ABR INFORMATION SERVICES INC, 10-K, 1998-11-13

ABR INFORMATION SERVICES INC
10-K, 1998-11-13
COMPUTER PROCESSING & DATA PREPARATION

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM 10-K

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[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED JULY 31, 1998
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COMMISSION FILE NUMBER 0-24132

ABR INFORMATION SERVICES, INC.
(Exact name of registrant as specified in its charter)

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FLORIDA 59-3228107
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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34125 U.S. HIGHWAY 19 NORTH
PALM HARBOR, FLORIDA
(Address of registrant's principal executive offices)

34684-2141
(Zip Code)

(727) 785-2819
(Registrant's telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

TITLE OF EACH CLASS
Voting Common Stock, $.0l par value
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

As of October 23, 1998, there were outstanding 28,701,594 shares of Voting
Common Stock. The aggregate market value of the Voting Common Stock held by
non-affiliates of the registrant based on the last sale price reported on the
Nasdaq National Market as of October 23, 1998 was $426,838,217.

DOCUMENTS INCORPORATED BY REFERENCE:

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DOCUMENTS FORM 10-K REFERENCE
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Proxy Statement dated on or about November 16, 1998......... Part III Items 10-12
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ABR INFORMATION SERVICES, INC.

FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS

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PAGE NO.
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PART I
Item 1 Business.................................................... 1
Item 2 Properties.................................................. 12
Item 3 Legal Proceedings........................................... 13
Item 4 Submission of Matters to a Vote of Security Holders......... 13

PART II
Item 5 Market for Registrant's Common Equity and Related
Stockholder Matters....................................... 14
Item 6 Selected Financial Data..................................... 14
Item 7 Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 15
Item 7A Quantitative and Qualitative Disclosures About Market
Risk...................................................... 19
Item 8 Financial Statements and Supplementary Data................. 20
Item 9 Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.................................. 20

PART III
Item 10 Directors and Executive Officers of the Registrant.......... 20
Item 11 Executive Compensation...................................... 20
Item 12 Security Ownership of Certain Beneficial Owners and
Management................................................ 20
Item 13 Certain Relationships and Related Transactions.............. 20

PART IV
Item 14 Exhibits, Financial Statement Schedules and Reports on Form
8-K....................................................... 20
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The statements contained in this report on Form 10-K that are not purely
historical are forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934, including statements regarding the Company's expectations, hopes, beliefs,
intentions, or strategies regarding the future. Forward-looking statements
include statements regarding, among other things: (i) the potential loss of
material customers; (ii) the failure to properly manage growth and successfully
integrate acquired businesses; (iii) the Company's financing plans; (iv) trends
affecting the Company's financial condition or results of operations; (v) the
Company's growth and operating strategies; (vi) the ability to attract and
retain qualified sales, information services and management personnel; (vii) the
impact of competition from new and existing competitors; (viii) the financial
condition of the Company's clients; (ix) potential increases in the Company's
costs; (x) the declaration and payment of dividends; (xi) the potential for
unfavorable interpretation of existing government regulations or new government
legislation; (xii) the development of a comprehensive and fully integrated suite
of benefits administrative services; (xiii) the sufficiency of the Company's
back-up facilities and disaster recovery procedures; (xiv) the ability of the
Company and its significant suppliers and large customers to address the Year
2000 Issue; (xv) the Company's ability to minimize the impact of interest rate
fluctuations; and (xvi) the outcome of certain litigation involving the Company.
Prospective investors are cautioned that any such forward-looking statements are
not guarantees of future performance and involve risks and uncertainties, and
that actual results may differ materially from those projected in the forward
looking statements as a result of various factors. All forward-looking
statements included in this document are based on information available to the
Company on the date hereof, and the Company assumes no obligation to update any
such forward-looking statement. Among the factors that could cause actual
results to differ materially are the factors detailed in Items 1 through 3 and 7
of this report and the risks discussed under the caption "Risk Factors" included
in the Company's filings under the Securities Act of 1933. Prospective investors
should also consult the risks described from time to time in the Company's
Reports on Form 10-Q, 8-K, 10-K and Annual Reports to Shareholders.

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PART I

ITEM 1. BUSINESS

ABR Information Services, Inc. (collectively with its subsidiaries, the
"Company"), through its wholly-owned subsidiaries, ABR Benefits Services, Inc.,
Charing Company, Inc., Matthews, Malone & Associates, Ltd., Business Computer
Services, Inc., MidAtlantic 401(k) Services, Inc., Chowning, Ltd., Western
Pension Service Corporation and BMC Consultants, Inc., is a leading provider of
comprehensive benefits administration, payroll and human resource services to
employers seeking to outsource these functions. The Company's operating revenues
currently are generated from three sources: employee health and welfare
administration services, qualified plan administration services, and payroll and
human resource administration services. All services are offered on either an "a
la carte" or a total outsourcing basis, allowing customers to outsource certain
benefits administration tasks which they find too costly or burdensome to
perform in-house, or to outsource the entire benefits administration function.
Additionally, the Company generates non-operating revenue from the short-term
lease of its St. Petersburg, Florida facility through its wholly-owned
subsidiary, ABR Properties, Inc.

The third source of the Company's revenue is providing payroll and human
resource administration services, including tax deposit services and integrated
human resource solutions.

The Company provides portability (primarily COBRA and HIPAA) services
through the trade name CobraServ(R) and payroll and tax deposit services through
the trade name PayAmerica(R). The Company is headquartered in Palm Harbor,
Florida, and employs approximately 1,400 people in marketing/operations centers
in Florida, New Jersey, Virginia, Maryland, California, Wisconsin, Pennsylvania,
Arizona, South Carolina and Colorado.

TREND TOWARD OUTSOURCING

Many U.S. companies, in order to focus on core competencies and
revenue-producing activities, have sought to outsource to specialized vendors
certain functions or services that were historically performed in-house. In
addition, the trend in recent legislation and healthcare reform proposals has
been to provide employees with the ability to continue their healthcare coverage
after a change in employment status and to take certain benefits with them to
new employers, a concept known as "portability". Based on the following factors,
the Company believes that benefits administration and compliance is often too
complicated, costly and administratively burdensome to be performed in-house:

- Extensive staff training and associated costs required to monitor complex
and frequently changing government regulations.

- Substantial exposure to liability for noncompliance with federal laws
concerning benefits, such as COBRA and HIPAA.

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- Employer awareness of benefit plans, including the concern for adverse
effects on employee relations and potential litigation due to inadequate
benefits administration.

- Cost of investment in specialized data processing systems requiring
periodic maintenance, updates and reinvestment.

- Disproportionate expenditures of management time and attention to a
function that is not directly related to the generation of revenues.

The Company believes that its market position, proprietary software and
compliance systems and experience in benefits administration should enable the
Company to capitalize on trends favoring outsourcing. The Company believes it is
strategically positioned to capitalize on the benefits administration
outsourcing trend because of its (i) proven ability to deliver economies of
location by performing administrative functions in relatively low-cost areas,
(ii) financial leverage of economies of scale by spreading fixed costs over a
large number of customers, (iii) economies of technology in utilizing its
sophisticated information systems and proprietary databases, (iv) synergistic
product offerings, and (v) strong financial position.

STRATEGY

The Company's objective is to strengthen its market position by becoming
the leading provider of benefits administration services to employers seeking to
outsource these functions. To achieve this objective, the Company has developed
a strategy that includes the following key components:

Cross-Selling. Approximately 90% of the Company's customers utilize only
one of its product offerings. The Company plans to actively market and
cross-sell its additional product lines to its existing customers to expand the
number of products used by individual customers. The Company's various product
offerings are designed to be complementary, in terms of (a) being sold by a
cross-trained ABR sales person (rather than a team or multiple sales persons),
and (b) being sold to essentially the same point of contact within an employer's
organization.

Seek Marketing Agreements With Other Service Providers. The Company
intends to investigate distribution or marketing arrangements with other
entities who provide similar or complementary services. These agreements could
be in the form of marketing alliances, technological alliances, institutional
resale agreements, or joint ventures.

