;

1.1.9 Ownership Interests in Other Entities. All equity
securities, partnership interests, indebtedness or other interests owned in any
other corporation, partnership, limited partnership, joint venture, limited
liability company, trust, or other entity or person, a correct and complete
list of which is set forth on Schedule 1.1.10 hereto.

1.1.10 General Intangibles and Rights of the Company. All
general intangible property of the Company and all rights in, to and under all
representations, warranties, covenants, guaranties made or provided by third
parties to or for the benefit of the Company, and all rights, privileges,
claims and causes of action of the Company; a correct and complete list of any
claims or causes of action owned by the Company is set forth on Schedule 1.1.11
hereto;

1.1.11 Prepaid Items. All of the Company's prepaid expenses,
prepaid insurance, deposits and other similar items ("Prepaid Items"), a
correct and complete list of which items is set forth on Schedule 1.1.12
hereto;

1.1.12 Company Name and Goodwill. The Company right to own
and use the name "Software Consulting Services" and all goodwill with respect
to the business and operations of the Company.

1.3 Assumption of Obligations and Liabilities. At the IPO Closing
Date , Purchaser shall assume and agree to pay or perform, promptly as they
become due, the following obligations and liabilities of the Company: (i) all
obligations as at 30 September 1997 set out in Exhibit 1.3 as adjusted in the
ordinary course of business of the Company consistent with the Company's past
practices between 30 September 1997 and the IPO Closing Date, (ii) to the
extent that such liabilities are not reflected in the liabilities referred to
in section 1.3(i), all obligations arising in the ordinary course of business
and consistent with the Company's past practices under the Acquired Contracts
set forth in schedule 1.1.6, and (iii) to the extent that such liabilities are
not reflected in the liabilities referred to in section 1.3(i), all currently
pending obligations to trade creditors and vendors which have been created by
the Company in the ordinary course of business and in a manner and in amounts
consistent with the Company's prior practices, (all of which are hereinafter
referred to as the "Assumed Obligations"). Except for the assumption of the
Assumed Obligations, Purchaser shall not assume or be deemed to have assumed
and shall not be responsible for any other obligation or liability of the
Company, direct or indirect, known or unknown, choate or inchoate, absolute or
contingent, including without limitation any and all obligations regarding
foreign, federal, state or local income tax, capital gains tax or stamp duty.

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<PAGE> 6
1.4 Certain Definitions. The following terms shall have the
meaning ascribed below for the purposes of this Agreement:

(i) "Closing Balance Sheet Date" means the end of the
most recent monthly accounting period of the Company preceding the
Closing Date.

(ii) "Current Assets" means the current assets of the
Company determined as of the Closing Balance Sheet Date in accordance
with GAAP.

(iii) "Current Liabilities" means the current liabilities
of the Company determined as of the Closing Balance Sheet Date in
accordance with GAAP and expressed as a positive number.

(iv) "GAAP" means U.S. generally accepted accounting
principles consistently applied.

(v) "IPO" means the Purchaser's first underwritten public
offering of Purchaser Common Stock resulting in net cash proceeds
sufficient to fund the use of proceeds of such offering as described
in the PPM (and any supplements thereto) referenced in section 3.23
herein (other than any offering pursuant to any registration statement
(A) relating to any capital stock of Purchaser or options, warrants or
other rights to acquire any such capital stock issued or to be issued
primarily to directors, officers or employees of the Purchaser or any
of its subsidiaries, (B) primarily to directors, officers or employees
of the Purchaser or any of its subsidiaries, (C) relating to any
employee benefit plan or interest therein, (D) relating principally to
any preferred stock or debt securities of the Purchaser, or (E) filed
pursuant to Rule 145 under the Securities Act of 1933 (USA), as
amended ("Securities Act"), or any successor or similar provision).

(vi) "IPO Closing Date" means the date that the Purchaser
receives funds in consideration for the sale of its securities in the
IPO.

(vii) "IPO Price" means the initial price per share,
calculated in Australian dollars at the exchange rate prevailing as at
the IPO Closing Date, to the public for shares of Purchaser Common
Stock in the IPO.

(viii) "Long-Term Debt" means all long-term liabilities of
the Company as of Closing Date, including capitalized lease
obligations, as determined under GAAP, plus current portions of such
long-term liabilities and pre-payment penalties as of the Closing
Date.

(ix) "Net Working Capital" means the Current Assets of the
Company minus the Current Liabilities of the Company as of the
applicable date of determination, all as determined under GAAP.

(x) "Trust" means the SCS Unit Trust, being a trust
constituted by trust deed dated 1 October 1994 with the Company as
original trustee and Kentcom Pty Ltd and Kullamurra Pty Ltd as
original unitholders.

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<PAGE> 7
1.5 Purchase Price. The purchase price ("Purchase Price") for the
Acquired Assets shall be:

(a) AUD$15 million in cleared funds to be paid to the
Company on the IPO Closing Date; and

(b) AUD$9 million in Purchaser Common Stock at a value
per share equal to the IPO Price to be issued to the
Company upon the Company from 1 January 1998 to the
IPO Closing Date and SCSI (and its permitted
assignee) thereafter together achieving aggregate
recognized revenues less allowances for doubtful
accounts and sales returns as determined in
accordance with GAAP equal to 75% of the recognized
revenues less allowances for doubtful accounts and
sales returns (as determined in accordance with GAAP)
of the Company for the 1997 calendar year.

To avoid any doubt, the Company acknowledges that the number of shares
of Purchaser Common Stock to be issued to the Company pursuant to this section
1.5(b) shall be equal to 9 million divided by the IPO Price, and that the price
that these shares are trading at on market at the date of issue of the said
shares pursuant to this section 1.5(b) to the Company shall be irrelevant.

1.6 Successor Operating Company.

1.6.1 Subject to payment of the Closing Cash Consideration,
the parties hereto acknowledge and agree that Purchaser shall immediately after
the IPO Closing Date (as defined above) assign all Acquired Assets and all
Assumed Obligations and all of its right, title and interest in and to this
Agreement, the related agreements and documents, and its rights and obligations
thereunder and the products thereof, to a new wholly-owned subsidiary
corporation of the Purchaser named Software Consulting Services International,
Inc., a Delaware, U.S.A. corporation ("SCSI"), which shall have no material
assets or liabilities prior to acquiring the Acquired Assets. The Purchaser
shall cause SCSI to receive and assume ownership of such assets and rights and
responsibility for the performance of such obligations and seek to employ the
employees previously employed by the Company so that SCSI may after the IPO
Closing Date conduct the business previously conducted by the Company and seek
to further develop such business.

1.6.2 The parties acknowledge and agree that the employees
of SCSI will have a significant direct interest in the operation of SCSI from
the IPO Closing Date until the date which is 13 months from the IPO Closing
Date because of the Incentive Stock Bonus Plan provision set forth hereinbelow.
Accordingly, the parties agree that Purchaser shall cause the management of
SCSI to consist of the following persons, subject to their willingness to so
serve, from the IPO Closing Date until the time which is 13 months from the IPO
Closing Date, so long as there has not been a material breach of this Agreement
by the Owners. The board of directors of SCSI shall consist of Marshall G.
Webb, Daniel M. Cofall and one nominee of the Purchaser, Stephen D. Caswell and
two nominees of the Company and the officers of SCSI shall include Stephen D.
Caswell as President and Chief Executive Officer and the Company's said nominee
as Senior Vice President. If either Mr. Caswell or the said nominee of the
Company shall for any reason cease to serve as a director, then a person named
by the other of the above two persons shall be elected to the board in the
place of the departed director. If Mr Caswell and the nominee of the Company
cease to serve as directors at the same time,

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<PAGE> 8
then their positions shall be filled by two nominees of the Company. To avoid
any doubt, the parties acknowledge that: (a) for the period that this section
1.6.2 survives, the board shall comprise an equal number of directors appointed
by Purchaser and by the Company respectively; and (b) the provisions of this
section 1.6.2 shall not survive after 13 months from the IPO Closing Date have
expired.

1.7 Payment of Purchase Price. Purchaser shall deliver payment of
the Purchase Price by:

1.7.1 delivery to the Company on the IPO Closing Date of the
cash consideration referred to in section 1.5(a) (the "Closing Cash
Consideration"); and

1.7.2 delivery of the stock consideration ("Stock
Consideration") in the manner contemplated by section 1.5(b).

2. THE CLOSING

2.1 Closing. A closing into Escrow ("Closing") will take place at
the offices of Chamberlain, Hrdlicka, White, Williams & Martin in Houston,
Texas at the time and on the day that the Purchaser and its underwriters agree
on the IPO Price for shares of Purchaser's Common Stock offered in the IPO as
set forth in an executed underwriting agreement, but in no event later than
April 23, 1998 ("Closing Date"); provided that each of the conditions precedent
to the obligations of the parties to effect the Closing are then satisfied or
waived by the applicable party. The parties may agree in writing on another
date, time or place for the Closing. At the Closing, the parties will deliver
or cause to be delivered into escrow with the escrow agent ("Escrow Agent")
under the Escrow Agreement set forth in Exhibit 2.1 hereto, the documents
described in Sections 7.3 and 7.5 below. On the IPO Closing Date, such
documents shall be delivered out of escrow to the parties designated to receive
such documents under this Agreement in accordance with the Escrow Agreement,
and the payment and delivery by the Purchaser of the Purchase Price shall be
made in compliance with Sections 1.5 and 1.7 of this Agreement.

2.2 No Other Assignments of Company Assets or Common Stock. It is
agreed that no assignment, transfer or other disposition of (i) any assets of
the Company (except in the ordinary course of business consistent with past
practices) or (ii) legal or beneficial ownership of any ownership interests in
the Company, may be made on or after the date hereof other than as provided
herein.

3. REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND THE OWNERS

The Company and the Owners , excluding KPMG Information Solutions Pty
Ltd ("KPMG") unless expressly indicated to the contrary, hereby represent and
warrant to Purchaser as follows:

3.1 Organization of the Company and the Trust. The Trust is a
Victoria, Australia unit trust and the Company is incorporated under Australian
law. The Trust and Company are duly organized, validly existing and in good
standing under the laws of the State of Victoria and each is duly qualified and
authorized to do business in all jurisdictions where required to be qualified
and authorized, except where the failure to obtain such qualification will not
have a Company Material Adverse Effect (as defined below). Without limiting the
foregoing:

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<PAGE> 9
3.1.1 The Company is empowered by the Trust and the Trust's
constituent documents to perform all of the obligations that it is contemplated
that the Company will perform under this Agreement and do all things required
by this Agreement and that there are no restrictions or conditions relating to
such conduct pursuant to the constituent documents of the Trust or for any
other reason.

3.1.2 The Company only acts in its capacity as trustee of the
Trust and does not act in its own right and does not own any property in its
own right.

3.1.3 All necessary meetings have been held and resolutions
passed as required by the constituent documents of the Trust in order to render
this Agreement fully enforceable against the Company.

3.1.4 The Company is the present and sole Trustee of the
Trust.

3.1.5 The Trust has not been determined in any way.

3.1.6 There are no restrictions on the right of the Company to
be indemnified out of the assets of the Trust.

3.1.7 The Company shall not retire as Trustee of the Trust
without the prior written consent of Purchaser.

3.1.8 The Company will not permit any amendment to the
constituent documents of the Trust unless authorised by Purchaser in writing.

3.1.9 The Company shall not appoint or distribute any of the
assets of the Trust whether capital or income or otherwise or lend any monies
to any beneficiary or other person otherwise than in the ordinary course of
business without the prior written consent of Purchaser.

3.1.10 The documents described in schedule 3.1.10 and which
have been made available by the Company to the Purchaser's solicitors,
represent all of the constituent documents of the Trust and there are no other
documents which in any way vary the terms of the Trust or impact upon the Trust
or are relevant to or relate to the Trust in any way.

3.2 Ownership Interests. All ownership interests, unitholdings and
shareholdings in the Trust and in the Company are set forth on Schedule 3.2
hereto ("Ownership Interests") and are held legally and beneficially by the
Owners in such amounts as are respectively set forth for each Owner by its name
on Schedule 3.2 hereto. All such Ownership Interests are duly and validly
authorized and issued, and were not issued in violation of the preemptive
rights of any past or present Owner. Except for the interests described on
Schedule 3.2, there are no outstanding convertible or exchangeable securities,
subscriptions, calls, options, warrants, rights or other agreements or
commitments of any character relating to the issuance or sale of any ownership
or management interest or shares or units in the Company or the Trust. Further,
the Trust and the Company have no liability, contingent or otherwise, to any
person or entity in connection with preemptive or contractual subscription
rights or the offer, sale, purchase, surrender or cancellation of any interests
or units or shares in the Trust or the Company.

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<PAGE> 10
3.3 Consents. Except as provided on Schedule 3.3, no approval,
consent, order or action of or filing with any court, administrative agency,
governmental authority or other third party is required for the effective
execution, delivery or performance by the Company and the Owners, as
applicable, of this Agreement, any Company Related Document (as defined in
clause 3.7) or any Owner Related Document (as defined herein). If the required
consents listed on Schedule 3.3 hereto are acquired, the execution, delivery
and performance by the Company and each Owner of this Agreement, the Company
Related Documents and the Owner Related Documents do not violate any mortgage,
indenture, contract, agreement, lease or commitment or other instrument of any
kind to which the Company or any Owner is a party or by which the Company or
any Owner or any of their respective assets or properties may be bound or
affected or any law, rule or regulation applicable to the Company or any Owner
or any court injunction, order or decree or any valid and enforceable order of
any governmental agency in effect as of the date hereof having jurisdiction
over the Company or any Owner.

3.4 Title of Acquired Assets. Except as set forth on Schedule 3.4
hereto, the Company and the Trust own outright, and have full legal and
beneficial title to, or a valid leasehold interest in (as appropriate), all of
the Acquired Assets free and clear of all liens, pledges, mortgages, security
interests, conditional sales contracts, claims, encumbrances, rights of others
and restrictions on transfer, including good and marketable title to all of the
real property interests, free and clear of any mortgages, security agreements,
liens, claims, encumbrances, rights of others or restrictions on transfer.

3.5 Condition of the Acquired Assets.

3.5.1 Tangible Personal Property. To the best of their
knowledge and belief with respect to section 3.5.1: except as set forth on
Schedule 1.1.1, the Tangible Personal Property is in good operating condition,
working order and repair (normal wear and tear excepted) and is fully-suitable
for the uses for which it is employed in the conduct of the Company's business.
All inventory is fit for the use intended and free from any known defect and is
of a quality and quantity for good use in the ordinary course of business.

3.5.2 Leases. To the best of their knowledge and belief
with respect to section 3.5.2: with respect to the Personal Property Leases and
the Real Property Leases, except as set forth on Schedules 1.1.2 and 1.1.4,
respectively;

(1) each lease is legal, valid, binding,
enforceable and in full force and effect;

(2) each lease will continue to be legal, valid,
binding, enforceable and in full force and effect on the same
terms following the Closing as before;

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<PAGE> 11
(4) no party to any such lease has repudiated in
writing any provision thereof;

(5) there are no disputes, oral agreements or
forbearance programs in effect as to such lease;

(6) to the best of the knowledge of the Company
and the Owners, the owner of the property leased pursuant to
such lease has good and marketable title to such property free
of any encumbrance that would adversely affect the leasehold
interests of the Company; and

(7) the Company has performed and satisfied in
full each material obligation to be performed by the Company
under such lease as of the date hereof.

3.5.3 Accounts Receivable. To the best of their knowledge
and belief, the Accounts Receivable reflected on Schedule 1.1.5, and all
Accounts Receivable arising between the date hereof and the Closing are and
will be valid accounts receivable that arose or will have arisen from bona fide
transactions in the ordinary course of business of the Company; the services
involved were or will have been validly and properly provided to the account
obligor, and after the accounts receivable have been booked, no further
services will be required to be provided in order to complete the sales and to
entitle the Company or its assignees to collect the accounts receivable in
full. Except for the allowance for doubtful accounts in the Company Financial
Statements, the Company has no reason to believe that the Accounts Receivable
will not be timely paid. No such account has been or will be assigned or
pledged to any other person, firm or corporation.

3.5.4 Acquired Contracts. To the best of their knowledge
and belief, the Company has attached to Schedule 1.1.6 a correct and complete
copy of the Acquired Contracts all of which are listed on Schedule 1.1.6. Such
Acquired Contracts, if assigned or novated (as appropriate), along with the
other Acquired Assets, provide sufficient rights for the Purchaser to conduct
business after the Closing in substance the same as business was conducted by
the Company prior to Closing. To the best of their knowledge and belief, except
as set forth on Schedule 1.1.6, each of the Acquired Contracts is legal, valid
and enforceable and is in full force and effect, and there is no material
default or existing condition that, with the giving of notice or the passage of
time or both, would constitute such a default by the Company or by any parties
thereto, and by the Closing, the Company and the Owners shall have used their
best endeavours to have acquired any required consents necessary for the
assignment of the Acquired Contracts hereunder. Except as set out in schedule
1.1.6, the Company has performed and satisfied in full each material obligation
required to be performed by the Company under each Acquired Contract as of the
date hereof. If services are to be provided to the Company under any such
Acquired Contract, to the best of their knowledge and belief such services have
been and are being performed satisfactorily and in a timely fashion,
substantially in accordance with terms of such Acquired Contract.

3.5.5 Licenses. The Company holds adequate licenses,
including licenses to use intellectual property or other rights to conduct its
business as now conducted ("Licences"), and the Company's conduct of business
prior to Closing does not conflict with, infringe on, or otherwise violate any
rights of others. The Company has attached to Schedule 1.1.8 correct and
complete copies of all such Licenses (as amended to date) disclosed on Schedule
1.1.8. Each License is legal, valid

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<PAGE> 12
and enforceable, and in full force and effect and will, if assigned, continue
to be so after the Closing on the same terms as before the Closing, and by the
Closing, the Company and the Owners shall have used their best endeavours to
have acquired any required consent necessary for the assignment to the
Purchaser hereunder of each License, such that the Purchaser may use the
Licenses to conduct business after the Closing the same as business is
conducted by the Company prior to Closing. No party to any License is in breach
or default thereof and no event has occurred which with notice or lapse of time
would constitute a breach or default or permit termination or modification of
any License.

3.5.6 Intellectual Property.

(1) Except as disclosed in this Agreement, the
Company owns absolutely the Intellectual Property without
conflict with or infringement of any, right, title or interest
of others.

(2) The Intellectual Property, unless otherwise
disclosed in writing to the Purchaser, comprises all of the
intellectual property material to the conduct of the business
of the Company.

(3) Title to all Intellectual Property will
effectively pass to Purchaser under this Agreement.

(4) All Intellectual Property essential to the
successful conduct of the Company that is capable of
registration under Australian law is validly registered and
subsisting in the name of the Company free from encumbrances.

(5) The Company, excluding its employees acting
in the ordinary course of business has not dealt with,
authorised or permitted and will not before the Closing Date
deal with, authorise or permit any person to use any of the
Intellectual Property.

(6) None of the Intellectual Property constitutes
or may constitute an infringement of any intellectual property
rights of any other person. No claims have been asserted or
are or may be pending or threatened by any person in relation
to the use or the validity of the Intellectual Property.

(7) No claims have been asserted or are expected
to be asserted by any person for the use by the Company of any
intellectual property that it uses by way of licence agreement
or otherwise in its business.

(8) The Company has no knowledge of, and has not
received any notice of, any claims to the effect that any
business or trade mark or trade name owned by the Company and
used in the business of the Company is substantially identical
as or is confusingly or deceptively similar to the name of any
other company or any business or trade name or trade mark
owned or used by any other person.

3.5.7 Prepaid Items. To the best of their knowledge and
belief, each of the Prepaid Items is valid and represents a credit on the
Company's behalf with the payee and may be transferred

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<PAGE> 13
to Purchaser without the necessity of obtaining any consent or approval except
as may be set forth on Schedule 3.3.

3.5.8 Completeness of Acquired Assets. The Acquired Assets
including, without limitation, the Licenses described in Schedule 1.1.8,
include all the assets and properties (excluding the employees of the Company)
necessary to conduct the business of the Company as at the date of this
Agreement.

3.6 Defaults. To the best of their knowledge and belief with
respect to section 3.6: neither the Company, nor any Owner is in default under
or in violation of, and the execution and delivery of this Agreement, the
Company Related Documents and the Owner Related Documents and the consummation
of the transactions contemplated hereby and thereby will not result in a
default by the Company, any Owner under or a violation of (i) any Acquired
Contract or (ii) any law, rule or regulation applicable to the Company or any
court injunction, order or decree, or any valid and enforceable order of any
governmental agency in effect having jurisdiction over the Company, which
default or violation could adversely affect the ability of the Company to
consummate the transactions contemplated hereby or will have a Company Material
Adverse Effect.

3.7 Authority. The Company has full right, power, legal capacity
and authority to (i) execute, deliver and perform this Agreement, and all other
documents and instruments referred to herein or contemplated hereby to be
executed, delivered and performed by the Company (each a "Company Related
Document") and (ii) consummate the transactions contemplated herein and
thereby. Each Owner has full right, power, legal capacity and authority to (i)
including KPMG with respect to this section 3.7(i) only execute, deliver and
perform this Agreement, and all other documents and instruments referred to
herein or contemplated hereby to be executed, delivered and performed by such
Owner (each an "Owner Related Document") and (ii) consummate the transactions
contemplated herein and thereby. This Agreement has been duly executed and
delivered by the Company and by each Owner and constitutes, and each Company
Related Document and each Owner Related Document, when duly executed and
delivered by each party thereto will constitute, legal, valid and binding
obligations of the Company and each Owner who or which is a party thereto,
enforceable against the Company and each Owner, as applicable, in accordance
with their respective terms and conditions, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and by general
principles of equity (whether applied in a proceeding at law or in equity).

3.8 Financial Statements. To the best of their knowledge and
belief with respect to section 3.8: the Company and the Owners have furnished
to the Purchaser and to its auditors, Deloitte Touche Tohmatsu all documents
and information sufficient to enable Deloitte Touche Tohmatsu to accurately
audit the following financial statements of the Company: (i) Balance Sheet as
of September 30, 1997 (the "Balance Sheet Date"), and (ii) Statements of Income
for the fiscal years of the Company ended June 30, 1996 and June 30, 1997 and
for the interim period ended September 30, 1997 for the current fiscal year.
Such Company Financial Statements, together with the Closing Balance Sheet, are
collectively referred to herein as ("Company Financial Statements"). Such
financial statements, except as described in the notes thereto, have been
prepared from the Company's records in accordance with GAAP. Such Balance Sheet
presents accurately and fairly in all material respects the financial condition
of the Company as of the date indicated thereon, and such Statements of Income
present accurately and fairly in all respects the results of the Company's
operations for the periods indicated

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<PAGE> 14
thereon. Except as set forth in the Company Financial Statements or in a
supplemental description in Schedule 3.8 hereto, and other than the performance
of its obligations under its Contracts, the Company has no liabilities or
obligations of any nature whether absolute, contingent or otherwise.

3.9 No Conflict. To the best of their knowledge and belief with
respect to section 3.9: the Company has full power, authority and legal right
and has all licenses, permits, qualifications, and other documentation
(including permits required under applicable Environmental Law, as defined
below) necessary to own and/or operate its businesses, properties and assets
and to carry on its businesses as being conducted on the date hereof, and such
businesses are now being conducted and such assets and properties are being
owned and/or operated, and there is no existing condition or state of facts
which would give rise to a violation thereof or a liability or default
thereunder, except where a violation, liability or default will not have a
Company Material Adverse Effect. The term "Environmental Law" means any law,
rule, regulation, approval, decision, decree, ordinance, by-law having the
force of law or order of any federal, state or local executive, legislative,
judicial, quasi judicial, regulatory or administrative agency, board or
authority, which relate to (i) noise; (ii) pollution or protection of the air,
surface water, ground water or land; (iii) solid, gaseous or liquid waste
generation, treatment, storage, use, processing, disposal or transportation;
(iv) exposure to hazardous or toxic substances; (v) the safety or health of
employees or (vi) regulation of the manufacture, processing, distribution in
commerce, use, or storage of chemical substances.

3.10 Compliance; Legal Actions. To the best of their knowledge and
belief with respect to section 3.10: the Company and the Owners have complied
with all applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges thereunder) of
federal, state, local, and foreign governments (and all agencies thereof) with
respect to the Company and its business or the Trust, and except as may be
described in Schedule 3.10 hereto, no legal action, suit, audit, investigation,
unfair labor practice charge, complaint, claim, grievance, or proceeding by or
before any court, arbitration panel, governmental authority or third party is
pending or, to the best knowledge of the Company or the Owners threatened,
which involves or may involve the Company or its now or previously owned or
operated assets, operations, properties or businesses.

3.11 Real Property. Schedule 3.11 includes correct and complete
legal descriptions of all real property owned in fee simple by the Company and
all mortgages, charges and encumbrances thereon and a copy of the relevant
title deeds and any other material documents reflecting or affecting the real
property interests owned by the Company.

3.12 Employees. To the best of their knowledge and belief with
respect to section 3.12: schedule 3.12 is a complete and accurate list of the
names, start dates and current annual salary or hourly wage rates of all
salaried and hourly regular full-time and part-time employees of the Company
together with a summary of the bonuses, additional compensation and other like
benefits and entitlements (other than long service leave, sick leave and
superannuation), if any, payable to each employee and the last date, if any, on
which each employee received (a) a raise in annual salary or hourly wage or (b)
a bonus.

3.13 Employees.

3.13.1 Employees' Particulars. The particulars of the
employees and permanent contractors listed in Schedule 3.12 are true, complete
and accurate and the names listed in that

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schedule comprise all employees and permanent contractors engaged full time by
the Company ("Employees") necessary for the conduct of the business of the
Company. There are no other employees or permanent contractors necessary or
integral to the conduct of the business of the Company other than those set out
in Schedule 3.12.

3.13.2 All Material Terms of Employment.

(1) The Company has disclosed to the Purchaser
before the date of this Agreement all material terms and
conditions on which each of the Employees is employed or
retained;

(2) The engagement of all Employees is on the
basis that the Company has no obligation to pay an Employee
any commission, bonus, incentive, retiring or similar payment
other than as disclosed in Schedule 3.12.

3.13.3 Transfer of Employees. The Company has no knowledge of
any facts which would indicate that any Employees will not transfer their
employment or retainer to the Purchaser on the Closing Date.

3.13.4 No Violation of Employment Laws.

To the best of their knowledge and belief with respect to
section 3.13.4:

(1) There has been no violation by the Company of
any applicable law or regulation relating to employment of
labour (including occupational Health and Safety legislation,
Equal Opportunity legislation and all other laws or
regulations relating to labour relations, labour standards or
employment practices and any relevant regulations); or

(2) The Company has not engaged in any conduct in
relation to the Employees which will or may result in any
liability to the Company or the Purchaser.

3.13.5 Additional Employees. Between the date of execution of
this Agreement and the IPO Closing Date the Company will not:

(1) employ or retain any additional employees or
permanent contractors in the business of the Company otherwise
than in the ordinary course of business, or with the
Purchaser's prior written consent, such consent not to be
unreasonably withheld; or

(2) make any substantial change (other than any
change required to comply with any relevant award or statute)
in the basis or amount of remuneration or the terms and
conditions of employment of any Employee without the
Purchaser's written consent, such consent which shall not be
unreasonably withheld.

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3.13.6 Taxes Paid from Employees' Wages. The Company has made
timely payments of any taxes required to be deducted and withheld from the
wages and salaries paid to the Company's employees in the business of the
Company.

3.13.7 Claims by Employees. To the best of their knowledge and
belief with respect to section 3.13.7: except as disclosed to the Purchaser
under this Agreement, the Company does not know of any facts which will result
in any present or former employee or permanent contractor of the Company having
any valid claim on the date of termination of his employment or contract
against the Company (whether under law or any employment, agreement or
otherwise) on account of or for:

(1) overtime pay;

(2) wages or salaries;

(3) any statute, ordinance, regulation or award
relating to minimum wages or other working conditions;

(4) redundancy pay, payment in lieu of notice or
compensation arising out of termination of employment;

(5) superannuation payments or benefits; or

(6) workers' compensation claims or common law
claims for any injury or disease.

3.13.8 No Labour Dispute. At the date of this Agreement there
is no labour dispute, strike or work stoppage which will affect or may affect
the business of the Company or interfere with its continued operation.

3.13.9 No Agreement with Unions. Except as disclosed in this
Agreement, there is no agreement, arrangement or understanding between the
Company and any trade union or any representatives of any trade union in
relation to the Employees.

3.13.10 No Share Scheme. Except as disclosed in this
Agreement, there are no share option or share incentive or similar schemes to
which any Employee is or may become a party.

3.14 Superannuation

3.14.1 All Material Documents. The Company has made available
to the Purchaser the correct and complete copies and records of all documents
it has in its possession relating to the Company's obligation to make
superannuation contributions on behalf of the Employees.

3.14.2 No Claims for Breach of Duty. To the best of their
knowledge and belief with respect to section 3.14.2: there are no pending or
threatened claims by or on behalf of any Employee or beneficiary thereof in
respect of the Company's obligation to pay superannuation contributions on
behalf of the Employees or violations of other applicable laws which could
result in any liability on the part of the Company.

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<PAGE> 17
3.14.3 All Claims Disclosed. All claims against the Company
relating to its obligation to make superannuation contributions have been
disclosed to the Purchaser in writing.

3.15 Safety Matters. Schedule 3.15 contains (if they exist) a copy
of all material safety data sheets, toxicology studies and environmental
studies of the Company.

3.16 Entities Owned. Schedule 1.1.10 hereto sets forth the name of
any corporation, partnership, firm, association, business organization, entity
or enterprise owned wholly or in part by the Company directly or indirectly.
To the best of their knowledge and belief, except as disclosed in Schedule
1.1.10, all the ownership interests of the Company in such entities are
directly or ultimately owned by the Company, free and clear of all liens,
encumbrances or adverse claims of every kind, and all such ownership interests
are duly and validly authorized and issued, fully paid and nonassessable, and
were not issued in violation of the preemptive rights of any past or present
stockholder.

3.17 Affiliate Relationships.

3.17.2 Except as set forth on Schedule 3.17.2 hereto,
neither the Company, the Owners nor any affiliate of the Owners, and no manager
or employee of or consultant to the Company owns, directly or indirectly, in
whole or in part, any property, assets or right, tangible or intangible, which
is associated with any property, asset or right owned by the Company or which
the Company is operating or using or the use of which is necessary for its
business. Also included in Schedule 3.17.2 is the disclosure of any
relationships which any Owner, affiliate of an Owner, director, officer,
employee, agent or consultant of the Company has with any other corporation,
partnership, firm, association or business organization, entity or enterprise
which is a competitor, potential competitor, supplier or customer of the
Company.

3.18 Investment Company. The Company is not an "investment
company" or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, or a "holding
company," a "subsidiary company" of a "holding company" or an "affiliate" of a
"holding company" or a "public utility" within the meaning of the Public
Utility Holding Company Act of 1935 (USA), as amended.

3.19 No Material Adverse Change. Except as specifically set forth
on Schedule 3.19, or otherwise as occurs in the ordinary course of business of
the Company and consistent with the Company's past practices, or as otherwise
expressly disclosed in this Agreement (including section 5.1.(17) or to the
Purchaser since the Balance Sheet Date there has not been: (a) any change in
the Trust or the Company's organizational or constituent documents or
regulations, (b) any material adverse change of any nature whatsoever in the
financial condition, assets, liabilities (contingent or otherwise), income,
business or prospects of the Company; (c) any damage, destruction or loss
(whether or not covered by insurance) materially adversely affecting the
properties or business of the

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<PAGE> 18
Company; (d) any change in the authorized capital of the Company or in its
securities outstanding or any change in the Ownership Interests; (e) any
declaration or payment of any dividend or distribution in respect of the
Ownership Interests or any direct or indirect redemption, purchase or other
acquisition of any of the Ownership Interests; (f) any contract or commitment
entered into by the Company or any incurrence by the Company or agreement by
the Company to incur any liability or make any capital expenditures in excess
of $10,000, except in the normal course of business; (g) any increase in the
compensation, bonus, sales commissions or fee arrangement payable or to become
payable by the Company to any of its officers, directors, Owners, employees,
consultants or agents; (h) any work interruptions, labor grievances or claims
filed, proposed law or regulation (the existence of which is known, or under
the normal course of business should be known, to the Company and/or the
Owners) or any event or condition of any character materially adversely
affecting the business or future prospects of the Company; (i) any creation,
assumption or permitting to exist of any mortgage, pledge or other lien or
encumbrance upon any assets or properties whether now owned or hereafter
acquired, except as set forth in Schedule 3.4 ; (j) any sale or transfer, or
any agreement to sell or transfer, any material assets, properties or rights of
the Company to any person, including, without limitation, the Owners and their
respective affiliates; (k) any cancellation, or agreement to cancel, any
indebtedness or other obligation owing to the Company, including, without
limitation, any indebtedness or obligation of the Owners or any of their
affiliates; (1) any plan, agreement or arrangement granting any preferential
rights to purchase or acquire any interest in any of the assets, properties or
rights of the Company or requiring consent of any party to the transfer and
assignment of any such assets, properties or rights; (m) any purchase or
acquisition, or agreement, plan or arrangement to purchase or acquire, any
property, rights or assets of the Company; (n) any negotiation for the
acquisition of any business or start-up of any new business; (o) any merger or
consolidation or agreement to merge or consolidate with or into any other
corporation (except the transactions contemplated by this Agreement); (p) any
waiver of any material rights or claims of the Company; (q) any breach,
amendment or termination of any material contract, agreement, license, permit,
permit application or other right to which the Company is a party; (r) any
discharge, satisfaction, compromise or settlement of any claim, lien, charge or
encumbrance or payment of any obligation or liability, contingent or otherwise,
other than current liabilities as of the Balance Sheet Date, current
liabilities incurred since the Balance Sheet Date in the ordinary course of
business and prepayments of obligations in accordance with normal and customary
past practices; or (s) any transaction by the Company outside the ordinary
course of its business or prohibited hereunder.

3.20 Access. The Company has provided the Purchaser and the
Purchaser's lenders, underwriters and placement agents and their respective
representatives the opportunity to make a full investigation of the properties,
operations and financial condition of the Company and afforded the Purchaser
and the Purchaser's lenders, underwriters and placement agents and their
respective representatives reasonable access to the offices, buildings, real
properties, machinery and equipment, inventory and supplies, records, files,
books of account, tax returns, agreements and commitments and personnel of the
Company to allow for a full investigation by such persons.

3.21 Disclosure. No representation or warranty by the Company or
the Owners in this Agreement, the Schedules hereto or any certificate delivered
by the Company or the Owners to the Purchaser pursuant to the Agreement,
contains or will contain any untrue statement of a material fact or omits or
will omit any material fact necessary in order to make the statements herein or
therein, in light of the circumstances under which they are or were made, not
misleading.

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<PAGE> 19
3.22 Company Material Adverse Effect. The term "Company Material
Adverse Effect" shall mean an adverse effect on the properties, assets,
financial position, results of operations, long-term debt, other indebtedness,
cash flows or contingent liabilities of the Company in an amount of AUD$25,000
or more.

3.23 Restricted Securities.

Including KPMG with respect to this section 3.23 only:

(1) The Company and Owners acknowledge that the shares of
Purchaser Common Stock to be acquired by the Company hereunder, and
then by the Owners by distribution from the Company, have not been
registered under the Securities Act of 1933 (USA), as amended (the
"Securities Act"), and are being acquired for the Company or Owners'
own account for investment and not with a view to the distribution
thereof, and the Purchaser Common Stock will be subject to the Stock
Transfer Restriction Agreement in Exhibit 7.3.3 hereto.

(2) The Company and each Owner has the knowledge and
experience in financial and business matters to enable it to evaluate
the merits and risks of entering this Agreement and the transactions
contemplated hereby and acquiring shares of Purchaser Common Stock.

(3) The Company and each Owner is able to bear the
economic risks of its investment in the Purchaser Common Stock,
including the risk of a loss of the value of the Purchaser Common
Stock.

(4) The Company and the Owners have been represented by
legal counsel in this transaction and they and their representatives,
including such counsel, have been given the opportunity to ask
questions of, and receive answers from, the officers of the Purchaser
concerning the terms of the transactions contemplated by this
Agreement and the affairs and the business and financial condition of
the Purchaser but have relied upon the representations set out in
Exhibit 7.5.3.

(5) The Company and each Owner has received a
Confidential Private Placement Memorandum ("PPM") which is annexed as
Schedule 3.23(5) hereto concerning the Purchaser and an investment in
shares of Purchaser Common Stock, and each of them and their
representatives, including financial advisers have been given such
access to all documents, books and additional information concerning
Purchaser which they have requested regarding Purchaser.

(6) The Company and each Owner and their representatives
have conducted such investigations in making a decision to approve
this Agreement and the transactions contemplated hereby as they have
deemed necessary and advisable.

(7) The Company and each Owner acknowledge and agree that
the Purchaser Common Stock to be issued to the Company may not be
disposed of except in accordance with the requirements of the
Securities Act and any applicable state securities laws and the Stock
Transfer Restriction Agreement.