Integrate The Company's Services Through Its MAX Version II Software. The
Company has undertaken writing Version II of its Enrollment and Eligibility
software platform, which management believes will be the focal point of the
Company's services for the foreseeable future. When completed, Version II is
expected to supersede the Company's existing Version I software and add greater
synergy and scalability to the Company's existing product lines. No assurances
can be given, however, that Version II will perform as anticipated or will be
adequate to meet the Company's and its customers' future needs.

Version II is intended to support all health and welfare benefit types,
qualified plans and payroll services through web-based technology and
object-oriented database configuration. Due to Version II's extensive use of
middleware, management believes new customer programming/modification will be
simplified and diminished in comparison to Version I. The Company further
believes that the efficiency of Version II's data model will be manifested in
lower operating, support and maintenance costs, although no assurances can be
given in this regard.

From a marketing perspective, Version II is expected to allow users to
select from ABR's multiple service offerings in an integrated "point and click"
manner. The Company believes that this merged sales and operating presentation
will (a) enhance its ability to cross-sell additional services to its existing
customers, (b) continue to leverage technology among its large client base and
(c) reduce its reliance on programmer operational support of certain of the
Company's information systems.

Certain elements of Version II were placed on-line in October 1998 and
further programming is expected to continue through calendar 1999. Nevertheless,
there can be no assurances that the development and

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implementation of Version II will be completed on a timely and cost-effective
basis, and the failure to do so could have a material adverse effect on the
Company's business, financial condition and results of operations.

Generate Recurring Revenue. The Company's services are structured to
generate revenue based on events which occur in the normal course of a
customer's business and in a relatively frequent manner. Furthermore, the
Company has developed extensive systems and databases that are not easily
duplicated, resulting in favorable customer retention. Due to the frequency of
events that generate revenue, the Company's high rate of customer retention, and
its monthly billing arrangements with capitation customers, the Company
generates a high level of recurring revenue.

Increase Portability Compliance Market Share. The portability compliance
market consists of approximately 650,000 employers that are required to comply
with COBRA and 5.5 million employers required to comply with HIPAA. The Company
believes that, based on the number of current and former employees covered by
its customers' healthcare benefit plans, it is the largest independent COBRA
compliance service provider in the United States. The Company provides
portability compliance services for more than 25,000 employers, which represents
approximately 4% of the potential COBRA compliance market. The Company intends
to increase its market share by expanding its telemarketing efforts and by
marketing its services directly through its sales force and indirectly through
the Company's agreements with insurance companies and other distribution
channels obtained through acquisition.

Create A National Independent Qualified Plan Administration
Presence. Historically, qualified plans administrators have affiliated
themselves with proprietary investments or services. The Company believes that
recent adverse publicity in the qualified plans industry will motivate plan
administrators to seek service providers who are independent of mutual fund
products and services. Through its acquisitions in the qualified plans segment
in the past nine months, the Company has obtained enhanced technical resources,
new products and additional sales distribution channels. The Company plans to
consolidate its various products and services into a singular product which will
be marketed nationally through its existing distribution network.

Nationalize the PayAmerica(R) Payroll Presence. Through its acquisition of
Business Computer Services, Inc. d.b.a. PayAmerica ("PayAmerica"), the Company
has significantly increased its payroll capacity and product offerings.
Historically, PayAmerica has targeted regional companies located in the
MidAtlantic states, its geographic location. The Company intends to expand
nationally the PayAmerica(R) product by, among other things, placing PayAmerica
sales personnel in existing ABR locations, opening new locations, including the
PayAmerica product in its national marketing campaigns, and directly targeting
ABR customers for PayAmerica(R) selling efforts.

Acquire Complementary Businesses. The Company intends to continue to
acquire complementary businesses in order to increase its market share, expand
its services and expand its geographic presence. Management believes such
acquisitions will permit the Company to cross-sell additional services to its
existing customer base and gain new customers and geographic bases to increase
market share. The Company believes that additional acquisition opportunities
exist in the benefits administration sector, although no assurances can be given
that any material acquisitions will be consummated in the future.

ACQUISITIONS

Since December 1995, the Company has made ten acquisitions of benefits
administration companies, one of which was completed by a pooling of interests.
These acquisitions are discussed below:

New Jersey Acquisition. On December 15, 1995, the Company, in an
acquisition accounted for as a purchase, acquired all of the outstanding capital
stock of Bullock Associates, Inc. ("Bullock"), for $12.5 million in cash, with
an additional $2.0 million payable upon the attainment of certain revenue
requirements during 1996 and 1997. During fiscal 1997 and 1998, $863,053 and
$1,136,947, respectively, of this additional amount was paid for the attainment
of these revenue requirements. Bullock, now part of ABR Benefits Services, Inc.,
is located in Princeton, New Jersey, and when acquired provided COBRA
administration, retiree insurance administration, insurance continuation billing
and collection, pension benefits administration services, QDRO administration
and educational benefit administration services as well as

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administration for other employee benefits programs such as employee discount
plans, adoption programs, program rebates and emergency loans.

TCS Acquisition. Effective February 1, 1996, in an acquisition accounted
for as a purchase, the Company acquired all of the outstanding capital stock of
Total Cobra Services ("TCS") for 265,424 shares of the Company's Common Stock.
TCS is located in Irvine, California and provides COBRA administration and
retiree billing services. For its fiscal year ended December 31, 1995, TCS had
revenues of less than $2.0 million. The California Acquisition has increased the
Company's market share in the COBRA compliance market and enhanced its ability
to market its services to clients on the west coast of the United States. In
1998, certain of TCS' back office functions were moved to the Company's existing
Florida operations.

Virginia Acquisition. On June 28, 1996, the Company acquired, in an
acquisition accounted for as a pooling of interests, all of the outstanding
stock of the L.P. Baier Company ("LPB") in exchange for 286,020 shares of the
Company's Common Stock. LPB, now part of ABR Benefits Services, Inc., is located
in Fairfax, Virginia and provides FSA administration and COBRA administration.
LPB had revenues of approximately $2.4 million in calendar year 1995. In 1998,
the COBRA administration operations of LPB were moved to the Company's Florida
operations.

Wisconsin Acquisition. Effective February 1, 1998, the Company, in an
acquisition accounted for as a purchase, acquired all of the outstanding capital
stock of Charing Company, Inc. ("Charing") for $7.5 million in cash and an
additional amount to be paid contingent upon future earnings. Charing is located
in Wisconsin and provides qualified plan administration, Section 125
administration, consulting services and comprehensive employee benefits
statement reporting. For the year ended July 31, 1998, Charing generated
revenues of approximately $3.0 million.

Arizona Acquisition. Effective February 1, 1998, the Company, in an
acquisition accounted for as a purchase, acquired all of the outstanding capital
stock of Matthews, Malone & Associates, Ltd. ("Matthews/ Malone") for $2.9
million in cash and an additional amount to be paid contingent upon future
earnings. Matthews/Malone is located in Arizona and provides defined benefit and
defined contribution plan administration services, as well as Section 125
administration and non-qualified plan administration services. For the year
ended July 31, 1998, Matthews/Malone generated revenues of approximately $3.0
million.

PayAmerica(R) Acquisition. Effective April 30, 1998, the Company, in an
acquisition accounted for as a purchase, acquired all of the outstanding capital
stock of Business Computer Services, Inc. d.b.a. PayAmerica(R) ("PayAmerica") in
exchange for 1,198,008 shares of the Company's Common Stock. PayAmerica is
located in McLean, Virginia and has offices in Maryland and New Jersey.
PayAmerica provides payroll and tax deposit services, along with human resource
administration services. For the year ended December 31, 1997, PayAmerica had
revenues of approximately $8.6 million.

MidAtlantic Acquisition. Effective August 1, 1998, the Company, in an
acquisition accounted for as a purchase, acquired all of the capital stock of
MidAtlantic 401(k) Services, Inc. ("MidAtlantic") for $10.9 million in cash and
an additional amount to be paid contingent upon future earnings. Located in
Midlothian, Virginia, MidAtlantic was a pioneer in the daily valuation 401(k)
field and is expected to generate approximately $4.0 million in Qualified Plans
revenue in fiscal 1999.

Chowning Acquisition. Effective October 22, 1998, the Company, in an
acquisition accounted for as a purchase, acquired all of the outstanding capital
stock of Chowning, Ltd., including its sole operating subsidiary, The Barrington
Group, Ltd., for $15.9 million in cash. Chowning is headquartered in Milwaukee,
Wisconsin, and has additional offices in Maryland, Pennsylvania and California.
The Barrington Group is one of the nation's largest independent administrators
of IRS Section 125 benefit plans (full cafeteria plans, flexible spending
accounts and pre-tax premium plans). For calendar 1998, The Barrington Group
expects revenues of approximately $10.0 million.

Western Pension Acquisition. Effective October 1, 1998, the Company, in an
acquisition accounted for as a purchase, acquired all of the outstanding capital
stock of Western Pension Service Corporation ("Western Pension") for $7.0
million in cash and an additional amount to be paid contingent upon future
earnings. Western Pension is headquartered in San Rafael, California, and
presently administers over 370 qualified
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retirement plans. Western Pension is expected to generate revenues of
approximately $2.5 million for calendar year 1998.

Colorado Acquisition. Effective November 1, 1998, the Company, in an
acquisition accounted for as a purchase, acquired all of the outstanding capital
stock of BMC Consultants, Inc. ("BMC") for $3.0 million in cash and an
additional amount to be paid contingent upon future earnings. BMC is
headquartered in Englewood, Colorado, and presently provides services to over
1,700 defined contribution and defined benefit plans in the Rocky Mountain
region. BMC is expected to generate revenues of approximately $3.3 million for
calendar year 1998.

BENEFITS ADMINISTRATION SERVICES

The Company provides the following comprehensive benefits administration,
payroll and human resource administration services to its customers, as
described below:

Health and Welfare Services

Portability Compliance Services. The Company provides comprehensive COBRA
compliance services to a diverse customer base throughout the United States.
Once the Company's customer or the qualified beneficiary notifies the Company of
a qualifying event, the Company assumes responsibility for COBRA compliance and
administration.

Under COBRA, premiums paid by continuants are generally limited to 102% of
the applicable insurance premium. Eligible participants have in most cases at
least 105 days after the occurrence of a qualifying event to elect to continue,
and pay for, insurance coverage retroactively. As a result, COBRA claims and
administration costs generally exceed premiums due primarily to adverse
selection (i.e., those who are eligible for continued insurance coverage under
COBRA, and have pending claims, are more likely to select coverage retroactively
when the cost of claims exceeds the cost of healthcare coverage, and those who
have no need for healthcare coverage typically do not elect coverage and
consequently do not pay premiums). The Company believes that uniform
determination of coverage eligibility and administration of COBRA claims in
accordance with applicable requirements can in most cases reduce COBRA claim
costs and, as a result, reduce healthcare costs for employers.

The COBRA compliance process begins when the Company or the employer sends
each employee and his or her dependents a notification of COBRA rights letter
when they become eligible to participate in the employer's group healthcare
plan. Thereafter, it is the employer's or the participant's responsibility to
send the Company a qualifying event notice following any qualifying event. After
processing the qualifying event, the Company communicates with any qualified
beneficiary who elects COBRA coverage throughout the period of coverage, which
typically extends for 18 to 36 months after the qualifying event. During this
period, the Company: (i) processes and archives all election forms and
correspondence; (ii) determines whether coverage elections have been made on a
timely basis; (iii) sends premium notices to, and collects payments from,
continuants; (iv) generates daily and monthly reports for customers; and (v)
maintains automated and customer representative telephone services for
continuant and customer inquiries.

As a provider of COBRA compliance and administration services, the Company
is subject to excise taxes for noncompliance with certain provisions of COBRA.
Under current federal laws, the maximum amount of such taxes that may be imposed
on the Company in any year for unintentional violations of COBRA is $2.0
million. In addition to the excise tax liability that may be imposed on the
Company, substantial excise taxes may be imposed under COBRA on the Company's
customers. Under the Company's service agreements with its customers, the
Company assumes financial responsibility for the payment of such taxes assessed
against its customers arising out of the Company's failure to comply with COBRA,
unless such taxes are attributable to the customer's failure to comply with
COBRA or with the terms of its agreement with the Company. In addition to
liability for excise taxes for noncompliance with COBRA, the Company accepts
financial responsibility for certain liabilities incurred by its customers that
are attributable to the Company's failure to comply with COBRA or to fulfill its
obligations to its customers under its agreements. These liabilities could, in
certain cases, be substantial. Although there can be no assurance that the
Company will not incur any

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material liability for noncompliance with COBRA or for its failure to comply
with its agreement with any customer, as of July 31, 1998, the Company has not
incurred any such material liability. The imposition of such liability on the
Company in excess of any available insurance coverage could have a material
adverse effect on the Company. See "Regulatory Environment."

The Company also provides comprehensive HIPAA compliance services to a
diverse customer base throughout the United States. Once the Company's customer
or the qualified beneficiary notifies the Company of a qualifying event, the
Company assumes responsibility for HIPAA compliance and administration.

HIPAA (also known as the Kennedy-Kassebaum bill when it was passed in 1996)
requires employers with two or more employees and a group health plan to issue
"Certificates of Creditable Coverage" to all persons who were covered by their
group health plan but lost coverage for any reason since October 1, 1996. The
requirement also applies to anyone losing coverage after June 1, 1997. The
certificate will serve as proof of coverage which the individual can use to
obtain waivers of pre-existing condition limitations when seeking coverage under
another employer's plan.

HIPAA requires employers to capture information reflecting types of
coverage and coverage periods for individuals (employees and dependents) on
their plan. Data must be captured as far back as July 1, 1996. They then must
issue certificates to these individuals documenting the coverage periods for
future insurers. Employees, covered dependents, employers and carriers may
request certificates at any time up to 24 months after the loss-of-coverage
event. The HIPAA compliance process begins when the Company sends each employee
and his or her dependents a HIPAA certificate following any qualifying event.

As a provider of HIPAA compliance and administration services, the Company
is subject to ERISA penalties for noncompliance with certain provisions of
HIPAA. Under the Company's service agreements with its customers, the Company
assumes financial responsibility for the payment of such penalties assessed
against its customers arising out of the Company's failure to comply with HIPAA,
unless such penalties are attributable to the customer's failure to comply with
HIPAA or with the terms of its agreement with the Company. Under ERISA,
employers that are subject to HIPAA are liable for penalties at the rate of $110
per "qualified beneficiary" for each day during which the group healthcare is in
noncompliance. These liabilities could, in certain cases, be substantial.
Although there can be no assurance that the Company will not incur any material
liability for noncompliance with HIPAA or for its failure to comply with its
agreement with any customer, as of July 31, 1998, the Company has not incurred
any such material liability. The imposition of such liability on the Company in
excess of any available insurance coverage could have a material adverse effect
on the Company. See "Regulatory Environment."

The Company also provides COBRA-like services to employers in certain
states as required by state laws therein.

Enrollment and Eligibility Services. The Company provides various
enrollment and eligibility services for employers such as disseminating
enrollment materials, processing responses, providing telephone assistance to
enrollees and determining eligibility for coverage and reporting. These services
are provided in conjunction with central employee data base administration of
the employers.

Flexible Spending Account (FSA) Administration Services. The Company
designs and supports all types of IRS Section 125 flexible benefit formats (full
cafeteria plans, flexible spending accounts and pre-tax premium plans),
including plan design, legal documents, employee education, enrollment support,
compliance testing, claims administration and the preparation of required IRS
forms.