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<PAGE> 20
3.24 Insolvency Matters.

(1) No receiver or receiver and manager has been
appointed to the whole or any part of the Acquired Assets and no
appointment has been threatened or is envisaged by the Company or the
Owners.

(2) The Company is not in liquidation and no
administrator under the Corporations Law of Australia ("Corporations
Law") has been appointed. No order, petition, application, proceeding,
meeting or resolution has been made, presented, brought, called,
threatened or passed for the purpose of liquidating the Company or the
Trust or appointing an administrator under the Corporations Law.

(3) The Company has not stopped payment to any creditor
and is not insolvent or unable to pay its debts for the purposes of
section 460 of the Corporations Law or otherwise. There is no
unfulfilled or unsatisfied judgement or court order outstanding
against the Company and there has been no unreasonable delay by the
Company in the payment of any obligation due for payment.

(4) No mortgagee is or is entitled to be in possession of
the whole or any of the part of the Acquired Assets.

3.25 Trade Practices Act Infringements. To the best of their
knowledge and belief with respect to this section 3.25: there is no agreement,
arrangement or activity (whether by commission or omission) in which the
Company has been or will be concerned which infringes or which has been or
which is required to be authorised under the Trade Practices Act 1974 (Cth) of
Australia or any other anti-trust legislation in relation to the Acquired
Assets of the Company.

3.26 Insurance.

(1) All of the Acquired Assets that are already insured
by the Company are insured with a company of good repute and financial
substance in an amount not less than the full cost of replacement
against fire and all other risks as are commonly insured against by
prudent persons carrying on a similar business of that carried on by
the Company (including third party injury). All other insurances
required by law and all current premiums on those insurances have been
paid. That insurance is in full force and effect until Closing and
nothing has been done or omitted to be done which would make any
insurance void, voidable or unenforceable.

(2) The Company has not failed to give any notice or
present any claim in relation to the Acquired Assets under any
insurance policy.

(3) There are no outstanding requirements or
recommendations by any:

(i) insurance company that issued a policy in
relation to any of the Acquired Assets; or

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<PAGE> 21
(ii) governmental authority requiring or
recommending any material repairs or other work done on or in
relation to any of the premises occupied by the Company or the
Acquired Assets, or requiring or recommending any material
equipment or facilities to be installed in or in relation to
any of the premises of the Company or the Acquired Assets.

3.27 SAP. The Company is a designated SAP implementation partner. It
is acknowledged by the Company and the Owners that the Company's relationship
with SAP is important to the value of the goodwill of the Company and the
business of the Company ("Goodwill"). Expressly excluding Robert Langford, the
Company and the Owners shall:

3.27.1 not act in any way which detrimentally affects the
Goodwill;

3.27.2 use their best endeavors to protect the Goodwill; and

3.27.3 use their best endeavors to procure that the existing
relationship between the Company and SAP continues after the IPO Closing Date
with the Purchaser or SCSI (as appropriate) in the place of the Company.

3.28 Receipt of Monies from ASAP. The Company receives as at the date
of this Agreement and on a month to month basis from ASAP rental of
AUD$4,000.00 per month for the utilization of part of the Company's premises at
255 Whitehorse Road, Balwyn, Victoria and compensation with respect to ASAP's
utilization of the services of the Company from time to time and the Company
and the Owners covenant to the Purchaser that they shall use their best
endeavours to assign the right to receive such monies to the Purchaser
effective from the Closing Date.

3.29 Owner Trusts. The trusts of which the Owners are identified in
this Agreement as being trustees of ("relevant trusts") are all validly
constituted, have not been determined and there is no restriction on the right
of an Owner to be indemnified out of the assets of the relevant trust, and the
Owners are all duly authorised and empowered by the relevant trusts to enter
into this Agreement.

4. REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser hereby represents and warrants to the Company and the Owners
as follows:

4.2 Capitalization of Purchaser. The total authorized capital
stock of Purchaser is as set forth and described in the Purchaser's PPM
delivered to the Company and the Owners in connection with the transactions
contemplated by this Agreement. The outstanding shares of Purchaser Common
Stock have been duly and validly issued and are fully paid and non-assessable.

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<PAGE> 22
4.3 Authority. Purchaser has full right, power, legal capacity and
authority to execute, deliver and perform this Agreement and all documents and
instruments referred to herein or contemplated hereby and to consummate the
transactions contemplated herein and thereby (the "Purchaser Related
Documents"). This Agreement has been duly executed and delivered by Purchaser
and constitutes, and all Purchaser Related Documents, when executed and
delivered by Purchaser will constitute, legal, valid and binding obligations of
Purchaser, enforceable in accordance with their respective terms and conditions
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (whether
applied in a proceeding at law or in equity).

4.4 Consents. No approval, consent, order or action of or filing
with any court, administrative agency, governmental authority or other third
party is required for the execution, delivery or performance by the Purchaser
of this Agreement or the Purchaser Related Documents or the consummation by the
Purchaser of the transactions contemplated thereby except as may be described
in the PPM and, except for (i) the filing of the Purchaser's registration
statement with respect to the IPO ("Registration Statement") with the U.S.
Securities and Exchange Commission ("SEC") pursuant to the Securities Act and
the SEC's declaration of effectiveness of such Registration Statement and the
completion of all necessary filings required thereunder, and (ii) the obtaining
of all necessary consents and approvals required pursuant to state securities
or "blue sky" laws in connection with the IPO.

4.6 Financial Statements. Purchaser has provided certain financial
statements of the Purchaser to the Owners ("Purchaser Financial Statements")
and such Purchaser Financial Statements have been prepared in accordance with
GAAP, are true and correct in all material respects, and are fair presentations
of the consolidated financial position, results of operations and cash flows of
Purchaser and its then existing consolidated subsidiaries as of the dates and
for the periods indicated. The books and records of Purchaser have been kept in
reasonable detail and accurately and fairly reflect the transactions of
Purchaser. Except as set forth in the Purchaser Financial Statements or the
PPM, the Purchaser has no liabilities or obligations of any nature whether
absolute, contingent or otherwise.

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<PAGE> 23
4.8 Compliance. Purchaser has full power, authority and legal
right and has all licenses, permits, qualifications, and other documentation
(including permits required under applicable Environmental Law) necessary to
own and/or operate its businesses, properties and assets and to carry on its
businesses as being conducted on the date of this Agreement, and such
businesses are now being conducted and such assets and properties are being
owned and/or operated in compliance with all applicable laws (including
Environmental Law), ordinances, rules and regulations of any governmental
agency of the United States, any state or political subdivision thereof, or any
foreign jurisdiction, all applicable court or administrative agency decrees,
awards and orders and all such licenses, permits, qualifications and other
documentation, except where the failure to comply will not have a Purchaser
Material Adverse Effect, and there is no existing condition or state of facts
which would give rise to a violation thereof or a liability or default
thereunder, except where a violation, liability or default will not have a
Purchaser Material Adverse Effect.

4.9 Investment Company. Purchaser is not an "investment company"
or a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "holding company," a
"subsidiary company" of a "holding company" or an "affiliate" of a "holding
company" or a "public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.

4.10 Disclosure. No representation or warranty by Purchaser in this
Agreement or the Schedules hereto and no statement contained any certificate
delivered by Purchaser to the Owners pursuant to this Agreement contains or
will contain any untrue statement of a material fact or omits or will omit any
material fact necessary in order to make the statements herein or therein, in
light of the circumstances under which they are or were made, not misleading.

4.11 Purchaser Material Adverse Effect. The term "Purchaser
Material Adverse Effect" shall mean an adverse effect on the properties,
assets, financial position, results of operations, long-term debt, other
indebtedness, cash flows or contingent liabilities of Purchaser and its
consolidated subsidiaries, taken as a whole, in an amount of AUD$25,000 or
more.

4.12 Specific Warranty of Purchaser. The Purchaser shall indemnify
the Company against any claims made against the Company arising solely out of
the publication of the name of the Company in any documentation issued to the
public by the Purchaser in relation to the IPO.

4.13 Stock Warranty. The common stock of Brightstar ("Brightstar
Stock") issued to the Company in accordance with the provisions of this
Agreement and the PPM shall be validly issued and outstanding and in compliance
with requirements of the United States Federal Securities Laws ("US Securities
Laws"). Such Brightstar Stock has not been registered under the US Securities
Laws in reliance on an exemption from such registration.

5. CERTAIN OTHER ACTIONS, COVENANTS AND DOCUMENTS

The Company and the Owners further agree with the Purchaser that from
the date hereof to the Closing Date:

5.1 Conduct of Business. Expressly excluding KPMG with respect to
this section 5.1, the Owners shall cause the Company to, and the Company shall,
conduct its operations according to its

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<PAGE> 24
ordinary and usual course of business to preserve substantially intact its
business organization, keep available the services of its officers and
employees, and maintain its present relationships with licensors, suppliers,
distributors, customers and others having significant business relationships
with it. The Company and Owners agree to confer with the Purchaser to keep it
informed with respect to the general status of the on-going operations of the
business of the Company. Without limiting the generality of the foregoing, and
except as otherwise contemplated herein or agreed to by Purchaser, the Owners
will cause the Company to, and the Company shall:

(1) carry on its business in substantially the same
manner as heretofore carried on and not introduce any material new
method of management, operation or accounting, nor provide discounted
services;

(2) maintain its properties, facilities, equipment and
other assets, including those held under leases, in good working
order, condition and repair, ordinary wear and tear excepted;

(4) keep in full force and effect its present insurance
policies or other comparable insurance coverage;

(6) refrain from effecting any change in the capital
structure of the Company; refrain from incurring any expenditures
outside the normal course of business, including any capital
expenditures in excess of AUD$10,000, without prior written
notification to the Purchaser;

(7) refrain from starting or acquiring any new businesses
without the prior written consent of the Purchaser (such consent not
to be unreasonably withheld);

(8) maintain its present salaries, commission levels and
bonus schemes for all officers, directors, employees or agents, except
for the usual and customary merit increases for employees;

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<PAGE> 25
(9) refrain from declaring or paying any extraordinary
bonuses, fees, commissions or any other unusual distributions to the
Owners, management, sales agents, employees or other personnel without
prior written consent of the Purchaser (such consent not to be
unreasonably withheld);

(10) promptly notify the Purchaser of the receipt by the
Company or any Owner of any notice or claim, written or oral, of (a)
default or breach by the Company under, or of any termination (other
than at the end of the stated term thereof) or cancellation, or threat
of termination (other than at end of the stated term thereof) of
cancellation, of any company contract, (b) any loss of, damage to or
disposition of, any of the properties, assets or the products of the
Company of a value of AUD$10,000 or more, singly or in the aggregate
(other than the sale or use of inventories in the ordinary course of
business), (c) any claim or litigation threatened or instituted, or
any other adverse event or occurrence involving or affecting the
Company or any of its assets, properties, operations, businesses or
employees, and (d) any proposal made by any third party received by
the Company, or of which any Owner obtains knowledge, in respect of
any sale or other disposition, direct or indirect, of the assets
(other than the sale or use of inventories in the ordinary course of
business), businesses or outstanding ownership or voting interests of
the Company;

(11) comply with and cause to be complied with all
applicable laws, rules, regulations and orders of all federal, state
and local governments or governmental agencies affecting or relating
to the Company or its assets, properties, operations, businesses or
employees except where the failure to comply will not have a Company
Material Adverse Effect;

(13) refrain from any purchase or redemption of, or any
dealing with any ownership or voting interest (including without
limitation, shares and units) in the Company or the Trust and, refrain
from issuing any ownership interest;

(14) refrain from making any change in any accounting
principle, classification, policy or practice;

(15) refrain from effecting any amendment to the
organizational and governing instruments of and documents relating to
the Company or the Trust;

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<PAGE> 26
(17) maintain its present debt and lease agreements and
instruments (except those that expire on their stated maturity or
lease termination dates); refrain from entering into any amendment
thereto or new debt or lease agreements or instruments except that the
Company's planned increase in its overdraft line of credit to AUD
$1,500,000, and the proposed new Sydney and Perth leases currently
being implemented by the Company and the possible negotiation of a new
Melbourne lease, and equipment leases with CBFC (all as disclosed
previously to the Purchaser) are hereby agreed to by Purchaser;
refrain from increasing any indebtedness for borrowed money or issuing
or selling any debt securities or letters of credit; and refrain from
making any payments of any indebtedness or interest or other amounts
thereon or with respect thereto (other than regularly scheduled
principal and interest payments and payments of principal, interest
and fees under revolving lines of credit);

(19) refrain from entering into any contract, lease,
undertaking, commitment, mortgage, indenture, note, security
agreement, license or other agreement (a) involving the receipt or
expenditure of more than AUD$25,000 over the term thereof, (b)
containing provisions calling for the sale or purchase of raw
materials, product or service at prices that vary from the market
prices of such raw materials, products or services generally
prevailing in customary third-party markets, (c) which include "take
or pay", "meet or release", "most favored nations" or similar pricing
or delivery arrangements, (d) with any officer, director, Owner or
affiliate of the Company, (e) other than in the ordinary course of
business and consistent with the Company's past practices requiring
the Company to indemnify or hold harmless any other person or entity,
(f) evidencing any warranty obligation of the Company with respect to
goods, services or products sold or leased by it (other than
warranties given in the normal course of business containing
substantially the same terms as those presently in effect), or (g)
imposing on the Company any confidentiality, non-disclosure or
non-compete or restraint of trade obligation.

5.2 Cooperation. The Company and each Owner will use reasonable
endeavours to cooperate fully with the Purchaser as to arrangements for the
consummation of the transactions contemplated hereby in an orderly fashion. The
Company and the Owners will use their reasonable efforts to obtain, as soon as
possible, all required consents or approvals, and will take all other
reasonable action which is necessary or desirable to effect the assignment to
Purchaser of the Licenses, Personal Property Leases, Assumed Contracts, Real
Property Leases, Real Property, and Prepaid Items, as well as the telephone
numbers and goodwill of the Company and other rights of the Company related to
the Acquired Assets.

5.3 Filings, Etc. Each Owner and the Company will make all filings
which are required to be made by them to lawfully consummate the transactions
contemplated hereby.

5.4 Access. The Owners (excluding KPMG to the intent that it is
only required to use its reasonable endeavours with respect to this section
5.4) and the Company will cooperate fully in permitting the Purchaser and the
Purchaser's lenders, underwriters and placement agents and their

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<PAGE> 27
respective representatives, advisers, consultants, appraisers, auditors,
engineers and other experts to make a full investigation of the properties,
operations and financial condition of the Company and will afford the Purchaser
and the Purchaser's lenders, underwriters and placement agents and their
respective representatives, advisers, consultants, appraisers, auditors,
engineers and other experts reasonable access to the offices, buildings, real
properties, machinery and equipment, inventory and supplies, records, files,
books of account, tax returns, agreements and commitments and personnel of the
Company. Without limitation of the foregoing, the Owners and the Company shall
provide the Purchaser with such reasonably available financial information (and
schedules with respect thereto) with respect to the Company as the Purchaser
may reasonably request and will cooperate with and assist representatives of
the Purchaser in the preparation of such financial information (and any
opinions or reports with respect thereto) with respect to the Company as the
Purchaser may reasonably request. Notwithstanding the above, the Purchaser and
its respective lenders, underwriters and placement agents and their respective
representatives, advisers, consultants, appraisers, engineers and other experts
shall incur no liability with respect to control, operation or management (or
alleged control, operation or management) of the Company as a result of the
covenants in this Section 5.4. The Purchaser agrees to keep all of the
financial information provided to it by the Company for as long as it does not
enter the public domain (other than due to the default of the Purchaser) secret
and confidential.

5.5 Satisfaction of Conditions. Excluding KPMG with respect to
sections 5.5(i) and (ii) hereof, the Company and the Owners shall (i) use all
reasonable efforts to obtain, as soon as possible, all governmental approvals
required to be obtained by the Company and make, as soon as possible, all
filings with any governmental authority required on the part of the Company to
consummate the transactions contemplated hereby, (ii) use their reasonable
efforts to obtain, as soon as possible, all other consents to and approvals
required to be obtained by the Company to consummate the transactions
contemplated hereby, and (iii) otherwise use their reasonable efforts to
satisfy the conditions set forth in Section 7 of this Agreement to the extent
that such satisfaction is within their control.

5.6 Capital Budget. Exhibit 5.6 attached hereto contains the
budgeted capital expenditures of the Company from August 31, 1997 through
December 31, 1998. Unless otherwise consented to by the Purchaser, prior to the
Closing, the Company will make capital expenditures only in accordance with
such budget.

5.7 Exclusivity. The Company and the Owners shall not (i) solicit,
initiate, or encourage the submission of any proposal or offer from any person
or entity relating to the acquisition of any ownership or management interest
in the Company, or any substantial portion of the assets of the Company
(including any acquisition structured as a merger, consolidation, or share
exchange) or (ii) participate in any negotiations or discussions regarding,
furnishing any information with respect to, assist or participate in, or
facilitate in any other manner any effort or attempt by any person or entity in
favor of any such acquisition. The Owners and the Company will promptly notify
the Purchaser if any person or entity makes any proposal, offer, inquiry, or
contact with respect to any of the foregoing.

5.8 Limitation on Assignments to Purchaser. Expressly excluding
KPMG with respect to section 5.8, notwithstanding anything herein contained to
the contrary, this Agreement shall not constitute nor require an assignment to
the Purchaser of any claim, lease, easement, permit, license,

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<PAGE> 28
contract or other right if an attempted assignment of the same without the
consent of any party would constitute a breach thereof unless and until such
consent shall have been obtained. In the case of any such claim, lease,
easement, permit license, contract or other right which cannot effectively be
transferred to Purchaser without such consent, the Owners and the Company will
each use all reasonable efforts to obtain such consent promptly and if such
consent is not obtained, the Company and the Purchaser agree to enter into such
reasonable arrangements as may be appropriate to provide Purchaser with
benefits purported to be vested in Purchaser pursuant to the terms of this
Agreement had such consent been obtained.

5.9 Release. The Owners and the Company do hereby release, acquit
and discharge Purchaser from any and all liabilities, obligations, claims,
demands, actions or causes of action arising from or relating to the Acquired
Assets, prior to the Closing Date other than those based on obligations of
Purchaser under this Agreement or which relate to actions of the Company
undertaken at the direction of the Purchaser, including, without limitation,
any claim arising from any event, occurrence, act, omission or condition
relating to the Acquired Assets occurring or existing on or prior to the
Closing Date.

6. CERTAIN AGREEMENTS

The parties hereto further agree as follows:

6.1 Restraint of Trade. The Company, the Owners and DCSI (expressly
excluding, with respect to this section 6.1 only, KPMG, and with respect to
sections 6.1.1(1), (2) and (3) only, Robert Langford and DCSI) agree with the
Purchaser that in order to protect the goodwill of the Company that is being
transferred to Purchaser hereunder and the business of the Company in the form
that it is conducted at the date of this Agreement, namely the provision of SAP
implementation services, ("Business"), the Company, the Owners and DCSI will
not:

6.1.1 either directly or indirectly:

(1) undertake, carry on or be engaged in or concerned
with (whether as director, employee, agent, principal, partner,
representative, shareholder, debenture holder, trustee, the holder of
any security or in any other capacity) any business which competes
with the Business or is similar in nature to the Business;

(2) counsel, procure or otherwise assist or encourage any
person to do anything referred to in clause 6.1.1(1);

(3) be a lender to or guarantor for any person engaged in
any business which may be competitive with the Business;

(4) canvass or solicit any employee of the Business to
leave his employment with the Business or the Purchaser;

(5) canvass or solicit any person who has been a client
or customer of the Company or of the Business in a way that is
detrimental to the Business, at any time during the year prior to the
Closing Date;

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<PAGE> 29
6.1.2 within:

(1) Australia;

(2) the State of Victoria;

(3) forty (40) kilometres of the Melbourne Central
Business District ("CBD");

(4) ten (10) kilometres of the CBD;

(5) two (2) kilometres of the CBD;

6.1.3 for a period of:

(1) three (3) years after the Closing Date;

(2) two (2) years after the Closing Date;

(3) one (1) year after the Closing Date;

6.1.4 Construction. Clause 6.1 is to be construed and take
effect as if it consisted of the number of separate provisions which are the
result of combining each type of conduct referred to in clause 6.1.1 with each
of the areas referred to in clause 6.1.2, and then relating each of those
combinations to each of the periods of time referred to in clause 6.1.3. If any
of those separate provisions is unenforceable, illegal or void for any reason
that provision shall be severed. Severance will not affect the validity or
unenforceability of any of the other separate provisions.

6.1.5 Fair and Reasonable. Each of the separate provisions
comprising clause 6.1 constitutes a fair and reasonable restraint of trade.

6.1.6 Marketable Securities. Clause 6.1 is not intended to
preclude the Company, the Owners or DCSI from owning marketable securities of a
stock exchange in Australia or elsewhere. But the Company, the Owners and DCSI
must not hold more than five percent (5%) of such marketable securities of such
corporation or trust if that corporation or trust carries on any business which
competes directly with the Business.

6.1.7 Insolvency. Notwithstanding any of the other provisions
of this Agreement, if the Purchaser or SCSI enters into any form of insolvency
administration within two (2) years of the IPO Closing Date, then the
provisions of this section 6.1 shall not, from the occurrence of that event
onwards, apply.

6.2 Audit. Prior to Closing, Deloitte Touche Tohmatsu, shall
complete an audit of the Company through December 31, 1997, and such additional
review work as may be requested by the Purchaser through and including the
Closing Date (or other periods subsequent to December 31, 1997), and provide
its report to the Purchaser and the Owners.

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<PAGE> 30
6.3 Confidentiality. Prior to Closing, none of the Purchaser, the
Company nor the Owners will disclose the terms of this Agreement to any person
other than their respective directors, officers, agents or representatives,
except as otherwise provided herein or unless required by law. The Company may
make appropriate disclosures of the general nature of the acquisition
contemplated by this Agreement to its employees, vendors and customers to
protect the Company's goodwill and to facilitate the Closing. The Purchaser may
disclose pertinent information regarding the said acquisition to its existing
and prospective investors, lenders, or investment bankers or financial advisors
for the purpose of obtaining financing, including, without limitation,
financing related to the IPO or other offerings of its securities. The
Purchaser may describe this Agreement and the transactions contemplated hereby
in any registration statement filed by the Purchaser under the Securities Act
and in reports filed by the Purchaser under the Securities Exchange Act of
1934, and may file this Agreement as an exhibit to any thereof. The Purchaser
may also make appropriate disclosures of the general nature of the Acquisition
and the identity, nature and scope of the Company's operations to prospective
acquisition candidates in connection with the Purchaser's efforts to effect
additional acquisitions. Each party will have mutual approval rights with
respect to written employee presentations concerning the Exchange.

6.4 Tax-Free Exchange. None of the Owners, the Purchaser or the
Company shall knowingly take or fail to take any action, which action or
failure to act would jeopardize the qualification of the Exchange as an
exchange within the meaning of Section 351 of the Code.

6.5 Motor Vehicles. Expressly excluding KPMG, the Owners and the
Company represent and warrant that no motor vehicle primarily used by an
executive management employee in the business of the Company prior to the
Closing is owned by the Company.

6.6 Incentive Stock Bonus Plan. In order to provide incentive to
the key employees of SCSI, Purchaser agrees to cause SCSI, as a subsidiary of
Purchaser, to enter into an Incentive Stock Bonus Plan ("Bonus Plan") with the
key employees of SCSI (who were formerly the key employees of the Company),
which will provide for a bonus pool of shares of Purchaser's Common Stock to be
issued to key employee participants in the Bonus Plan, being the persons
specified in section 6.11 ("Participants") contingent on the combined
recognised revenues for the 1998 calendar year of the Company to the IPO
Closing Date and SCSI (and its permitted assignee) between the IPO Closing Date
and the end of the 1998 calendar year. The Participants shall determine the
amount of participation of each Participant. The shares will be issued at a
value per share equal to the IPO Price. The Bonus Plan will provide that if,
for the 1998 calendar year, the Company from 1 January 1998 to the IPO Closing
Date and SCSI (and its permitted assignee) from the IPO Closing Date to the end
of the 1998 calendar year ("1998 Year") have combined recognized revenue (less
allowances for doubtful accounts and sales returns) as determined in accordance
with GAAP ("Recognized Revenue"), of AUD $38,400,000 or more, , then there
shall be a bonus pool payable to the key employee participants in the Bonus
Plan of AUD $4,000,000 in value of Purchaser's Common Stock to be issued at a
value per share in United States dollars equal to the IPO Price. If the Company
from 1 January 1998 to the IPO Closing Date and SCSI (and its permitted
assignee) from the IPO Closing Date to the end of the 1998 Year have combined
Recognized Revenue of AUD$31,200,000 or less for the 1998 Year, then there will
be no bonus pool payable. If the Company from 1 January 1998 to the IPO Closing
Date and SCSI (and its permitted assignee) from the IPO Closing Date to the end
of the 1998 Year have Recognized Revenue of more than AUD $31,200,000, but less
than

29
<PAGE> 31
AUD $38,400,000, for the 1998 Year, then the amount of the bonus pool shall be
the result of the following computation:

Recognized Revenue for 1998 Year minus AUD$31,200,000 times AUD$4,000,000
-----------------------------------------------------
AUD$7,200,000

6.7 Transfer of Interest in DCSI or TCS.

6.7.1 If the Company wishes (whether of its own accord, or
as a result of receiving an offer from a third party) to sell, transfer, assign
or otherwise dispose of or grant an option over any of the Company's shares in
DCSI or units in the TCS Trust (as appropriate) ("Ownership Interests") or any
interest in those Ownership Interests or right forming part of or attaching to
those Ownership Interests the following will apply:

(1) the Company must first serve a notice
("Notice") in writing on the Purchaser setting out:

(a) if it has not received an offer from a
third party for the Ownership Interests, the terms upon which it wishes to
sell; or

(b) if it has received an offer from a third
party for the Ownership Interests, the terms of that offer.

(2) the Purchaser shall be given by the Company,
prior to any sale of the Ownership Interests being entered into,
becoming binding or being effected, the opportunity to provide its own
offer to purchase the Ownership Interests to the Company.

6.7.2 The Purchaser acknowledges that the Company is not
required to accept any offer made by the Purchaser for any of the Ownership
Interests.

6.7.3 In this section 6.7, reference to the Ownership
Interests include any part of the Ownership Interests.

6.8 Business Records. The Company agrees to make available to the
Purchaser at any time upon request free of charge, all books and records of the
Company relating to the Acquired Assets and the Assumed Obligations wherever
located, including without limitation, all credit records, payroll records,
computer records, computer programs, contracts, agreements, operating manuals,
schedules of assets, accounting and financial records, sales and property tax
records and returns, sales records, customer and supplier data, blueprints,
specifications, plans, maps, surveys, building and machinery diagrams,
maintenance records, personnel and labor relation records, real estate records,
construction records, environmental records and returns, files, papers, books
and all other public and confidential business records (together the "Business
Records"), whether such Business Records are in hard copy form or are
electronically or magnetically stored, excluding only the Company's income tax
records

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<PAGE> 32
and returns, its Minute Books and constituent documents and stock records. The
Purchaser shall be entitled to take photocopies of any of the Business Records.

6.9 Telephone Numbers. The Company shall use its best endeavours
to transfer all of the Company' right, title and interest in, to and under all
telephone numbers used by the Company and Company business telephone numbers
used by its employees to the Purchaser, a correct and complete list of which is
set forth on Schedule 1.1.13 hereto.

6.10 Transferring Employees.

6.10.1 Prior to the IPO Closing Date the Purchaser must
offer employment or contracts (as appropriate) to each of the Employees to
commence on the IPO Closing Date subject to the completion of the transactions
contemplated by this Agreement. The employment or contracts (as appropriate)
offered must be on terms and conditions as to wages and salaries and other
conditions and entitlements no less favourable than those on which the
Employees are employed or retained on the date of this Agreement unless
otherwise agreed in writing by the Company and the Purchaser.

6.10.2 The Company must use its best endeavours to procure
the acceptance by all of the Employees receiving offers of employment or
contracts (as appropriate) by the Purchaser. Subject to completion of the
transactions contemplated by this Agreement, the services of each of the
employees and contractors who accept the offer of employment or agree to permit
the assignment of their contracts (as appropriate) to the Purchaser will be
transferred to the Purchaser and the Company consents to this.

6.11 Employment Agreements. The Company and the Owners (excluding
KPMG) agree in good faith to use their best endeavours to negotiate employment
agreements between Purchaser (or its permitted assignee) of the one part and
Stephen Caswell, Christopher Banks and Desmond Lock of the other part,
substantially in the form of the employment agreement annexed as exhibit 6.11.

7. CONDITIONS PRECEDENT; CLOSING DELIVERIES

7.1.1 Accuracy of Representations and Warranties. The
representations and warranties of the Owners and the Company contained in this
Agreement, the Schedules and Exhibits hereto, or in any closing certificate or
document delivered to the Purchaser pursuant hereto shall be true and correct
at and as of the Closing Date as though made as of that time, other than such
representations and warranties as are specifically made as of another date, and
the Owners and the Company shall each have delivered to the Purchaser a
certificate to that effect.

7.1.2 Performance of Covenants. The Owners and the Company
shall have performed and complied with all covenants of this Agreement to be
performed or complied with by

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<PAGE> 33
them at or prior to the Closing Date, and the Owners and the Company shall each
have delivered to the Purchaser a certificate to that effect.

7.1.3 Legal Actions or Proceedings. Excluding KPMG with
respect to section 7.1.3, no legal action or proceeding shall have been
instituted after the date hereof against the Company or any Owner or against
the Purchaser arising by reason of the Exchange or any of the transactions
contemplated by this Agreement, which is reasonably likely (i) to restrain,
prohibit or invalidate the consummation of the transactions contemplated by
this Agreement, (ii) to have a Company Material Adverse Effect or (iii) to have
a Purchaser Material Adverse Effect after giving effect to the consummation of
the transactions contemplated by this Agreement, and the Owners and the Company
shall each have delivered to the Purchaser a certificate to that effect.

7.1.4 Approvals. Excluding KPMG with respect to section
7.1.4, subject to section 5.8, the Company and the Owners shall have acquired
all of the consents, approvals and waivers of third parties and of any
regulatory body or authority, whether required contractually or by applicable
law or otherwise, necessary for the execution, delivery and performance of this
Agreement (including the Company Related Documents and the Owner Related
Documents) by the Company and the Owners prior to the Closing Date, and the
Owners and the Company shall each have delivered to the Purchaser a certificate
to that effect.

7.1.5 Foreign Investment Review Board. The Purchaser
receiving from the Foreign Investment Review Board of the Commonwealth of
Australia approval of the purchase of the Acquired Assets and all of the other
transactions contemplated by this Agreement, such approval which is:-

(a) unconditional; or

(b) subject to conditions which do not materially
affect the commercial arrangement constituted by this Agreement or the economic
substance of the agreement reached between the parties reflected in this
Agreement.

The Purchaser agrees to consult with the Company in making its application to
the Foreign Investment Review Board for approval.

7.1.6 Closing Deliveries. All documents required to be
executed or delivered at Closing by the Owners or the Company pursuant to
Section 7.3 of this Agreement shall have been so executed and delivered.

7.1.7 No Loss or Damage. No material loss or damage shall
have occurred on or prior to the Closing Date to any of the properties or
assets of the Company.

7.1.8 Licenses, etc. The Purchaser shall have obtained, or
will obtain under this Agreement, all such licenses and permits as are legally
required for the continued operation of the business of the Company after the
Closing Date, substantially the same as before.

7.1.9 No Material Adverse Change. Since the Balance Sheet
Date there shall not have been any event that in the reasonable judgment of the
Purchaser, adversely affects the properties, assets, financial condition,
results of operations, cash flows, businesses or prospects of the Company

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<PAGE> 34
to a material extent (excluding the situation where the Company is unable to
effectively assign a contract of the Company to Purchaser).

7.1.10 IPO. The Purchaser shall have completed the IPO on
terms acceptable to it, and the net proceeds thereof shall have been received
by the Purchaser.

7.1.11 Certain Corporate Actions. All necessary owner and
manager resolutions, waivers and consents required from the Company and the
Owners to consummate the transactions contemplated hereunder shall have been
executed and delivered.

7.1.12 Foreign Company. The Purchaser successfully registering
as a foreign company under the Corporations Law of the Commonwealth of
Australia.

7.1.13 ASAP Restraint. ASAP executing a deed in favour of
Purchaser containing a restraint of trade provision to the following effect, or
as otherwise mutually agreed between the parties:

"1.1 ASAP agrees with the Purchaser that in order to
protect the goodwill of the Company that is being
transferred to Purchaser under an agreement and plan
of exchange between, inter alia, the Company and
Purchaser dated on or around 20 December 1997
("Agreement and Plan of Exchange") and the business
of the Company in the form that it is conducted at
the date of the Agreement and Plan of Exchange,
namely the provision of SAP implementation services
("Business"), ASAP shall not:

1.1.1 either directly or indirectly:

(1) canvas or solicit any employee of the
Business to leave his employment with the
Business or the Purchaser;

(2) canvass or solicit any person who has been a
client or customer of the Company or of the
Business at any time during the year prior to
the Closing Date (as that term is defined in
the Agreement and Plan of Exchange) in a way
that is detrimental to the Business;

(3) engage any employees or independent
contractors after the Closing Date to be used
by ASAP to itself provide SAP software
implementation services;

1.1.2 within:

(1) Australia;

(2) the State of Victoria;

(3) forty (40) kilometres of the Melbourne
Central Business District ("CBD");

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<PAGE> 35
(4) ten (10) kilometres of the CBD;

(5) two (2) kilometres of the CBD;

1.1.3 for a period of:

(1) two (2) years after the Closing Date;

(2) one (1) year after the Closing Date.

1.1.4 Construction. Clause 1.1.1 is to be construed and
take effect as if it consisted of the number of
separate provisions which are the result of combining
each type of conduct referred to in clause 1.1.1 with
each of the areas referred to in clause 1.1.2, and
then relating each of those combinations to each of
the periods of time referred to in clause 1.1.3. If
any of those separate provisions is unenforceable,
illegal or void for any reason that provision shall
be severed. Severance will not affect the validity or
unenforceability of any of the other separate
provisions.

1.1.5 Fair and Reasonable. Each of the separate provisions
comprising clause 1.1 constitutes a fair and
reasonable restraint of trade.

1.1.6 Marketable Securities. Clause 1.1 is not intended to
preclude ASAP from owning marketable securities of a
stock exchange in Australia or elsewhere. But ASAP
must not hold more than five percent (5%) of such
marketable securities of such corporation or trust if
that corporation or trust carries on any business
which competes directly with the Business.

1.1.7 Insolvency. Notwithstanding any of the other
provisions of this Agreement, if the Purchaser or
SCSI enters into any form of insolvency
administration within two (2) years of the IPO
Closing Date, then the provisions of this section 1.1
shall not, from the occurrence of that event onwards,
apply.

1.2 ASAP agrees with the Company that, consistent with
its past practices, it shall in good faith use its
best endeavours to continue referring clients to the
Business for a period of two (2) years after the IPO
Closing Date."

7.1.14 Charges. The Company delivering to Purchaser
simultaneously with the Exchange a release of the equitable mortgage in favour
of the Commonwealth Bank of Australia referred to in Schedule 3.4.

7.2 Conditions Precedent to the Obligations of the Owners and the
Company. The obligations of the Owners and the Company under this Agreement are
subject to the satisfaction of each of the following conditions, unless waived
by the Company in writing. Provisions in this Section 7.2 requiring the
delivery of documents and certificates to the Company and the Owners shall be
deemed satisfied by delivery of such materials to the Escrow Agent for later
release to the Company and the Owners upon satisfaction of the conditions
contained in the Escrow Agreement.

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<PAGE> 36
7.2.1 Accuracy of Representations and Warranties. The
representations and warranties of the Purchaser contained in this Agreement or
in any closing certificate or document delivered to the Owners or the Company
pursuant hereto shall be true and correct on and as of the Closing Date as
though made at and as of that date other than such representations and
warranties as are specifically made as of another date (such as the warranties
made with respect to the schedules referred to in section 3), and the Purchaser
shall have delivered to the Owners and the Company a certificate to that
effect.

7.2.2 Performance of Covenants. The Purchaser shall have
performed and complied with all covenants of this Agreement to be performed or
complied with by it at or prior to the Closing Date and the Purchaser shall
have delivered to the Owners and the Company a certificate to such effect.

7.2.3 Approvals. Purchaser shall have acquired all of the
consents, approvals and waivers specified under Section 4.4 prior to the
Closing Date, and Purchaser shall deliver to the Owners and the Company a
certificate to that effect.

7.2.4 Closing Deliveries. All documents required to be
executed or delivered at Closing by Purchaser pursuant to Section 7.5 of this
Agreement shall have been so executed and delivered.

7.3 Deliveries by the Company or the Owners at the Closing. At the
Closing, simultaneously with the deliveries by the Purchaser specified in
Section 7.5 below, and in addition to any deliveries required to be made by the
Owners and the Company pursuant to any other transaction document at the
Closing, the Company or the Owners, as applicable, shall deliver or cause to be
delivered to the Escrow Agent the following:

7.3.1 Closing Certificates. The Owners and the Company
shall execute and deliver the Escrow Agreement substantially in the form of
Exhibit 2.1 and the certificates and documents required pursuant to Sections
7.1.1, 7.1.2, 7.1.3, 7.1.4 and 7.1.6.