Educational Benefits Administration Services. The Company administers
various educational benefit programs such as educational loans, reimbursements
and scholarships. Also, the Company verifies eligibility, processes payments and
loan forms, and monitors for compliance against the customer's benefit plan.

New Hire Processing Services. The Company processes benefits
administration forms and information relating to the provision of benefits to
newly hired employees.

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Retiree/Inactive Employee Benefits Administration. The Company's
experience with benefits administration and compliance services, and the
extensive databases maintained to provide these services, have enabled the
Company to expand its operations to provide for the administration of various
employer-sponsored benefits that are not mandated by law. The Company provides
notification, billing, collection, record-keeping and reporting services to
larger employers where a periodic benefit plan contribution is required to be
made by retirees or their dependents. The Company also administers benefits
provided for inactive employees, such as healthcare benefits.

Other. The Company also administers employee discount plans, adoption
programs, employee emergency loan programs, and product rebate programs;
provides employee help desk and Qualified Medical Child Support Order ("QMCSO")
administration, eligibility verification; and administers tuition refund and
Family Medical Leave Act ("FMLA") insurance programs.

Qualified Plan Services

Pension/Profit Sharing Services. The Company provides employers with
administration services for IRS qualified plans, including defined contribution,
defined benefit, and 401(k) plans.

Vestee Services. The Company provides active and retired employees who are
vested in a company's pension plan with benefit information and process
retirement election forms and other materials to begin the retirement payment
process. The Company maintains Retiree and Vestee Answer Centers that provide
access to benefit analysts who are proficient in client-specific plans and
procedures.

Qualified Domestic Relations Order ("QDRO") Services. The Company develops
packages to assist QDRO participants in the process of properly and accurately
dividing pension plan assets. The Company verifies "qualification" of a domestic
relations order, and responds to telephone and written inquires regarding QDRO
benefits.

Payroll and Human Resource Administration Services

Payroll Services. The Company offers payroll services through its
PayAmerica(R) proprietary operating system. The Company offers the following
payroll services: preparation and payment of pay checks and direct deposits,
along with supporting journals, summaries and management reports.

Tax Filing Services. The Company processes federal, state and local
payroll taxes on behalf of clients and remits such taxes to the appropriate
taxing authorities when due.

Human Resources (HR) Services. The Company offers various HR services
including comprehensive human resources recordkeeping services, such as employee
job history, applicant tracking, training position management and benefits
tracking capabilities.

Summary of Functions

In connection with the performance of various benefits administration
services, the Company generally provides one or more of the following functions:

Notification. Provide timely notifications of eligibility for coverage and
healthcare benefit plan requirements to participants, employers and insurance
companies.

Billing and Premium Collections. Send detailed monthly premium notice,
return envelope for payment and request for ongoing certification of eligibility
to participants. Remit collected premiums to employers on a monthly basis in
accordance with employers' instructions.

Automated Response System. Maintain 24 hour-a-day, 365 day-a-year
toll-free automated voice and facsimile response systems for certain status
information available to customers and participants.

Customer Service Hotline. Respond during normal business hours to
inquiries from participants or employers requiring individual attention from
trained customer service representatives.

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Compliance Monitoring and Determination of Eligibility. Monitor government
compliance guidelines regarding availability of healthcare coverage. Determine
whether applications and premium payments comply with applicable regulations and
established eligibility criteria.

Reporting and Auditing. Generate daily reports for employers to monitor
elections and terminations of coverage by participants. Generate monthly reports
for employers providing current status of all participants or employees.

Archive and Record-Keeping Systems. Archive in an off-site facility all
electronic storage media, correspondence, postmarked envelopes and copies of
premium notices and checks evidencing payment.

SEASONALITY

Certain of the Company's business is characterized by significant
seasonality. As a result, the Company's revenue will be subject to seasonal
fluctuations, with the largest increases in annual revenue occurring in the
Company's second and third fiscal quarters. During these quarters, new customers
beginning flexible spending accounts, qualified plans and payroll services are
likely to start services with the Company to coincide with the start of the tax
(calendar) year. Also, qualified plans and payroll services customers generally
require additional compliance related work after the end of the tax year. Open
enrollment services similarly occur annually, prior to the start of the new
benefits (calendar) year.

SALES, MARKETING AND CUSTOMER SERVICE

Approximately 39.7%, 33.5% and 36.1% of the Company's revenues in fiscal
1996, 1997, and 1998, respectively, were derived solely from agreements with the
Company's ten largest customers. Approximately 15.0%, 14.5% and 10.5% of the
Company's revenues in fiscal 1996, 1997 and 1998, respectively, were derived
from General Electric Company. Assuming the acquisition of Bullock had occurred
on August 1, 1995, approximately 44.9% of the Company's revenues in fiscal 1996
would have been attributable to the Company's ten largest customers, with
approximately 20.8% of such revenues being derived from General Electric
Company. As part of the Bullock acquisition, the Company entered into a
four-year contract with this customer, which contract was renewed in fiscal 1998
for an additional three-year period. The Company's loss of any of these large
customers, including General Electric Company, could have a material adverse
effect on the Company.

The Company markets its services across the United States through a sales,
marketing and support staff consisting of approximately 80 employees as of July
31, 1998. The Company identifies prospective customers through a combination of
direct mail, telemarketing, advertising and referrals.

Generally, the Company markets its services in one of two ways, depending
upon whether a potential customer is (i) a large employer or an institutional
resale customer, or (ii) a small employer. When a large employer or
institutional resale customer has been identified as a potential customer, the
Company's sales strategy is to focus its sales and marketing efforts on
developing relationships with key decision makers, such as the potential
customer's Chief Executive Officer, Chief Financial Officer or Director of Human
Resources or Benefits. The Company's sales executives make presentations that
are designed to acquaint the potential customer with the Company's services and
the benefits associated with outsourcing functions to the Company. A formal
presentation is usually followed by a visit to the Company's facility where the
prospective customer evaluates the Company's internal procedures, data
processing capabilities and customer support team.

With respect to potential customers who are small employers, the Company
markets its services directly to the employer via telemarketing. The Company's
telemarketing staff sells the Company's services by educating the potential
customer about the benefits of the Company's outsourcing services without the
need for face-to-face presentations. The Company also markets its services to
small employers through independent insurance agents, insurance companies, as
well as banks or other product providers. The agents typically receive a
one-time commission and renewal fees for 3-5 years for each client who utilizes
the Company's services.

8
<PAGE> 11

The Company emphasizes account development to strengthen its relationship
with existing customers. The Company disseminates information about its services
through newsletters and various periodic reports. These activities are designed
to increase existing customer awareness and understanding of the scope of
benefits administration services offered by the Company.

COMPUTER OPERATIONS, SOFTWARE DEVELOPMENT AND PROPRIETARY PRODUCT PROTECTION

The Company's central data processing and information system consists of
high-performance micro and mid-range processors linked in multiple local-area
networks through high-speed routers and intelligent hubs. Installed in the data
center located at the Company's new service center in Palm Harbor, Florida, the
network utilizes client-server and web technology in a DOS and Windows
environment, on a UNIX platform and Oracle database environment.

The Company meets the changing information needs of its customers by
developing, maintaining and enhancing its software. The Company provides the
majority of its services to customers using proprietary software that is owned
by the Company and not licensed to others. The Company utilizes certain
third-party software to service a portion of its qualified plans operations. The
Company's major programming initiatives include MAX Version II (see "Strategy")
and Freedom, an enhanced integrated Payroll/HR platform which will be linked
with MAX Version II. See also "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources" (Item
7).

The Company's main computer system works with on-line, real-time
information, thus allowing its service representatives to give accurate,
up-to-date information to continuants and customers. In addition, the Company
believes that its ability to upload and download information to customers and
insurance carriers with minimal development time provides the Company with a
competitive advantage. The Company's software and systems have supported the
customer base without interruption for over eleven years. As of October 23,
1998, the Company had approximately 200 full-time equivalent employees in
programming, software development, modifications and maintenance. In addition,
the Company periodically utilizes contractors for various information systems
services.

The Company's primary data center is located in Florida and protected by a
fire extinguishing system. The data center is supported by two centralized UPS
(uninterruptible power supply) systems that provide short-term battery backup in
the event of a power outage, reduced voltage or power surge, and dual phone and
electric feeds from adjacent, but separate, power grids. Further back-up power
is supplied for the primary data center by a diesel powered generator, which
could continuously power the data center for 5-7 days. In addition, the facility
which houses the data center is built to withstand 130+ mile per hour wind and
is approximately 35 feet above sea level. Multiple layers of password and access
authorization are imposed to prevent unauthorized access, use or distribution of
information. The Company maintains log-in records of all users, restricts
certain key record fields and maintains audit trail records of all changes.
Software and related data files are backed up three times a day and stored
off-site at multiple locations.

The Company believes that the quality of its systems and the ability to
adapt to the changing business requirements of its customers have proven to be
key factors in maintaining its current customers and obtaining new customers.
The Company ensures the accuracy of data, customers' deposits and continuant
records by independent double-entry of premium payments and verification and
reconciliation of continuant records.

The Company also has purchased certain software and license agreements from
outside vendors. In conjunction with these agreements, the Company has purchased
maintenance and support agreements or provided trained in-house expertise to
support these applications. The Company believes that all such technology is
readily replaceable through other vendors should any of its current suppliers
experience any degree of business interruption.

Interruption or loss of the Company's information processing capabilities
through loss of stored data, breakdown or malfunctioning of computer equipment
and software systems, telecommunications failure or damage to the Company's
headquarters and systems caused by fire, hurricane, lightning, electrical power
outage or other disruption could have a material adverse effect on the Company.
Although the Company

9
<PAGE> 12

maintains business interruption insurance providing for three months of
operations with an aggregate limit of $2.0 million per occurrence, there can be
no assurance that such insurance will: (i)continue to be available; (ii)
continue to be available at reasonable prices; (iii) cover all such losses; or
(iv) be sufficient to compensate the Company for losses due to the Company's
inability to provide services to its customers. See "Insurance."

The Company relies upon a combination of contract provisions and trade
secret laws to protect its proprietary technology. The Company attempts to
protect its trade secrets and other proprietary information through agreements
with employees and consultants. The Company does not hold any patents and does
not have any patent applications pending. There can be no assurance that the
steps taken by the Company to protect its proprietary technology will be
adequate to deter misappropriation of its proprietary rights or third party
development of similar proprietary software.

REGULATORY ENVIRONMENT

The benefit plans administered by the Company generally are subject to
various laws and regulations, including the Consolidated Omnibus Budget
Reconciliation Act ("COBRA"), the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"), proposed regulations of the Internal Revenue Service
and the Public Health Service Act. These laws and regulations are administered
by numerous agencies, such as the Internal Revenue Service, the Department of
Labor and the Department of Health and Human Services. The Company's internal
compliance department regularly reviews the Company's operations to ensure
compliance with applicable federal laws and regulations.

Enacted in 1986, COBRA has been amended significantly by Congress and is
the subject of proposed regulations of the Internal Revenue Service. COBRA,
which amended the Internal Revenue Code, ERISA, and the Public Health Service
Act, is subject to interpretation by the federal courts and is administered
jointly by several federal agencies, including the Internal Revenue Service, the
Department of Labor and the Department of Health and Human Services. In
addition, COBRA is affected by certain other federal legislation and entitlement
programs, such as Medicare, FMLA and, most recently, the Health Insurance
Portability and Accountability Act of 1996 ("HIPAA"). COBRA applies to virtually
all employers with 20 or more employees that maintain group health insurance
plans, including fully-insured, self-insured or partially-insured plans, and
union or non-union plans. Church groups and the District of Columbia government
are exempt from compliance with COBRA.

To comply with COBRA, an employer must provide written notice to all
employees, including newly hired employees and their dependents, of their rights
under COBRA when they become covered under a group health plan. Employees and
their dependents become eligible for COBRA coverage upon the occurrence of a
qualifying event. The occurrence of a qualifying event triggers a series of
notifications and related response and payment deadlines, including grace
periods, that result in an employee's or qualified beneficiary's ability to
elect continued group healthcare plan coverage retroactively, and often after
the occurrence of an event leading to claims under the related coverage.

The penalties for noncompliance with COBRA are substantial. As a provider
of COBRA compliance and administration services, the Company's exposure under
the Internal Revenue Code for excise taxes imposed for unintentional violations
of certain provisions of COBRA is limited to an aggregate of $2.0 million per
year. Under the Internal Revenue Code, employers that are subject to COBRA are
liable for excise taxes at the rate of $100 per "qualified beneficiary" ($200 if
the qualified beneficiary has covered dependents) for each day during which the
group healthcare plan is in noncompliance, subject to an annual maximum for
unintentional violations. When such noncompliance is not corrected before an
audit by the Internal Revenue Service, the employer is subject to certain
minimum excise tax obligations, depending on whether or not the violations are
"de minimis." ERISA also imposes personal liability on the plan administrator
for the benefit of plan participants for COBRA violations in the form of a
penalty of up to $110 for each day the violation continues. In addition to
liability for COBRA violations under the Internal Revenue Code and ERISA,
improper denial of coverage under COBRA or failure to comply with COBRA's
notification requirements may result in an employer's liability for damages and
equitable remedies, including, but not limited to, healthcare coverage for

10
<PAGE> 13

a former employee or dependent retroactive to the date of the qualifying event
which triggered the notification requirement. Depending on the terms of the
employer's group healthcare plan, such an employer may be required to provide
this type of retroactive coverage without reimbursement from its insurance
carrier.

The Company is not subject to federal or state regulations specifically
applicable to financial and insurance institutions such as banks, thrifts,
credit unions, insurance companies and third-party administrators. As a provider
of COBRA compliance services to its customers, the Company is required to comply
with various federal laws and regulations as noted above. The Company follows
changes in federal laws and regulations related to COBRA and judicial
interpretations of COBRA and promptly implements required changes to its data
processing operations.

HIPAA (also known as the Kennedy-Kassebaum bill when it was passed in 1996)
requires employers with two or more employees and a group health plan to issue
"Certificates of Creditable Coverage" to all persons who were covered by their
group health plan but lost coverage for any reason since October 1, 1996. The
certificate will serve as proof of coverage which the individual can use to
obtain waivers of pre-existing condition limitations when seeking coverage under
another employer's group health plan.

HIPAA requires employers to capture information reflecting type of coverage
and coverage periods for individuals (employees and dependents) on their plan.
Data must be captured as far back as July 1, 1996. The employers then must issue
certificates to these individuals documenting the coverage periods for future
insurers. Employees, covered dependents, employers and carriers may request
certificates at any time up to 24 months after the loss-of-coverage event. The
HIPAA compliance process begins when the Company sends each employee and his or
her dependents a HIPAA certificate following any loss of coverage from the group
health plan.

COMPETITION

The market for the Company's services is highly competitive, subject to
rapid change and significantly affected by new service introductions and other
market activities of industry participants. With respect to benefits
administration services, the Company's existing competitors include insurance
companies, third-party administrators and other outsourcing service companies.
Certain of the Company's existing competitors, as well as a number of potential
competitors, have longer operating histories, greater financial, technical,
marketing and other resources, greater name recognition and a larger number of
clients than the Company. In addition to the Company's competitors, services
offered by the Company are often provided in-house. Consequently, outsourcing of
benefits administration and payroll services may require the Company's potential
customers to reduce, reassign or eliminate in-house benefits administration or
human resources personnel, who often have an interest in maintaining these
responsibilities in-house. The Company has experienced, and expects to continue
to experience, competition from new entrants into its markets. Increased
competition, the failure of the Company to compete successfully, pricing
pressures, loss of market share and loss of clients could have a material
adverse effect on the Company's business, financial condition and results of
operations.