7.3.2 Instruments of Transfer.

(a) The Company shall use its best endeavours to
deliver at the Closing executed landlord's estoppel letters in a form
satisfactory to Purchaser with respect to all Real Property Leases,
and the Company shall use its best endeavours to execute and deliver
to Purchaser at the Closing an Assignment and Assumption of the Real
Property Leases, in substantially the form attached as Exhibit
7.3.2(i) hereto;

(b) At the Closing, the Company shall use its
best endeavours to deliver to Purchaser such other instruments of
transfer as shall be reasonably necessary or appropriate to vest in
Purchaser good and indefeasible title to the Acquired Assets and to
evidence the assignment by the Company and the assumption by Purchaser
of the Assumed Obligations.

7.3.3 Stock Transfer Restriction Agreement. The Company and
the Owners shall execute and deliver a Stock Transfer Restriction Agreement,
effective as of the Closing Date, substantially in the form set forth in
Exhibit 7.3.3.

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<PAGE> 37
7.3.4 Opinion of Counsel for the Owners and the Company.
The Owners and the Company shall deliver the favorable opinion of its legal
counsel, dated as of the Closing Date, substantially in the form and to the
effect set forth in Exhibit 7.3.5 attached hereto.

7.3.5 Documents.. The Company and the Owners shall execute
and deliver, the documents, certificates, opinions, instruments and agreements
required to be executed and delivered by the Company or any Owner at the
Closing as contemplated hereby or as may be reasonably requested by the
Purchaser.

7.4 No Waiver. The consummation of the Closing shall not be deemed
to be a waiver by the Purchaser of any of its rights or remedies against the
Owners or the Company hereunder for any breach of warranty, covenant or
agreement by the Company or the Owners herein irrespective of any knowledge of
or investigation made by or on behalf of the Purchaser; provided, however, that
if the Company shall disclose in writing to the Purchaser prior to the Closing
Date a specified breach of a specifically identified representation, warranty,
covenant or agreement of the Company or a Owner herein by the Company or a
Owner, and requests a waiver thereof by the Purchaser, and the Purchaser shall
waive any such specifically identified breach in writing prior to the Closing
Date, the Purchaser, for themselves and for each Purchaser Indemnified Party
(as defined below) shall be deemed to have waived their respective rights and
remedies hereunder for, and the Owners and the Company shall have no liability
with respect to any such specifically identified breach to the extent so
identified by the Company and so waived by the Purchaser.

7.5 Deliveries by the Purchaser at the Closing. At the Closing,
simultaneously with the deliveries by the Owners specified in Section 7.3
above, and in addition to any other deliveries to be made by the Purchaser
pursuant to any other transaction document at the Closing, the Purchaser, as
applicable, shall deliver or cause to be delivered to the Owners and the
Company the following:

7.5.1 Closing Certificates. The Purchaser shall execute and
deliver the Escrow Agreement in the form of Exhibit 2.1, the certificates and
documents required pursuant to Sections 7.2.1, 7.2.2, 7.2.3 and 7.2.4.

7.5.2 Instruments of Transfer. At the Closing, the
Purchaser shall execute and deliver to the Company the following documents:

(i) the Assignment and Assumption of the Real
Property Leases, in substantially the form attached as Exhibit
7.3.2(i) hereto; and

(ii) such other instruments or documents as shall
be reasonably necessary or appropriate to vest in Purchaser good and
indefeasible title to the Acquired Assets and to evidence the
assumption by Purchaser of the Assumed Obligations.

7.5.3 Opinion of Counsel for the Purchaser. The Purchaser
shall deliver the favorable opinion of its legal counsel dated as of
the Closing Date, substantially in the form and to the effect set
forth in Exhibit 7.5.3.

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7.5.4 Closing Cash Consideration. The Purchaser shall
deliver the Closing Cash Consideration to the Company as set forth in
Section 1.5 hereof.

7.6 No Waiver. The consummation of the Closing shall not be deemed
to be a waiver by the Owners or the Company of any of their rights or remedies
hereunder for breach of any warranty, covenant or agreement herein by the
Purchaser irrespective of any knowledge of or investigation with respect
thereto made by or on behalf of any Owner or the Company; provided, however,
that if the Purchaser shall disclose in writing to the Owners prior to the
Closing a specified breach of a specifically identified representation,
warranty, covenant or agreement of the Purchaser contained herein by the
Purchaser, and requests a waiver thereof by the Company and the Owners, and the
Company and the Owners shall waive any such specifically identified breach in
writing prior to the Closing, the Company and the Owners shall be deemed to
have waived their rights and remedies hereunder for, and the Purchaser shall
have no liability or obligation to the Owners or the Company with respect to,
any such specifically identified breach, to the extent so identified by the
Purchaser and waived by the Company and the Owners.

7.7.1 Legal Actions or Proceedings. No legal action or
proceeding shall have been instituted after the date hereof against the Company
or the Owners which is reasonably likely (i) to restrain, prohibit or
invalidate the consummation of the transactions contemplated by this Agreement,
(ii) to have a Company Material Adverse Effect or (iii) to have a Purchaser
Material Adverse Effect after giving effect to the consummation of the
transactions contemplated by this Agreement.

7.7.2 IPO. The Purchaser shall have completed the IPO on
terms described in the Registration Statement for the IPO, and the net proceeds
thereof shall have been received by the Purchaser.

7.8 Delivery of the Closing Cash Consideration. On the IPO Closing
Date, the Purchaser shall deliver the Closing Cash Consideration to the Company
and the Escrow Agent shall release and deliver all documents and certificates
held in escrow to the appropriate parties.

7.9 Provision of Working Capital. As soon as practicable after
completion of Closing the Purchaser will arrange for the provision to SCSI of
monies sufficient for its day to day operations, including without limitation
arranging a line of credit.

8. ACCOUNTS RECEIVABLE AND OWNERS ENTITLEMENTS

8.1 The Owners represent that as at 30 September 1997 the
accounting records of the Company prior to any adjustment for purposes of the
financial statements referred to in section 3.8 show certain amounts were owing
to them by the Company representing loans, undistributed pre-30 June 1997
profits, capital introductions, post-30 June 1997 interest and profit
accumulation all of which are contained in exhibit 1.3 and which, as at that
date, stood at AUD$2,723,987.

37
<PAGE> 39
8.2 The Purchaser, which is acquiring the Accounts Receivable
pursuant to section 1.1.5, agrees to apply the proceeds of the collection of
the Accounts Receivable in the following manner:

8.2.1 First, to the Owners in satisfaction of the
entitlements of the Owners referred to in section 8.1, as adjusted in the
ordinary course of business of the Company and consistent with its past
practices (including interest and profit accumulation from 1 October 1997 to
the IPO Closing Date) and which includes the crediting of profits of the
Company earned between 30 September 1997 and the IPO Closing Date, less any
amounts distributed by the Company to the Owners between 30 September 1997 and
the IPO Closing Date in reduction of said entitlements ("Owner's
Entitlements"); and

8.2.2 Secondly, to the Purchaser.

8.3 The Purchaser agrees and acknowledges that if a shortfall
arises in respect of the payment of the Owners Entitlements pursuant to section
8.2.1, that it shall pay that shortfall to the Company within three (3) months
of the IPO Closing Date. The Purchaser reserves the right, upon the giving of
reasonable prior notice to the Company, to conduct an audit of the items
referred to in section 8, at its own cost as at the IPO Closing Date.

9. SURVIVAL; INDEMNIFICATIONS

9.1 Survival. The representations and warranties set forth in this
Agreement and the other documents, instruments and agreements contemplated
hereby shall survive after the date hereof to the extent provided herein. The
representations and warranties of the Owners and the Company in the Owner
Related Documents and the Company Related Documents other than those in Section
3.4 shall survive for a period of twenty-four (24) months after the date hereof
and the representations and warranties of the Owners and the Company contained
in Section 3.4 shall survive for the maximum period permitted by applicable
law. The representations and warranties of Purchaser herein and in the
Purchaser Related Documents shall survive for a period of twenty-four (24)
months after the date hereof. The periods of survival of the representations
and warranties as stated above in this Section 9.1 are referred to herein as
the "Survival Period." The liabilities of the parties under their respective
representations and warranties shall expire as of the expiration of the
applicable Survival Period and no claim for indemnification may be made with
respect to any breach of any representation or warranty, the applicable
Survival Period of which shall have expired, except to the extent that written
notice of such breach shall have been given to the party against which such
claim is asserted on or before the date of such expiration. The covenants and
agreements of the parties herein and in other documents and instruments
executed and delivered in connection with the closing of the transactions
contemplated hereby shall survive for the maximum period permitted by law.

9.2 Indemnification.

9.2.1 The parties agree and acknowledge that KPMG shall be
excluded completely from the operation of this section 9.2.

9.2.2 Purchaser Indemnified Parties. Subject to the
provisions of Sections 9.1 and 9.3 hereof, the Company and the Owners shall
indemnify, save and hold harmless Purchaser and any of its assignees (including
lenders) and all of their respective officers, directors, employees,

38
<PAGE> 40
representatives, agents, advisors and consultants and all of their respective
heirs, legal representatives, successors and assigns (collectively, the
"Purchaser Indemnified Parties") from and against any and all damages,
liabilities, losses, claims, deficiencies, penalties, interest, expenses,
fines, assessments, charges and costs, including reasonable attorneys' fees and
court costs on a solicitor and own client basis (collectively "Losses") arising
out of:

(i) the breach of any covenant of the Company or any
Owner or the failure by the Company or the Owners to perform any
obligation of any Owner or the Company contained herein or in any
Company Related Document or Owner Related Document;

(ii) any inaccuracy or breach of any representation or
warranty of any Owner contained herein or in any Owner Related
Document;

(iii) any inaccuracy or breach of any representation or
warranty of the Company contained herein or any Company Related
Document;

(iv) any act or omission of the Company or the Owners
occurring or existing at any time on, before or after the Closing and
involving or related to the Excluded Assets; and

(v) any act or omission of the Company, or any Owner
(excluding Robert Langford) occurring at any time on or before the IPO
Closing Date and involving or related to the Acquired Assets or the
properties, business or operations now or previously owned or operated
by the Company.

9.2.3 Minimum Losses. For purposes of this Section 9.2,
Losses shall be calculated with respect to any inaccuracy or breach of any
representation or warranty without giving effect to any clause which would
permit such inaccuracy or breach up to an amount which would be deemed a
Company or Purchaser Material Adverse Effect. The Company and the Owners shall
have no obligation under Section 9.2.2 until the aggregate amount of all such
Losses equal or exceed $75,000 (whether or not any particular loss resulted in
a Company Material Adverse Effect), at which time the Company and the Owners
shall be subject to the provisions of Section 9.2.2 with respect to any Losses
of the Purchaser Indemnified Parties above the $75,000 allowance.

9.2.4 Purchaser Indemnity. Subject to the provisions of
Sections 9.1 and 9.3, Purchaser shall indemnify, save and hold harmless the
Company, the Owners and all of their respective heirs, legal representatives,
successors and assigns from and against all Losses arising from, out of or in
any manner connected with or based on:

(i) any breach of any covenant of Purchaser or the
failure by Purchaser to perform any of its obligations contained
herein or in the Purchaser Related Documents;

(ii) any inaccuracy or breach of any representation or
warranty of Purchaser contained herein or in the Purchaser Related
Documents; and

39
<PAGE> 41
(iii) any act, omission, event, condition or circumstance
occurring or existing at any time after (but not on or before) the IPO
Closing Date that involve or relate to the Acquired Assets or the
Assumed Obligations; provided, however, that this clause (iii) shall
not apply to any Losses to the extent that such Losses result from any
Owner's acts or omissions (unless such acts or omissions occur as a
result of a request from the Purchaser) after the date hereof as an
officer, director and/or employee of Purchaser or its affiliates.

9.3 Limitations. Notwithstanding any of the other provisions of
this Agreement:

(1) The aggregate liability of the Company under
Section 9.2.2 shall not exceed:

(a) the aggregate Purchase Price less an
amount equal to the dimunition in value of the
Purchaser Common Stock issued to the Company under
this Agreement between the IPO Closing Date and the
date the indemnity is called upon pursuant to section
9.2.2 ("Adjusted Purchase Price"); or

(b) AUD$24 million,

whichever is the lesser.

(2) The aggregate liability of each Owner under
section 9.2.2 shall not exceed such Owner's pro rata
derivative interest in:

(a) the Adjusted Purchase Price based on such
Owner's Ownership Interest as set forth on Schedule
3.2 hereto; or

(b) AUD$24 million,

whichever is the lesser.

(3) The liability of each Owner under section 9.2.2,
with respect to any claim made by the Purchaser for indemnity
("Claim") shall not exceed that proportion of the Claim which
is equal to the proportion reflected by the Owner's pro-rata
derivative interest in:

(a) the Adjusted Purchase Price based on such
Owner's Ownership Interests as set forth on schedule
3.2 hereto; or

(b) AUD$24 million,

whichever is the lesser.

(4) The aggregate liability of the Purchaser under
Section 9.2.4 shall not exceed the amount of the Purchase
Price, except that after the Closing Cash Consideration has
been paid to the Company, the aggregate liability of the
Purchaser

40
<PAGE> 42
under section 9.2.4 shall not exceed the amount of the
Purchase Price paid with Purchaser Common Stock.

9.4 Procedures for Indemnification.

9.4.1 Notice. The party (the "Indemnified Party") that may
be entitled to indemnity hereunder shall give prompt notice to the party
obligated to give indemnity hereunder (the "Indemnifying Party") of the
assertion of any claim, or the commencement of any suit, action or proceeding
in respect of which indemnity may be sought hereunder. Any failure on the part
of any Indemnified Party to give the notice described in this Section 9.4.1
shall relieve the Indemnifying Party of its obligations under this Article 9
only to the extent that such Indemnifying Party has been prejudiced by the lack
of timely and adequate notice (except that the Indemnifying Party shall not be
liable for any expenses incurred by the Indemnified Party during the period in
which the Indemnified Party failed to give such notice). Thereafter, the
Indemnified Party shall deliver to the Indemnifying Party, promptly (and in any
event within 10 days thereof) after the Indemnified Party's receipt thereof,
copies of all notices and documents (including court papers) received by the
Indemnified Party relating to such claim, action, suit or proceeding.

9.4.2 Legal Defense. The Purchaser shall have the
obligation to assume the defense or settlement of any third-party claim, suit,
action or proceeding in respect of which indemnity may be sought hereunder,
provided that (i) the Owners and the Company shall at all times have the right,
at their option, to participate fully therein, and (ii) if the Purchaser does
not proceed diligently to defend the third-party claim, suit, action or
proceeding within 10 days after receipt of notice of such third-party claim,
suit, action or proceeding, the Owners and the Company shall have the right,
but not the obligation, to undertake the defense of any such third-party claim,
suit, action or proceeding.

9.4.3 Settlement. The Indemnifying Party shall not be
required to indemnify the Indemnified Party with respect to any amounts paid in
settlement of any third-party suit, action, proceeding or investigation entered
into without the written consent of the Indemnifying Party; provided, however,
that if the Indemnified Party is a Purchaser Indemnified Party, such
third-party suit, action, proceeding or investigation may be settled without
the consent of the Indemnifying Party on 10 days' prior written notice to the
Indemnifying Party if such third-party suit, action, proceeding or
investigation is then unreasonably interfering with the business or operations
of the Company and the settlement is commercially reasonable under the
circumstances; and provided further, that if the Indemnifying Party gives 10
days' prior written notice to the Indemnified Party of a settlement offer which
the Indemnifying Party desires to accept and to pay all Losses with respect
thereto ("Settlement Notice") and the Indemnified Party fails or refuses to
consent to such settlement within 10 days after delivery of the Settlement
Notice to the Indemnified Party, and such settlement otherwise complies with
the provisions of this Section 9.4, the Indemnifying Party shall not be liable
for Losses arising from such third-party suit, action, proceeding or
investigation in excess of the amount proposed in such settlement offer.
Notwithstanding the foregoing, no Indemnifying Party will consent to the entry
of any judgment or enter into any settlement without the consent of the
Indemnified Party, if such judgment or settlement imposes any obligation or
liability upon the Indemnified Party other than the execution, delivery or
approval thereof and customary releases of claims with respect to the subject
matter thereof.

41
<PAGE> 43
9.4.4 Cooperation. The parties shall cooperate in defending
any such third-party suit, action, proceeding or investigation, and the
defending party shall have reasonable access to the books and records, and
personnel in the possession or control of the Indemnified Party that are
pertinent to the defense. The Indemnified Party may join the Indemnifying Party
in any suit, action, claim or proceeding brought by a third party, as to which
any right of indemnity created by this Agreement would or might apply, for the
purpose of enforcing any right of the indemnity granted to such Indemnified
Party pursuant to this Agreement.

10. TERMINATION

10.1 Grounds for Termination. This Agreement may be terminated only
as provided below.

10.1.1 Prior to Closing. The parties may terminate this Agreement
at any time prior to the Closing only as provided below:

(i) Mutual Consent. Purchaser and the Company may
terminate this Agreement by mutual written consent at any time prior
to the Closing;

(ii) Termination by Purchaser. Purchaser may terminate
this Agreement by giving written notice thereof to the Company at any
time prior to the Closing: (a) in the event that the Owners or the
Company has breached any material representation, warranty, or
covenant contained in this Agreement in any material respect,
Purchaser has notified the Company of the breach, and the breach has
continued without cure until the earlier of 20 days after the notice
of such breach or the Closing Date, whichever is earlier, (b) if the
Registration Statement for the IPO has not been filed with the U.S.
Securities and Exchange Commission on or before December 31, 1997, or
(c) if the IPO Closing Date shall not have occurred on or before April
30, 1998, by reason of the failure of any condition precedent under
Section 7.1 hereof (unless the failure results primarily from
Purchaser itself ); and

(iii) Termination by the Company. The Company may terminate
this Agreement by giving written notice thereof to Purchaser at any
time prior to the Closing: (a) in the event the Purchaser has breached
any material representation, warranty, or covenant contained in this
Agreement in any material respect, the Company has notified Purchaser
of the breach, and the breach has continued without cure until the
earlier of 20 days after the notice of such breach or the Closing
Date, whichever is earlier, (b) if the Registration Statement for the
IPO has not been filed with the U.S. Securities and Exchange
Commission on or before December 31, 1997, or (c) if the IPO Closing
Date shall not have occurred on or before April 30, 1998 by reason of
the failure of any condition precedent under Section 7.2 hereof
(unless the failure results primarily from the Company or an Owner
materially breaching any material representation, warranty, or
covenant contained in this Agreement).

10.1.2 After the Closing Date. This agreement may be
terminated after the Closing only as follows:

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<PAGE> 44
shares of Purchaser Common Stock from Purchaser on a firm commitment
basis for resale to the public initially at the IPO Price, Purchaser
or the Company may each terminate this Agreement by providing written
notice to the other.

(ii) Automatic Termination. This Agreement shall terminate
automatically and without action on the part of any party hereto if
the IPO is not consummated within 10 business days after the Closing.

10.2 Effect of Termination. If this Agreement is terminated as
permitted under Section 10.1, such termination shall be without liability of
any party to any other party, except that such termination shall be without
prejudice to any and all remedies the parties may have against each other for
breach of this Agreement.

11. MISCELLANEOUS

11.1 Notice. Any notice, delivery or communication required or
permitted to be given under this Agreement shall be in writing, and shall be
mailed, postage prepaid, or delivered, to the addresses given below, or sent by
facsimile or e-mail to the telecopy numbers set forth below, as follows:

To the Company:

c/- Philip Ciravolo
Cugley Ciravolo Bordin Pty Ltd
8-10 Flintoff Street
Greensborough Vic 3088
Facsimile: (613) 9432-0003
E-mail [email protected]

To the Owners:

c/- Philip Ciravolo
Cugley Ciravolo Bordin Pty Ltd
8-10 Flintoff Street
Greensborough Vic 3088
Facsimile: (613) 9432-0003
E-mail [email protected]

To the Purchaser:

(a) BrightStar Information Technology Group, Inc.
10375 Richmond Avenue, Suite 1620,
Houston, Texas, USA, 77042
Attn: President
Facsimile: (713) 361-2501
E-mail [email protected]

43
<PAGE> 45
(b) with a copy to Robert J. Viguet Jnr.
Chamberlain, Hrdlicka, White, Williams & Martin,
1200 Smith Street, Suite 1400,
Houston, Texas, USA, 77042
Facsimile: (713) 658-1818

or other such address as shall be furnished in writing by any such party to the
other party

11.2 A notice or other communication shall be deemed to have been
served:

11.2.1 if mailed by air-mail, seven days after mailing;

11.2.2 if hand delivered, at the time of delivery;

11.2.3 if sent by facsimile, on the date of receipt by the
sender from the sender's facsimile machine of an acknowledgment of error free
transmission in legible form; or

11.2.4 if e-mailed, on receipt of an acknowledgment from the
person receiving the e-mail of receipt of the e-mail.

To the extent any notice provision in any other agreement, instrument
or document required to be executed or executed by the parties in connection
with the transactions contemplated herein contains a notice provision which is
different from the notice provision contained in Sections 11.1 and 11.2 with
respect to matters arising under such other agreement, instrument or document,
the notice provision in such other agreement, instrument or document shall
control.

11.3 Further Documents. Each party shall, at any time and from time
to time after the date hereof, upon request by another party and without
further consideration, execute and deliver such instruments or other documents
and take such further action as may be reasonably required in order to perfect
any other undertaking made by the Owners or the Company hereunder.

11.4 Assignability. Neither the Company nor any Owner shall assign
this Agreement in whole or in part without the prior written consent of the
Purchaser, except by the operation of law and the Purchaser may only assign its
rights under this Agreement, the Company Related Documents and the Owner
Related Documents: (a) to SCSI at any time, or (b) after thirteen months from
the IPO Closing Date has expired, to any entity, or (c) within the thirteen
month period from the IPO Closing Date, to any entity which forms part of a
bona fide reconstruction or reorganisation of the affairs of the Purchaser or
SCSI or the group of companies of which they are a part with the consent of the
Owners and the Company, such consent not to be unreasonably withheld.

11.5 Exhibits and Schedules. The Exhibits and Schedules (and any
appendices thereto) referred to in this Agreement are and shall be incorporated
herein and made a part hereof.

11.6 Entire Agreement. This Agreement constitutes the full
understanding of the parties, a complete allocation of risks between them and a
complete and exclusive statement of the terms and conditions of their agreement
relating to the subject matter hereof and supersedes any and all prior
agreements, whether written or oral, that may exist between the parties with
respect thereto. Except

44
<PAGE> 46
as otherwise specifically provided in this Agreement, no conditions, usage of
trade, course of dealing or performance, understanding or agreement purporting
to modify, vary, explain or supplement the terms or conditions of this
Agreement shall be binding unless hereafter made in writing and signed by the
party to be bound, and no modification shall be effected by the acknowledgment
or acceptance of documents containing terms or conditions at variance with or
in addition to those set forth in this Agreement. No waiver by any party with
respect to any breach or default or of any right or remedy and no course of
dealing shall be deemed to constitute a continuing waiver of any other breach
or default or of any other right or remedy, unless such waiver be expressed in
writing signed by the party to be bound. Failure of a party to exercise any
right shall not be deemed a waiver of such right or rights in the future.

11.7 Headings. Headings as to the contents of particular articles
and sections are for convenience only and are in no way to be construed as part
of this Agreement or as a limitation of the scope of the particular articles or
sections to which they refer.

11.8 Governing Law. The law of this Agreement is the law of the
State of Victoria, Australia. The parties irrevocably and unconditionally
submit themselves to the non-exclusive jurisdiction of the courts of the State
of Victoria, Australia or courts having jurisdiction in the State of Victoria,
Australia and of all courts competent to hear appeals from those courts. The
parties waive any right to object to any proceedings being brought in those
courts.

11.9 Public Announcements.

(a) Neither the Company nor any Owner shall make any
press release, public announcement, or public confirmation or
disclose any other information regarding this Agreement or the
contents hereof except with the consent of the Purchaser, such
consent not to be unreasonably withheld, or as required by
law.

(b) The Purchaser shall not make any press release,
public announcement or prior confirmation or disclosure
regarding SCSI or the Company unless it has first informed the
Company of the general terms of that disclosure.

11.10 No Third Party Beneficiaries. Except as set forth in Article
9, no person or entity not a party to this Agreement shall have rights under
this Agreement as a third party beneficiary or otherwise.

11.11 Amendments and Waivers. This Agreement may be amended prior to
Closing by the Purchaser, the Company, and the Owners, by an instrument in
writing signed on behalf of each such party and in compliance with applicable
law. Any term or provision of this Agreement may be waived in writing at any
time by the party which is entitled to the benefits thereof.

11.12 No Employee Rights. Subject to clause 6.11, nothing herein
expressed or implied (unless expressly set out in any written employment
agreements between the Company and an employee of the Company) shall confer
upon any employee of the Company, any other employee or legal representatives
or beneficiaries of any thereof any rights or remedies, including any right to
employment or continued employment for any specified period, of any nature or
kind whatsoever

45
<PAGE> 47
under or by reason of this Agreement, or shall cause the employment status of
any employee to be other than terminable at will.

11.13 No Personal Liability of Representatives of Purchaser. No
recourse for the payment of any amounts due hereunder or for any claim based on
this Agreement or the transactions contemplated hereby or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Purchaser in this Agreement shall be had against any incorporator,
organizer, promoter, shareholder, officer, director, employee or representative
as such, past, present or future, of the Purchaser or of any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such obligations are those of the Purchaser as a separate
corporate entity.

11.14 When Effective. This Agreement shall become effective only
upon the execution and delivery of one or more counterparts of this Agreement
by each of the Purchaser, the Company and the Owners.

11.15 Takeover Statutes. If any "fair price," "moratorium," "control
share acquisition" or other form of anti-takeover statute or regulation shall
become applicable to the transactions contemplated hereby, Purchaser, and the
Company and its Owners shall grant such approvals and take such actions as are
necessary so that the transactions contemplated by this Agreement may be
consummated as promptly as practicable on the terms contemplated herein and
otherwise act to eliminate or minimize the effects of such statute or
regulation on the transactions contemplated herein.

11.16 Number and Gender of Words. Whenever herein the singular
number is used, the same shall include the plural where appropriate and words
of any gender shall include each other gender where appropriate.

11.17 Invalid Provisions. If any provision of this Agreement is held
to be illegal, invalid, or unenforceable under present or future laws, such
provisions shall be fully severable as if such invalid or unenforceable
provisions had never comprised a part of the Agreement; and the remaining
provisions of the Agreement shall remain in full force and effect and shall not
be affected by the illegal, invalid or unenforceable provision or by its
severance from this Agreement. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be automatically as a part of this
Agreement, a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.

11.18 Multiple Counterparts. This Agreement may be executed in a
number of identical counterparts. If so executed, each of such counterparts is
to be deemed an original for all purposes and all such counterparts shall,
collectively, constitute one agreement, but, in making proof of this Agreement,
it shall not be necessary to produce or account for more than one such
counterpart.

11.19 No Rule of Construction. All of the parties hereto have been
represented by counsel in the negotiations and preparation of this Agreement;
therefore, this Agreement will be deemed to be drafted by each of the parties
hereto, and no rule of construction will be invoked respecting the authorship
of this Agreement.

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<PAGE> 48
11.20 Expenses. Each of the parties shall bear all of their own
expenses in connection with the negotiation and closing of this Agreement and
the transactions contemplated hereby; provided that Purchaser shall pay all
expenses associated with the accounting and auditing fees and expenses of
Deloitte and Touche, L.L.P.

11.21 Interpretation. Unless expressly provided otherwise in this
Agreement, or unless the context otherwise requires:

11.21.1 the singular includes the plural and vice versa and
reference to a gender includes other genders;

11.21.2 a reference to any legislation or statutory
instrument:

(1) includes:

(a) a reference to that legislation or
statutory instrument as amended, modified, re-
enacted and replaced from time to time; and

(b) any rulings, regulations or guidelines
made or issued under or in relation to that
legislation or statutory instrument; and

(2) is to be construed according to the relevant
State or Federal Acts Interpretation Act applicable
to that legislation or statutory instrument;

11.21.3 a reference to a person includes a corporation, firm
or body of persons recognised by law and that person's successors, assigns and
legal personal representatives;

11.21.4 other grammatical forms of defined words or phrases
have corresponding meanings;

11.21.5 a reference to a section, schedule or annexure is a
reference to a section of or schedule or annexure to this Agreement;

11.21.6 a reference to a document (including this document)
includes a reference to that document as amended or replaced from time to time;
and

11.21.7 a reference to money (including a reference to dollars
and expressions preceded by the symbol "$") is a reference to Australian
currency.

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<PAGE> 49
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered on the date first hereinabove written.

PURCHASER:

BRIGHTSTAR INFORMATION
TECHNOLOGY GROUP, INC.

By: /s/ MARSHALL G. WEBB
------------------------------------
Marshall G. Webb, President

COMPANY:

SOFTWARE CONSULTING SERVICES
PTY. LTD.

[SEAL] THE COMMON SEAL OF SOFTWARE CONSULTING
SERVICES PTY. LTD. (ACN 005 931 886) was
hereunto affixed in accordance with its
Articles of Association in the presence
of:

/s/ S.D. CASWELL Director
------------------------

S.D. Caswell Name (please
------------------------ print)

/s/ PHILIP CIRAVOLO Secretary
------------------------

/s/ PHILIP CIRAVOLO Name (please
------------------------ print)

OWNERS:

[SEAL] THE COMMON SEAL of KPMG INFORMATION
SOLUTIONS PTY. LTD. (ACN 065 410 746)
was hereunto affixed in accordance with
its Articles of Association in the
presence of:

/s/ [TO BE FURNISHED Director
UPON REQUEST]
------------------------

[TO BE FURNISHED] Name (please
UPON REQUEST print)
------------------------

/s/ IAN C. McBRIDE Secretary
------------------------

Ian C. McBride Name (please
------------------------ print)

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<PAGE> 50
[SEAL] THE COMMON SEAL of KENTCOM PTY LTD (ACN
065 369 440) was hereunto affixed in
accordance with its Articles of
Association in the presence of:

/s/ KEREN FAZIO Director
----------------------

Keren Fazio Name (please print)
----------------------

/s/ SALVATORE FAZIO Secretary
----------------------

Salvatore Fazio Name (please print)
----------------------

SIGNED by SALVATORE FAZIO in the presence
of:

/s/ SALVATORE FAZIO Salvatore Fazio
----------------------

/s/ PHILIP CIRAVOLO Witness
----------------------

PHILIP CIRAVOLO Name (please print)
----------------------

[SEAL] THE COMMON SEAL of PEPPER TREE PTY LTD
(ACN 007 342 538) was hereunto affixed in
accordance with its Articles of
Association in the presence of:

/s/ L. BANKS Director
----------------------

L. Banks Name (please print)
----------------------

/s/ C.R. BANKS Secretary
----------------------

C.R. Banks Name (please print)
----------------------

SIGNED by CHRISTOPHER RICHARD BANKS in
the presence of:

/s/ C.R. BANKS Christopher Banks
----------------------

/s/ PHILIP CIRAVOLO Witness
----------------------

PHILIP CIRAVOLO Name (please print)
----------------------

<PAGE> 1
EXHIBIT 10.7

AGREEMENT AND PLAN OF EXCHANGE

BY AND AMONG

BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.

AND

THE HOLDERS OF THE
OUTSTANDING CAPITAL STOCK
OF
SOFTWARE INNOVATORS, INC.

DECEMBER 18, 1997

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TABLE OF CONTENTS

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1. AGREEMENT FOR EXCHANGE........................................................................................1
1.1 Exchange of Shares and Other Consideration......................................................1
1.2 Aggregate Exchange Consideration from Parent....................................................1
1.2.1 Closing Exchange Consideration.........................................................1
1.2.2 Earnout Consideration..................................................................2
1.2.3 Certain Definitions....................................................................2
1.3 Payment of Closing Exchange Consideration.......................................................3
1.3.1 Closing Before Receipt of the 1997 Audit Report........................................3
1.3.2 Closing After Receipt of the 1997 Audit Report.........................................4
1.4 Determination of Earnout........................................................................4
1.4.1 Review of Earnout Statement............................................................4
1.4.2 Payment of Earnout Consideration.......................................................4
1.5 No Fractional Shares............................................................................4

2. THE CLOSING...................................................................................................5
2.1 Closing.........................................................................................5
2.2 Delivery of Company Common Stock................................................................5
2.2.1 Assignments of Company Common Stock....................................................5
2.2.2 Payment In Full Satisfaction of All Rights.............................................5

3. REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDERS......................................................................................5
3.1 Stock Ownership.................................................................................5
3.2 Shareholder Authority...........................................................................6
3.3 Shareholders Consents...........................................................................6
3.4 Organization, Etc...............................................................................6
3.5 Capitalization of the Company...................................................................6
3.6 Company Authority...............................................................................7
3.7 Company Consents................................................................................7
3.8 Intellectual Property...........................................................................7
3.9 Title...........................................................................................7
3.10 Defaults........................................................................................8
3.11 Other Disclosures...............................................................................8
3.12 Investment Company.............................................................................10
3.13 Financial Statements...........................................................................10
3.14 Undisclosed Liabilities........................................................................10
3.15 Tax Matters....................................................................................11
3.16 Full Authority.................................................................................12
3.17 Legal Actions..................................................................................12
3.18 Company Contracts, Company Plans...............................................................13
3.19 Access.........................................................................................13
3.20 No Material Adverse Change.....................................................................13
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3.21 Subsidiaries; Predecessors.....................................................................14
3.22 Affiliate Relationships........................................................................14
3.23 Disclosure.....................................................................................14
3.24 Company Material Adverse Effect................................................................14
3.25 Restricted Securities..........................................................................15

4. REPRESENTATIONS AND WARRANTIES
OF THE PARENT...........................................................................................15
4.1 Organization...................................................................................15
4.2 Capitalization of the Parent...................................................................16
4.3 Authority......................................................................................16
4.4 Consents.......................................................................................16
4.5 Defaults.......................................................................................16
4.6 Investment Company.............................................................................16
4.7 Financial Statements...........................................................................17
4.8 Taxes..........................................................................................17
4.9 Full Authority.................................................................................17
4.10 Access.........................................................................................17
4.11 Disclosure.....................................................................................17
4.12 Parent Material Adverse Effect.................................................................17

6. CERTAIN AGREEMENTS...........................................................................................23
6.1 Audit..........................................................................................23
6.2 Company Plans..................................................................................23
6.3 Confidentiality................................................................................23
6.4 Tax-Free Exchange..............................................................................23
6.5 Certain Tax Matters............................................................................23
6.5.1 Tax Periods Ending on or Before the IPO Closing Date..................................23
6.5.2 Cooperation on Tax Matters............................................................24
6.5.3 Tax Sharing Agreements................................................................24
6.6 Sale of Motor Vehicles.........................................................................24
6.7 Chief Executive Officer of Company.............................................................25
6.8 Parent Insurance...............................................................................25
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6.9 Parent Stock Option Plan.......................................................................25
6.10 Parent Advances to Company.....................................................................25

7. CONDITIONS PRECEDENT; CLOSING DELIVERIES.....................................................................25
7.1 Conditions Precedent to the Obligations of the Parent..........................................25
7.1.1 Accuracy of Representations and Warranties............................................25
7.1.2 Performance of Covenants..............................................................25
7.1.3 Legal Actions or Proceedings..........................................................25
7.1.4 Approvals.............................................................................26
7.1.5 Closing Deliveries....................................................................26
7.1.6 No Loss or Damage.....................................................................26
7.1.7 Licenses, etc.........................................................................26
7.1.8 No Material Adverse Change............................................................26
7.1.9 Certain Corporate Actions.............................................................26
7.2 Conditions Precedent to the Obligations of the Shareholders and the Company....................26
7.2.1 Accuracy of Representations and Warranties............................................26
7.2.2 Performance of Covenants..............................................................26
7.2.3 Approvals.............................................................................26
7.2.4 Closing Deliveries....................................................................27
7.3 Deliveries by the Shareholders at the Closing..................................................27
7.3.1 Closing Certificates..................................................................27
7.3.2 Stock Transfer Restriction Agreement..................................................27
7.3.3 Employment Agreements.................................................................27
7.3.4 Opinion of Counsel for the Shareholders and the Company...............................27
7.3.5 Documents, Stock Certificates.........................................................27
7.4 No Waiver by Parent............................................................................27
7.5 Deliveries by the Parent at the Closing........................................................28
7.5.1 Closing Certificates..................................................................28
7.5.2 Opinion of Counsel for the Parent.....................................................28
7.6 No Waiver......................................................................................28
7.7 Conditions Precedent to Completion of the Closing..............................................28
7.7.1 Legal Actions or Proceedings..........................................................28
7.7.2 IPO...................................................................................28
7.8 Delivery of the Exchange Consideration.........................................................28

8. SURVIVAL, INDEMNIFICATIONS...................................................................................29
8.1 Survival.......................................................................................29
8.2 Indemnification................................................................................29
8.2.1 Parent Indemnified Parties............................................................29
8.2.2 Minimum Losses........................................................................30
8.2.3 Parent Indemnity......................................................................30
8.3 Limitations....................................................................................31
8.4 Procedures for Indemnification.................................................................31
8.4.1 Notice................................................................................31
8.4.2 Legal Defense.........................................................................31
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8.4.3 Settlement............................................................................31
8.4.4 Cooperation...........................................................................32
8.5 Subrogation....................................................................................32

9. TERMINATION..................................................................................................32
9.1 Grounds for Termination........................................................................32
9.1.1 Prior to Closing......................................................................32
9.1.2 After the Closing Date................................................................33
9.2 Effect of Termination..........................................................................33

10. MISCELLANEOUS...............................................................................................33
10.1 Notice.........................................................................................33
10.2 Further Documents..............................................................................34
10.3 Assignability..................................................................................34
10.4 Exhibits and Schedules.........................................................................35
10.5 Sections and Articles..........................................................................35
10.6 Entire Agreement...............................................................................35
10.7 Headings.......................................................................................35
10.8 CONTROLLING LAW................................................................................35
10.9 Public Announcements...........................................................................35
10.10 No Third Party Beneficiaries...................................................................35
10.11 Amendments and Waivers.........................................................................35
10.12 No Employee Rights.............................................................................36
10.13 No Personal Liability of Representatives of Parent.............................................36
10.14 When Effective.................................................................................36
10.15 Takeover Statutes..............................................................................36
10.16 Number and Gender of Words.....................................................................36
10.17 Invalid Provisions.............................................................................36
10.18 Multiple Counterparts..........................................................................36
10.19 No Rule of Construction........................................................................37
10.20 Expenses.......................................................................................37
10.21 No Brokers.....................................................................................37
10.22 Section 351 Plan of Exchange...................................................................37
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Exhibit 1.1 List of Shareholders
Exhibit 2.1 Escrow Agreement
Exhibit 2.2 Letter of Transmittal from Shareholders
Exhibit 5.6 Budgeted Capital Expenditures of Company
Exhibit 7.3.2 Stock Transfer Restriction Agreement
Exhibit 7.3.3 Certain Employees of the Company
Exhibit 7.3.3A Employment Agreement
Exhibit 7.3.4 Opinion of Counsel for the Shareholders and the
Company
Exhibit 7.5.2 Opinion of Counsel for the Parent
Exhibit 10.22 Section 351 Plan of Exchange

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AGREEMENT AND PLAN OF EXCHANGE

This AGREEMENT AND PLAN OF EXCHANGE (this "Agreement") made effective
as of December 18, 1997, by and among BRIGHTSTAR INFORMATION TECHNOLOGY GROUP,
INC., a Delaware corporation (the "Parent"), AND THE UNDERSIGNED HOLDERS (the
"Shareholders") OF ALL OF THE OUTSTANDING CAPITAL STOCK OF SOFTWARE INNOVATORS,
INC., an Arkansas corporation (the "Company").