The Company believes that the most significant competitive factors in the
sale of its services include quality, reliability of services and integrity of
data provided, flexibility in tailoring services to client needs,

11
<PAGE> 14

assumption of certain responsibilities for compliance with complex laws and
regulations, experience, reputation, comprehensive services, integrated services
and price.

EMPLOYEES

As of October 28, 1998, the Company had approximately 1,400 full-time
equivalent employees. The service nature of the Company's business makes its
employees an important corporate asset. While the market for qualified personnel
is competitive, the Company has been able to hire and retain its personnel and
believes its relations with its employees are good. The Company's employees are
not represented by any union.

SERVICEMARKS

CobraServ(R) and PayAmerica(R) are registered servicemarks of the Company.
Other than CobraServ(R) and PayAmerica(R), the Company does not believe that any
other servicemark is material to its business.

INSURANCE

As a provider of portability compliance and administration services, the
Company is subject to excise taxes and penalties for noncompliance with certain
provisions of COBRA and HIPAA. In addition, the Company accepts financial
responsibility for certain liabilities incurred by its customers that are
attributable to the Company's failure to fulfill its obligations to its
customers under its agreements. The Company maintains a professional liability
policy, with a deductible of $25,000 per occurrence, and an annual per aggregate
limit on coverage of $5.0 million.

In addition to professional liability coverage, the Company maintains the
following policies: (i) a general commercial liability policy which has an
aggregate coverage of $2.0 million, with a $1.0 million limit per occurrence;
(ii) an automobile liability policy with a combined single coverage limit of
$1.0 million; (iii) an excess liability policy, which covers liabilities that
exceed the limits of the above policies, with an aggregate and a per occurrence
limit of $4.0 million; and (iv) a business interruption policy, which covers
three months of operations, with an aggregate limit of $2.0 million.

ITEM 2. PROPERTIES

The Company leases the following facilities:

<TABLE>
<CAPTION>
SQUARE EXPIRATION
LOCATION FOOTAGE OF LEASE
- -------- ------- --------------
<S> <C> <C>
Clearwater, Florida......................................... 11,000 June 1999
Princeton, New Jersey....................................... 22,300 December 1999
Irvine, California.......................................... 2,150 December 2000
Fairfax, Virginia........................................... 13,000 May 2005
Phoenix, Arizona............................................ 10,000 February 2001
LaCrosse, Wisconsin......................................... 6,200 March 2000
Madison, Wisconsin.......................................... 900 May 2000
Milwaukee, Wisconsin........................................ 500 May 1999
McLean, Virginia............................................ 19,000 June 2001
Baltimore, Maryland......................................... 2,600 June 1999
Cherry Hill, New Jersey..................................... 3,000 April 2003
Milwaukee, Wisconsin........................................ 19,460 June 2005
San Rafael, California...................................... 6,450 November 2002
Englewood, Colorado......................................... 10,700 July 2002
Midlothian, Virginia........................................ 8,400 March 2000
Columbia, South Carolina.................................... 10,700 September 2002
Silver Spring, Maryland..................................... 1,800 May 2002
</TABLE>

12
<PAGE> 15

The Company maintains its 65,000 square foot headquarters in Palm Harbor,
Florida. The Company purchased this facility in June 1996 for $3.5 million
(including land). In May 1997, the Company also moved into its 118,000 square
foot facility in Palm Harbor, Florida. The total cost for this facility was
approximately $10.7 million (including the land). In addition, the Company owns
real estate in Tarpon Springs, Florida, acquired at a price of $2.5 million. In
October 1997, the Company acquired a 383,000 square foot campus in St.
Petersburg, Florida for $13.5 million. The Company expects to spend
approximately $23.0 million to expand and renovate the facility over the next
three years. Upon completion in fiscal 2000, this facility is expected to become
the Company headquarters. The Company believes that its facilities are adequate
for the foreseeable future.

ITEM 3. LEGAL PROCEEDINGS

Effective November 12, 1996, Vincent Addonisio was removed as Executive
Vice President, Chief Financial Officer and Treasurer of the Company due to
differences with the Board of Directors. On November 10, 1996, Mr. Addonisio
resigned as a Director of the Company and withdrew as a nominee for election as
a Director at the 1996 Annual Meeting of Shareholders. On November 22, 1996, Mr.
Addonisio filed a lawsuit against the Company in Florida state court, alleging
breach of his employment contract, and against the Company and James E.
MacDougald, Chairman of the Board, President and Chief Executive Officer of the
Company, alleging defamation. The Company does not believe that such litigation
will have a material adverse effect on the Company's financial position but no
assurances can be given in this regard.

The Company is engaged in various other litigation arising from the
ordinary course of its business. In the opinion of management, the ultimate
outcome of such litigation is not expected to be material to the Company's
financial position, results of operations or liquidity.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth
quarter of fiscal 1998.

EXECUTIVE OFFICERS OF THE REGISTRANT

As of July 31, 1998 there was one executive officer who was not also a
director of the Company. James P. O'Drobinak, age 37, has been Senior Vice
President and Chief Financial Officer since January 30, 1997. Prior to joining
the Company, Mr. O'Drobinak served as Chief Financial Officer -- North America
for Danka Industries, Inc. from 1995 to 1997. From 1983 to 1995, Mr. O'Drobinak
held various positions with Deloitte & Touche, LLP, most recently as a Senior
Manager of the Tampa, Florida Office. Executive officers are elected annually by
the Board of Directors.

13
<PAGE> 16

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The following table sets forth the high and low sale price of the Company's
Common Stock since its initial public offering on May 26, 1994 as reported by
Nasdaq and restated for the three-for-two stock splits completed on July 13,
1995 and February 19, 1996, and the two-for-one stock split completed on
February 19, 1997:
<TABLE>
<CAPTION>
1998 1997 1996
-------------------- ------------------- ----------------------
HIGH LOW HIGH LOW HIGH LOW
---- --- ---- --- ---- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
First Quarter................... $29 5/8 $22 $37 3/4 $25 1/2 $9 59/64 $6 1/2
Second Quarter.................. 26 5/16 21 11/32 33 1/2 19 11/16 16 27/64 9 43/64
Third Quarter................... 31 5/8 24 1/4 24 3/8 16 11/16 31 1/2 16 3/32
Fourth Quarter.................. 27 3/4 17 1/2 32 3/4 20 5/8 32 1/2 19
Year............................ 31 5/8 17 1/2 37 3/4 16 11/16 32 1/2 6 1/2

<CAPTION>
1995 1994
---------------------- ----------------------
HIGH LOW HIGH LOW
---- --- ---- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
First Quarter................... $3 19/32 $2 29/64 $-- $--
Second Quarter.................. 4 49/64 3 1/16 -- --
Third Quarter................... 5 5/8 4 43/64 -- --
Fourth Quarter.................. 7 27/32 5 13/64 2 59/64 2 9/32
Year............................ 7 27/32 2 29/64 2 59/64 2 9/32
</TABLE>

The Company has never declared or paid any cash dividends on its Common
Stock. The Company currently anticipates that all of its earnings will be
retained for development and expansion of the Company's business and does not
anticipate paying any cash dividends in the foreseeable future. Any payment of
future dividends and the amounts thereof will be dependent upon the Company's
earnings, financial requirements and other factors deemed relevant by the Board
of Directors.

The total number of holders of record of the Company's Common Stock as of
October 23, 1998 was approximately 6,429.

ITEM 6. SELECTED FINANCIAL DATA

The following selected financial data are derived from the consolidated
financial statements of the Company for each of the five years ended July 31,
1998, 1997, 1996, 1995 and 1994. These consolidated financial statements have
been audited and reported on by Grant Thornton LLP, independent certified public
accountants.