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

1. AGREEMENT FOR EXCHANGE

1.1 Exchange of Shares and Other Consideration. Shareholders agree to
assign, transfer and deliver to Parent all right, title and interest in and to
all of the outstanding shares of common stock of the Company ("Company Common
Stock") in exchange for the "Aggregate Exchange Consideration" (as defined
below) which Parent hereby agrees to pay, assign, transfer and deliver to the
Shareholders in accordance with this Agreement, and among them in proportion to
the number of shares of Company Common Stock owned by the Shareholders and
assigned to Parent by the Shareholders as set forth in Exhibit 1.1 hereto.

1.2 Aggregate Exchange Consideration from Parent. The Aggregate
Exchange Consideration to be delivered to the Shareholders by the Parent shall
be an amount equal to the sum of the Closing Exchange Consideration and the
Earnout Consideration as defined below.

1.2.1 Closing Exchange Consideration. The Closing Exchange
Consideration shall be equal to the amount of revenue recognized by the
Company, less allowances for doubtful accounts and sales returns, as determined
in accordance with GAAP (as defined below) with respect to the period from
January 1, 1997 through December 31, 1997, reduced by: (i) Long-Term Debt (as
defined below) of the Company at the Closing Date; amounts owed by the Company
under that certain promissory note payable to Bruce L. Bauer in the original
principal amount of $550,000; (iii) federal, state or local income taxes
payable by the Company with respect to all periods prior to the Closing not
included in Long-Term Debt; and (iv) the amount of any reduction in the
Company's Net Working Capital (as defined below) from July 31, 1997 to the
Closing Balance Sheet Date; but increased by the amount by which cash on hand
in the Company as of the Closing Balance Sheet Date

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is in excess of $500,000, (such amount to include as cash the amount of any
loans payable to the Company by Parent) but not greater than the amount that
Net Working Capital as of the Closing Balance Sheet Date is in excess of Net
Working Capital as of July 31, 1997.

1.2.2 Earnout Consideration. The Earnout Consideration shall
be equal to one-third of the amount that net income of the Company before
taxes, as determined in accordance with GAAP, for the period January 1, 1998
through December 31, 1998 exceeds $1,238,000. The parties acknowledge that net
income before taxes for the purpose of the Earnout Consideration is net of all
expenses and deductions of the Company in accordance with GAAP other than
income tax expense and before any allocation or deduction of overhead expense
or goodwill from the Parent.

1.2.3 Certain Definitions. The following terms shall have the
meaning ascribed below for purposes of this Agreement:

(i) "Closing Balance Sheet Date" means the end of the most
recent monthly accounting period of the Company preceding the Closing
Date.

(ii) "Current Assets" means the current assets of the Company
determined as of the Closing Balance Sheet Date in accordance with
GAAP.

(iii) "Current Liabilities" means the current liabilities of
the Company determined as of the Closing Balance Sheet Date in
accordance with GAAP excluding those current liabilities included in
Long-Term Debt and federal, state and local income taxes payable by
the Company with respect to all periods prior to Closing not included
in Long-Term Debt, and the $550,000 promissory note payable to Bruce
L. Bauer by the Company for the redemption of his Company Common
Stock, and expressed as a positive number; provided, however, that all
expenses of the Company or the Shareholders incurred in connection
with the transactions contemplated hereby which are payable by the
Company shall be included in Current Liabilities.

(iv) "GAAP" means U.S. generally accepted accounting
principles consistently applied.

(v) "IPO"means the Parent's first underwritten public
offering of Parent Common Stock resulting in net cash proceeds
sufficient to fund the use of proceeds of such offering as described
in the PPM (and any supplements thereto) referenced in Section 3.25
herein (other than any offering pursuant to any registration statement
(i) relating to any capital stock of Parent or options, warrants or
other rights to acquire any such capital stock issued or to be issued
primarily to directors, officers or employees of the Parent or any of
its subsidiaries, (ii) relating to any employee benefit plan or
interest therein, (iii) relating principally to any preferred stock or
debt securities of the Parent, or (iv) filed pursuant to Rule 145
under the Securities Act of 1933, as amended ("Securities Act"), or
any successor or similar provision).

(vi) "IPO Closing Date" means the date that the Parent
receives funds in consideration for the sale of its securities in the
IPO.

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(vii) "IPO Price" means the initial price per share to the
public for shares of Parent Common Stock in IPO.

(ix) "Net Working Capital" means the Current Assets of the
Company minus the Current Liabilities of the Company as of the Closing
Balance Sheet Date, all as determined under GAAP.

1.3 Payment of Closing Exchange Consideration. Parent shall deliver
payment of the Closing Exchange Consideration by delivery of cash and Parent
Common Stock such that $450,000 is delivered to the Shareholders in cash and
the balance is delivered in Parent Common Stock. For purposes of this Section
1.3, such shares of Parent Common Stock shall have a per share value equal to
the IPO Price. The Closing Exchange Consideration shall be paid as follows:

1.3.1 Closing Before Receipt of the 1997 Audit Report. If the
IPO Closing Date occurs prior to receipt by the Parent and the Company of the
1997 Audit Report (defined below), then the Closing Exchange Consideration
shall be paid by the Parent in two installments.

(i) The first installment shall be paid and
delivered to the Shareholders on the IPO Closing Date and shall be
equal to that portion of the Closing Exchange Consideration payable
with respect to the period from January 1, 1997 through December 31,
1997 based on revenue recognized by the Company, less adjustments as
provided in Section 1.2.1, as reported on the Company's unaudited
Balance Sheet and Income Statement, prepared in accordance with GAAP,
as of and for the year ending December 31, 1997 (the "Unaudited
Financial Statements"). This first installment shall be paid by
delivery of $450,000 in cash and the balance by delivery of Parent
Common Stock in accordance with Section 1.3 above.

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amount to the Parent. Any payment under this Section 1.3.1(ii) shall
be made by delivery of shares of Parent Common Stock with a per share
value equal to the IPO Price.

1.3.2 Closing After Receipt of the 1997 Audit Report. If the
Closing occurs after receipt of the 1997 Audit Report by Parent and the
Company, all of the Closing Exchange Consideration shall be paid and delivered
by the Parent to the Shareholders on the IPO Closing Date based on revenue
recognized by the Company, modified by adjustments in Section 1.2.1, as
reported on the Company's audited 1997 Financial Statements.

1.4 Determination of Earnout. Parent shall prepare and deliver to the
Shareholders, on or before January 31, 1999, a statement (the "Earnout
Statement") based on the financial statements of the Company for the period
from January 1, 1998 through December 31, 1998, prepared in accordance with
GAAP, and showing the amount of Net Income Before Taxes determined in
accordance with GAAP, together with Parent's calculation of the Earnout
Consideration.

1.4.1 Review of Earnout Statement. The Shareholders shall
have the right to review the Earnout Statement (and supporting work papers) and
provide written notice to the Parent of Shareholder's objections with respect
to any error, omission or other discrepancy in the Earnout Statement (the
"Discrepancy Notice") for 20 days following Parent's delivery of the Earnout
Statement. Parent and Shareholders shall work together in good faith to resolve
any such dispute and agree on the final Earnout Statement. In the event that
Parent and Shareholders cannot agree on the final Earnout Statement within 10
days after delivery of Shareholder' s Discrepancy Notice, Parent and
Shareholders shall refer the disputed issue or issues to a national independent
public accounting firm (other than the regular accountants for any party or the
accountants who prepared the Earnout Statement) which is reasonably acceptable
to each party (the "Arbitrating Accountants") within 15 days following delivery
of Shareholder's Discrepancy Notice. The Arbitrating Accountants shall be
instructed to render a decision, which shall be binding upon both parties,
within 20 days. Each party shall be entitled to present any information or
analysis concerning the matter in good faith to the Arbitrating Accountants
with a copy provided to the other party. Parent and Shareholders shall each
bear their own fees and expenses, and the fees and expenses of the Arbitrating
Accountants shall be shared equally by Parent and Shareholders.

1.4.2 Payment of Earnout Consideration. Within thirty days
following delivery of the Earnout Statement, Parent shall deliver payment of
the Earnout Consideration to the Shareholders by delivery of Parent Common
Stock (the "Earnout Shares") at a per share value equal to the IPO Price.

1.5 No Fractional Shares. Notwithstanding the foregoing, no fractional
shares of Parent Common Stock will be issued pursuant to this Section 1, and if
any Shareholder would be entitled hereunder to receive a fractional share of
Parent Common Stock but for this paragraph, that Shareholder shall receive a
cash payment for and in lieu thereof in the amount (rounded upward to the
nearest whole cent) equal to that Shareholder's fractional interest in a share
of Parent Common Stock multiplied by the IPO Price.

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2. THE CLOSING

2.1 Closing. A closing into Escrow ("Closing") will take place at the
offices of Chamberlain, Hrdlicka, White, Williams & Martin in Houston, Texas at
the time and on the day that the Parent and its underwriters agree on the IPO
Price for shares of Parent Common Stock offered in the Parent's IPO (the
"Pricing Date") as set forth in an executed underwriting agreement, but in no
event later than April 23, 1998 (the "Closing Date"); provided that each of the
conditions precedent to the obligations of the parties to effect the Closing
are then satisfied or waived by the applicable party. The parties may agree in
writing on another date, time or place for the Closing. At the Closing, the
parties will deliver or cause to be delivered into escrow with the escrow agent
("Escrow Agent") under the Escrow Agreement set forth in Exhibit 2.1 hereto,
the documents described in Sections 7.3 and 7.5 below. On the IPO Closing Date,
such documents shall be delivered out of escrow to the parties designated to
receive such documents under this Agreement in accordance with the Escrow
Agreement, and Parent shall pay and deliver the Exchange Consideration due to
the Shareholders on the IPO Closing Date as prescribed in this Agreement.

2.2 Delivery of Company Common Stock. Prior to the Closing, the Parent
will deliver to each of the Shareholders a Letter of Transmittal, in
substantially the form attached hereto as Exhibit 2.2, to be used by each
Shareholder for surrendering to Parent certificates representing all the
Company Common Stock in exchange for the right to receive the Exchange
Consideration and the Earnout Consideration. On the Closing Date, certificates
for all of the Company Common Stock held by each Shareholder will be delivered
by such Shareholder to the Escrow Agent in accordance with the Escrow Agreement
for the benefit of the Parent together with properly completed and executed
Letters of Transmittal.

2.2.1 Assignments of Company Common Stock. It is agreed that
no assignment, transfer or other disposition of record or beneficial ownership
of any shares of Company Common Stock may be made on or after the date hereof
other than as provided herein.

3. REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDERS

Each Shareholder separately, and with respect only to his matters and
circumstances, hereby represents and warrants to the Parent that the following
statements in Section 3.1 through 3.3 and 3.25 are true and correct; and the
Shareholders, jointly and severally, hereby represent and warrant to the Parent
that the following statements in Sections 3.4 through 3.24 and are true and
correct:

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of shares of Company Common Stock set forth beside such Shareholder's name on
Exhibit 1.1 and such shares are so held by the Shareholders free and clear of
all liens, encumbrances and adverse claims whatsoever.

3.2 Shareholder Authority. Each Shareholder has full right, power,
legal capacity and authority to (i) execute, deliver and perform this
Agreement, and all other documents and instruments referred to herein or
contemplated hereby to be executed, delivered and/or performed by the
Shareholders (each a "Shareholder Related Document") and (ii) consummate the
transactions contemplated herein and thereby. This Agreement has been duly
executed and delivered by each Shareholder and constitutes, and each
Shareholder Related Document, when duly executed and delivered by each
Shareholder who is a party thereto will constitute, legal, valid and binding
obligations of such Shareholder enforceable against such Shareholder in
accordance with their respective terms and conditions, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity (whether applied in a proceeding
at law or in equity).

3.3 Shareholders Consents. Except as provided on Schedule 3.3, no
approval, consent, order or action of or filing with any court, administrative
agency, governmental authority or other third party is required for the
execution, delivery or performance by the Shareholders of this Agreement or any
Shareholder Related Document other than filings related to the IPO. The
execution, delivery and performance by each Shareholder of this Agreement and
the Shareholder Related Documents do not violate any mortgage, indenture,
contract, agreement, lease or commitment or other instrument of any kind to
which such Shareholder is a party or by which such Shareholder or such
Shareholder's assets or properties may be bound or affected or any law, rule or
regulation applicable to such Shareholder or any court injunction, order or
decree or any valid and enforceable order of any governmental agency in effect
as of the date hereof having jurisdiction over such Shareholder.

3.4 Organization, Etc. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Arkansas
and is duly qualified or licensed as a foreign corporation authorized to do
business in all other states in which any of its assets or properties may be
situated or where the business of the Company is conducted except where the
failure to obtain such qualification or license will not have a Company
Material Adverse Effect (as defined in Section 3.24 below). Except as disclosed
on Schedule 3.4 of the Disclosure Schedule previously provided to the Parent by
the Company ("Disclosure Schedule"), the Company does not own, of record or
beneficially, directly or indirectly, any of the outstanding capital stock,
voting interests or ownership interests in any corporation, partnership, joint
venture, limited liability company, trust, limited partnership or other entity.

3.5 Capitalization of the Company. The total authorized capital stock
of the Company is (i) 1,000 shares of Company Common Stock, $1.00 par value, of
which 600 shares are issued and outstanding and held of record and beneficially
by the Shareholders as set forth on Exhibit 1.1 hereto and 150 of which are
held in the treasury of the Company, and (ii) 9,000 shares of non-voting common
stock, $1.00 par value, none of which are issued and outstanding and none of
which are held in the treasury of the Company. Each issued and outstanding
share of Company Common Stock is duly and validly authorized and issued, fully
paid and non-assessable, and was not issued in violation of the

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preemptive rights of any past or present shareholder. Except for the shares of
Company Common Stock owned beneficially and of record by the Shareholders as
set forth on Exhibit 1.1 hereto, there are no outstanding shares of capital
stock, convertible or exchangeable securities, subscriptions, calls, options,
warrants, rights or other agreements or commitments of any character relating
to the issuance or sale of any shares of capital stock of, or other equity
ownership interest in, the Company. The Company has no liability, contingent or
otherwise, to any person or entity in connection with preemptive or contractual
subscription rights or the offer, sale, purchase, surrender or cancellation of
any shares of capital stock, warrants, options or other equity or voting
interests or securities of the Company.

3.8 Intellectual Property. The Company owns or is licensed to use, and
has sufficient rights to use, all trade names, trademarks, logos, service
marks, copyrights, patents, writings, literary works, licenses, mask works,
trade secrets, patented ideas, schematics, sketches, drawings, designs,
notebooks, reports, memoranda, drafts, worksheets, formulas, processes,
inventions, procedures, knowhow, computer software programs, computer
technology, databases, operating systems, source and object codes, flowcharts,
algorithms, coding sheets, routines, sub-routines, compilers, assemblers,
design concepts, plans, documentation, manuals, production processes, marketing
techniques and arrangements, mailing lists, purchasing information, pricing
policies, customer and supplier lists and data and other intellectual property
(collectively "Intellectual Property") necessary for the operation of the
Company's business as presently conducted and the marketing, sale, use and
application of the services and products sold by the Company. Each item of such
Intellectual Property will be owned or licensed to be used and available for
use by the Company after the IPO Closing Date on the same terms and conditions
as prior to Closing. None of the ownership, access to, or use of the
Intellectual Property by the Company infringes on the rights of any other party
and the Company's rights to the Intellectual Property are valid and
enforceable. No person has interfered with, infringed upon, misappropriated or
otherwise come into conflict with the Intellectual Property rights of the
Company. The Company has not interfered with, infringed upon, misappropriated
or otherwise come into conflict with any intellectual property rights of
others, and the Company has not received any charge, complaint, demand or
notice alleging any such interference, infringement, misappropriation or
conflict.

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title to all of its real property interests, free and clear of any mortgages,
security agreements, liens or encumbrances.

3.11 Other Disclosures. The following disclosures pertaining to the
Company are set forth in Schedule 3.11 of the Disclosure Schedule. Such
disclosures are complete and accurate.

(i) Schedule 3.11(i) is a list of the products of the Company
and all product registrations used by the Company, including all products
licensed by the Company to customers and products licensed to the Company from
licensors, and a description of the parties to and principal terms of such
license arrangements, and a list of all material safety data sheets, toxicology
studies and environmental studies of the Company.

(iv) Schedule 3.11(iv) includes (a) a list of assets owned by
the Company as of the date hereof which have been capitalized and have an
unamortized value of $5,000 or more, including vehicles and rolling stock, (b)
a list of all leased equipment of the Company, including leased vehicles and
rolling stock and (c) the Company's most recent depreciation schedule with
respect to the assets of the Company. The Shareholders represent and warrant
that all of the machinery, equipment, vehicles and rolling stock of the Company
are in good working order and condition, ordinary wear and tear excepted.

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(viii) Schedule 3.11(viii) is a list and summary description
of, or copies of, all governmental licenses and permits of the Company.

(xi) Schedule 3.11(xi) is a list naming each Company Contract
(as defined below). The Shareholders represent and warrant that (a) none of the
Company's customers or suppliers have canceled or substantially reduced, or are
currently attempting or threatening to cancel or substantially reduce, service
or products; (b) except to the extent set forth on Schedule 3.11(xi), the
Company has complied with all commitments and obligations and is not in default
under any such contracts and agreements, no notice of default has been received
by the Company, and the Company is not aware of any defaults by customers,
suppliers and other parties to such contracts and agreements; (c) the Company
has not experienced labor interruptions over the past three years and the
Shareholders consider the relationship between the Company and its employees to
be good; and (d) the Company has never been a party to any governmental
contracts subject to price redetermination or renegotiation. The term "Company
Contract" means each contract, lease, undertaking, commitment, mortgage,
indenture, note, security agreement, license and other agreement of the Company
in effect on the date hereof (a) involving the expenditure or receipt of more
than $10,000 over the term thereof, (b) containing provisions calling for the
sale or purchase of raw materials, products or services at prices that vary
from the market prices of such raw materials, products or services generally
prevailing in customary third party markets, (c) which include "take or pay",
"meet or release", "most favored nations" or similar pricing or delivery
arrangements, (d) requiring the Company to indemnify or hold harmless any other
person or entity, (e) evidencing any warranty obligation of the Company with
respect to goods, services or products sold or leased by it, (other than
warranties given in

<PAGE> 15

the ordinary course of business), (f) imposing on the Company any
confidentiality, non-disclosure or non-compete obligation or containing any
acceleration or termination provisions effective upon a change of control of
the Company, or a merger of the Company into another entity, or (g) involving
collective bargaining or agreements with any labor union or employee group.

(xii) Schedule 3.11(xii) is a list of all powers of attorney
presently in effect granted by the Company and all investments of the Company
in any equity securities, partnership interests, indebtedness or other
interests in any other corporation, or any person, partnership, joint venture,
limited liability company, trust, limited partnership or other legal entity.

3.13 Financial Statements. The Shareholders have listed in Schedule
3.13 of the Disclosure Schedule and have delivered to the Parent copies of the
following audited financial statements of the Company: Balance Sheets as of
July 31, 1996 and 1997, and Statements of Income, Stockholders Equity and Cash
Flows for the years ended July 31, 1996 and 1997; plus the unaudited Balance
Sheet as of September 30, 1997 ("Balance Sheet Date") and Statements of Income
and Cash Flows for the nine months ended September 30, 1996 and 1997. Such
financial statements are collectively referred to herein as "Company Financial
Statements". The Company Financial Statements, except as described in the notes
thereto, have been prepared from the Company's records in accordance with GAAP.
The Company Financial Statements present accurately and fairly in all material
respects the financial condition of the Company as of the dates indicated
thereon, and present accurately and fairly in all respects the results of the
Company's operations for the periods indicated thereon. The Company Financial
Statements do not omit any liabilities or obligations of a type which should be
included in or reflected in such financial statements in accordance with GAAP,
whether related to tax or non-tax matters, accrued or contingent, due or not
yet due, liquidated or unliquidated, or otherwise, except as and to the extent
disclosed or reflected in the Company Financial Statements, or in Schedule 3.14
of the Disclosure Schedule.

3.14 Undisclosed Liabilities. To the best knowledge of Shareholders
and the Company, except as and to the extent disclosed in Schedule 3.14 of the
Disclosure Schedule or in the Company Financial Statements, the Company has no
liabilities or obligations of any nature (whether absolute, contingent or
otherwise). In the case of any liabilities which are not fixed, an estimate of
the maximum amount which may be payable is set forth on Schedule 3.14 of the
Disclosure Schedule.

<PAGE> 16

3.15 Tax Matters.

(i) All federal, state, local and foreign tax returns
required to be filed by the Company (and, if applicable, its subsidiaries)
prior to the date hereof have been filed on a timely basis with the appropriate
governmental authorities in all jurisdictions in which such tax returns are
required to be filed, and all such returns are correct and complete. The
Shareholders have delivered to Parent, and Schedule 3.15(i) of the Disclosure
Schedule includes, correct and complete copies of all federal, state, local and
foreign income and franchise tax returns filed by, examination reports received
by, and statements of deficiencies asserted against or agreed to by the Company
(and, if applicable, its subsidiaries) since January 1, 1991. The Company
(including any of its subsidiaries) is not currently the subject of any audit,
examination or any similar investigation by any governmental authority.
Schedule 3.15(i) of the Disclosure Schedule sets forth all audits, examinations
or similar investigations of the Company (including any of its subsidiaries) by
any governmental authority.

(ii) All federal, state, local and foreign income, franchise,
sales, use, property, and all other taxes, fees, assessments, or other
governmental charges (including withholding taxes), and all interest and
penalties thereon (all of the foregoing collectively, "Taxes") due from or
properly accruable by the Company (including any of its subsidiaries) have been
fully and timely paid or, in the cases of Taxes for which payment is not yet
required, properly and fully accrued for on the Company Financial Statements
with respect to all taxable periods ending on or prior to the date hereof and
interim periods through the date hereof.

(iii) The Company (including any of its subsidiaries) has not
filed a consent under Section 341(f) of the Internal Revenue Code of 1986
("Code") concerning collapsible corporations. The Company (including any of its
subsidiaries) and each of the Shareholders is not a party to any agreement,
contract or arrangement that would, by reason of the consummation of any of the
transactions contemplated by this Agreement, individually or in the aggregate,
result in the payment of any "excess parachute payment" within the meaning of
Section 280G of the Code. None of the assets of the Company (including any of
its subsidiaries) is required to be treated as being owned by any other person
pursuant to the "safe harbor" leasing provisions of Section 168 of the Internal
Revenue Code of 1954, as in effect prior to the repeal of such provisions.

(iv) The Company (including any of its subsidiaries) is not a
party to any Tax allocation or sharing agreement. The Company (including any of
its subsidiaries): (A) has not been a member of an affiliated group filing a
consolidated federal income tax return (other than a group the common parent of
which was the Company); and (B) does not have any liability for the taxes of
any person (other than the Company or any of its subsidiaries) under Treas.
Reg. Section 1.1502-6 (or any similar provision of state, local, or foreign
law), as a transferee or successor, by contract, or otherwise.

(v) Schedule 3.15(v) of the Disclosure Schedule sets forth
the following information with respect to the Company (including any of its
subsidiaries) as of the most recent practicable date: (A) the basis of the
Company (and any of its subsidiaries) in its assets; (B) the basis of the
stockholder(s) of any subsidiary of the Company in its stock of the subsidiary
(or the amount of any excess loss account); (C) the amount of any net operating
loss, net capital loss, unused investment or other credit, unused foreign tax,
or excess charitable contribution allocable to the Company (and any of its
subsidiaries); and (D) the

<PAGE> 17

amount of any deferred gain or loss allocable to the Company (or any of its
subsidiaries) arising out of any Deferred Intercompany Transaction (as defined
in Treas. Reg. Section 1.1502-13).

(vi) The Company (including any of its subsidiaries) has not
waived any statute of limitations, or agreed to any extension of time with
respect to an assessment or deficiency, with respect to any Taxes.

3.16 Full Authority. The Company has full power, authority and legal
right and has all licenses, permits, qualifications, and other documentation
(including permits required under applicable Environmental Law (as defined
below)) necessary to own and/or operate its businesses, properties and assets
and to carry on its businesses as being conducted on the date hereof, and such
businesses are now being conducted and such assets and properties are being
owned and/or operated, and the Company Plans have been implemented and
maintained, in compliance with all applicable laws (including Environmental
Law), ordinances, rules and regulations of any governmental agency of the
United States, any state or political subdivision thereof, or any foreign
jurisdiction, all applicable court or administrative agency decrees, awards and
orders and all such licenses, permits, qualifications and other documentation,
except where the failure to comply will not have a Company Material Adverse
Effect, and there is no existing condition or state of facts which would give
rise to a violation thereof or a liability or default thereunder, except where
a violation, liability or default will not have a Company Material Adverse
Effect. The term "Environmental Law" means any law, rule, regulation, approval,
decision, decree, ordinance, by-law having the force of law or order of any
federal, state or local executive, legislative, judicial, regulatory or
administrative agency, board or authority, which relate to (i) noise; (ii)
pollution or protection of the air, surface water, ground water or land; (iii)
solid, gaseous or liquid waste generation, treatment, storage, use, processing,
disposal or transportation; (iv) exposure to hazardous or toxic substances; (v)
the safety or health of employees or (vi) regulation of the manufacture,
processing, distribution in commerce, use, or storage of chemical substances.

<PAGE> 18

3.18 Company Contracts, Company Plans. Neither the Company nor any
other party thereto is in default under or in violation of any Company Contract
or Company Plan.

3.19 Access. The Company has cooperated fully in permitting the Parent
and the Parent's lenders, underwriters and placement agents and their
respective representatives to make a full investigation of the properties,
operations and financial condition of the Company; and afforded the Parent and
the Parent's lenders, underwriters and placement agents and their respective
representatives reasonable access to the offices, buildings, real properties,
machinery and equipment, inventory and supplies, records, files, books of
account, tax returns, agreements and commitments and personnel of the Company.

3.20 No Material Adverse Change. Except as specifically set forth on
Schedule 3.20 of the Disclosure Schedule, since the Balance Sheet Date, there
has not been: (a) any change in the Company's Articles of Incorporation or
Bylaws, (b) any material adverse change of any nature whatsoever in the
financial condition, assets, liabilities (contingent or otherwise), income,
business or prospects of the Company; (c) any damage, destruction or loss
(whether or not covered by insurance) materially adversely affecting the
properties or business of the Company; (d) any change in the authorized capital
of the Company or in its securities outstanding or any change in its ownership
interests; (e) any declaration or payment of any dividend or distribution in
respect of the capital stock or any direct or indirect redemption, purchase or
other acquisition of any of the capital stock of the Company; (f) any contract
or commitment entered into by the Company or any incurrence by the Company or
agreement by the Company to incur any liability or make any capital
expenditures in excess of $3,000, except in the normal course of business; (g)
any increase in the compensation, bonus, sales commissions or fee arrangement
payable or to become payable by the Company to any of its officers, directors,
stockholders, employees, consultants or agents; (h) any work interruptions,
labor grievances or claims filed, proposed law or regulation (the existence of
which is known, or under the normal course of business should be known, to the
Shareholder) or any event or condition of any character materially adversely
affecting the business of future prospects of the Company; (i) any creation,
assumption or permitting to exist any mortgage, pledge or other lien or
encumbrance upon any assets or properties whether now owned or hereafter
acquired, except as set forth in Schedules 3.11(ix), 3.11(xi) and 3.14 of the
Disclosure Schedule; (j) any sale or transfer, or any agreement to sell or
transfer, any material assets, properties or rights of the Company to any
person, including, without limitation, the Shareholders and their respective
affiliates; (k) any cancellation, or agreement to cancel, any indebtedness or
other obligation owing to the Company, including, without limitation, any
indebtedness or obligation of the Shareholders or any of their affiliates; (1)
any plan, agreement or arrangement granting any preferential rights to purchase
or acquire any interest in any of the assets, properties or rights of the
Company or requiring consent of any party to the transfer and assignment of any
such assets, properties or rights; (m) any purchase or acquisition, or
agreement, plan or arrangement to purchase or acquire, any property, rights or
assets of the Company; (n) any negotiation for the acquisition of any business
or start-up of any new business; (o) any merger or consolidation or agreement
to merge or consolidate with or into any other corporation (except the
transactions contemplated by this Agreement); (p) any waiver of any material
rights or claims of the Company; (q) any breach, amendment or termination of
any material contract, agreement, license, permit, permit application or other
right to which the Company is a party; (r) any discharge, satisfaction,
compromise or settlement of any claim, lien, charge or encumbrance or payment
of any obligation or liability, contingent or otherwise, other than current
liabilities as of the Balance Sheet Date, current liabilities incurred since
the Balance Sheet Date in the ordinary course of business and prepayments of
obligations in accordance with normal and customary

<PAGE> 19

past practices; or (s) any transaction by the Company outside the ordinary
course of its business or prohibited hereunder.

3.22 Affiliate Relationships.

(i) Except as set forth on Schedule 3.22 of the Disclosure
Schedule, neither the Shareholders nor any affiliate of the Shareholders, and
no director, officer or employee of or consultant to the Company owns, directly
or indirectly, in whole or in part, any property, assets or right, tangible or
intangible, which is associated with any property, asset or right owned by the
Company or which the Company is operating or using or the use of which is
necessary for its business. Also included in Schedule 3.22 of the Disclosure
Schedule is the disclosure of any relationships which any Shareholder or any
director, officer, employee, agent or consultant of the Company has with any
other corporation, partnership, firm, association or business organization,
entity or enterprise which is a competitor, potential competitor (based upon
the nature of such potential competitor's business as of the Closing Date),
supplier or customer of the Company.

(ii) The term "affiliate" means with respect to any person,
any other person which directly or indirectly, by itself or through one or more
intermediaries, controls, or is controlled by, or is under direct or indirect
common control with, such person. The term "control" means the possession,
directly or indirectly, of the power to direct, or cause the direction of, the
management and policies of a person, whether through the ownership of voting
securities, by contract or otherwise.

3.23 Disclosure. No representation or warranty by the Company or any
Shareholder in the Agreement (including the Exhibits hereto) and no statement
contained in the Disclosure Schedule or any certificate delivered by the
Company or the Shareholders to the Parent pursuant to the Agreement, contains
or will contain any untrue statement of a material fact or omits or will omit
any material fact necessary in order to make the statements herein or therein,
in light of the circumstances under which they are or were made, not
misleading.

<PAGE> 20

3.25 Restricted Securities.

(1) Each Shareholder acknowledges that the shares of Parent
Common Stock to be acquired by the Shareholder hereunder, have not
been registered under the Securities Act of 1933, as amended (the
"Securities Act"), and are being acquired for the Shareholder's own
account for investment and not with a view to the distribution
thereof, and the Parent Common Stock will be subject to the Stock
Transfer Restriction Agreement in Exhibit 7.3.2 hereto.

(3) Each Shareholder is able to bear the economic risks of
its investment in the Parent Common Stock, including the risk of a
loss of the value of the Parent Common Stock.

(4) Each Shareholder has been represented by legal counsel in
this transaction and such Shareholder and its representatives,
including such counsel, have been given the opportunity to ask
questions of, and receive answers from, the officers of the Parent
concerning the terms of the transactions contemplated by this
Agreement and the affairs and the business and financial condition of
the Parent.

(6) Each Shareholder and its representatives have conducted
such investigations in making a decision to approve this Agreement and
the transactions contemplated hereby as they have deemed necessary and
advisable.

(7) Each Shareholder acknowledges and agrees that the Parent
Common Stock to be issued to such Shareholder may not be disposed of
except in accordance with the requirements of the Securities Act and
any applicable state securities laws and the Stock Transfer
Restriction Agreement in Exhibit 7.3.2 hereto.

4. REPRESENTATIONS AND WARRANTIES
OF THE PARENT

The Parent hereby represents and warrants to the Shareholders as
follows:

<PAGE> 21

or where its business is conducted except where the failure to obtain such
qualification or license would not have a Parent Material Adverse Effect (as
defined in Section 4.12 below).

4.3 Authority. The Parent has the requisite, power and authority to
execute, deliver and perform this Agreement and all documents and instruments
referred to herein or contemplated hereby (the "Parent Related Documents") and
to consummate the transactions contemplated herein and thereby. This Agreement
has been duly executed and delivered by the Parent and constitutes, and all the
Parent Related Documents, when executed and delivered by the Parent will
constitute, legal, valid and binding obligations of the Parent, enforceable in
accordance with their respective terms and conditions except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity (whether applied in a proceeding
at law or in equity).

4.4 Consents. No approval, consent, order or action of or filing with
any court, administrative agency, governmental authority or other third party
is required for the execution, delivery or performance by the Parent of this
Agreement or the Parent Related Documents or the consummation by the Parent of
the transactions contemplated hereby, except as may be described in the PPM and
except for the filing of the Parent's registration statement with respect to
the IPO ("Registration Statement") with the U.S. Securities and Exchange
Commission ("SEC") pursuant to the Securities Act and the SEC's declaration of
effectiveness of such Registration Statement and the completion of all
necessary filings required under, and the obtaining of all necessary consents
and approvals required pursuant to, state securities or "blue sky" laws in
connection with the IPO.

4.5 Defaults. The Parent is not in default under or in violation of,
and the execution, delivery and performance of this Agreement and the Parent
Related Documents and the consummation by the Parent of the transactions
contemplated hereby and thereby will not result in a default under or in
violation of (i) any mortgage, indenture, charter or bylaw provision, contract,
agreement, lease, commitment or other instrument of any kind to which the
Parent is a party or by which the Parent or any of its properties or assets may
be bound or affected or (ii) any law, rule or regulation applicable to the
Parent or any court injunction, order or decree, or any valid and enforceable
order of any governmental agency in effect as of the date hereof having
jurisdiction over the Parent, which default or violation prevents the Parent
from consummating the transactions contemplated hereby or is reasonably likely
to have a Parent Material Adverse Effect.

4.6 Investment Company. The Parent is not an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "holding company," a
"subsidiary company" of a "holding company" or an "affiliate" of a "holding
company" or a "public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.