<TABLE>
<CAPTION>
YEARS ENDED JULY 31,
--------------------------------------------------
1998 1997 1996 1995 1994
-------- -------- -------- ------- -------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Revenue............................................... $ 74,592 $ 50,079 $ 31,162 $18,835 $13,465
Cost of services...................................... 42,387 28,179 17,864 10,410 7,689
Selling, general and administrative expenses.......... 13,849 9,765 6,575 4,448 3,250
Acquisition costs..................................... -- -- 361 -- --
Acquired research and development..................... 11,010 -- -- -- --
-------- -------- -------- ------- -------
Operating income...................................... 7,346 12,135 6,362 3,977 2,526
Interest income....................................... 5,364 7,081 2,872 572 65
Lease revenue, net.................................... 2,817 -- -- -- --
-------- -------- -------- ------- -------
Income before provision for income taxes.............. 15,527 19,216 9,234 4,549 2,591
Income tax provision.................................. 8,800 6,987 3,560 1,755 981
-------- -------- -------- ------- -------
Net income............................................ $ 6,727 $ 12,229 $ 5,674 $ 2,794 $ 1,610
======== ======== ======== ======= =======
Per share data (diluted):
Net income per share.................................. $ .24 $ .44 $ .25 $ .14 $ .11
======== ======== ======== ======= =======
Weighted average shares outstanding (diluted)......... 28,194 27,892 23,031 20,001 14,965
</TABLE>

<TABLE>
<CAPTION>
JULY 31,
--------------------------------------------------
1998 1997 1996 1995 1994
-------- -------- -------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital....................................... $122,170 $127,839 $145,825 $14,192 $13,676
Total assets................................... 273,191 222,017 202,574 33,191 27,186
Total long-term debt........................... -- -- -- -- --
Total shareholders' equity..................... 230,615 194,096 181,150 19,213 16,113
</TABLE>

14
<PAGE> 17

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

OVERVIEW

The Company's operating revenues currently are generated from three
sources: employee health and welfare administration services, qualified plan
administration services, and payroll and human resource administration services.
Additionally, starting in fiscal 1998 the Company generates non-operating
revenue from the short-term lease of its St. Petersburg, Florida operations
center through its wholly-owned subsidiary, ABR Properties, Inc.

The first source of the Company's revenue is providing employee health and
welfare administration outsourcing services. In particular, the Company provides
portability (i.e., COBRA (the "Consolidated Omnibus Budget Reconciliation Act"),
HIPAA (the "Health Insurance Portability and Accountability Act of 1996") or
state-mandated continuation coverage) law compliance services primarily through
its qualifying event agreements with employers and capitation agreements with
insurance companies. Through qualifying event agreements, the Company receives a
fixed, per occurrence, fee from its customers for each qualifying event. A
qualifying event occurs when an employee or his or her dependents experience a
loss or change of coverage under a group healthcare plan. The amount of the
fixed fee varies depending on the type of portability qualifying event and the
method of the qualifying event notification mailing, which is selected by the
customer. Through capitation agreements, insurance companies designate the
Company as the administrator of compliance for their group insurance clients
that are subject to health portability laws. The Company is paid a monthly fee
for each employee covered by the group plan. The revenue generated under a
capitation agreement is not dependent on the triggering of a qualifying event,
but is determined based on the number of employees covered by the group plan at
the beginning of each month. The Company also receives an administrative fee
typically equal to 2% of the monthly health insurance premium that is paid by or
on behalf of each COBRA continuant, as well as interest earned on the premiums
received from continuants prior to remittance to the employer. In addition, the
Company generates health and welfare administration services revenues by
providing administration services for benefits provided to active employees,
including open enrollment, employee enrollment and eligibility, and flexible
spending account administration, along with providing administration services
for benefits provided to retired and inactive employees, including retiree
healthcare, disability, surviving dependent, family leave and severance
benefits. Most services are provided both on a one-time and continuous basis.
During fiscal 1998 and 1997, 85.4% and 97.5%, respectively, of the Company's
revenues were attributable to employee health and welfare administration
services.

The second source of the Company's revenue is providing employee qualified
plan administration services, including 401(k) plan administration, profit
sharing administration, defined benefit plan administration, ESOP administration
and Qualified Domestic Relations Order ("QDRO") administration. During fiscal
1998 and 1997, 10.7% and 1.7%, respectively, of the Company's revenues were
attributable to employee qualified retirement plans administration.

The third source of the Company's revenue is providing payroll and human
resource administration services, including tax deposit services and integrated
human resource solutions. During fiscal 1998 and 1997, 3.9% and .8%,
respectively, of the Company's revenues were attributable to payroll and human
resource administration services.

15
<PAGE> 18

Costs of services include direct personnel, occupancy and other costs
associated with providing services to customers, such as mailing and printing
costs. Selling, general and administrative expenses include administrative,
marketing and certain other indirect costs.

RESULTS OF OPERATIONS

The following table sets forth the percentage of revenue represented by
certain items reflected in the Company's statements of income.

<TABLE>
<CAPTION>
PERCENTAGE OF REVENUES
-----------------------
YEARS ENDED JULY 31,
-----------------------
1998 1997 1996
----- ----- -----
<S> <C> <C> <C>
Revenue..................................................... 100.0% 100.0% 100.0%
Cost of services............................................ 56.8 56.3 57.3
Selling, general and administrative expenses................ 18.6 19.5 21.1
Acquisition costs........................................... -- -- 1.2
Acquired Research and Development........................... 14.8 -- --
----- ----- -----
Operating income............................................ 9.8 24.2 20.4
Interest income............................................. 7.2 14.2 9.2
Lease revenue, net.......................................... 3.8 -- --
Income taxes................................................ 11.8 14.0 11.4
----- ----- -----
Net income.................................................. 9.0% 24.4% 18.2%
===== ===== =====
</TABLE>

YEAR ENDED JULY 31, 1998 COMPARED TO YEAR ENDED JULY 31, 1997

Revenues increased $24.5 million, or 48.9%, to $74.6 million during the
year ended July 31, 1998 from $50.1 million during the year ended July 31, 1997.
Of the $24.5 million increase in revenues, $14.9 million was attributable to
increased employee health and welfare administration revenues, $7.1 million was
attributable to increased employee qualified plan administration revenues and
$2.5 million was due to increased revenues from payroll and human resource
administration services. For the year ended July 31, 1998, health and welfare
administration revenue was $63.7 million, qualified plan administration revenue
was $8.0 million, and payroll and human resource administration was $2.9
million.

The increase in employee health and welfare administration revenues was
primarily attributable to the addition of new customers and new service product
offerings related to the federally-mandated HIPAA requirements. The increase in
employee qualified retirement plan administration revenues was primarily
attributable to the two new subsidiaries acquired by the Company effective
February 1, 1998. The increase in payroll and human resource administration was
primarily attributable to the acquisition of PayAmerica effective April 30,
1998.

Cost of services increased $14.2 million, or 50.4%, to $42.4 million during
the year ended July 31, 1998 from $28.2 million during the year ended July 31,
1997. The increase in cost of services was attributable to the addition of data
processing, information systems and customer service personnel to support
revenue growth, the amortization of software placed in service as completed, the
transition and consolidation of certain operational duties into the Florida
operations center and the addition of three subsidiaries during the year ended
July 31, 1998. As a percentage of revenues, 1998 cost of services increased to
56.8% from 56.3% in the previous year.

Selling, general and administrative expenses increased $4.0 million, or
40.8%, to $13.8 million during the year ended July 31, 1998 from $9.8 million
during the year ended July 31, 1997. The increase in selling, general and
administrative expenses was primarily attributable to additional advertising,
the addition of marketing, management and administrative personnel and equipment
necessary to support the Company's growth and the acquisition of three
subsidiaries during the year ended July 31, 1998. As a percentage of revenues,
selling, general and administrative expenses decreased to 18.6% from 19.5% in
the previous year.

16
<PAGE> 19

Acquired research and development increased to $11.0 million for the year
ended July 31, 1998 as compared to $0 for the year ended July 31, 1997. The
acquired in-process research and development was, as a result of the purchase of
PayAmerica in 1998 which, in accordance with applicable accounting rules, was
expensed. The value assigned to acquired in-process research and development was
based on a third-party valuation.