<PAGE> 22

4.7 Financial Statements. The Parent has provided certain financial
statements to the Shareholders in the PPM ("Parent Financial Statements") and
such Parent Financial Statements have been prepared in accordance with GAAP and
fairly present the consolidated financial position, results of operations and
cash flows of the Parent and its then existing consolidated subsidiaries as of
the dates and for the periods indicated, subject to normal year-end adjustments
and any other adjustments described therein or in the notes or schedules
thereto. The books and records of the Parent have been kept in reasonable
detail and accurately and fairly reflect the transactions of the Parent.

4.8 Taxes. The Parent has either accrued, discharged or caused to be
discharged, as the same have become due, or the Parent Financial Statements
contain adequate accruals and reserves for, all taxes, interest thereon, fines
and penalties of every kind and character for such taxes, attributable or
relating to the properties and business of the Parent.

4.9 Full Authority. The Parent has the corporate power and authority
and has obtained all licenses, permits, qualifications, and other documentation
(including permits required under applicable environmental law) necessary to
own and/or operate its businesses, properties and assets and to carry on its
businesses as being conducted on the date of this Agreement, except such
licenses, permits, qualifications or other documentation, the failure to obtain
which is not reasonably likely to result in a Parent Material Adverse Effect,
and such businesses are now being conducted and such assets and properties are
being owned and/or operated in compliance with all applicable laws (including
environmental law), ordinances, rules and regulations of any governmental
agency of the United States, any state or political subdivision thereof, or any
foreign jurisdiction, all applicable court or administrative agency decrees,
awards and orders and all such licenses, permits, qualifications and other
documentation, except where the failure to comply will not have a Parent
Material Adverse Effect, and there is no existing condition or state of facts
that would give rise to a violation thereof or a liability or default
thereunder that is reasonably likely to have a Parent Material Adverse Effect.

4.11 Disclosure. No representation or warranty by the Parent in this
Agreement, and no statement contained in any certificate delivered by the
Parent to the Shareholders pursuant to this Agreement, contains any untrue
statement of a material fact or omits any material fact necessary in order to
make the statements herein or therein, in light of the circumstances under
which they are or were made, not misleading.

4.12 Parent Material Adverse Effect. The term "Parent Material Adverse
Effect" shall mean an adverse effect on the properties, assets, financial
position, results of operations, long-term debt, other indebtedness, cash flows
or contingent liabilities of the Parent and its consolidated subsidiaries,
taken as a whole in an amount of $25,000 or more.

<PAGE> 23

5. CERTAIN COVENANTS AND AGREEMENTS OF SHAREHOLDERS

The Shareholders further jointly and severally agree with the Parent
that from the date hereof through the Closing Date:

5.1 Conduct of Business. The Shareholders shall cause the Company to
conduct its operations according to its ordinary and usual course of business
to preserve substantially intact its business organization, keep available the
services of its officers and employees, and maintain its present relationships
with licensors, suppliers, distributors, customers and others having
significant business relationships with it. The Shareholders agree to cause
representatives of the Company to confer with representatives of the Parent to
keep it informed with respect to the general status of the on-going operations
of the business of the Company. Without limiting the generality of the
foregoing, and except as otherwise contemplated herein or agreed to in writing
by Parent, the Shareholders will cause the Company to:

(i) carry on its business in substantially the same manner as
heretofore carried on and not introduce any material new method of
management, operation or accounting, nor provide discounted services
outside the ordinary course of business;

(ii) maintain its properties, facilities, equipment and other
assets, including those held under leases, in good working order,
condition and repair, ordinary wear and tear excepted;

(iii) perform all of its obligations under all debt and lease
instruments and other agreements (including the Company Contracts)
relating to or affecting its business, assets, properties, equipment
and rights, and pay all vendors, suppliers, and other third parties
(including mechanics and materialmen) as and when their bills are due
and pay in full all payroll obligations when due;

(iv) keep in full force and effect its present insurance
policies or other comparable insurance coverage;

(vi) refrain from effecting any change in the capital
structure of the Company and from incurring any expenditures outside
the ordinary course of business;

(vii) refrain from starting or acquiring any new businesses;

<PAGE> 24

(x) promptly notify the Parent of the receipt by it or any
Shareholder of any notice or claim, written or oral, of (a) default or
breach by the Company under, or of any termination (other than at the
end of the stated term thereof) or cancellation, or threat of
termination (other than at end of the stated term thereof) of
cancellation, of any Company Contract, (b) any loss of, damage to or
disposition of, any of the properties, assets or the products of the
Company of a value of $10,000 or more, singly or in the aggregate
(other than the sale or use of inventories in the ordinary course of
business), (c) any claim or litigation threatened or instituted, or
any other adverse event or occurrence involving or affecting the
Company or any of its assets, properties, operations, businesses or
employees, and (d) any proposal made by any third party received by
the Company or of which any Shareholder obtains knowledge in respect
of any sale or other disposition, direct or indirect, of the assets
(other than the sale or use of inventories in the ordinary course of
business), businesses or outstanding capital stock or other ownership
or voting interests of the Company;

(xi) comply with and cause to be complied with all applicable
laws, rules, regulations and orders of all federal, state and local
governments or governmental agencies affecting or relating to the
Company or its assets, properties, operations, businesses or employees
except where the failure to comply will not have a Company Material
Adverse Effect;

(xiii) refrain from any purchase or redemption of any capital
stock, other ownership interest or other voting interest of the
Company and refrain from issuing any capital stock or other ownership
interest;

(xiv) refrain from making any change in any accounting
principle, classification, policy or practice;

(xv) refrain from effecting any amendment to the certificate
or articles of incorporation or bylaws or other governing instruments
of the Company;

<PAGE> 25

indebtedness for borrowed money or issuing or selling any debt
securities or letters of credit; and refrain from making any payments
of any indebtedness or interest or other amounts thereon or with
respect thereto (other than regularly scheduled principal and interest
payments and payments of principal, interest and fees under revolving
lines of credit);

(xix) refrain from entering into any contract, lease,
undertaking, commitment, mortgage, indenture, note, security
agreement, license or other agreement (a) involving the receipt or
expenditure of more than $25,000 over the term thereof (other than
consulting or service contracts with customer entered in the ordinary
course of business), (b) containing provisions calling for the sale or
purchase of raw materials, product or service at prices that vary from
the market prices of such raw materials, products or services
generally prevailing in customary third-party markets, (c) which
include "take or pay", "meet or release", "most favored nations" or
similar pricing or delivery arrangements, (d) with any officer,
director, shareholder or affiliate of the Company, (e) requiring the
Company to indemnify or hold harmless any other person or entity
(other than consulting or service contracts with customer entered in
the ordinary course of business), (f) evidencing any warranty
obligation of the Company with respect to goods, services or products
sold or leased by it (other than warranties given in the normal course
of business containing substantially the same terms as those presently
in effect), or (g) imposing on the Company any confidentiality,
non-disclosure or non-compete obligation (other than consulting or
service contracts with customers entered in the ordinary course of
business).

5.3 Filings, Etc. Each Shareholder will make, and cause the Company to
make, all filings which are required to be made by them to lawfully consummate
the transactions contemplated hereby.

<PAGE> 26

as the Parent may reasonably request. Notwithstanding the above, the Parent and
its respective lenders, underwriters and placement agents and their respective
representatives, advisers, consultants, appraisers, engineers and other experts
shall incur no liability with respect to control, operation or management (or
alleged control, operation or management) of the Company as a result of the
covenants in this Section 5.4.

5.5 Satisfaction of Conditions. The Shareholders shall (i) use their
reasonable efforts to obtain, as soon as possible, all governmental approvals
required to be obtained by the Company and make, as soon as possible, all
filings with any governmental authority required on the part of the Company to
consummate the transactions contemplated hereby, (ii) use their reasonable
efforts to obtain, as soon as possible, all other consents to and approvals
required to be obtained by the Company to consummate the transactions
contemplated hereby, and (iii) otherwise use their reasonable efforts to
satisfy the conditions set forth in this Agreement to the extent that such
satisfaction is within their control; provided, however, that this Section 5.5
shall not be construed to limit the rights of the Company to terminate this
Agreement as provided in Article 9 of this Agreement.

5.6 Capital Budget. Exhibit 5.6 hereto contains the budgeted capital
expenditures of the Company from July 1, 1997 through December 31, 1998. Unless
otherwise consented to by the Parent, the Company will make capital
expenditures in accordance with such budget and shall not make any additional
capital expenditures.

5.7 Exclusivity. The Shareholders shall not (i) solicit, initiate, or
encourage the submission of any proposal or offer from any person or entity
relating to the acquisition of any capital stock or other voting securities, or
any substantial portion of the assets of the Company (including any acquisition
structured as a merger, consolidation, or share exchange) or (ii) participate
in any negotiations or discussions regarding, furnishing any information with
respect to, assist or participate in, or facilitate in any other manner any
effort or attempt by any person or entity in favor of any such acquisition. The
Shareholders will (and shall cause the Company to) promptly notify the Parent
if any person or entity makes any proposal, offer, inquiry, or contact with
respect to any of the foregoing.

5.8 Agreements of Shareholders to be Effective Upon Closing. Effective
upon Closing, and without further action on the part of any party or other
person, each Shareholder covenants and agrees as follows:

5.8.1 Covenant Not to Compete.

(i) For the consideration specified in this Agreement and in
recognition that the covenants by the Shareholders in this Section are
a material inducement to the Parent to enter into and perform this
Agreement, (a) each Shareholder who is not an employee of the Company
prior to the date hereof agrees that during the one-year period after
the Closing Date, Shareholder will comply with the provisions of
Section 5.8.1(ii) below, and (b) each Shareholder who is an employee
of the Company agrees to comply with the provisions of Section
5.8.1(ii) below until the date which is the later to occur of two (2)
years after the Closing Date or one year from and after the date of
termination of such Shareholder's employment by the Company regardless
of the reason for such termination.

<PAGE> 27

(ii) Each Shareholder agrees that for the applicable time
period in Section 5.8.1(i) above ("Restricted Period"), such
Shareholder will not represent, engage in or carry on, directly or
indirectly, any business with any person or entity who was a customer
or client of the Company during the one year period preceding the
beginning of the Restricted Period (or any customer or client of an
affiliate of the Company for which the Shareholder has materially
assisted such affiliate in serving such customer or client ("Assisted
Affiliate")) or any business within 100 miles of the city or county
limits of any city or county in the United States or foreign countries
where the Company or any Assisted Affiliates has an office or in which
the Company provides services which produce Company revenues of an
amount equal to 2% or more of the Company's revenues for the twelve
complete calendar months preceding the time of termination, which
business competes with any business, services or products produced,
sold, conducted, developed, or in the process of development by the
Company or jointly by the Company and an Assisted Affiliate, including
any business that involves the furnishing of information technology
services that are the type of services furnished by the Company,
either for himself, as a member or equity owner of a partnership or
limited liability company, or as a shareholder (other than as a
shareholder of less than one percent (1%) of the issued and
outstanding stock of a publicly-held company whose gross revenues
exceed $100 million), investor, owner, officer, or director of a
company or other entity, or as an employee, agent, trustee, manager,
associate or consultant of any person, partnership, corporation or
other entity.

(iii) Each Shareholder agrees that the limitations set forth
herein on such Shareholder's rights to compete with the Parent and its
affiliates as set forth above are reasonable and necessary for the
protection of Parent and its affiliates. In this regard, each
Shareholder specifically agrees that the limitations as to period of
time and geographic area, as well as all other restrictions on the
Shareholder's activities specified herein, are reasonable and
necessary for the protection of the Parent and its affiliates. Each
Shareholder agrees that, in the event that the provisions of this
Section should ever be deemed to exceed the scope of business, time or
geographic limitations permitted by applicable law, such provisions
shall be and are hereby reformed to the maximum scope of business,
time or geographic limitations permitted by applicable law.

(iv) Each Shareholder agrees that the remedy at law for any
breach by such Shareholder of this Section 5.8.1 will be inadequate
and that the Parent shall be entitled to injunctive relief.

<PAGE> 28

6. CERTAIN AGREEMENTS

The parties hereto further agree as follows:

6.1 Audit. Prior to Closing, at the expense of Parent, Deloitte &
Touche LLP may complete an audit of the Company through December 31, 1997 and
such additional review work as may be requested by the Parent through and
including the Closing Date (or other periods subsequent to December 31, 1997),
and provide its report to the Parent and the Shareholders.

6.2 Company Plans. Except as otherwise provided in this Agreement, the
Company Plans (within the meaning of Section 3.11 (xiii) hereto), in effect at
the date of this Agreement, shall remain in effect unless otherwise determined
by Parent after the Closing Date.

6.3 Confidentiality. Prior to the Closing Date, none of the Parent,
the Company or the Shareholders will disclose the terms of this Agreement or
the Exchange to any person other than their respective directors, officers,
agents or representatives, except as otherwise provided herein or unless
required by law. The Company may make appropriate disclosures of the general
nature of the Exchange to its employees, vendors and customers to protect the
Company's goodwill and to facilitate the Closing. The Parent may disclose
pertinent information regarding the Exchange to its existing and prospective
investors, lenders, or investment bankers or financial advisors for the purpose
of obtaining financing, including, without limitation, financing related to the
IPO or other offerings of its securities may describe this Agreement and the
transactions contemplated hereby in any registration statement filed by the
Parent under the Securities Act and in reports filed by the Parent under the
Securities Exchange Act of 1934, and may file this Agreement as an exhibit to
any thereof. The Parent may also make appropriate disclosures of the general
nature of the Exchange and the identity, nature and scope of the Company's
operations to prospective acquisition candidates in connection with the
Parent's efforts to effect additional acquisitions. Each party will have mutual
approval rights with respect to written employee presentations concerning the
prospective Exchange.

6.4 Tax-Free Exchange. Unless the other parties shall otherwise agree
in writing, none of the Shareholders, the Parent or the Company shall knowingly
take or fail to take any action, which action or failure to act would
jeopardize the qualification of the Exchange as an exchange within the meaning
of Section 351 of the Code.

6.5 Certain Tax Matters.

<PAGE> 29

to review and comment on each such Tax Return described in the preceding
sentence prior to filing and shall make such revisions to such Tax Returns as
are reasonably requested by Shareholders. Shareholders shall reimburse Parent
for Taxes of the Company (including any of its subsidiaries) with respect to
such periods within fifteen (15) days after payment by Parent or the Company
(including any of its subsidiaries) of such Taxes to the extent such Taxes are
not reflected in the reserve for Tax liability (other than any reserve for
deferred Taxes established to reflect timing differences between book and Tax
income) shown on the face of the Company Financial Statements.

6.5.2 Cooperation on Tax Matters.

(i) Parent, Company (including any of its subsidiaries) and
Shareholders shall cooperate fully, as and to the extent reasonably
requested by the other party, in connection with the filing of Tax
Returns pursuant to this Section and any audit, litigation or other
proceeding with respect to Taxes. Such cooperation shall include the
retention and (upon the other party's request) the provision of
records and information which are reasonably relevant to any such
audit, litigation or other proceeding and making employees available
on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. Company (and any of
its subsidiaries) and Shareholders agree: (A) to retain all books and
records with respect to Tax matters pertinent to Company (including
any of its subsidiaries) relating to any taxable period beginning
before the IPO Closing Date until the expiration of the statute of
limitations (and, to the extent notified by Parent or Shareholders,
any extensions thereof) of the respective taxable periods, and to
abide by all record retention agreements entered into with any taxing
authority; and (B) to give the other party reasonable written notice
prior to transferring, destroying or discarding any such books and
records and, if the other party so requests, Company (including any of
its subsidiaries) or Shareholders, as the case may be, shall allow the
other party to take possession of such books and records.

6.5.3 Tax Sharing Agreements. All tax sharing agreements or
similar agreements with respect to or involving Company (including any of its
subsidiaries) shall be terminated as of the IPO Closing Date and, after the IPO
Closing Date, Company (including any of its subsidiaries) shall not be bound
thereby or have any liability thereunder.

6.6 Sale of Motor Vehicles. The Shareholders agree to cause the
Company to effect the sale of any Company-owned motor vehicle primarily used by
an executive management employee to such

<PAGE> 30

employee prior to the Closing at a price equal to the depreciated book value of
the vehicle as included in the Company financial statements at the time of
purchase.

6.7 Chief Executive Officer of Company. The parties hereto shall take
such steps as are appropriate to cause Mark D. Diggs to continue as Chief
Executive Officer of the Company in accordance with the terms of an Employment
Agreement between the Company and Mr. Diggs pursuant to Section 7.3.3 hereof.

6.8 Parent Insurance. Prior to the Closing, Parent and its Board of
Directors shall have obtained and put in place adequate and customary insurance
coverage for errors, omissions and/or negligence covering the actions and
activities of its officers and directors.

6.9 Parent Stock Option Plan. Prior to or within six (6) months of the
IPO Closing Date, Parent shall use its commercially reasonable efforts to adopt
an employee stock option plan for the benefit of Company employees.

6.10 Parent Advances to Company. Parent shall advance $550,000 to the
Company after the IPO Closing Date in order to provide funds to the Company to
pay when due the $550,000 promissory note to Bruce L. Bauer.

7. CONDITIONS PRECEDENT; CLOSING DELIVERIES

7.1.2 Performance of Covenants. The Shareholders shall have
performed and complied with all covenants of this Agreement to be performed or
complied with by them at or prior to the Closing Date, and the Shareholders
shall each have delivered to the Parent a certificate to that effect.

<PAGE> 31

7.1.4 Approvals. The Shareholders shall have procured all of
the consents, approvals and waivers of third parties or any regulatory body or
authority, whether required contractually or by applicable law or otherwise
necessary for the execution, delivery and performance of this Agreement
(including the Company Related Documents and the Shareholder Related Documents)
by the Shareholders prior to the Closing Date, and Shareholders shall have
delivered to the Parent a certificate to that effect.

7.1.5 Closing Deliveries. All documents required to be
executed or delivered at Closing by the Shareholders pursuant to Section 7.3 of
this Agreement shall have been so executed and delivered.

7.1.7 Licenses, etc. The Company shall have obtained all such
licenses and permits as are legally required for the continued operation of the
business after the IPO Closing Date, except such licenses and permits, the
absence of which will not have a Company Material Adverse Effect.

7.1.9 Certain Corporate Actions. All necessary director and
shareholder resolutions, waivers and consents required to consummate the
transactions contemplated hereunder shall have been executed and delivered.

7.2 Conditions Precedent to the Obligations of the Shareholders and
the Company. The obligations of the Shareholders to effect the Closing under
this Agreement are subject to the satisfaction of each of the following
conditions, unless waived by the Shareholders in writing. Provisions in this
Section 7.2 requiring the delivery of documents and certificates to the
Shareholders shall be deemed satisfied by the delivery of such materials to the
Escrow Agent for later release to Shareholders upon satisfaction of the
conditions contained in the Escrow Agreement.

7.2.3 Approvals. The Parent shall have procured prior to the
Closing Date all of the consents, approvals and waivers required of it for
entering into this Agreement without violating any requirements to which it is
subject, and the Parent shall deliver to the Shareholders a certificate to that
effect.

<PAGE> 32

7.2.4 Closing Deliveries. All documents required to be
executed or delivered at Closing by the Parent pursuant to Section 7.5 of this
Agreement shall have been so executed and delivered.

7.3.1 Closing Certificates. The Shareholders shall deliver
the certificates required pursuant to Sections 7.1.1, 7.1.2, 7.1.3 and 7.1.4.

7.3.2 Stock Transfer Restriction Agreement. Each Shareholder
shall execute and deliver a Stock Transfer Restriction Agreement on the Closing
Date substantially in the form set forth in Exhibit 7.3.2.

7.3.3 Employment Agreements. Each employee of the Company
specified on Exhibit 7.3.3. shall execute and deliver an Employment Agreement
with the Company on the Closing Date substantially in the form of the
applicable form of the three forms of Employment Agreement set forth in
Exhibits 7.3.3A, as stated by employee's name on Exhibit 7.3.3.

7.3.4 Opinion of Counsel for the Shareholders and the
Company. The Shareholders shall deliver the favorable opinion of Nichols,
Wolff, Ledbetter & Campbell, counsel to the Shareholders and the Company, dated
as of the Closing Date, substantially in the form and to the effect set forth
in Exhibit 7.3.4 attached hereto.

7.3.5 Documents, Stock Certificates. The Shareholders shall
execute and deliver, and shall cause the Company to execute and deliver, the
documents, certificates, opinions, instruments and agreements required to be
executed and delivered by the Company or its officers or directors or any
Shareholder at the Closing as contemplated hereby or as may be reasonably
requested by the Parent and shall deliver or cause to be delivered the
documents and evidence required under this Agreement. Stock Certificates
representing all of the outstanding Company Common Stock and properly executed
and completed Letters of Transmittal shall be delivered by the Shareholders to
the Escrow Agent.

7.4 No Waiver by Parent. The consummation of the Closing shall not be
deemed to be a waiver by the Parent or the Company of any of their rights or
remedies against the Shareholders hereunder for any breach of warranty,
covenant or agreement by the Shareholders herein irrespective of any knowledge
of or investigation made by or on behalf of the Parent; provided, however, that
if the Shareholders shall disclose in writing to the Parent prior to the
Closing Date a specified breach of a specifically identified representation,
warranty, covenant or agreement of the Shareholder herein, and requests a
waiver thereof by the Parent, and the Parent shall waive any such specifically
identified breach in writing prior to the Closing Date, the Parent and the
Company, for themselves and for each Parent Indemnified Party (as defined
below) shall be deemed to have waived their respective rights and remedies

<PAGE> 33

hereunder for, and the Shareholders shall have no liability with respect to,
any such specifically identified breach, to the extent so identified by the
Shareholders and so waived by the Parent.

7.5.1 Closing Certificates. The Parent shall deliver the
certificates required pursuant to Sections 7.2.1, 7.2.2, and 7.2.3.

7.6 No Waiver. The consummation of the Closing shall not be deemed to
be a waiver by the Shareholders of any of their rights or remedies hereunder
for breach of any warranty, covenant or agreement herein by the Parent
irrespective of any knowledge of or investigation with respect thereto made by
or on behalf of any Shareholder; provided, however, that if the Parent shall
disclose in writing to the Shareholders prior to the Closing a specified breach
of a specifically identified representation, warranty, covenant or agreement of
the Parent contained herein by the Parent, and requests a waiver thereof by the
Shareholders, and the Shareholders shall waive any such specifically identified
breach in writing prior to the Closing, the Shareholders shall be deemed to
have waived their rights and remedies hereunder for, and the Parent shall have
no liability or obligation to the Shareholders with respect to, any such
specifically identified breach, to the extent so identified by the Parent and
waived the Shareholders.

7.7 Conditions Precedent to Completion of the Closing. The obligations
of the parties to consummate the share exchange transaction under this
Agreement on the IPO Closing Date are subject to the satisfaction of each of
the following conditions (unless waived by each of the parties in writing):

7.7.2 IPO. The Parent shall have completed the IPO on terms
described in the Registration Statement, and the net proceeds thereof shall
have been received by the Parent.

7.8 Delivery of the Exchange Consideration. On the IPO Closing Date,
the Parent shall deliver the portion of the Exchange Consideration due to the
Shareholders at that time, and the Escrow Agent shall release and deliver all
documents and certificates held in escrow to the appropriate parties.

<PAGE> 34

8. SURVIVAL, INDEMNIFICATIONS

8.1 Survival. The representations and warranties set forth in this
Agreement and the other documents, instruments and agreements contemplated
hereby shall survive after the date hereof to the extent provided herein. The
representations and warranties of the Shareholders and the Company herein and
in the Shareholder Related Documents and the Company Related Documents, other
than those in Sections 3.9 and 3.15, shall survive for a period of 24 months
after the date hereof and the representations and warranties of the
Shareholders and the Company contained in Sections 3.9 and 3.15 shall survive
for the maximum period permitted by applicable law. The representations and
warranties of the Parent herein and in the Parent Related Documents shall
survive for a period of 24 months after the date hereof. The periods of
survival of the representations and warranties as stated above in this Section
8.1 are referred to herein as the "Survival Period." The liabilities of the
parties under their respective representations and warranties shall expire as
of the expiration of the applicable Survival Period and no claim for
indemnification may be made with respect to any breach of any representation or
warranty, the applicable Survival Period of which shall have expired, except to
the extent that written notice of such breach shall have been given to the
party against which such claim is asserted on or before the date of such
expiration. The covenants and agreements of the parties herein and in other
documents and instruments executed and delivered in connection with the closing
of the transactions contemplated hereby shall survive for the maximum period
permitted by law.

8.2 Indemnification.

8.2.1 Parent Indemnified Parties. Subject to the provisions
of Sections 8.1 and 8.3 hereof, the Shareholders shall indemnify, save and hold
harmless the Parent, the Company and any of their assignees (including lenders)
and all of their respective officers, directors, employees, representatives,
agents, advisors and consultants and all of their respective heirs, legal
representatives, successors and assigns (collectively the "Parent Indemnified
Parties") from and against any and all damages, liabilities, losses, claims,
deficiencies, penalties, interest, expenses, fines, assessments, charges and
costs, including reasonable attorneys' fees and court costs (collectively
"Losses") arising from, out of or in any manner connected with or based on:

(i) any breach of any covenant of any Shareholder or the
Company or the failure by any Shareholder or the Company to perform
any obligation of any Shareholder or the Company contained herein or
in any Company Related Document or Shareholder Related Document;

(ii) any inaccuracy in or breach of any representation or
warranty of any Shareholder contained herein or in any Shareholder
Related Document;

(iii) any inaccuracy in or breach of any representation or
warranty of the Company contained herein or in any Company Related
Document;

<PAGE> 35

Notwithstanding the foregoing, the foregoing indemnities shall not apply to the
extent that such Losses are reimbursed to the Parent Indemnified Parties under
provisions of any errors and omissions or professional liability insurance
policy containing waiver of subrogation provisions applicable to claims
relating to such Losses. The foregoing indemnities shall not limit or otherwise
adversely affect the Shareholder Indemnified Parties' rights of indemnity for
Losses under Section 8.2.3.

8.2.3 Parent Indemnity. Subject to the provisions of Sections
8.1 and 8.3, the Parent shall indemnify, save and hold harmless the
Shareholders and the Shareholders' heirs, legal representatives, successors and
assigns (the "Shareholder Indemnified Parties") from and against all Losses
arising from, out of or in any manner connected with or based on:

(i) any breach of any covenant of the Parent or the failure by
the Parent to perform any of its obligations contained herein or in the
Parent Related Documents;

(ii) any inaccuracy in or breach of any representation or
warranty of the Parent contained herein or in the Parent Related
Documents; and

The foregoing indemnities shall not limit or otherwise adversely affect the
Parent Indemnified Parties' rights of indemnity for Losses under Section 8.2.1.

<PAGE> 36

8.3 Limitations. The aggregate liability of each Shareholder under
Section 8.2.1 shall not exceed an amount equal to the portion of the Exchange
Consideration and Earnout Consideration payable to such Shareholder, with the
Parent Common Stock being valued at the IPO Price for such purpose. The
aggregate liability of the Parent under Section 8.2.3 shall not exceed the
amount of the Exchange Consideration and Earnout Consideration paid with Parent
Common Stock.

8.4 Procedures for Indemnification.

8.4.1 Notice. The party (the "Indemnified Party") that may be
entitled to indemnity hereunder shall give prompt notice to the party obligated
to give indemnity hereunder (the "Indemnifying Party") of the assertion of any
claim, or the commencement of any suit, action or proceeding in respect of
which indemnity may be sought hereunder. Any failure on the part of any
Indemnified Party to give the notice described in this Section 8.4.1 shall
relieve the Indemnifying Party of its obligations under this Article 8 only to
the extent that such Indemnifying Party has been prejudiced by the lack of
timely and adequate notice (except that the Indemnifying Party shall not be
liable for any expenses incurred by the Indemnified Party during the period in
which the Indemnified Party failed to give such notice). Thereafter, the
Indemnified Party shall deliver to the Indemnifying Party, promptly (and in any
event within 10 days thereof) after the Indemnified Party's receipt thereof,
copies of all notices and documents (including court papers) received by the
Indemnified Party relating to such claim, action, suit or proceeding.

8.4.2 Legal Defense. The Parent shall have the obligation to
assume the defense or settlement of any third-party claim, suit, action or
proceeding in respect of which indemnity may be sought hereunder, provided that
(i) the Shareholders shall at all times have the right, at their option, to
participate fully therein, and (ii) if the Parent does not proceed diligently
to defend the third-party claim, suit, action or proceeding within 10 days
after receipt of notice of such third-party claim, suit, action or proceeding,
the Shareholders shall have the right, but not the obligation, to undertake the
defense of any such third-party claim, suit, action or proceeding.

<PAGE> 37

the Indemnified Party other than the execution, delivery or approval thereof
and customary releases of claims with respect to the subject matter thereof.

8.4.4 Cooperation. The parties shall cooperate in defending
any such third-party suit, action, proceeding or investigation, and the
defending party shall have reasonable access to the books and records, and
personnel in the possession or control of the Indemnified Party that are
pertinent to the defense. The Indemnified Party may join the Indemnifying Party
in any suit, action, claim or proceeding brought by a third party, as to which
any right of indemnity created by this Agreement would or might apply, for the
purpose of enforcing any right of the indemnity granted to such Indemnified
Party pursuant to this Agreement.

9. TERMINATION

9.1 Grounds for Termination. This Agreement may be terminated
only as provided below.

9.1.1 Prior to Closing. The parties may terminate this
Agreement at any time prior to the Closing only as provided below:

(i) Mutual Consent. Parent and Mark D. Diggs
("Mr. Diggs") may terminate this Agreement by mutual written
consent at any time prior to the Closing;

(ii) Termination by Parent. Parent may terminate
this Agreement by giving written notice thereof to Mr. Diggs
at any time prior to the Closing: (a) in the event that the
Shareholders or the Company has breached any material
representation, warranty, or covenant contained in this
Agreement in any material respect, Parent has notified Mr.
Diggs of the breach, and the breach has continued without
cure until the earlier of 20 days after the notice of such
breach or the Closing Date, whichever is earlier, (b) if the
Registration Statement for the IPO has not been filed with
the Securities and Exchange Commission on or before December
31, 1997, or (c) if the IPO Closing Date shall not have
occurred on or before April 30, 1998, by reason of the
failure of any condition precedent under Section 7.1 hereof
(unless the failure results primarily from Parent itself
materially breaching any material representation, warranty,
or covenant contained in this Agreement); and

(iii) Termination by Mr. Diggs. Mr. Diggs may
terminate this Agreement by giving written notice thereof to
Parent at any time prior to the Closing: (a) in the event the
Parent has breached any material representation, warranty, or
covenant contained in this Agreement in any material respect,
the Shareholders have notified Parent of the breach, and the
breach has continued without cure until the earlier of 20
days after the

<PAGE> 38

notice of such breach or the Closing Date, whichever is
earlier, (b) if the Registration Statement for the IPO has
not been filed with the Securities and Exchange Commission on
or before December 31, 1997, or (c) if the IPO Closing Date
shall not have occurred on or before April 30, 1998, by
reason of the failure of any condition precedent under
Section 7.2 hereof (unless the failure results primarily from
any Shareholder materially breaching any material
representation, warranty, or covenant contained in this
Agreement).

9.1.2 After the Closing Date. This agreement may be
terminated after the Closing only as follows:

(i) Termination of Underwriting Agreement. Upon
termination, prior to the successful completion of the IPO,
of the agreement between Parent and certain investment
banking firms (the "Underwriting Agreement") under which such
firms agree to purchase shares of Parent Common Stock from
Parent on a firm commitment basis for resale to the public
initially at the IPO Price, Parent or the Shareholders may
each terminate this Agreement by providing written notice to
the other.

(ii) Automatic Termination. This Agreement shall
terminate automatically and without action on the part of any
party hereto if the IPO is not consummated within 10 business
days after the Closing.

9.2 Effect of Termination. If this Agreement is terminated as
permitted under Section 9.1, such termination shall be without liability of any
party to any other party, except that such termination shall be without
prejudice to any and all remedies the parties may have against each other for
breach of this Agreement. Upon termination, documents delivered by one party to
another party pursuant hereto shall be promptly returned.

10. MISCELLANEOUS

To the Shareholders:

Mark D. Diggs
Michael B. Miller
1501 North University, Suite 670
Little Rock, Arkansas 72207
Telecopy: (501) 664-7523

<PAGE> 39

Copy to:

Rufus E. Wolff
Nichols, Wolff, Ledbetter & Campbell
Attorneys at Law
1014 West Third Street
Little Rock, Arkansas 72201
Telecopy: (501) 374-8657

To the Parent:

BrightStar Information Technology Group, Inc.
Attn: President
10375 Richmond Avenue, Suite 1620
Houston, Texas 77042
Telecopy: (713) 361-2501

Copy to:

Robert J. Viguet, Jr.
Chamberlain, Hrdlicka, White, Williams & Martin
1200 Smith Street, Suite 1400
Houston, Texas 77002-4310
Telecopy: (713) 658-2553

or other such address as shall be furnished in writing by any such party to the
other party, and such notice shall be effective and be deemed to have been
given as of the date actually received.

10.3 Assignability. No Shareholder shall assign this Agreement in
whole or in part without the prior written consent of the Parent, except by the
operation of law. The Parent may assign its rights under this Agreement, the
Company Related Documents and the Shareholder Related Documents without the
consent of either Shareholder; provided, however, that no such assignment shall
affect the Shareholders right to receive the Aggregate Exchange Consideration.
After the Closing Date, the Company may assign

<PAGE> 40

its rights under this Agreement, the Company Related Documents and the
Shareholder Related Documents without the consent of any of the Shareholders.

10.4 Exhibits and Schedules. The Exhibits and Schedules (and any
appendices thereto) referred to in this Agreement are and shall be incorporated
herein and made a part hereof.

10.5 Sections and Articles. Unless the context otherwise requires, all
Sections, Articles and Exhibits referred to herein are, respectively, sections
and articles of, and exhibits to, this Agreement and all Schedules referred to
herein are schedules constituting a part of the Disclosure Schedule.

10.6 Entire Agreement. This Agreement constitutes the full
understanding of the parties, a complete allocation of risks between them and a
complete and exclusive statement of the terms and conditions of their agreement
relating to the subject matter hereof and supersedes any and all prior
agreements, whether written or oral, that may exist between the parties with
respect thereto. Except as otherwise specifically provided in this Agreement,
no conditions, usage of trade, course of dealing or performance, understanding
or agreement purporting to modify, vary, explain or supplement the terms or
conditions of this Agreement shall be binding unless hereafter made in writing
and signed by the party to be bound, and no modification shall be effected by
the acknowledgment or acceptance of documents containing terms or conditions at
variance with or in addition to those set forth in this Agreement. No waiver by
any party with respect to any breach or default or of any right or remedy and
no course of dealing shall be deemed to constitute a continuing waiver of any
other breach or default or of any other right or remedy, unless such waiver be
expressed in writing signed by the party to be bound. Failure of a party to
exercise any right shall not be deemed a waiver of such right or rights in the
future.

10.7 Headings. Headings as to the contents of particular articles and
sections are for convenience only and are in no way to be construed as part of
this Agreement or as a limitation of the scope of the particular articles or
sections to which they refer.

10.8 CONTROLLING LAW. THE VALIDITY, INTERPRETATION AND PERFORMANCE OF
THIS AGREEMENT AND ANY DISPUTE CONNECTED HEREWITH SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS EXCEPT TO THE
EXTENT THE APPLICABLE CORPORATE LAW MANDATORILY APPLIES WITH RESPECT THERETO.

10.9 Public Announcements. No Shareholder shall make any press
release, public announcement, or public confirmation or disclose any other
information regarding this Agreement or the contents hereof.

10.10 No Third Party Beneficiaries. Except as set forth in Article 8,
no person or entity not a party to this Agreement shall have rights under this
Agreement as a third party beneficiary or otherwise.

<PAGE> 41

requirements for shareholder approvals) may be waived in writing at any time by
the party which is, or whose shareholders are, entitled to the benefits
thereof.

10.13 No Personal Liability of Representatives of Parent. No recourse
for the payment of any amounts due hereunder or for any claim based on this
Agreement or the transactions contemplated hereby or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Parent in this Agreement shall be had against any incorporator, organizer,
promoter, shareholder, officer, director, employee or representative as such
(other than the Shareholders as set forth herein), past, present or future, of
the Parent or of any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by enforcement of any assessment or
penalty or otherwise; it being expressly understood that all such obligations
are those of the Parent as a separate corporate entity.

10.14 When Effective. This Agreement shall become effective only upon
the execution and delivery of one or more counterparts of this Agreement by
each of the Parent and the Shareholders.

10.15 Takeover Statutes. If any "fair price," "moratorium," "control
share acquisition" or other form of anti-takeover statute or regulation shall
become applicable to the transactions contemplated hereby, Parent and the
Company and their respective members of their Boards of Directors shall grant
such approvals and take such actions as are necessary so that the transactions
contemplated by this Agreement may be consummated as promptly as practicable on
the terms contemplated herein and otherwise act to eliminate or minimize the
effects of such statute or regulation on the transactions contemplated herein.

10.16 Number and Gender of Words. Whenever herein the singular number
is used, the same shall include the plural where appropriate and words of any
gender shall include each other gender where appropriate.

10.17 Invalid Provisions. If any provision of this Agreement is held
to be illegal, invalid, or unenforceable under present or future laws, such
provisions shall be fully severable as if such invalid or unenforceable
provisions had never comprised a part of the Agreement; and the remaining
provisions of the Agreement shall remain in full force and effect and shall not
be affected by the illegal, invalid or unenforceable provision or by its
severance from this Agreement. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be automatically as a part of this
Agreement, a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.

10.18 Multiple Counterparts. This Agreement may be executed in a
number of identical counterparts. If so executed, each of such counterparts is
to be deemed an original for all purposes and

<PAGE> 42

all such counterparts shall, collectively, constitute one agreement, but, in
making proof of this Agreement, it shall not be necessary to produce or account
for more than one such counterpart.

10.22 Section 351 Plan of Exchange. Simultaneously with the execution
hereof, the parties hereto shall execute the Section 351 Plan of Exchange in
the form set forth in Exhibit 10.22 hereto.

<PAGE> 43

IN WITNESS WHEREOF, this Agreement and Plan of Exchange has been duly
executed and delivered effective as of the date first hereinabove written.

PARENT:

BRIGHTSTAR INFORMATION
TECHNOLOGY GROUP, INC.

By: /s/ MARSHALL G. WEBB
---------------------------------------
Marshall G. Webb, President

SHAREHOLDERS:

/s/ MARK D. DIGGS
-------------------------------------------
Mark D. Diggs

/s/ MICHAEL B. MILLER
-------------------------------------------
Michael B. Miller

<PAGE> 1
EXHIBIT 10.8

AGREEMENT AND PLAN OF EXCHANGE

BY AND AMONG

BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.

AND

THE HOLDER OF THE
OUTSTANDING CAPITAL STOCK
OF
ZELO GROUP, INC.
AND
JOEL RAYDEN

DECEMBER 18, 1997

<PAGE> 2

TABLE OF CONTENTS
<TABLE>
<CAPTION>

Page

2. THE CLOSING...................................................................................................3
2.1 Closing.........................................................................................3
2.2 Delivery of Company Common Stock................................................................3
2.2.1 Assignments of Company Common Stock....................................................3
2.2.2 Payment In Full Satisfaction of All Rights.............................................3

3. REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDER AND RAYDEN............................................................................4
3.1 Stock Ownership.................................................................................4
3.2 Authority.......................................................................................4
3.3 Shareholder Consents............................................................................4
3.4 Organization, Etc...............................................................................4
3.5 Capitalization of the Company...................................................................5
3.6 Company Authority...............................................................................5
3.7 Company Consents................................................................................5
3.8 Intellectual Property...........................................................................5
3.9 Title...........................................................................................6
3.10 Defaults........................................................................................6
3.11 Other Disclosures...............................................................................6
3.12 Investment Company..............................................................................8
3.13 Financial Statements............................................................................9
3.14 Undisclosed Liabilities.........................................................................9
3.15 Tax Matters.....................................................................................9
3.16 Full Authority.................................................................................11
3.17 Legal Actions..................................................................................11
3.18 Company Contracts, Company Plans...............................................................11
3.19 Access.........................................................................................11
3.20 No Material Adverse Change.....................................................................12
3.21 Subsidiaries; Predecessors.....................................................................12
3.22 Affiliate Relationships........................................................................13
3.23 Disclosure.....................................................................................13
3.24 Company Material Adverse Effect................................................................13
3.25 Restricted Securities..........................................................................14
</TABLE>

<PAGE> 3

<TABLE>

<S> <C>
4. REPRESENTATIONS AND WARRANTIES
OF THE PARENT...........................................................................................14
4.1 Organization...................................................................................14
4.2 Capitalization of the Parent...................................................................15
4.3 Authority......................................................................................15
4.4 Consents.......................................................................................15
4.5 Defaults.......................................................................................15
4.6 Investment Company.............................................................................15
4.7 Financial Statements...........................................................................16
4.8 Taxes..........................................................................................16
4.9 Full Authority.................................................................................16
4.10 Access.........................................................................................16
4.11 Disclosure.....................................................................................16
4.12 Parent Material Adverse Effect.................................................................16

5. CERTAIN COVENANTS AND AGREEMENTS OF SHAREHOLDER AND RAYDEN
.......................................................................................................17
5.1 Conduct of Business............................................................................17
5.2 Cooperation....................................................................................19
5.3 Filings, Etc...................................................................................19
5.4 Access.........................................................................................20
5.5 Satisfaction of Conditions.....................................................................20
5.6 Capital Budget.................................................................................20
5.7 Exclusivity....................................................................................20
5.8 Agreements of Shareholder to be Effective Upon Closing.........................................21
5.8.1 Covenant Not to Compete...............................................................21
5.8.2 Release...............................................................................22
5.9 Shareholder Indebtedness and Receivables.......................................................22

6. CERTAIN AGREEMENTS...........................................................................................22
6.1 Audit..........................................................................................22
6.2 Company Plans..................................................................................22
6.3 Confidentiality................................................................................22
6.4 Tax-Free Exchange..............................................................................23
6.5 Certain Tax Matters............................................................................23
6.5.1 Tax Periods Ending on or Before the IPO Closing Date..................................23
6.5.2 Cooperation on Tax Matters............................................................23
6.5.3 Tax Sharing Agreements................................................................24
6.6 Sale of Motor Vehicles.........................................................................24
6.7 Parent Stock Option Plan.......................................................................24
6.8 Indemnity for Certain Guaranties...............................................................24

<S> <C> <C>
7.1.4 Approvals.............................................................................25
7.1.5 Closing Deliveries....................................................................25
7.1.6 No Loss or Damage.....................................................................25
7.1.7 Licenses, etc.........................................................................26
7.1.8 No Material Adverse Change............................................................26
7.1.9 Certain Corporate Actions.............................................................26
7.2 Conditions Precedent to the Obligations of the Shareholder and the Company.....................26
7.2.1 Accuracy of Representations and Warranties............................................26
7.2.2 Performance of Covenants..............................................................26
7.2.3 Approvals.............................................................................26
7.2.4 Closing Deliveries....................................................................26
7.2.5 Closing Date..........................................................................26
7.3 Deliveries by the Shareholder and Rayden at the Closing........................................26
7.3.1 Closing Certificates..................................................................27
7.3.2 Stock Transfer Restriction Agreement..................................................27
7.3.3 Employment Agreements.................................................................27
7.3.4 Opinion of Counsel for the Shareholder and the Company................................27
7.3.5 Documents, Stock Certificates.........................................................27
7.4 No Waiver by Parent............................................................................27
7.5 Deliveries by the Parent at the Closing........................................................27
7.5.1 Closing Certificates..................................................................28
7.5.2 Opinion of Counsel for the Parent.....................................................28
7.6 No Waiver......................................................................................28
7.7 Conditions Precedent to Completion of the Closing..............................................28
7.7.1 Legal Actions or Proceedings..........................................................28
7.7.2 IPO...................................................................................28
7.8 Delivery of Exchange Consideration on the IPO Closing Date.....................................28

8. SURVIVAL, INDEMNIFICATIONS...................................................................................29
8.1 Survival.......................................................................................29
8.2 Indemnification................................................................................29
8.2.1 Parent Indemnified Parties............................................................29
8.2.2 Minimum Losses........................................................................30
8.2.3 Parent Indemnity......................................................................30
8.3 Limitations....................................................................................31
8.4 Procedures for Indemnification.................................................................31
8.4.1 Notice................................................................................31
8.4.2 Legal Defense.........................................................................31
8.4.3 Settlement............................................................................31
8.4.4 Cooperation...........................................................................32
8.5 Subrogation....................................................................................32

iii

<PAGE> 5

<TABLE>

<S> <C>
10. MISCELLANEOUS...............................................................................................33
10.1 Notice.........................................................................................33
10.2 Further Documents..............................................................................34
10.3 Assignability..................................................................................35
10.4 Exhibits and Schedules.........................................................................35
10.5 Sections and Articles..........................................................................35
10.6 Entire Agreement...............................................................................35
10.7 Headings.......................................................................................35
10.8 CONTROLLING LAW................................................................................35
10.9 Public Announcements...........................................................................36
10.10 No Third Party Beneficiaries...................................................................36
10.11 Amendments and Waivers.........................................................................36
10.12 No Employee Rights.............................................................................36
10.13 No Personal Liability of Representatives of Parent.............................................36
10.14 When Effective.................................................................................36
10.15 Takeover Statutes..............................................................................36
10.16 Number and Gender of Words.....................................................................36
10.17 Invalid Provisions.............................................................................37
10.18 Multiple Counterparts..........................................................................37
10.19 No Rule of Construction........................................................................37
10.20 Expenses.......................................................................................37
10.21 No Brokers.....................................................................................37
10.22 Section 351 Plan of Exchange...................................................................37
</TABLE>

Exhibit 1.1 Sole Shareholder
Exhibit 2.1 Escrow Agreement
Exhibit 2.2 Letter of Transmittal from Shareholders
Exhibit 5.6 Budgeted Capital Expenditures of Company
Exhibit 6.8 Certain Guaranties
Exhibit 7.3.2 Stock Transfer Restriction Agreement
Exhibit 7.3.3 Certain Employees of the Company
Exhibit 7.3.3A Employment Agreement
Exhibit 7.3.4 Opinion of Counsel for the Shareholders and the
Company
Exhibit 7.5.2 Opinion of Counsel for the Parent
Exhibit 10.22 Section 351 Plan of Exchange

<PAGE> 6

AGREEMENT AND PLAN OF EXCHANGE

This AGREEMENT AND PLAN OF EXCHANGE (this "Agreement") made effective
as of December 18, 1997, by and among BRIGHTSTAR INFORMATION TECHNOLOGY GROUP,
INC., a Delaware corporation (the "Parent"), AND THE UNDERSIGNED HOLDER (the
"Shareholder") OF ALL OF THE OUTSTANDING CAPITAL STOCK OF ZELO GROUP, INC., a
California corporation (the "Company"), and JOEL RAYDEN, the president and
chief executive officer of the Company ("Rayden").

WHEREAS, Parent and the Shareholder desire to provide for the transfer
by the Shareholder to Parent of the outstanding shares of capital stock of the
Company in exchange for common stock and cash of Parent (the "Exchange");

WHEREAS, Rayden shall receive substantial benefits from and arising
out of the Exchange, including an Employment Agreement with the Company.

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

1. AGREEMENT FOR EXCHANGE

1.1 Exchange of Shares and Other Consideration. Shareholder agrees to
assign, transfer and deliver to Parent all right, title and interest in and to
all of the outstanding shares of common stock of the Company ("Company Common
Stock") in exchange for the Exchange Consideration (as defined below) which
Parent hereby agrees to pay, assign, transfer and deliver to the Shareholder in
accordance with this Agreement.

1.2 Aggregate Consideration from Parent. The aggregate consideration
to be delivered to the Shareholder by the Parent shall be an amount equal to
the sum of the Exchange Consideration as defined below.

1.2.1 Exchange Consideration. The Exchange Consideration
shall be equal to the amount of $1,250,000 reduced by the amount of any
reduction in the Company's Net Working Capital (as defined below) from
September 30, 1997 to the Closing Balance Sheet Date (as defined below).

1.2.2 Certain Definitions. The following terms shall have the
meaning ascribed below for purposes of this Agreement:

<PAGE> 7

(i) "Closing Balance Sheet Date" means the end of the most
recent monthly accounting period of the Company preceding the Closing
Date.

(ii) "Current Assets" means the current assets of the Company
determined as of the Closing Balance Sheet Date in accordance with
GAAP.

(iii) "Current Liabilities" means the current liabilities of
the Company determined as of the Closing Balance Sheet Date in
accordance with GAAP excluding those current liabilities included in
Long-Term Debt and federal, state and local income taxes payable by
the Company with respect to all periods prior to Closing not included
in Long-Term Debt, and expressed as a positive number; provided,
however, that all expenses of the Company or the Shareholders incurred
in connection with the transactions contemplated hereby which are
payable by the Company shall be included in Current Liabilities.

(iv) "GAAP" means U.S. generally accepted accounting
principles consistently applied.

(vi) "IPO Closing Date" means the date that the Parent
receives funds in consideration for the sale of its securities in the
IPO.

(vii) "IPO Price" means the initial price per share to the
public for shares of Parent Common Stock in IPO.

(ix) "Net Working Capital" means the Current Assets of the
Company minus the Current Liabilities of the Company as of the Closing
Balance Sheet Date, all as determined under GAAP.

1.3 Payment of Exchange Consideration. Parent shall deliver
payment of the Exchange Consideration by delivery of cash and Parent Common
Stock such that 30% of the Exchange Consideration (and any installment thereof)
is delivered to the Shareholder in cash and 70% of the Exchange Consideration
(and any installment thereof) is delivered in Parent Common Stock. For

<PAGE> 8

purposes of this Section 1.3, such shares of Parent Common Stock shall have a
per share value equal to the IPO Price. The Exchange Consideration shall be
paid on the IPO Closing Date.

1.4 No Fractional Shares. Notwithstanding the foregoing, no fractional
shares of parent Common Stock will be issued pursuant to this Section 1.3, and
if the Shareholder would be entitled hereunder to receive a fractional share of
Parent Common Stock but for this paragraph, the Shareholder shall receive a
cash payment for and in lieu thereof in the amount (rounded upward to the
nearest whole cent) equal to the Shareholder's fractional interest in a share
of Parent Common Stock multiplied by the IPO Price.

2. THE CLOSING

2.1 Closing. A closing into Escrow ("Closing") will take place at the
offices of Chamberlain, Hrdlicka, White, Williams & Martin in Houston, Texas at
the time and on the day that the Parent and its underwriters agree on the IPO
Price for shares of Parent Common Stock offered in the Parent's IPO (the
"Pricing Date") as set forth in an executed underwriting agreement, but in no
event later than April 23, 1998 (the "Closing Date"); provided that each of the
conditions precedent to the obligations of the parties to effect the Closing
are then satisfied or waived by the applicable party. The parties may agree in
writing on another date, time or place for the Closing. At the Closing, the
parties will deliver or cause to be delivered into escrow with the escrow agent
("Escrow Agent") under the Escrow Agreement set forth in Exhibit 2.1 hereto,
the documents described in Sections 7.3 and 7.5 below. On the IPO Closing Date,
such documents shall be delivered out of escrow to the parties designated to
receive such documents under this Agreement in accordance with the Escrow
Agreement, and Parent shall pay and deliver the Exchange Consideration to the
Shareholder as prescribed in this Agreement.

2.2 Delivery of Company Common Stock. Prior to the Closing, the Parent
will deliver to the Shareholder a Letter of Transmittal, in substantially the
form attached hereto as Exhibit 2.2, to be used by Shareholder for surrendering
to Parent certificates representing all the Company Common Stock in exchange
for the right to receive the Exchange Consideration. On the Closing Date,
certificates for all of the Company Common Stock held by Shareholder will be
delivered by Shareholder to the Escrow Agent in accordance with the Escrow
Agreement for the benefit of the Parent together with properly completed and
executed Letters of Transmittal.

2.2.1 Assignments of Company Common Stock. It is agreed that
no assignment, transfer or other disposition of record or beneficial ownership
of any shares of Company Common Stock may be made on or after the date hereof
other than as provided herein.

2.2.2 Payment In Full Satisfaction of All Rights. The
delivery of the Exchange Consideration to the Shareholder with respect to the
shares of Company Common Stock shall be deemed to be payment in full
satisfaction of all rights pertaining to such outstanding shares.

<PAGE> 9

3. REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDER AND RAYDEN

The Shareholder and Rayden, jointly and severally, hereby represent
and warrant to the Parent that the following statements are true and correct,
subject to the various schedules comprising "Disclosure Schedules" attached
hereto which shall be deemed to qualify all applicable representations and
warranties under this Agreement and any ancillary agreements, schedules or
exhibits associated therewith, whether or not specifically cross referenced as
pertaining thereto:

3.1 Stock Ownership. Exhibit 1.1 accurately sets forth the name of the
sole Shareholder of the Company and the number of shares of Company Common
Stock owned by such Shareholder. The Shareholder owns, beneficially and of
record, with full power to vote, transfer and assign the number of shares of
Company Common Stock set forth beside such Shareholder's name on Exhibit 1.1
and such shares are so held by the Shareholder free and clear of all liens,
encumbrances and adverse claims whatsoever.

3.2 Authority. The Shareholder and Rayden have full right, power,
legal capacity and authority to (i) execute, deliver and perform this
Agreement, and all other documents and instruments referred to herein or
contemplated hereby to be executed, delivered and/or performed by the
Shareholder and/or Rayden (each a "Shareholder Related Document") and (ii)
consummate the transactions contemplated herein and thereby. This Agreement has
been duly executed and delivered by the Shareholder and Rayden and constitutes,
and each Shareholder Related Document, when duly executed and delivered by the
Shareholder and/or Rayden, as applicable, will constitute, a legal, valid and
binding obligation of such person enforceable against Shareholder and/or
Rayden, as applicable, in accordance with their respective terms and
conditions, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
(whether applied in a proceeding at law or in equity).

3.3 Shareholder Consents. Except as provided on Schedule 3.3, no
approval, consent, order or action of or filing with any court, administrative
agency, governmental authority or other third party is required for the
execution, delivery or performance by the Shareholder or Rayden of this
Agreement or any Shareholder Related Document other than filings related to the
IPO. The execution, delivery and performance by the Shareholder and Rayden of
this Agreement and the Shareholder Related Documents do not violate any
mortgage, indenture, contract, agreement, lease or commitment or other
instrument of any kind to which such Shareholder or Rayden is a party or by
which such Shareholder or Rayden or their assets or properties may be bound or
affected or any law, rule or regulation applicable to such Shareholder or
Rayden or any court injunction, order or decree or any valid and enforceable
order of any governmental agency in effect as of the date hereof having
jurisdiction over such Shareholder or Rayden.

3.4 Organization, Etc. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of California
and is duly qualified or licensed as a foreign corporation authorized to do
business in all other states in which any of its assets or properties may be
situated or where the business of the Company is conducted except where the
failure to obtain such qualification or license will not have a Company
Material Adverse Effect (as defined in Section

<PAGE> 10

3.24 below). Except as disclosed on Schedule 3.4 of the Disclosure Schedule
previously provided to the Parent by the Company ("Disclosure Schedule"), the
Company does not own, of record or beneficially, directly or indirectly, any of
the outstanding capital stock, voting interests or ownership interests in any
corporation, partnership, joint venture, limited liability company, trust,
limited partnership or other entity.

3.5 Capitalization of the Company. The total authorized capital stock
of the Company is 25,000 shares of Company Common Stock, no par value, of which
5,000 shares are issued and outstanding and held of record and beneficially by
the Shareholder as set forth on Exhibit 1.1 hereto, and of which none are held
in the treasury of the Company. Each issued and outstanding share of Company
Common Stock is duly and validly authorized and issued, fully paid and
non-assessable, and was not issued in violation of the preemptive rights of any
past or present shareholder. Except for the shares of Company Common Stock
owned beneficially and of record by the Shareholder as set forth on Exhibit 1.1
hereto, there are no outstanding shares of capital stock, convertible or
exchangeable securities, subscriptions, calls, options, warrants, rights or
other agreements or commitments of any character relating to the issuance or
sale of any shares of capital stock of, or other equity ownership interest in,
the Company. The Company has no liability, contingent or otherwise, to any
person or entity in connection with preemptive or contractual subscription
rights or the offer, sale, purchase, surrender or cancellation of any shares of
capital stock, warrants, options or other equity or voting interests or
securities of the Company.

3.6 Company Authority. The Company has full right, power, legal
capacity and authority to execute, deliver and perform and all documents and
instruments referred to herein or contemplated hereby to be executed, delivered
and/or performed by the Company (the "Company Related Documents") and to
consummate the transactions contemplated thereby. All of the Company Related
Documents, when duly executed and delivered by the Company, will constitute,
legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity (whether applied in a proceeding at law or in
equity).

<PAGE> 11

or licensed to be used and available for use by the Company after the IPO
Closing Date on the same terms and conditions as prior to Closing. None of the
ownership, access to, or use of the Intellectual Property by the Company
infringes on the rights of any other party and the Company's rights to the
Intellectual Property are valid and enforceable. No person has interfered with,
infringed upon, misappropriated or otherwise come into conflict with the
Intellectual Property rights of the Company. The Company has not interfered
with, infringed upon, misappropriated or otherwise come into conflict with any
intellectual property rights of others, and the Company has not received any
charge, complaint, demand or notice alleging any such interference,
infringement, misappropriation or conflict.

3.11 Other Disclosures. The following disclosures pertaining to the
Company are set forth in Schedule 3.11 of the Disclosure Schedule. Such
disclosures are complete and accurate.

(i) Schedule 3.11(i) is a list of the products of the Company
and all product registrations used by the Company, including all products
licensed by the Company to customers and products licensed to the Company from
licensors, and a description of the parties to and principal terms of such
license arrangements, and a list of all material safety data sheets, toxicology
studies and environmental studies of the Company.

<PAGE> 12

(iv) Schedule 3.11(iv) includes (a) a list of assets owned by
the Company as of the date hereof which have been capitalized and have an
unamortized value of $5,000 or more, including vehicles and rolling stock, (b)
a list of all leased equipment of the Company, including leased vehicles and
rolling stock and (c) the Company's most recent depreciation schedule with
respect to the assets of the Company. The Shareholder and Rayden represent and
warrant that all of the machinery, equipment, vehicles and rolling stock of the
Company are in good working order and condition, ordinary wear and tear
excepted.

(vi) Attached to and listed on Schedule 3.11(vi) is each
policy of insurance maintained by the Company together with information on
premiums, coverages, insurers, expiration dates and deductibles, an accurate
list of all insurance loss runs and workers' compensation claims received for
the past three policy years. The Shareholder and Rayden represent and warrant
that (a) such insurance is currently in full force and effect, (b) the
Company's insurance has never been canceled, (c) the Company has never been
denied coverage or experienced a substantial increase in premiums or a
substantial reduction in coverage from one policy period to the next policy
period, (d) such coverage is adequate in character and amount and (e) such
coverage is placed with financially sound and reputable insurers unaffiliated
with either the Shareholder or the Company.

(viii) Schedule 3.11(viii) is a list and summary description
of, or copies of, all governmental licenses and permits of the Company.

<PAGE> 13

(xi) Schedule 3.11(xi) is a list naming each Company Contract
(as defined below). The Shareholder and Rayden represent and warrant that: (a)
none of the Company's customers or suppliers have canceled or substantially
reduced, or are currently attempting or threatening to cancel or substantially
reduce, service or products; (b) except to the extent set forth on Schedule
3.11(xi), the Company has complied with all commitments and obligations and is
not in default under any such contracts and agreements, no notice of default
has been received by the Company, and the Company is not aware of any defaults
by customers, suppliers and other parties to such contracts and agreements; (c)
the Company has not experienced labor interruptions over the past three years
and the Shareholder and Rayden consider the relationship between the Company
and its employees to be good; and (d) the Company has never been a party to any
governmental contracts subject to price redetermination or renegotiation. The
term "Company Contract" means each contract, lease, undertaking, commitment,
mortgage, indenture, note, security agreement, license and other agreement of
the Company in effect on the date hereof (a) involving the expenditure or
receipt of more than $10,000 over the term thereof, (b) containing provisions
calling for the sale or purchase of raw materials, products or services at
prices that vary from the market prices of such raw materials, products or
services generally prevailing in customary third party markets, (c) which
include "take or pay", "meet or release", "most favored nations" or similar
pricing or delivery arrangements, (d) requiring the Company to indemnify or
hold harmless any other person or entity, (e) evidencing any warranty
obligation of the Company with respect to goods, services or products sold or
leased by it, (other than warranties given in the ordinary course of business),
(f) imposing on the Company any confidentiality, non-disclosure or non-compete
obligation or containing any acceleration or termination provisions effective
upon a change of control of the Company, or a merger of the Company into
another entity, or (g) involving collective bargaining or agreements with any
labor union or employee group.

(xii) Schedule 3.11(xii) is a list of all powers of attorney
presently in effect granted by the Company and all investments of the Company
in any equity securities, partnership interests, indebtedness or other
interests in any other corporation, or any person, partnership, joint venture,
limited liability company, trust, limited partnership or other legal entity.

<PAGE> 14

3.13 Financial Statements. The Shareholder and Rayden have listed on
Schedule 3.13 of the Disclosure Schedule and have delivered to the Parent
copies of the following audited financial statements of the Company: Balance
Sheets as of December 31, 1996, and as of June 30, 1997, and Statements of
Income, Stockholders Equity and Cash Flows for the year ended December 31, 1996
and for the six month period ended June 30, 1997; plus the unaudited Balance
Sheet as of September 30, 1997 ("Balance Sheet Date") and Statements of Income
and Cash Flows for the nine months ended September 30, 1996 and 1997. Such
financial statements are collectively referred to herein as "Company Financial
Statements". To the best knowledge of Shareholder and Rayden the Company
Financial Statements, except as described in the notes thereto, have been
prepared from the Company's records in accordance with GAAP. The Company
Financial Statements present accurately and fairly in all material respects the
financial condition of the Company as of the dates indicated thereon, and
present accurately and fairly in all respects the results of the Company's
operations for the periods indicated thereon. The Company Financial Statements
do not omit any liabilities or obligations of a type which should be included
in or reflected in such financial statements in order for the financial
statements to not be materially inaccurate, whether related to tax or non-tax
matters, accrued or contingent, due or not yet due, liquidated or unliquidated,
or otherwise, except as and to the extent disclosed or reflected in the Company
Financial Statements, or in Schedule 3.14 of the Disclosure Schedule.

3.14 Undisclosed Liabilities. To the best knowledge of Shareholder,
Rayden and the Company, except as and to the extent disclosed in Schedule 3.14
of the Disclosure Schedule or in the Company Financial Statements, the Company
has no liabilities or obligations of any nature (whether absolute, contingent
or otherwise). In the case of any liabilities which are not fixed, an estimate
of the maximum amount which may be payable is set forth on Schedule 3.14 of the
Disclosure Schedule.

3.15 Tax Matters.

(i) All federal, state, local and foreign tax returns
required to be filed by the Company (and, if applicable, its subsidiaries)
prior to the date hereof have been filed on a timely basis with the appropriate
governmental authorities in all jurisdictions in which such tax returns are
required to be filed, and all such returns are correct and complete. The
Shareholder has delivered to Parent, and Schedule 3.15(i) of the Disclosure
Schedule includes, correct and complete copies of all federal, state, local and
foreign income and franchise tax returns filed by, examination reports received
by, and statements of deficiencies asserted against or agreed to by the Company
(and, if applicable, its subsidiaries) since January 1, 1991. The Company
(including any of its subsidiaries) is not currently the subject of any audit,
examination or any similar investigation by any governmental authority.
Schedule 3.15(i) of the Disclosure Schedule sets forth all audits, examinations
or similar investigations of the Company (including any of its subsidiaries) by
any governmental authority.

(ii) All federal, state, local and foreign income, franchise,
sales, use, property, and all other taxes, fees, assessments, or other
governmental charges (including withholding taxes), and all interest and
penalties thereon (all of the foregoing collectively, "Taxes") due from or
properly accruable by the Company (including any of its subsidiaries) have been
fully and timely paid or, in the cases of Taxes for which payment is not yet
required, properly and fully accrued for on the Company

<PAGE> 15

Financial Statements with respect to all taxable periods ending on or prior to
the date hereof and interim periods through the date hereof.

(iii) The Company (including any of its subsidiaries) has not
filed a consent under Section 341(f) of the Internal Revenue Code of 1986
("Code") concerning collapsible corporations. The Company (including any of its
subsidiaries) and each of the Shareholder is not a party to any agreement,
contract or arrangement that would, by reason of the consummation of any of the
transactions contemplated by this Agreement, individually or in the aggregate,
result in the payment of any "excess parachute payment" within the meaning of
Section 280G of the Code. None of the assets of the Company (including any of
its subsidiaries) is required to be treated as being owned by any other person
pursuant to the "safe harbor" leasing provisions of Section 168 of the Internal
Revenue Code of 1954, as in effect prior to the repeal of such provisions.

(iv) The Company (including any of its subsidiaries) is not a
party to any Tax allocation or sharing agreement. The Company (including any of
its subsidiaries): (A) has not been a member of an affiliated group filing a
consolidated federal income tax return (other than a group the common parent of
which was the Company); and (B) does not have any liability for the taxes of
any person (other than the Company or any of its subsidiaries) under Treas.
Reg. Section 1.1502-6 (or any similar provision of state, local, or foreign
law), as a transferee or successor, by contract, or otherwise.

(v) Schedule 3.15(v) of the Disclosure Schedule sets forth
the following information with respect to the Company (including any of its
subsidiaries) as of the most recent practicable date: (A) the basis of the
Company (and any of its subsidiaries) in its assets; (B) the basis of the
stockholder(s) of any subsidiary of the Company in its stock of the subsidiary
(or the amount of any excess loss account); (C) the amount of any net operating
loss, net capital loss, unused investment or other credit, unused foreign tax,
or excess charitable contribution allocable to the Company (and any of its
subsidiaries); and (D) the amount of any deferred gain or loss allocable to the
Company (or any of its subsidiaries) arising out of any Deferred Intercompany
Transaction (as defined in Treas. Reg. Section 1.1502-13).

(vi) The Company (including any of its subsidiaries) has not
waived any statute of limitations, or agreed to any extension of time with
respect to an assessment or deficiency, with respect to any Taxes.

<PAGE> 16

(viii) With respect to the qualification of the Exchange as
an exchange transaction within the meaning of Section 351 of the Code, there is
no specific plan or intention on the part of any Shareholder to sell, exchange
or otherwise dispose of any shares of Parent Common Stock received in the
Exchange.

3.16 Full Authority. The Company has full power, authority and legal
right and has all licenses, permits, qualifications, and other documentation
(including permits required under applicable Environmental Law (as defined
below)) necessary to own and/or operate its businesses, properties and assets
and to carry on its businesses as being conducted on the date hereof, and such
businesses are now being conducted and such assets and properties are being
owned and/or operated, and the Company Plans have been implemented and
maintained, in compliance with all applicable laws (including Environmental
Law), ordinances, rules and regulations of any governmental agency of the
United States, any state or political subdivision thereof, or any foreign
jurisdiction, all applicable court or administrative agency decrees, awards and
orders and all such licenses, permits, qualifications and other documentation,
except where the failure to comply will not have a Company Material Adverse
Effect, and there is no existing condition or state of facts which would give
rise to a violation thereof or a liability or default thereunder, except where
a violation, liability or default will not have a Company Material Adverse
Effect. The term "Environmental Law" means any law, rule, regulation, approval,
decision, decree, ordinance, by-law having the force of law or order of any
federal, state or local executive, legislative, judicial, regulatory or
administrative agency, board or authority, which relate to (i) noise; (ii)
pollution or protection of the air, surface water, ground water or land; (iii)
solid, gaseous or liquid waste generation, treatment, storage, use, processing,
disposal or transportation; (iv) exposure to hazardous or toxic substances; (v)
the safety or health of employees or (vi) regulation of the manufacture,
processing, distribution in commerce, use, or storage of chemical substances.

3.17 Legal Actions. Except as described in Schedule 3.17 of the
Disclosure Schedule, no legal action, suit, audit, investigation, unfair labor
practice charge, complaint, claim, grievance, or proceeding by or before any
court, arbitration panel, governmental authority or third party is pending or,
to the best knowledge of the Company, the Shareholder or Rayden, threatened,
which involves or may involve the Company or its now or previously owned or
operated assets, operations, properties or businesses.

3.18 Company Contracts, Company Plans. Neither the Company nor any
other party thereto is in default under or in violation of any Company Contract
or Company Plan.

3.19 Access. The Company has cooperated fully in permitting the Parent
and the Parent's lenders, underwriters and placement agents and their
respective representatives to make a full investigation of the properties,
operations and financial condition of the Company; and afforded the Parent and
the Parent's lenders, underwriters and placement agents and their respective
representatives reasonable access to the offices, buildings, real properties,
machinery and equipment, inventory and supplies, records, files, books of
account, tax returns, agreements and commitments and personnel of the Company.

<PAGE> 17

3.20 No Material Adverse Change. Except as specifically set forth on
Schedule 3.20 of the Disclosure Schedule, since the Balance Sheet Date, there
has not been: (a) any change in the Company's Articles of Incorporation or
Bylaws, (b) any material adverse change of any nature whatsoever in the
financial condition, assets, liabilities (contingent or otherwise), income,
business or prospects of the Company; (c) any damage, destruction or loss
(whether or not covered by insurance) materially adversely affecting the
properties or business of the Company; (d) any change in the authorized capital
of the Company or in its securities outstanding or any change in its ownership
interests; (e) any declaration or payment of any dividend or distribution in
respect of the capital stock or any direct or indirect redemption, purchase or
other acquisition of any of the capital stock of the Company; (f) any contract
or commitment entered into by the Company or any incurrence by the Company or
agreement by the Company to incur any liability or make any capital
expenditures in excess of $3,000, except in the normal course of business; (g)
any increase in the compensation, bonus, sales commissions or fee arrangement
payable or to become payable by the Company to any of its officers, directors,
stockholders, employees, consultants or agents; (h) any work interruptions,
labor grievances or claims filed, proposed law or regulation (the existence of
which is known, or under the normal course of business should be known, to the
Shareholder) or any event or condition of any character materially adversely
affecting the business of future prospects of the Company; (i) any creation,
assumption or permitting to exist any mortgage, pledge or other lien or
encumbrance upon any assets or properties whether now owned or hereafter
acquired, except as set forth in Schedules 3.11(ix), 3.11(xi) and 3.14 of the
Disclosure Schedule; (j) any sale or transfer, or any agreement to sell or
transfer, any material assets, properties or rights of the Company to any
person, including, without limitation, the Shareholder and their respective
affiliates; (k) any cancellation, or agreement to cancel, any indebtedness or
other obligation owing to the Company, including, without limitation, any
indebtedness or obligation of the Shareholder or any of their affiliates; (1)
any plan, agreement or arrangement granting any preferential rights to purchase
or acquire any interest in any of the assets, properties or rights of the
Company or requiring consent of any party to the transfer and assignment of any
such assets, properties or rights; (m) any purchase or acquisition, or
agreement, plan or arrangement to purchase or acquire, any property, rights or
assets of the Company; (n) any negotiation for the acquisition of any business
or start-up of any new business; (o) any merger or consolidation or agreement
to merge or consolidate with or into any other corporation (except the
transactions contemplated by this Agreement); (p) any waiver of any material
rights or claims of the Company; (q) any breach, amendment or termination of
any material contract, agreement, license, permit, permit application or other
right to which the Company is a party; (r) any discharge, satisfaction,
compromise or settlement of any claim, lien, charge or encumbrance or payment
of any obligation or liability, contingent or otherwise, other than current
liabilities as of the Balance Sheet Date, current liabilities incurred since
the Balance Sheet Date in the ordinary course of business and prepayments of
obligations in accordance with normal and customary past practices; or (s) any
transaction by the Company outside the ordinary course of its business or
prohibited hereunder.

<PAGE> 18

by the Company, free and clear of all liens, encumbrances or adverse claims of
every kind. All such shares are duly and validly authorized and issued, fully
paid and nonassessable, and were not issued in violation of the preemptive
rights of any past or present stockholder. Also set forth in Schedule 3.21 of
the Disclosure Schedule is a listing of all names under which the Company has
done business as well as the names of all predecessors of the Company,
including the names of any entities from which the Company previously acquired
significant assets.

3.22 Affiliate Relationships.

(i) Except as set forth on Schedule 3.22 of the Disclosure
Schedule, neither the Shareholder nor Rayden nor any affiliate of the
Shareholder or Rayden, and no director, officer or employee of or consultant to
the Company owns, directly or indirectly, in whole or in part, any property,
assets or right, tangible or intangible, which is associated with any property,
asset or right owned by the Company or which the Company is operating or using
or the use of which is necessary for its business. Also included in Schedule
3.22 of the Disclosure Schedule is the disclosure of any relationships which
the Shareholder or Rayden, or any director, officer, employee, agent or
consultant of the Company has with any other corporation, partnership, firm,
association or business organization, entity or enterprise which is a
competitor, potential competitor (based upon the nature of such potential
competitor's business as of the Closing Date), supplier or customer of the
Company.

(ii) The term "affiliate" means with respect to any person,
any other person which directly or indirectly, by itself or through one or more
intermediaries, controls, or is controlled by, or is under direct or indirect
common control with, such person. The term "control" means the possession,
directly or indirectly, of the power to direct, or cause the direction of, the
management and policies of a person, whether through the ownership of voting
securities, by contract or otherwise.

3.23 Disclosure. No representation or warranty by the Shareholder,
Rayden or the Company in the Agreement (including the Exhibits hereto) and no
statement contained in the Disclosure Schedule or any certificate delivered by
the Company or the Shareholder to the Parent pursuant to the Agreement,
contains or will contain any untrue statement of a material fact or omits or
will omit any material fact necessary in order to make the statements herein or
therein, in light of the circumstances under which they are or were made, not
misleading.

<PAGE> 19

3.25 Restricted Securities.

(1) The Shareholder acknowledges that the shares of Parent
Common Stock to be acquired by the Shareholder hereunder have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), and are being acquired for the Shareholder's own
account for investment and not with a view to the distribution
thereof, and the Parent Common Stock will be subject to the Stock
Transfer Restriction Agreement in Exhibit 7.3.2 hereto.

(2) The Shareholder and its representatives have the
knowledge and experience in financial and business matters to enable
them to evaluate the merits and risks of entering this Agreement and
the transactions contemplated hereby and acquiring shares of Parent
Common Stock.

(3) The Shareholder is able to bear the economic risks of its
investment in the Parent Common Stock, including the risk of a loss of
the value of the Parent Common Stock.

(4) The Shareholder has been represented by legal counsel in
this transaction and such Shareholder and its representatives,
including such counsel, have been given the opportunity to ask
questions of, and receive answers from, the officers of the Parent
concerning the terms of the transactions contemplated by this
Agreement and the affairs and the business and financial condition of
the Parent.

(5) The Shareholder has received a Confidential Private
Placement Memorandum ("PPM") concerning the Parent and an investment
in shares of Parent Common Stock, and such Shareholder and its
representatives have been given such access to all documents, books
and additional information concerning Parent which they have requested
regarding Parent.

(6) The Shareholder and its representatives have conducted
such investigations in making a decision to approve this Agreement and
the transactions contemplated hereby as they have deemed necessary and
advisable.

(7) The Shareholder acknowledges and agrees that the Parent
Common Stock to be issued to such Shareholder may not be disposed of
except in accordance with the requirements of the Securities Act and
any applicable state securities laws and the Stock Transfer
Restriction Agreement in Exhibit 7.3.2 hereto.

4. REPRESENTATIONS AND WARRANTIES
OF THE PARENT

The Parent hereby represents and warrants to the Shareholder and
Rayden as follows:

4.1 Organization. The Parent is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. The
Parent is duly qualified or licensed as a foreign

<PAGE> 20

corporation authorized to do business in all states in which any of its assets
or properties may be situated or where its business is conducted except where
the failure to obtain such qualification or license would not have a Parent
Material Adverse Effect (as defined in Section 4.12 below).

4.3 Authority. The Parent has the requisite, power and authority to
execute, deliver and perform this Agreement and all documents and instruments
referred to herein or contemplated hereby (the "Parent Related Documents") and
to consummate the transactions contemplated herein and thereby. This Agreement
has been duly executed and delivered by the Parent and constitutes, and all the
Parent Related Documents, when executed and delivered by the Parent will
constitute, legal, valid and binding obligations of the Parent, enforceable in
accordance with their respective terms and conditions except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity (whether applied in a proceeding
at law or in equity).

4.4 Consents. No approval, consent, order or action of or filing with
any court, administrative agency, governmental authority or other third party
is required for the execution, delivery or performance by the Parent of this
Agreement or the Parent Related Documents or the consummation by the Parent of
the transactions contemplated hereby, except as may be described in the PPM and
except for the filing of the Parent's registration statement with respect to
the IPO ("Registration Statement") with the U.S. Securities and Exchange
Commission ("SEC") pursuant to the Securities Act and the SEC's declaration of
effectiveness of such Registration Statement and the completion of all
necessary filings required under, and the obtaining of all necessary consents
and approvals required pursuant to, state securities or "blue sky" laws in
connection with the IPO.

4.5 Defaults. The Parent is not in default under or in violation of,
and the execution, delivery and performance of this Agreement and the Parent
Related Documents and the consummation by the Parent of the transactions
contemplated hereby and thereby will not result in a default under or in
violation of (i) any mortgage, indenture, charter or bylaw provision, contract,
agreement, lease, commitment or other instrument of any kind to which the
Parent is a party or by which the Parent or any of its properties or assets may
be bound or affected or (ii) any law, rule or regulation applicable to the
Parent or any court injunction, order or decree, or any valid and enforceable
order of any governmental agency in effect as of the date hereof having
jurisdiction over the Parent, which default or violation prevents the Parent
from consummating the transactions contemplated hereby or is reasonably likely
to have a Parent Material Adverse Effect.

<PAGE> 21

"affiliate" of a "holding company" or a "public utility" within the meaning of
the Public Utility Holding Company Act of 1935, as amended.

4.7 Financial Statements. The Parent has provided certain financial
statements to the Shareholder in the PPM ("Parent Financial Statements") and
such Parent Financial Statements have been prepared in accordance with GAAP and
fairly present the consolidated financial position, results of operations and
cash flows of the Parent and its then existing consolidated subsidiaries as of
the dates and for the periods indicated, subject to normal year-end adjustments
and any other adjustments described therein or in the notes or schedules
thereto. The books and records of the Parent have been kept in reasonable
detail and accurately and fairly reflect the transactions of the Parent.

4.8 Taxes. The Parent has either accrued, discharged or caused to be
discharged, as the same have become due, or the Parent Financial Statements
contain adequate accruals and reserves for, all taxes, interest thereon, fines
and penalties of every kind and character for such taxes, attributable or
relating to the properties and business of the Parent.

4.9 Full Authority. The Parent has the corporate power and authority
and has obtained all licenses, permits, qualifications, and other documentation
(including permits required under applicable environmental law) necessary to
own and/or operate its businesses, properties and assets and to carry on its
businesses as being conducted on the date of this Agreement, except such
licenses, permits, qualifications or other documentation, the failure to obtain
which is not reasonably likely to result in a Parent Material Adverse Effect,
and such businesses are now being conducted and such assets and properties are
being owned and/or operated in compliance with all applicable laws (including
environmental law), ordinances, rules and regulations of any governmental
agency of the United States, any state or political subdivision thereof, or any
foreign jurisdiction, all applicable court or administrative agency decrees,
awards and orders and all such licenses, permits, qualifications and other
documentation, except where the failure to comply will not have a Parent
Material Adverse Effect, and there is no existing condition or state of facts
that would give rise to a violation thereof or a liability or default
thereunder that is reasonably likely to have a Parent Material Adverse Effect.

4.10 Access. The Parent has cooperated fully in permitting the
Shareholder and their representatives to make a full investigation of the
properties, operations and financial condition of the Parent and has afforded
the Shareholder and their representatives reasonable access to the offices,
buildings, real properties, machinery and equipment, inventory and supplies,
records, files, books of account, tax returns, agreements and commitments and
personnel of Parent.

4.11 Disclosure. No representation or warranty by the Parent in this
Agreement, and no statement contained in any certificate delivered by the
Parent to the Shareholder pursuant to this Agreement, contains any untrue
statement of a material fact or omits any material fact necessary in order to
make the statements herein or therein, in light of the circumstances under
which they are or were made, not misleading.

4.12 Parent Material Adverse Effect. The term "Parent Material Adverse
Effect" shall mean an adverse effect on the properties, assets, financial
position, results of operations, long-term

<PAGE> 22

debt, other indebtedness, cash flows or contingent liabilities of the Parent
and its consolidated subsidiaries, taken as a whole in an amount of $25,000 or
more.

5. CERTAIN COVENANTS AND AGREEMENTS OF SHAREHOLDER AND RAYDEN

The Shareholder and Rayden further jointly and severally agree with
the Parent that from the date hereof through the Closing Date:

5.1 Conduct of Business. The Shareholder and Rayden shall cause the
Company to conduct its operations according to its ordinary and usual course of
business to preserve substantially intact its business organization, keep
available the services of its officers and employees, and maintain its present
relationships with licensors, suppliers, distributors, customers and others
having significant business relationships with it. The Shareholder and Rayden
agree to cause representatives of the Company to confer with representatives of
the Parent to keep it informed with respect to the general status of the
on-going operations of the business of the Company. Without limiting the
generality of the foregoing, and except as otherwise contemplated herein or
agreed to in writing by Parent, the Shareholder and Rayden will cause the
Company to:

(i) carry on its business in substantially the same manner as
heretofore carried on and not introduce any material new method of
management, operation or accounting, nor provide discounted services
outside the ordinary course of business;

(ii) maintain its properties, facilities, equipment and other
assets, including those held under leases, in good working order,
condition and repair, ordinary wear and tear excepted;

(iii) perform all of its obligations under all debt and lease
instruments and other agreements (including the Company Contracts)
relating to or affecting its business, assets, properties, equipment
and rights, and pay all vendors, suppliers, and other third parties
(including mechanics and materialmen) as and when their bills are due
and pay in full all payroll obligations when due;

(iv) keep in full force and effect its present insurance
policies or other comparable insurance coverage;

(vi) refrain from effecting any change in the capital
structure of the Company and from incurring any expenditures outside
the ordinary course of business;

(vii) refrain from starting or acquiring any new businesses;

<PAGE> 23

(ix) refrain from declaring or paying any bonuses, fees,
extraordinary commissions, dividends or any other distributions to the
Shareholder, directors, management, sales agents, employees or other
personnel inconsistent with past practice;

(x) promptly notify the Parent of the receipt by it, the
Shareholder or Rayden of any notice or claim, written or oral, of (a)
default or breach by the Company under, or of any termination (other
than at the end of the stated term thereof) or cancellation, or threat
of termination (other than at end of the stated term thereof) of
cancellation, of any Company Contract, (b) any loss of, damage to or
disposition of, any of the properties, assets or the products of the
Company of a value of $10,000 or more, singly or in the aggregate
(other than the sale or use of inventories in the ordinary course of
business), (c) any claim or litigation threatened or instituted, or
any other adverse event or occurrence involving or affecting the
Company or any of its assets, properties, operations, businesses or
employees, and (d) any proposal made by any third party received by
the Company or of which the Shareholder or Rayden obtains knowledge in
respect of any sale or other disposition, direct or indirect, of the
assets (other than the sale or use of inventories in the ordinary
course of business), businesses or outstanding capital stock or other
ownership or voting interests of the Company;

(xi) comply with and cause to be complied with all applicable
laws, rules, regulations and orders of all federal, state and local
governments or governmental agencies affecting or relating to the
Company or its assets, properties, operations, businesses or employees
except where the failure to comply will not have a Company Material
Adverse Effect;

(xiii) refrain from any purchase or redemption of any capital
stock, other ownership interest or other voting interest of the
Company and refrain from issuing any capital stock or other ownership
interest;

(xiv) refrain from making any change in any accounting
principle, classification, policy or practice;

(xv) refrain from effecting any amendment to the certificate
or articles of incorporation or bylaws or other governing instruments
of the Company;

<PAGE> 24

(xvii) maintain and comply with its debt and lease agreements
and instruments (except those that expire on their stated maturity or
lease termination dates); refrain from entering into any material
amendment thereto other than in the ordinary course of business not
involving the expenditure of $25,000 or more; refrain from increasing
any indebtedness for borrowed money or issuing or selling any debt
securities or letters of credit; and refrain from making any payments
of any indebtedness or interest or other amounts thereon or with
respect thereto (other than regularly scheduled principal and interest
payments and payments of principal, interest and fees under revolving
lines of credit);

(xix) refrain from entering into any contract, lease,
undertaking, commitment, mortgage, indenture, note, security
agreement, license or other agreement (a) involving the receipt or
expenditure of more than $25,000 over the term thereof (other than
consulting or service contracts with customers entered in the ordinary
course of business), (b) containing provisions calling for the sale or
purchase of raw materials, product or service at prices that vary from
the market prices of such raw materials, products or services
generally prevailing in customary third-party markets, (c) which
include "take or pay", "meet or release", "most favored nations" or
similar pricing or delivery arrangements, (d) with any officer,
director, shareholder or affiliate of the Company, (e) requiring the
Company to indemnify or hold harmless any other person or entity
(other than consulting or service contracts with customers entered in
the ordinary course of business), (f) evidencing any warranty
obligation of the Company with respect to goods, services or products
sold or leased by it (other than warranties given in the normal course
of business containing substantially the same terms as those presently
in effect), or (g) imposing on the Company any confidentiality,
non-disclosure or non-compete obligation (other than consulting or
service contracts with customers entered in the ordinary course of
business).

5.2 Cooperation. The Shareholder and Rayden will cooperate fully with
the Parent, and will cause the Company to cooperate fully with the Parent, as
to arrangements for the consummation of the transactions contemplated hereby in
an orderly fashion.

5.3 Filings, Etc. The Shareholder and Rayden will make, and cause the
Company to make, all filings which are required to be made by them to lawfully
consummate the transactions contemplated hereby.

<PAGE> 25

5.4 Access. The Shareholder and Rayden will, and will cause the
Company to, cooperate fully in permitting the Parent and the Parent's lenders,
underwriters and placement agents and their respective representatives,
advisers, consultants, appraisers, auditors, engineers and other experts to
make a full investigation of the properties, operations and financial condition
of the Company and will afford the Parent and the Parent's lenders,
underwriters and placement agents and their respective representatives,
advisers, consultants, appraisers, auditors, engineers and other experts
reasonable access to the offices, buildings, real properties, machinery and
equipment, inventory and supplies, records, files, books of account, tax
returns, agreements and commitments and personnel of the Company. Without
limitation of the foregoing, the Shareholder, Rayden and the Company shall
provide the Parent with such reasonably available financial information (and
schedules with respect thereto) with respect to the Company as the Parent may
reasonably request and will cooperate with and assist representatives of the
Parent in the preparation of such financial information (and any opinions or
reports with respect thereto) with respect to the Company as the Parent may
reasonably request. Notwithstanding the above, the Parent and its respective
lenders, underwriters and placement agents and their respective
representatives, advisers, consultants, appraisers, engineers and other experts
shall incur no liability with respect to control, operation or management (or
alleged control, operation or management) of the Company as a result of the
covenants in this Section 5.4.

5.5 Satisfaction of Conditions. The Shareholder and Rayden shall (i)
use their reasonable efforts to obtain, as soon as possible, all governmental
approvals required to be obtained by the Company and make, as soon as possible,
all filings with any governmental authority required on the part of the Company
to consummate the transactions contemplated hereby, (ii) use their reasonable
efforts to obtain, as soon as possible, all other consents to and approvals
required to be obtained by the Company to consummate the transactions
contemplated hereby, and (iii) otherwise use their reasonable efforts to
satisfy the conditions set forth in this Agreement to the extent that such
satisfaction is within their control; provided, however, that this Section 5.5
shall not be construed to limit the rights of the Company to terminate this
Agreement as provided in Article 9 of this Agreement.

5.6 Capital Budget. Exhibit 5.6 hereto contains the budgeted capital
expenditures of the Company from July 1, 1997 through December 31, 1998. Unless
otherwise consented to by the Parent, the Company will make capital
expenditures in accordance with such budget and shall not make any additional
capital expenditures.

5.7 Exclusivity. The Shareholder and Rayden shall not (i) solicit,
initiate, or encourage the submission of any proposal or offer from any person
or entity relating to the acquisition of any capital stock or other voting
securities, or any substantial portion of the assets of the Company (including
any acquisition structured as a merger, consolidation, or share exchange) or
(ii) participate in any negotiations or discussions regarding, furnishing any
information with respect to, assist or participate in, or facilitate in any
other manner any effort or attempt by any person or entity in favor of any such
acquisition. The Shareholder and Rayden will (and shall cause the Company to)
promptly notify the Parent if any person or entity makes any proposal, offer,
inquiry, or contact with respect to any of the foregoing.

<PAGE> 26

5.8 Agreements of Shareholder to be Effective Upon Closing. Effective
upon Closing, and without further action on the part of any party or other
person, the Shareholder and Rayden covenant and agree as follows:

5.8.1 Covenant Not to Compete.

(i) For the consideration specified in this Agreement and in
recognition that the covenants by the Shareholder and Rayden in this
Section are a material inducement to the Parent to enter into and
perform this Agreement, Shareholder and Rayden will comply with the
provisions of Section 5.8.1(ii) below until the date which is the
later to occur of three (3) years after the Closing Date or one year
from and after the date of termination of such Shareholder's
employment by the Company regardless of the reason for such
termination.

(ii) Each of Shareholder and Rayden agree that for the
applicable time period in Section 5.8.1(i) above ("Restricted
Period"), they will not represent, engage in or carry on, directly or
indirectly, any business with any person or entity who was a customer
or client of the Company during the one year period preceding the
Closing Date (or any customer or client of an affiliate of the Company
for which the Company has materially assisted such affiliate during
the one year period preceding the Closing Date in serving such
customer or client ("Assisted Affiliate")) or any business within 100
miles of the city or county limits of any city or county in the United
States or foreign countries where the Company or any Assisted
Affiliates has an office or in which the Company provides services
which produce Company revenues of an amount equal to 2% or more of the
Company's revenues for the twelve complete calendar months preceding
the time of termination, which business competes with any business,
services or products produced, sold, conducted, developed, or in the
process of development by the Company or jointly by the Company and an
Assisted Affiliate, including any business that involves the
furnishing of information technology services that are the type of
services furnished by the Company, either for himself, as a member or
equity owner of a partnership or limited liability company, or as a
shareholder (other than as a shareholder of less than one percent (1%)
of the issued and outstanding stock of a publicly-held company whose
gross revenues exceed $100 million), investor, owner, officer, or
director of a company or other entity, or as an employee, agent,
trustee, manager, associate or consultant of any person, partnership,
corporation or other entity.

(iii) The Shareholder and Rayden agree that the limitations
set forth herein on such Shareholder and Rayden's rights to compete
with the Parent and its affiliates as set forth above are reasonable
and necessary for the protection of Parent and its affiliates. In this
regard, the Shareholder and Rayden specifically agree that the
limitations as to period of time and geographic area, as well as all
other restrictions on the Shareholder's and Rayden's activities
specified herein, are reasonable and necessary for the protection of
the Parent and its affiliates. The Shareholder and Rayden agree that,
in the event that the provisions of this Section should ever be deemed
to exceed the scope of business, time or geographic limitations
permitted by applicable law, such provisions shall be and are hereby
reformed to the maximum scope of business, time or geographic
limitations permitted by applicable law.

<PAGE> 27

(iv) Parent warrants and represents that the non-compete
covenant set forth herein is substantially similar to the non-compete
covenant of the controlling shareholders of other companies who have
entered into an Agreement and Plan of Exchange with Parent in
connection with Parent's IPO.

(v) The Shareholder and Rayden agree that the remedy at law
for any breach by such Shareholder or Rayden of this Section 5.8.1
will be inadequate and that the Parent shall be entitled to injunctive
relief.

5.8.2 Release. Effective as of the Closing Date, the
Shareholder and Rayden do hereby (i) release, acquit and forever discharge the
Company from any and all liabilities, obligations, claims, demands, actions or
causes of action arising from or relating to any event, occurrence, act,
omission or condition occurring or existing on or prior to the Closing Date,
including, without limitation, any claim for indemnity or contribution from the
Company in connection with the obligations or liabilities of the Shareholder or
Rayden hereunder, except for salary and benefits payable to the Shareholder or
Rayden as an employee in the ordinary course of business; (ii) waive all
breaches, defaults or violations of any agreement applicable to the Company
Common Stock and agree that any and all such agreements are terminated as of
the Closing Date, and (iii) waive any and all preemptive or other rights to
acquire any shares of capital stock of the Company and release any and all
claims arising in connection with any prior default, violation or failure to
comply with or satisfy any such preemptive or other rights.

5.9 Shareholder Indebtedness and Receivables. On or prior to Closing,
the Shareholder and Rayden shall cause to be paid in full in cash all accounts
payable, notes payable and advances payable by the Shareholder or Rayden to the
Company and the Company shall pay in full in cash all accounts payable, notes
payable and advances payable by the Company to the Shareholder or Rayden.

6. CERTAIN AGREEMENTS

The parties hereto further agree as follows:

6.1 Audit. Prior to Closing, at the expense of Parent, Deloitte &
Touche, LLP may complete an audit of the Company through December 31, 1997, and
such additional review work as may be requested by the Parent through and
including the Closing Date (or other periods subsequent to December 31, 1997),
and provide its report to the Parent and the Shareholder.

6.2 Company Plans. Except as otherwise provided in this Agreement, the
Company Plans (within the meaning of Section 3.11 (xiii) hereto), in effect at
the date of this Agreement, shall remain in effect unless otherwise determined
by Parent after the Closing Date.

6.3 Confidentiality. Prior to the Closing Date, none of the Parent,
the Company, the Shareholder or Rayden will disclose the terms of this
Agreement or the Exchange to any person other than their respective directors,
officers, agents or representatives, except as otherwise provided herein or
unless required by law. Prior to Closing, Parent will keep as confidential, and
will not disclose or deliver any information about the Company to any third
person without the prior consent of the

<PAGE> 28

Company. The Company may make appropriate disclosures of the general nature of
the Exchange to its employees, vendors and customers to protect the Company's
goodwill and to facilitate the Closing. The Parent may disclose pertinent
information regarding the Exchange to its existing and prospective investors,
lenders, or investment bankers or financial advisors for the purpose of
obtaining financing, including, without limitation, financing related to the
IPO or other offerings of its securities may describe this Agreement and the
transactions contemplated hereby in any registration statement filed by the
Parent under the Securities Act and in reports filed by the Parent under the
Securities Exchange Act of 1934, and may file this Agreement as an exhibit to
any thereof. The Parent may also make appropriate disclosures of the general
nature of the Exchange and the identity, nature and scope of the Company's
operations to prospective acquisition candidates in connection with the
Parent's efforts to effect additional acquisitions. Each party will have mutual
approval rights with respect to written employee presentations concerning the
prospective Exchange.

6.4 Tax-Free Exchange. Unless the other parties shall otherwise
agree in writing, none of the Shareholder, Rayden, the Parent or the Company
shall knowingly take or fail to take any action, which action or failure to act
would jeopardize the qualification of the Exchange as an exchange within the
meaning of Section 351 of the Code.

6.5 Certain Tax Matters.

6.5.1 Tax Periods Ending on or Before the IPO Closing Date.
Parent shall prepare or cause to be prepared and file or cause to be filed all
returns, declarations, reports, claims for refund, or information returns or
statements relating to Taxes, including any schedule, attachment, or amendment
thereto ("Tax Returns") for the Company (including any of its subsidiaries) for
all periods ending on or prior to the IPO Closing Date which are filed after
the IPO Closing Date. Parent shall permit Shareholder and Rayden to review and
comment on each such Tax Return described in the preceding sentence prior to
filing and shall make such revisions to such Tax Returns as are reasonably
requested by Shareholder and Rayden. Shareholder and Rayden shall reimburse
Parent for Taxes of the Company (including any of its subsidiaries) with
respect to periods prior to December 31, 1997, within fifteen (15) days after
payment by Parent or the Company (including any of its subsidiaries) of such
Taxes to the extent such Taxes are not reflected in the reserve for Tax
liability (other than any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) shown on the face of the
Company Financial Statements.

6.5.2 Cooperation on Tax Matters.

(i) Parent, Company (including any of its subsidiaries),
Shareholder and Rayden shall cooperate fully, as and to the extent
reasonably requested by the other party, in connection with the filing
of Tax Returns pursuant to this Section and any audit, litigation or
other proceeding with respect to Taxes. Such cooperation shall include
the retention and (upon the other party's request) the provision of
records and information which are reasonably relevant to any such
audit, litigation or other proceeding and making employees available
on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. Company (and any of
its subsidiaries), Shareholder and Rayden agree: (A) to retain all
books and records with respect to Tax matters pertinent to Company

<PAGE> 29

(including any of its subsidiaries) relating to any taxable period
beginning before the IPO Closing Date until the expiration of the
statute of limitations (and, to the extent notified by Parent or
Shareholder or Rayden, any extensions thereof) of the respective
taxable periods, and to abide by all record retention agreements
entered into with any taxing authority; and (B) to give the other
party reasonable written notice prior to transferring, destroying or
discarding any such books and records and, if the other party so
requests, Company (including any of its subsidiaries) or Shareholder
and Rayden, as the case may be, shall allow the other party to take
possession of such books and records.

(ii) Parent and Shareholder and Rayden further agree, upon
request, to use their best efforts to obtain any certificate or other
document from any governmental authority or any other person as may be
necessary to mitigate, reduce or eliminate any Taxes that could be
imposed (including, but not limited to, with respect to the
transactions contemplated hereby).

(iii) The Company and Shareholder and Rayden shall cooperate
fully in the preparation and delivery to Parent and its counsel of tax
certificates, representations, or similar documents that may be
necessary or appropriate in connection with the preparation of tax
opinions or other items regarding the tax matters impacting this
Agreement, the Parent, or the Company that are prepared with respect
to the IPO.

6.5.3 Tax Sharing Agreements. All tax sharing agreements or
similar agreements with respect to or involving Company (including any of its
subsidiaries) shall be terminated as of the IPO Closing Date and, after the IPO
Closing Date, Company (including any of its subsidiaries) shall not be bound
thereby or have any liability thereunder.

6.6 Sale of Motor Vehicles. The Shareholder and Rayden agree to cause
the Company to effect the sale of any Company-owned motor vehicle primarily
used by an executive management employee to such employee prior to the Closing
at a price equal to the depreciated book value of the vehicle as included in
the Company financial statements at the time of purchase.

6.7 Parent Stock Option Plan. Prior to or within six (6) months of the
IPO Closing Date, Parent shall use its commercially reasonable efforts to adopt
an employee stock option plan in which key Company employees may participate.

6.8 Indemnity for Certain Guaranties. Parent shall indemnify the
Shareholder and Rayden from any loss, payment, cost or expense incurred by the
Shareholder or Rayden with respect to paying any guaranty of the performance by
the Company of its obligations to a secured party or guaranteed party that is
described on Exhibit 6.8.

<PAGE> 30

7. CONDITIONS PRECEDENT; CLOSING DELIVERIES

7.1.1 Accuracy of Representations and Warranties. The
representations and warranties of the Shareholder and Rayden contained in this
Agreement, and the Disclosure Schedule referred to herein and the Exhibits
provided by the Shareholder, Rayden and Company pursuant to this Agreement or
in any closing certificate or document delivered to the Parent pursuant hereto
shall be true and correct at and as of the Closing Date as though made at and
as of that time other than such representations and warranties as are
specifically made as of another date, and the Shareholder and Rayden shall have
delivered to the Parent a certificate to that effect.

7.1.2 Performance of Covenants. The Shareholder and Rayden
shall have performed and complied with all covenants of this Agreement to be
performed or complied with by them at or prior to the Closing Date, and the
Shareholder and Rayden shall have delivered to the Parent a certificate to that
effect.

7.1.3 Legal Actions or Proceedings. No legal action or
proceeding shall have been instituted after the date hereof against the
Company, the Shareholder or Rayden which is reasonably likely (i) to restrain,
prohibit or invalidate the consummation of the transactions contemplated by
this Agreement, (ii) to have a Company Material Adverse Effect or (iii) to have
a Parent Material Adverse Effect after giving effect to the consummation of the
transactions contemplated by this Agreement, and the Shareholder and Rayden
shall have delivered to the Parent a certificate to that effect.

7.1.4 Approvals. The Shareholder and Rayden shall have
procured all of the consents, approvals and waivers of third parties or any
regulatory body or authority, whether required contractually or by applicable
law or otherwise necessary for the execution, delivery and performance of this
Agreement (including the Company Related Documents and the Shareholder Related
Documents) by the Shareholder prior to the Closing Date, and Shareholder and
Rayden shall have delivered to the Parent a certificate to that effect.

7.1.5 Closing Deliveries. All documents required to be
executed or delivered at Closing by the Shareholder and Rayden pursuant to
Section 7.3 of this Agreement shall have been so executed and delivered.

<PAGE> 31

7.1.7 Licenses, etc. The Company shall have obtained all such
licenses and permits as are legally required for the continued operation of the
business after the IPO Closing Date, except such licenses and permits, the
absence of which will not have a Company Material Adverse Effect.

7.1.9 Certain Corporate Actions. All necessary director and
shareholder resolutions, waivers and consents required to consummate the
transactions contemplated hereunder shall have been executed and delivered.

7.2 Conditions Precedent to the Obligations of the Shareholder and the
Company. The obligations of the Shareholder and Rayden to effect the Closing
under this Agreement are subject to the satisfaction of each of the following
conditions, unless waived by the Shareholder or Rayden in writing. Provisions
in this Section 7.2 requiring the delivery of documents and certificates to the
Shareholder and Rayden shall be deemed satisfied by the delivery of such
materials to the Escrow Agent for later release to Shareholder and Rayden upon
satisfaction of the conditions contained in the Escrow Agreement.

7.2.1 Accuracy of Representations and Warranties. The
representations and warranties of the Parent contained in this Agreement or in
any closing certificate or document delivered to the Shareholder and Rayden
pursuant hereto shall be true and correct on and as of the Closing Date as
though made at and as of that date other than such representations and
warranties as are specifically made as of another date, and the Parent shall
have delivered to the Shareholder a certificate to that effect.

7.2.3 Approvals. The Parent shall have procured prior to the
Closing Date all of the consents, approvals and waivers required of it for
entering into this Agreement without violating any requirements to which it is
subject, and the Parent shall deliver to the Shareholder and Rayden a
certificate to that effect.

7.2.4 Closing Deliveries. All documents required to be
executed or delivered at Closing by the Parent pursuant to Section 7.5 of this
Agreement shall have been so executed and delivered.

7.2.5 Closing Date. The IPO Closing Date shall be on or
before April 30, 1998.

7.3 Deliveries by the Shareholder and Rayden at the Closing. In
accordance with Section 2.1 above, at the Closing, simultaneously with the
deliveries by the Parent specified in Section 7.5

<PAGE> 32

below, and in addition to any deliveries required to be made by the Shareholder
or Rayden pursuant to any other transaction document at the Closing, the
Shareholder and Rayden deliver or cause to be delivered to the Escrow Agent the
following:

7.3.1 Closing Certificates. The Shareholder and Rayden shall
deliver the certificates required pursuant to Sections 7.1.1, 7.1.2, 7.1.3 and
7.1.4.

7.3.2 Stock Transfer Restriction Agreement. The Shareholder
shall execute and deliver a Stock Transfer Restriction Agreement on the Closing
Date substantially in the form set forth in Exhibit 7.3.2.

7.3.4 Opinion of Counsel for the Shareholder and the Company.
The Shareholder shall deliver the favorable opinion of Pezzola & Reinke,
counsel to the Shareholder and the Company, dated as of the Closing Date,
substantially in the form and to the effect set forth in Exhibit 7.3.4 attached
hereto.

7.3.5 Documents, Stock Certificates. The Shareholder and
Rayden shall execute and deliver, and shall cause the Company to execute and
deliver, the documents, certificates, opinions, instruments and agreements
required to be executed and delivered by the Company or its officers or
directors or the Shareholder or Rayden at the Closing as contemplated hereby or
as may be reasonably requested by the Parent and shall deliver or cause to be
delivered the documents and evidence required under this Agreement. Stock
Certificates representing all of the outstanding Company Common Stock and
properly executed and completed Letters of Transmittal shall be delivered by
the Shareholder to the Escrow Agent.

7.4 No Waiver by Parent. The consummation of the Closing shall not be
deemed to be a waiver by the Parent or the Company of any of their rights or
remedies against the Shareholder or Rayden hereunder for any breach of
warranty, covenant or agreement by the Shareholder or Rayden herein
irrespective of any knowledge of or investigation made by or on behalf of the
Parent; provided, however, that if the Shareholder or Rayden shall disclose in
writing to the Parent prior to the Closing Date a specified breach of a
specifically identified representation, warranty, covenant or agreement of the
Shareholder or Rayden herein, and requests a waiver thereof by the Parent, and
the Parent shall waive any such specifically identified breach in writing prior
to the Closing Date, the Parent and the Company, for themselves and for each
Parent Indemnified Party (as defined below) shall be deemed to have waived
their respective rights and remedies hereunder for, and the Shareholder and
Rayden shall have no liability with respect to, any such specifically
identified breach, to the extent so identified by the Shareholder and Rayden
and so waived by the Parent.

7.5 Deliveries by the Parent at the Closing. In accordance with
Section 2.1 above, at the Closing, simultaneously with the deliveries by the
Shareholder and Rayden specified in Section 7.3

<PAGE> 33

above, and in addition to any other deliveries to be made by the Parent
pursuant to any other transaction document at the Closing, the Parent shall
deliver or cause to be delivered to the Escrow Agent the following:

7.5.1 Closing Certificates. The Parent shall deliver the
certificates required pursuant to Sections 7.2.1, 7.2.2, and 7.2.3.

7.6 No Waiver. The consummation of the Closing shall not be deemed to
be a waiver by the Shareholder or Rayden of any of their rights or remedies
hereunder for breach of any warranty, covenant or agreement herein by the
Parent irrespective of any knowledge of or investigation with respect thereto
made by or on behalf of Shareholder or Rayden; provided, however, that if the
Parent shall disclose in writing to the Shareholder and Rayden prior to the
Closing a specified breach of a specifically identified representation,
warranty, covenant or agreement of the Parent contained herein by the Parent,
and requests a waiver thereof by the Shareholder and Rayden, and the
Shareholder and Rayden shall waive any such specifically identified breach in
writing prior to the Closing, the Shareholder and Rayden shall be deemed to
have waived their rights and remedies hereunder for, and the Parent shall have
no liability or obligation to the Shareholder or Rayden with respect to any
such specifically identified breach, to the extent so identified by the Parent
and waived by the Shareholder and Rayden.

7.7 Conditions Precedent to Completion of the Closing. The obligations
of the parties to consummate the share exchange transaction under this
Agreement on the IPO Closing Date are subject to the satisfaction of each of
the following conditions (unless waived by each of the parties in writing):

7.7.1 Legal Actions or Proceedings. No legal action or
proceeding shall have been instituted after the date hereof against the
Company, the Shareholder or Rayden which is reasonably likely (i) to restrain,
prohibit or invalidate the consummation of the transactions contemplated by
this Agreement, (ii) to have a Company Material Adverse Effect or (iii) to have
a Parent Material Adverse Effect after giving effect to the consummation of the
transactions contemplated by this Agreement.

7.7.2 IPO. The Parent shall have completed the IPO on terms
described in the Registration Statement without material changes to the
disclosures set forth in the PPM, and the net proceeds thereof shall have been
received by the Parent on or before April 30, 1998.

7.8 Delivery of Exchange Consideration on the IPO Closing Date. On the
IPO Closing Date, the Parent shall deliver the portion of the Exchange
Consideration due to the Shareholder at that time, and the Escrow Agent shall
release and deliver all documents and certificates held in escrow to the
appropriate parties.

<PAGE> 34

8. SURVIVAL, INDEMNIFICATIONS

8.1 Survival. The representations and warranties set forth in this
Agreement and the other documents, instruments and agreements contemplated
hereby shall survive after the date hereof to the extent provided herein. The
representations and warranties of the Shareholder, Rayden and the Company
herein and in the Shareholder Related Documents and the Company Related
Documents, other than those in Sections 3.9 and 3.15, shall survive for a
period of 24 months after the date hereof and the representations and
warranties of the Shareholder, Rayden and the Company contained in Sections 3.9
and 3.15 shall survive for the maximum period permitted by applicable law. The
representations and warranties of the Parent herein and in the Parent Related
Documents shall survive for a period of 24 months after the date hereof. The
periods of survival of the representations and warranties as stated above in
this Section 8.1 are referred to herein as the "Survival Period." The
liabilities of the parties under their respective representations and
warranties shall expire as of the expiration of the applicable Survival Period
and no claim for indemnification may be made with respect to any breach of any
representation or warranty, the applicable Survival Period of which shall have
expired, except to the extent that written notice of such breach shall have
been given to the party against which such claim is asserted on or before the
date of such expiration. The covenants and agreements of the parties herein and
in other documents and instruments executed and delivered in connection with
the closing of the transactions contemplated hereby shall survive for the
maximum period permitted by law.

8.2 Indemnification.

8.2.1 Parent Indemnified Parties. Subject to the provisions of
Sections 8.1 and 8.3 hereof, the Shareholder and Rayden, jointly and severally,
shall indemnify, save and hold harmless the Parent, the Company and any of
their assignees (including lenders) and all of their respective officers,
directors, employees, representatives, agents, advisors and consultants and all
of their respective heirs, legal representatives, successors and assigns
(collectively the "Parent Indemnified Parties") from and against any and all
damages, liabilities, losses, loss of value (including the value of adverse
effects on cash flow or earnings), claims, deficiencies, penalties, interest,
expenses, fines, assessments, charges and costs, including reasonable
attorneys' fees and court costs (collectively "Losses") arising from, out of or
in any manner connected with or based on:

(i) any breach of any covenant of the Shareholder, Rayden or
the Company or the failure by the Shareholder, Rayden or the Company
to perform any obligation of the Shareholder, Rayden or the Company
contained herein or in any Company Related Document or Shareholder
Related Document;

(ii) any inaccuracy in or breach of any representation or
warranty of the Shareholder or Rayden contained herein or in any
Shareholder Related Document;

(iii) any inaccuracy in or breach of any representation or
warranty of the Company contained herein or in any Company Related
Document;

<PAGE> 35

Notwithstanding the foregoing, the foregoing indemnities shall not apply to the
extent that such Losses are reimbursed to the Parent Indemnified Parties under
provisions of any errors and omissions or professional liability insurance
policy containing waiver of subrogation provisions applicable to claims
relating to such Losses. The foregoing indemnities shall not limit or otherwise
adversely affect the Shareholder Indemnified Parties' rights of indemnity for
Losses under Section 8.2.3

8.2.2 Minimum Losses. For purposes of this Section 8.2.2,
Losses shall be calculated with respect to any inaccuracy or breach of any
representation or warranty of the Shareholder or Rayden contained herein or in
any Shareholder Related Document without giving effect to any clause which
would permit such inaccuracy or breach up to an amount which would be deemed a
Company Material Adverse Effect. The Shareholder and Rayden shall have no
obligation under Section 8.2.1 until the aggregate amount of all such Losses
equals or exceeds $75,000 (whether or not resulting in a Company Material
Adverse Effect), at which time the Shareholder and Rayden shall be subject to
the provisions of Section 8.2.1 with respect to all Losses of the Parent
Indemnified Parties in excess of the first $75,000 of Losses.

8.2.3 Parent Indemnity. Subject to the provisions of Sections
8.1 and 8.3, the Parent shall indemnify, save and hold harmless the
Shareholder, Rayden and any of their heirs, legal representatives, successors
and assigns (the "Shareholder Indemnified Parties") from and against all Losses
arising from, out of or in any manner connected with or based on:

(i) any breach of any covenant of the Parent or the failure
by the Parent to perform any of its obligations contained herein or in
the Parent Related Documents;

(ii) any inaccuracy in or breach of any representation or
warranty of the Parent contained herein or in the Parent Related
Documents; and

(iii) any act, omission, event, condition or circumstance
occurring or existing at any time after (but not on or before) the
Closing Date and involving or relating to the assets, properties,
businesses or operations of the Company; provided, however, that this
clause (iii) shall not apply to any Losses to the extent that such
Losses result from any acts or omissions of Shareholder or Rayden
after the Closing Date as an officer, director and/or employee of the
Parent, the Surviving Corporation and/or any other affiliate of the
Parent.

<PAGE> 36

The foregoing indemnities shall not limit or otherwise adversely affect the
Parent Indemnified Parties' rights of indemnity for Losses under Section 8.2.1.

8.3 Limitations. The aggregate liability of the Shareholder and Rayden
under Section 8.2.1 shall not exceed an amount equal to the aggregate of the
Exchange Consideration, with the Parent Common Stock being valued at the IPO
Price for such purpose. The aggregate liability of the Parent under Section
8.2.3 shall not exceed the amount of the Exchange Consideration paid with the
Parent Common Stock.

8.4 Procedures for Indemnification.

8.4.1 Notice. The party (the "Indemnified Party") that may be
entitled to indemnity hereunder shall give prompt notice to the party obligated
to give indemnity hereunder (the "Indemnifying Party") of the assertion of any
claim, or the commencement of any suit, action or proceeding in respect of
which indemnity may be sought hereunder. Any failure on the part of any
Indemnified Party to give the notice described in this Section 8.4.1 shall
relieve the Indemnifying Party of its obligations under this Article 8 only to
the extent that such Indemnifying Party has been prejudiced by the lack of
timely and adequate notice (except that the Indemnifying Party shall not be
liable for any expenses incurred by the Indemnified Party during the period in
which the Indemnified Party failed to give such notice). Thereafter, the
Indemnified Party shall deliver to the Indemnifying Party, promptly (and in any
event within 10 days thereof) after the Indemnified Party's receipt thereof,
copies of all notices and documents (including court papers) received by the
Indemnified Party relating to such claim, action, suit or proceeding.

8.4.2 Legal Defense. The Parent shall have the obligation to
assume the defense or settlement of any third-party claim, suit, action or
proceeding in respect of which indemnity may be sought hereunder, provided that
(i) the Shareholder and Rayden shall at all times have the right, at their
option, to participate fully therein, and (ii) if the Parent does not proceed
diligently to defend the third-party claim, suit, action or proceeding within
10 days after receipt of notice of such third-party claim, suit, action or
proceeding, the Shareholder and Rayden shall have the right, but not the
obligation, to undertake the defense of any such third-party claim, suit,
action or proceeding.

<PAGE> 37

from such third-party suit, action, proceeding or investigation in excess of
the amount proposed in such settlement offer. Notwithstanding the foregoing, no
Indemnifying Party will consent to the entry of any judgment or enter into any
settlement without the consent of the Indemnified Party, if such judgment or
settlement imposes any obligation or liability upon the Indemnified Party other
than the execution, delivery or approval thereof and customary releases of
claims with respect to the subject matter thereof.

8.4.4 Cooperation. The parties shall cooperate in defending any
such third-party suit, action, proceeding or investigation, and the defending
party shall have reasonable access to the books and records, and personnel in
the possession or control of the Indemnified Party that are pertinent to the
defense. The Indemnified Party may join the Indemnifying Party in any suit,
action, claim or proceeding brought by a third party, as to which any right of
indemnity created by this Agreement would or might apply, for the purpose of
enforcing any right of the indemnity granted to such Indemnified Party pursuant
to this Agreement.

8.5 Subrogation. Each Indemnifying Party hereby waives for itself and
its affiliates any rights to subrogation against any Indemnified Party or its
insurers for Losses arising from any third-party claims for which it is liable
or against which it indemnifies any Indemnified Party and, if necessary, each
Indemnifying Party shall obtain waivers of such subrogation from its, his or
her insurers.

9. TERMINATION

9.1 Grounds for Termination. This Agreement may be terminated only as
provided below.

9.1.1 Prior to Closing. The parties may terminate this
Agreement at any time prior to the Closing only as provided below:

(i) Mutual Consent. Parent, Shareholder and Rayden
may terminate this Agreement by mutual written consent at any
time prior to the Closing;

(ii) Termination by Parent. Parent may terminate
this Agreement by giving written notice thereof to the
Shareholder and Rayden at any time prior to the Closing: (a)
in the event that the Shareholder, Rayden or the Company has
breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, Parent
has notified Shareholder and Rayden of the breach, and the
breach has continued without cure until the earlier of 20
days after the notice of such breach (which Company shall
promptly provide upon actual knowledge of such breach) or the
Closing Date, whichever is earlier, (b) if the Registration
Statement for the IPO has not been filed with the Securities
and Exchange Commission on or before December 31, 1997, or
(c) if the IPO Closing Date shall not have occurred on or
before April 30, 1998, by reason of the failure of any
condition precedent under Section 7.1 hereof (unless the
failure results primarily from Parent itself materially
breaching any material representation, warranty, or covenant
contained in this Agreement); and

<PAGE> 38
(iii) Termination by the Shareholder and Rayden. The
Shareholder and Rayden may terminate this Agreement by
jointly giving written notice thereof to Parent at any time
prior to the Closing: (a) in the event the Parent has
breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, the
Shareholder or Rayden have notified Parent of the breach, and
the breach has continued without cure until the earlier of 20
days after the notice of such breach (which Shareholder and
Rayden shall promptly provide upon actual knowledge of such
breach) or the Closing Date, whichever is earlier, (b) if the
Registration Statement for the IPO has not been filed with
the Securities and Exchange Commission on or before December
31, 1997, or (c) if the IPO Closing Date shall not have
occurred on or before April 30, 1998 by reason of the failure
of any condition precedent under Section 7.2 hereof (unless
the failure results primarily from the Shareholder materially
breaching any material representation, warranty, or covenant
contained in this Agreement).

9.1.2 After the Closing Date. This agreement may be
terminated after the Closing only as follows:

(i) Termination of Underwriting Agreement. Upon
termination, prior to the successful completion of the IPO,
of the agreement between Parent and certain investment
banking firms (the "Underwriting Agreement") under which such
firms agree to purchase shares of Parent Common Stock from
Parent on a firm commitment basis for resale to the public
initially at the IPO Price, Parent or the Shareholder may
each terminate this Agreement by providing written notice to
the other.

(ii) Automatic Termination. This Agreement shall
terminate automatically and without action on the part of any
party hereto if the IPO is not consummated within 10 business
days after the Closing.

9.2 Effect of Termination. If this Agreement is terminated as
permitted under Section 9.1, such termination shall be without liability of any
party to any other party, except that such termination shall be without
prejudice to any and all remedies the parties may have against each other for
breach of this Agreement. Upon termination, documents delivered by one party to
another party pursuant hereto shall be promptly returned.

10. MISCELLANEOUS

<PAGE> 39

To the Shareholder and Rayden:

Sharon Coughran
Joel Rayden
4350 Transport St., Suite 101
Ventura, California 93003
Telecopy: (804) 644-0677

Copy to:

Donald C. Reinke
Pezzola & Reinke
Counselors at Law
Lake Merritt Plaza Bldg.
1999 Harrison St., Suite 1300
Oakland, California 94612
Telecopy: (510) 834-7440

To the Parent:

BrightStar Information Technology Group, Inc.
Attn: President
10375 Richmond Avenue, Suite 1620
Houston, Texas 77042
Telecopy: (713) 361-2501

Copy to:

Robert J. Viguet, Jr.
Chamberlain, Hrdlicka, White, Williams & Martin
1200 Smith Street, Suite 1400
Houston, Texas 77002-4310
Telecopy: (713) 658-2553

or other such address as shall be furnished in writing by any such party to the
other party, and such notice shall be effective and be deemed to have been
given as of the date actually received.

10.2 Further Documents. Each party shall, at any time and from
time to time after the date hereof, upon reasonable request by another party
and without further consideration, execute and

<PAGE> 40

deliver such instruments or other documents and take such further action as may
be reasonably required in order to perfect any other undertaking made by the
party hereunder.

10.3 Assignability. Neither the Shareholder nor Rayden shall assign
this Agreement in whole or in part without the prior written consent of the
Parent, except by the operation of law. The Parent may assign its rights under
this Agreement, the Company Related Documents and the Shareholder Related
Documents with the consent of Shareholder and Rayden, which consent shall not
be unreasonably withheld; provided, however, that no such assignment shall
affect the Shareholder's right to receive the Exchange Consideration. After the
Closing Date, the Company may assign its rights under this Agreement, the
Company Related Documents and the Shareholder Related Documents without the
consent of either the Shareholder or Rayden.

10.4 Exhibits and Schedules. The Exhibits and Schedules (and any
appendices thereto) referred to in this Agreement are and shall be incorporated
herein and made a part hereof.

10.5 Sections and Articles. Unless the context otherwise requires, all
Sections, Articles and Exhibits referred to herein are, respectively, sections
and articles of, and exhibits to, this Agreement and all Schedules referred to
herein are schedules constituting a part of the Disclosure Schedule.

10.6 Entire Agreement. This Agreement constitutes the full
understanding of the parties, a complete allocation of risks between them and a
complete and exclusive statement of the terms and conditions of their agreement
relating to the subject matter hereof and supersedes any and all prior
agreements, whether written or oral, that may exist between the parties with
respect thereto. Except as otherwise specifically provided in this Agreement,
no conditions, usage of trade, course of dealing or performance, understanding
or agreement purporting to modify, vary, explain or supplement the terms or
conditions of this Agreement shall be binding unless hereafter made in writing
and signed by the party to be bound, and no modification shall be effected by
the acknowledgment or acceptance of documents containing terms or conditions at
variance with or in addition to those set forth in this Agreement. No waiver by
any party with respect to any breach or default or of any right or remedy and
no course of dealing shall be deemed to constitute a continuing waiver of any
other breach or default or of any other right or remedy, unless such waiver be
expressed in writing signed by the party to be bound. Failure of a party to
exercise any right shall not be deemed a waiver of such right or rights in the
future.

10.7 Headings. Headings as to the contents of particular articles and
sections are for convenience only and are in no way to be construed as part of
this Agreement or as a limitation of the scope of the particular articles or
sections to which they refer.

10.8 CONTROLLING LAW. THE VALIDITY, INTERPRETATION AND PERFORMANCE OF
THIS AGREEMENT AND ANY DISPUTE CONNECTED HEREWITH SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS EXCEPT TO THE
EXTENT THE APPLICABLE CORPORATE LAW MANDATORILY APPLIES WITH RESPECT THERETO.

<PAGE> 41

10.9 Public Announcements. Neither the Shareholder nor Rayden shall
make any press release, public announcement, or public confirmation or disclose
any other information regarding this Agreement or the contents hereof.

10.10 No Third Party Beneficiaries. Except as set forth in Article 8,
no person or entity not a party to this Agreement shall have rights under this
Agreement as a third party beneficiary or otherwise.

10.11 Amendments and Waivers. This Agreement may be amended by the
Parent, the Shareholder and Rayden; provided that all amendments to this
Agreement must be by an instrument in writing signed on behalf of the Parent,
the Shareholder and Rayden. Any term or provision of this Agreement (other than
the requirements for shareholder approvals) may be waived in writing at any
time by the party which is, or whose Shareholder are, entitled to the benefits
thereof.

10.13 No Personal Liability of Representatives of Parent. No recourse
for the payment of any amounts due hereunder or for any claim based on this
Agreement or the transactions contemplated hereby or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Parent in this Agreement shall be had against any incorporator, organizer,
promoter, shareholder, officer, director, employee or representative as such
(other than the Shareholder as set forth herein), past, present or future, of
the Parent or of any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by enforcement of any assessment or
penalty or otherwise; it being expressly understood that all such obligations
are those of the Parent as a separate corporate entity.

10.14 When Effective. This Agreement shall become effective only upon
the execution and delivery of one or more counterparts of this Agreement by
each of the Parent and the Shareholder.

10.15 Takeover Statutes. If any "fair price," "moratorium," "control
share acquisition" or other form of anti-takeover statute or regulation shall
become applicable to the transactions contemplated hereby, Parent and the
Company and their respective members of their Boards of Directors shall grant
such approvals and take such actions as are necessary so that the transactions
contemplated by this Agreement may be consummated as promptly as practicable on
the terms contemplated herein and otherwise act to eliminate or minimize the
effects of such statute or regulation on the transactions contemplated herein.

10.16 Number and Gender of Words. Whenever herein the singular number
is used, the same shall include the plural where appropriate and words of any
gender shall include each other gender where appropriate.

<PAGE> 42

10.17 Invalid Provisions. If any provision of this Agreement is held
to be illegal, invalid, or unenforceable under present or future laws, such
provisions shall be fully severable as if such invalid or unenforceable
provisions had never comprised a part of the Agreement; and the remaining
provisions of the Agreement shall remain in full force and effect and shall not
be affected by the illegal, invalid or unenforceable provision or by its
severance from this Agreement. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be automatically as a part of this
Agreement, a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.

10.20 Expenses. Each of the parties shall bear all of their own
expenses in connection with the negotiation and closing of this Agreement and
the transactions contemplated hereby; provided that the Company shall pay the
costs of any attorney engaged by the Shareholder; and provided further that all
fees, costs and expenses incurred or payable by the Company (other than
accounting and auditing fees and expenses) in connection with the negotiation
and closing of this Agreement and the transactions contemplated hereby and the
costs of any such attorney shall be included in current liabilities for
purposes of determining Working Capital.

10.22 Section 351 Plan of Exchange. Simultaneously with the execution
hereof, the parties hereto shall execute the Section 351 Plan of Exchange in
the form set forth in Exhibit 10.22 hereto.

<PAGE> 43

IN WITNESS WHEREOF, this Agreement and Plan of Exchange has been duly
executed and delivered effective as of the date first hereinabove written.

PARENT:

BRIGHTSTAR INFORMATION
TECHNOLOGY GROUP, INC.

By: /s/ MARSHALL G. WEBB
----------------------------------------
Marshall G. Webb, President

SHAREHOLDER:

/s/ SHARON COUGHRAN
--------------------------------------------
Sharon Coughran

RAYDEN:

/s/ JOEL RAYDEN
--------------------------------------------
Joel Rayden

<PAGE> 1
EXHIBIT 10.11

August 14, 1997

Mr. Marshall Webb
President
BrightStar Information Technology Group, Inc.
12011 Surrey Lane
Houston, Texas 77024-5011

Dear Mr. Webb:

The purpose of this letter ("the Agreement"), and the attached Addendum A, is to
set forth the agreement between McFarland, Grossman & Company, Inc. ("MGCO") and
BrightStar Information Technology Group, Inc. ("the Company") regarding
investment banking services to be provided in connection with the proposed
acquisition of a group of businesses in the information technology services
industry ("the Acquisitions") and financing related thereto.

A. SCOPE OF THE ENGAGEMENT

This Agreement will continue for a period of six months from its effective date
unless extended or terminated early by mutual consent; except the Company
acknowledges that the provisions of Sections B.2. through B.7. and Addendum A
shall survive any termination of the Agreement. During the term hereof, MGCO
will use its best efforts to provide the following services to the Company:

1. MGCO will first provide financial advisory services in connection with
planning and executing the Acquisitions.

2. If needed for presentations to investors and/or lenders, MGCO will
prepare a comprehensive information memorandum and business plan and/or
detailed projections.

3. MGCO will prepare any presentation materials deemed necessary for
meetings with investors and/or lenders.

4. If requested, MGCO will introduce the Company to institutional
investors interested in a Private Placement (as herein defined), assist
in negotiating the terms of the transaction, and facilitating the
closing.

5. MGCO will introduce the Company to lenders interested in providing a
senior credit facility and will assist in negotiating and facilitating
the closing.

6. MGCO will provide such other financial advisory services as deemed
necessary which are related to transaction structure and timing, and
other corporate finance matters.

<PAGE> 2

Mr. Marshall Webb
August 14, 1997
Page 2

B. TERMS AND CONDITIONS

1. Financial Advisory Fee

Upon accepting this Agreement, the Company will pay MGCO a financial
advisory fee of $15,500. Thereafter, the Company will pay MGCO a
monthly financial advisory fee at the beginning of each monthly period
as follows: (1) month 2: $15,500, and (2) months 3-6: $11,000.

In addition to the compensation set forth above, MGCO or its designees
will be sold for 100, a warrant(s) granting the holder(s) thereof the
right to acquire 50,000 shares of common stock of the Company (the
"Newco Stock") at a price per share equal to $6.00 per share. However,
if the Company completes an initial public offering (the "IPO") within
eighteen months after issuance of the warrant(s), the exercise price
will be adjusted to the lesser of $6.00 per share or 60% of the price
per share of the Newco Stock that is sold in the Company's IPO. Such
warrant(s) will be exercisable in whole or in part beginning six months
after its issuance. The Newco Stock into which the warrant(s) is
exercisable (the "Underlying Stock") will be registered, if the Company
completes an IPO, (i) in the Company's first registration statement on
Form S-8 (or comparable form), which will be filed no later than six
months after the Company completes an IPO; or (ii) pursuant to
"piggy-back" registration rights in post-IPO offerings of Newco Stock.

The warrant(s) will be issued in a form which is mutually acceptable,
as soon as practicable after this letter is accepted by the Company and
the Underlying Stock will be subject to adjustment (upward or downward)
so that if the Company completes an IPO, at the time of the IPO, the
Underlying Stock will equal 50,000 shares of the Newco Stock.

2. Private Placement. In the event that one or more transaction(s)
involving a Private Placement (as defined below) of capital in the
Company (or an affiliate in which the Company or its shareholders are
equity owners) is consummated during the term of this Agreement with
any capital source (other than retail private placement conducted and
completed by the founding shareholders of up to $2 million), or within
two (2) years following the termination of this Agreement between the
Company and any capital source(s) introduced by MGCO during the term of
this Agreement, it is understood that MGCO shall earn and be paid
Placement Agent fees as follows:

6% of the amount of the Private Placement. For the purpose of
this Agreement, the Private Placement shall include capital
received as equity and debt that is either (i) advanced by a
person(s) who is also an equity investor, (ii) is subordinated
to loans made by non equity investors, (iii) or is either
convertible into equity, provides the lender

<PAGE> 3

Mr. Marshall Webb
August 14, 1997
Page 3

with warrants to acquire equity, or participates in the
earnings of the Company. Placement Agent fee payments will be
made in full and in cash at the time of the closing.

MGCO will also be issued a warrant to purchase an amount equal
to 10% of the securities issued in the Private Placement (in
the case of convertible securities or warrants, 10% of the
underlying securities). Said warrant shall be in a form
acceptable to MGCO and the Company and shall (i) be
exercisable for a period of 5 years at 120% of the purchase
price as the securities placed as a result of this
transaction, (ii) contain customary anti-dilution provisions,
(iii) exercisable in whole or in part, and/or on a "cashless
exercise basis, and (iv) shall be subject to a customary
piggy-back registration rights agreement.

5. Senior Debt Placement. MGCO will be the exclusive agent for any senior
secured credit agreements for the Company if negotiations or
discussions with the lender is initiated during the term of the
Agreement. MGCO will be paid a placement agent fee equal to 2% of the
amount of the credit facility payable in cash at the time of the
closing if negotiations with the lender extending the facility were
conducted during the term of this Agreement and it is closed during or
within one year of the termination of this Agreement.

6. The Acquisitions. In consideration for financial advisory services
rendered in connection with the Acquisitions, the transaction value of
which is estimated to be $40 million, the Company will pay MGCO a
success fee in cash at the closing of the acquisition of all, or a
material part of the business included in the Acquisitions. The fee
will be the greater of $400,000 or the sum of 5% of the transaction
value up to $1 million, 4% of the transaction value in excess of $1
million up to $2 million, plus 3% of the transaction value in excess
of $2 million up to $3 million, plus 2% of the transaction value in
excess of $3 million. For purposes of this Agreement the transaction
value will include cash, securities, non-compete agreements,
promissory notes, and all other consideration exchanged in the
transaction and upon which the value was established.

7. Reimbursement of Expenses. The Company will reimburse MGCO for all
out-of-pocket travel expenses, printing expenses, delivery fees, and
third party information service fees incurred in connection with this
Agreement. Out-of-pocket expenses will be billed on the 1st and 15th of
the month, for the previous fifteen day period. Invoices are payable
upon receipt.

8. Advertisements. In the event of consummation of a transaction, MGCO
shall have the right to disclose its participation in such transaction,
including, without limitation, the placement of a "tombstone"
advertisement in financial and other newspaper and journals, provided
that

<PAGE> 4

Mr. Marshall Webb
August 14, 1997
Page 4

MGCO will submit a copy of any such advertisements to the Company for
its approval, which approval shall not be unreasonable withhold or
delayed.

9. Documentation. In the event that any of the transactions contemplated
herein are consummated, MGCO will be provided with a bound volume of
the documents evidencing such transactions substantially similar in
form and content as any bound volume that is prepared for the Company.

We look forward to the opportunity to continue our relationship with you If this
proposal is acceptable, please acknowledge with your signature, return one copy
for our records, and retain the other copy.

Very Truly Yours,
McFarland, Grossman & Company, Inc.

/s/ CARY GROSSMAN
- -----------------------
Cary Grossman
Chief Executive Officer

<PAGE> 5

Mr. Marshall Webb
August 14, 1997
Page 5

AGREED AND ACCEPTED:

BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.

/s/ Marshall G. Webb
- ---------------------------
Signature

Marshall G. Webb, President
- ---------------------------
Print Name and Title

09-02-97
- ---------------------------
Date

<PAGE> 6

Mr. Marshall Webb
August 14, 1997
Page 6

Addendum A

Indemnification

In connection with our engagement described in the foregoing letter dated August
14, 1997 ("Letter"), to which this Addendum A is attached, the Company (as
defined in the Letter) agrees to indemnify and hold harmless McFarland, Grossman
& Company, Inc. ("MGCO") and each of its directors, officers, agents, employees
and controlling persons (within the meaning of the Securities Act of 1933, as
amended) against any losses, claims, damages, liabilities or expenses (or
actions or proceedings in respect thereof) ("Claims") relating to or arising out
of our engagement, and will reimburse MGCO and such other person indemnified
hereunder, from time to time upon written request, for all reasonable legal and
other expenses incurred in connection with investigating or defending any such
loss, claim, damage, liability, action or proceeding whether or not in
connection with pending or threatened litigation in which MGCO or any of its
directors, officers, agents, employees and controlling persons is a party
including without limitation any such claims arising from the negligence of MGCO
or the person seeking indemnification or for punitive damages; provided however,
the Company will not be liable in any such case for Claims (except arising out
of the use of information provided by the Company) that a court of competent
jurisdiction shall have found in a final judgement to have arisen primarily from
the gross negligence or willful misconduct of MGCO or the party claiming a right
to indemnification. In case any proceeding shall be instituted involving any
person in respect to whom indemnity may be sought, such person (the "Indemnified
Party") shall promptly notify the Company and the Company, upon request of the
Indemnified Party, shall retain the Company's current legal counsel or such
other counsel reasonably satisfactory to the Indemnified Party to represent the
Indemnified Party and any others the Company may designate in such proceeding
and shall pay the fees and expenses of such counsel related to such proceeding
from time to time upon written request provided, however, that in such event the
Company shall not be responsible hereunder for the fees and expenses of more
than one firm of such counsel in addition to any local counsel. In any such
proceeding, any Indemnified Party shall have the right to retain its own counsel
at its own expense, except that the Company shall pay, from time to time upon
written request the reasonable fees and expenses of counsel retained by the
Indemnified Party in the event that (i) the Company and the Indemnified Party
shall have mutually agreed to the retention of such counsel or, (ii) the named
parties to any such proceeding (including any impleaded parties) include both
the Company and the Indemnified Party and representation of both parties by the
same counsel would be inappropriate, in the reasonable opinion of counsel to the
Indemnified Party, due to actual or potential differing interests between them.

The Company shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there be a
final judgment for the plaintiff, the Company agrees to indemnify the
Indemnified Party to the extent set forth in this Addendum A. In addition, the
Company will not, without the prior written consent of MGCO, settle or
compromise or consent to the entry of any judgement in any pending or threatened
claim, action, suit or proceeding in respect

<PAGE> 7

Mr. Marshall Webb
August 14, 1997
Page 7

of which indemnification may be sought hereunder (whether or not MGCO or any
Indemnified Party is any actual or potential party to such claim, action, suit
or proceeding) unless such settlement, compromise or consent includes an
unconditional release of MGCO and each other Indemnified Party hereunder from
all liability arising out of such claim, action, suit or proceeding.

In the event a claim for indemnification under this Addendum A is determined to
be unenforceable by a final judgement of a court of competent jurisdiction, then
the Company shall contribute to the aggregate losses, claims, damages or
liabilities to which MGCO or its officers, directors, agents, employees or
controlling persons may be subject in such amount as is appropriate to reflect
the relative benefits received by each of the Company and the party seeking
contribution on the one hand and the relative faults of the Company and the
party seeking contribution on the other, as well as any other relevant equitable
considerations.

This indemnification shall apply to the original engagement as set forth in the
Letter and any modification of the original engagement and the indemnification
provided herein shall survive termination of our engagement and shall be binding
upon any successors or assigns of the Company.

Acknowledges and Agreed:

AGREED AND ACCEPTED:

BrightStar Information Technology Group, Inc.

/s/ Marshall G. Webb
- ----------------------------
Signature

Marshall G. Webb - President
- ----------------------------
Print Name and Title

09-02-97
- ----------------------------
Date

<PAGE> 1
EXHIBIT 10.12

CONSULTING AGREEMENT

This Consulting Agreement ("Agreement") is dated September 26, 1997,
between Bright Star Information Technology Group, Inc. (the "Company") and
Brewer-Gruenert Capital Advisors, LLC, 3003 South Loop West, Suite 320,
Houston, Texas 7054 ("BGCA").

RECITALS:

WHEREAS, the Company is seeking investment capital and desires to
develop its business.

WHEREAS, BGCA has agreed to assist the Company in capital formation
and the strategic corporate development of the Company's business.

NOW, THEREFORE, the Company and BGCA agree as follows:

1. ENGAGEMENT OF BGCA

The Company hereby engages BGCA to act as a consultant to the Company
regarding capital formation and corporate development matters. BGCA will perform
the following services on a non-exclusive basis for the Company:

- Identification of appropriate and qualified investors;

- Identification of potential acquisitions.

2. FEES

The Company agrees to pay BGCA fees for services rendered pursuant to
this Agreement as follows:

a. A fee of $60,000. Such fee shall be paid in a lump sum at the
closing of the Company's initial public offering of securities to the
act pursuant to a registration statement deemed effective by the
Securities Exchange Commission under the Securities Exchange Act of
1934 ("IPO").

b. The Company agrees to issue to BGCA an option to purchase shares
of the Company's common stock at such a price and in such a number
that, upon the closing of the IPO and the exercise of the option, the
option shall have a value of $100,000. For example, in the event that
the Company's common stock is priced at $10.00 per share at the
closing of the IPO, BGCA shall be entitled to exercise the option to
purchase 20,000 shares of the Company's common stock at $5.00 per
share. The option granted to BGCA by the Company pursuant to this
Agreement shall be exercisable for five years from the date of issue.
The Company agrees that, if BGCA exercises its option on or before the
date of the IPO, to include the shares issued to BGCA pursuant to the
option in the registration for the IPO. The option
<PAGE> 2
agreed to herein shall be issued in the form of an Option Agreement,
satisfactory in form to the Company, to be executed after the date
hereof.

c. With regard to any potential business acquisition presented to the
Company by BGCA, the Company agrees (i) to take no action to in any
way circumvent or interfere with BGCA's agreement with the potential
acquisition target; (ii) to pay fees to BGCA in an amount consistent
with the formula set forth below, and (iii) that BGCA does not
represent the Company exclusively and has the right to present such
target acquisition to others.

A. In the event that the Company closes on the acquisition of
a company presented to the Company BGCA, the Company agrees to
pay BGCA a fee equivalent to the following:

- 5% of the value of the consideration paid by the
Company up to the first $1,000,000; plus

- 4% of the second $1,000,000 of the consideration
paid by the Company; plus

- 3% of the third $1,000,000 of the consideration
paid by the Company; plus

- 1% of the consideration paid by the Company above
$4,000,000.

d. The Company agrees to pay BGCA a cash fee equivalent to 10% of the
gross investment proceeds received from any investor identified by
BGCA.

3. DIRECT EXPENSES

The Company agrees to reimburse BGCA for all direct expenses authorized by the
Company in writing incurred during the term of this Agreement. BGCA shall
submit expenses from time to time to the Company for approval after which the
Company shall pay such invoices within ten days of receipt.

4. TERM

The term of this Agreement shall be one year from the date hereof and shall be
renewable by the written consent of the parties for another one year term.

5. CONFIDENTIALITY

The parties hereto understand that the terms of this Agreement shall be
confidential, and neither party shall disclose the terms hereof, whether during
or after the term hereof, except pursuant to court order or for the parties'
respective internal accounting and tax purposes.

2
<PAGE> 3
6. MISCELLANEOUS

a. Relationship of the parties. The parties agree that
nothing in this Agreement shall be deemed to create, require
or otherwise result in, as the case may be, (i) the
relationship of partnership between the parties; (ii) an
employer-employee relationship; (iii) an agency relationship
between the parties; (iv) BGCA being deemed to be an
"Investment Advisor," an "Underwriter" or a "Broker/Dealer"
pursuant to the terms of any state or federal securities laws
or regulations; or (v) BGCA being deemed to be an "Affiliate"
of the Company pursuant to any state or federal securities
laws or regulations. It is understood by the parties that
BGCA is an independent contractor, responsible for all of
BGCA's own local, state and federal taxes.

b. Indemnification. With regard to the services to be
performed by BGCA pursuant to this Agreement, BGCA shall not
be liable to the Company, to anyone who may claim any right
due to any relationship with the Company, or to any third
party, for (i) any acts or omissions in the performance of any
of the services on the part of BGCA, except when said acts or
omissions of BGCA are due to BGCA's willful misconduct or
gross negligence, or (ii) any act or omission on the part of
any officer, director, shareholder, attorney, employee or
agent of the Company. The Company hereby agrees, on behalf of
itself, its successors, assigns, officers, directors,
shareholders, attorneys, and legal representatives
(collectively the "Indemnitors"), to indemnify and hold
harmless BGCA, its successors, agents, employees, attorneys,
legal representatives and assigns from and against any and all
liability, loss or damage any such parties may suffer as a
result of any and all claims, demands, costs or judgments
against any of them arising from any acts or omissions
occurring during the term on the part of any of the
Indemnitors or on the part of BGCA, except when said acts or
omissions of BGCA are due to BGCA's willful misconduct or
gross negligence.

c. This Agreement shall be binding upon BGCA and the Company
and shall inure to the benefit of both parties and their
respective successors and permitted assigns, including any
corporation with which or into which the Company or its
successor may be merged or which may succeed to its assets or
business. Although the obligations of BGCA are personal and
may be performed only by BGCA, BGCA may assign this Agreement
to any corporation which is wholly owned by BGCA which
corporation shall succeed to all of BGCA's rights and
obligations hereunder. Except for the foregoing, neither
party shall assign its rights or obligations hereunder to any
other entity without the prior written consent of the other,
which consent shall not be unreasonably withheld.

3
<PAGE> 4
7. COMPLETE AGREEMENT

This Agreement encompasses the complete understanding of the parties with
regard to the subject matter hereof, and supersedes all prior or
contemporaneous understandings and agreements. No amendment or modifications
hereof shall be effective absent the written consent of both parties.

8. GOVERNING LAW

THE INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF TEXAS.

SIGNED THIS 29th day of September, 1997.

BREWER-GRUENERT CAPITAL ADVISORS, LLC THE COMPANY

By: /s/ Stephen M. Brewer By: /s/ Marshall G. Webb
- --------------------------------- ----------------------------------

Title: President Title: President/CEO
- ------------------------------ ----------------------------------

4
<PAGE> 5
FIRST AMENDMENT
TO
CONSULTING AGREEMENT

THIS FIRST AMENDMENT TO CONSULTING AGREEMENT (this "Amendment") is
made and entered into this 15th day of December, 1997, by and between
BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC., a Delaware corporation (the
"Company"), and BREWER-GRUENERT CAPITAL ADVISORS, LLC ("BGCA").

INTRODUCTION

BGCA and the Company previously entered into that certain Consulting
Agreement dated September 26, 1997 (the "Consulting Agreement"), whereby BGCA
agreed to provide consulting services regarding corporate development matters
to the Company. BGCA and the Company desire to amend the Consulting Agreement
pursuant to the terms and conditions contained herein. For and in
consideration of the premises and the agreements herein contained and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, BGCA and the Company hereby agree as follows:

1. The first two sentences of Section 2(b) are hereby deleted in
their entirety and the following shall be added in their place:

"The Company agrees to issue to BGCA an option to purchase the number
of shares of common stock of the Company, $.001 par value ("Common
Stock"), equal to $100,000 divided by the difference between the per
share initial public offering price of Common Stock sold to the public
in the Corporation's initial public offering ("IPO") and the exercise
price of $6.00 per share. For example, in the event that the
Company's Common Stock is priced at $10.00 per share at the closing of
the IPO, BGCA shall be entitled to exercise the option to purchase
25,000 shares of the Company's Common Stock at $6.00 per share."

2. Unless otherwise defined herein, all capitalized terms used in
this Amendment shall have the same meanings as set forth in the Consulting
Agreement.

3. Except as modified and amended in this Amendment, the
Consulting Agreement shall remain in full force and effect.

4. This Amendment may be executed in multiple counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
<PAGE> 6
IN WITNESS WHEREOF, this Amendment has been entered into and
is effective as of the date set forth above.

COMPANY:

BrightStar Information Technology, Inc.

By: /s/ MARSHALL G. WEBB, PRESIDENT
--------------------------------
Marshall G. Webb, President

BGCA

Brewer-GruenertCapital Advisors, LLC:

By: /s/ STEVE BREWER
--------------------------------
Name: Steve Brewer
------------------------------
Title:
-----------------------------

<PAGE> 1

EXHIBIT 23.1

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of BrightStar Information
Technology Group, Inc. on Form S-1 of our reports for Brian R. Blackmarr and
Associates, Inc., Integrated Controls, Inc., Mindworks Professional Education
Group, Inc., Software Consulting Services America, LLC, Software Innovators,
Inc., and Zelo Group, Inc., dated December 19, 1997, appearing in the
Prospectus, which is part of this Registration Statement.

We also consent to the reference to us under the heading of "Experts" in such
Prospectus.

DELOITTE & TOUCHE LLP
Dallas, Texas

December 22, 1997

<PAGE> 1

EXHIBIT 23.2

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of BrightStar
Information Technology Group, Inc. on Form S-1 of our report for SCS Unit Trust
dated December 19, 1997, appearing in the Prospectus, which is part of this
Registration Statement.

We also consent to the reference to us under the heading of "Experts" in
such Prospectus.

DELOITTE TOUCHE TOHMATSU
Melbourne, Australia

December 22, 1997

<PAGE> 1
EXHIBIT 23.4

CONSENT OF PERSON TO BECOME A DIRECTOR

Pursuant to Rule 438 under the Securities Act of 1933, as amended (the
"Act"), I hereby consent to the use of my name and any reference to me as a
person nominated to become a director of BrightStar Information Technology
Group, Inc. ("BrightStar") in the Prospectus constituting a part of BrightStar's
Registration Statement on Form S-1 to be filed with the Securities and Exchange
Commission pursuant to the Act, and any amendments thereto.

Dated: December 15, 1997

/s/ BRIAN R. BLACKMARR
-----------------------------
Brian R. Blackmarr