Interest income decreased $1.7 million to $5.4 million during the year
ended July 31, 1998 from $7.1 million during the year ended July 31, 1997. This
decrease was the result of less cash available for investing due to capital
purchases, cash payments for acquisitions of two new subsidiaries, increased
utilization of tax-free investment instruments which yield a lower stated
interest rate, and an overall decline in short-term interest rates.

Lease revenue increased to $2.8 million for the year ended July 31, 1998 as
compared to $0 for the corresponding period in 1997 due to the purchase of an
office campus (with an existing tenant) in St. Petersburg, Florida. Lease
revenue is presented net of direct costs associated with operating the campus.
This net revenue will decrease as the Company begins to occupy the campus in
phases beginning in calendar 1999 and will decrease to $0 by April 1999, at the
latest. Final occupancy by the Company is expected in 2000.

Income taxes increased 25.7% to $8.8 million during the year ended July 31,
1998 from $7.0 million during the year ended July 31, 1997. The Company's
effective tax rate increased to 56.7% for the year ended July 31, 1998 from
36.4% for the corresponding period in the previous year. This increase was
primarily due to the non-deductibility (for income tax purposes) of acquired
in-process research and developments costs associated with the PayAmerica
acquisition.

As a result of the foregoing, the Company's net income decreased $5.5
million, or 45.1%, to $6.7 million during the year ended July 31, 1998 from
$12.2 million during the year ended July 31, 1997. Net income per share was $.24
(diluted) for the year ended July 31, 1998 as compared to $.44 (diluted) for the
prior year.

YEAR ENDED JULY 31, 1997 COMPARED TO YEAR ENDED JULY 31, 1996

Revenues increased $18.9 million, or 60.6%, to $50.1 million during the
year ended July 31, 1997 from $31.2 million during the year ended July 31, 1996.
Of the $18.9 million increase in revenues, $18.3 million was attributable to
increased employee health and welfare administration revenues, $.5 million was
attributable to increased employee qualified plan administration revenues and
$.1 million was due to increased revenues from payroll and human resource
administration services. For the year ended July 31, 1997, health and welfare
administration revenue was $48.8 million, qualified plan administration revenue
was $.9 million, and payroll and human resource administration was $.4 million.

The increase in employee health and welfare administration revenues was
primarily attributable to the addition of new customers and new service product
offerings related to state-mandated continuation coverage health portability
laws, enrollment and eligibility and the federally-mandated HIPAA requirements.
The increase in payroll and human resource administration was primarily
attributable to the addition of new customers.

Cost of services increased $10.3 million, or 57.5%, to $28.2 million during
the year ended July 31, 1997 from $17.9 million during the year ended July 31,
1996. The increase in cost of services was attributable to the addition of data
processing, information systems and customer service personnel to support
revenue growth, and the amortization of software placed in service as completed.
As a percentage of revenues, the 1997 cost of services decreased to 56.3% from
57.3% in the previous year. The decrease as a percent of revenues resulted
primarily from operating efficiencies from the allocation of these expenses over
an increasingly larger revenue base.

Selling, general and administrative expenses increased $3.2 million, or
48.5%, to $9.8 million during the year ended July 31, 1997 from $6.6 million
during the year ended July 31, 1996. The increase in selling, general and
administrative expenses was primarily attributable to the addition of marketing,
management and administrative personnel and equipment necessary to support the
Company's growth and additional advertising costs. As a percentage of revenues,
selling, general and administrative expenses decreased to 19.5% from
17
<PAGE> 20

21.1% in the previous year, primarily as a result of operating efficiencies from
the allocation of these expenses over an increasingly larger revenue base.

Acquisition costs decreased to $0 during fiscal 1997 from $361,000 for
fiscal 1996. The 1996 expenses relate to costs associated with the acquisition
of the L.P. Baier Company, which was accounted for using the pooling of
interests method of accounting.

Interest income increased $4.2 million to $7.1 million during the year
ended July 31, 1997 from $2.9 million during the year ended July 31, 1996. This
increase was the result of the proceeds from the secondary stock offering
completed in March 1996 being invested for a full year in fiscal 1997.

Income taxes increased 96.3% to $7.0 million during the year ended July 31,
1997 from $3.6 million during the year ended July 31, 1996. The Company's
effective tax rate decreased to 36.4% for the year ended July 31, 1997 from
38.6% for the corresponding period in the previous year. This decrease reflected
the Company's move to more tax-free investments in fiscal 1997.

As a result of the foregoing, the Company's net income increased $6.5
million, or 115.5%, to $12.2 million during the year ended July 31, 1997 from
$5.7 million during the year ended July 31, 1996. Net income per share (diluted)
was $.44 for the year ended July 31, 1997 as compared to $.25 (diluted) for the
prior year.

YEAR 2000 MATTERS

The Year 2000 Issue is the result of computer programs being written using
two digits rather than four to define the applicable year. In 1996, the Company
initiated the process of modifying existing software programs to become Year
2000 compliant. Management has determined that the Year 2000 issue will not pose
a significant operational problem for its computer systems.

The Company is utilizing both internal and external resources to test and
reprogram, or replace, the software for Year 2000 compliance. The Company is
also in the process of identifying non-IT systems in which Year 2000 problems
could be embedded, testing those systems for Year 2000 compliance and correcting
or replacing those systems having Year 2000 problems. The Company anticipates
completing the Year 2000 project for both IT and non-IT systems no later than
March 1999, which is prior to any anticipated impact on its operating systems.
The total cost of the Year 2000 project is estimated at approximately $250,000.
Approximately $100,000 in costs has been incurred to date. These costs are being
funded through operating cash flows and are not expected to have a material
adverse effect on the Company's business, financial condition or results of
operations. All costs associated with addressing the Year 2000 Issue are being
expensed as incurred.

The cost of the project and the date on which the Company believes it will
complete the Year 2000 modifications are based on management's best estimates,
which were derived utilizing numerous assumptions of future events, including
the continued availability of certain resources, third-party modification plans
and other factors. However, there can be no guarantee that these estimates will
be achieved and actual results could differ materially from those anticipated.
Specific factors that might cause such material differences include, but are not
limited to, the availability and cost of personnel trained in this area, the
ability to locate and correct all relevant computer codes, and similar
uncertainties.

The Company has initiated formal communications with all of its significant
suppliers and large customers to determine the extent to which the Company's
interface systems are vulnerable to those third parties' failure to remediate
their own Year 2000 issues. While some suppliers and customers have responded
affirmatively, a majority have not as yet provided the necessary feedback. There
can be no guarantee that the systems of other companies on which the Company's
systems rely will be timely converted and will not have a material adverse
effect on the Company's systems and in turn, the Company's business, financial
condition and results of operations.

18
<PAGE> 21

LIQUIDITY AND CAPITAL RESOURCES

For the year ended July 31, 1998, net cash provided by operating activities
was $32.6 million as compared to $16.4 million for fiscal 1997. As of July 31,
1998 and 1997, the Company's working capital and current ratio were $122.1
million and 4.6:1 and $127.8 million and 6.1:1, respectively. The Company
invests excess cash balances in short-term investment grade securities, such as
money market investments, obligations of the U.S. government and its agencies
and obligations of state and local government agencies.

During the year ended July 31, 1998, the Company's capital expenditures
were $33.7 million.

On October 2, 1997, the Company acquired a 383,000 square foot office
campus in St. Petersburg, Florida for $13.5 million. The Company expects to
spend approximately $23 million to expand and renovate the facility over the
next three years. Management estimates that as of July 31, 1998, approximately
$13 million will be required in order for the Company to purchase additional
equipment, furniture and hardware, and to complete its currently defined
software projects.

In September 1998, the Company announced plans to repurchase up to 3.0
million shares of its outstanding common stock.

The Company believes that its cash, investments, cash flows from operations
and potential additional borrowing capacity will be adequate to meet the
Company's expected capital requirements for the foreseeable future.

The Company has a three-year, $25.0 million unsecured credit facility. The
Company has agreed to maintain all of its assets free and clear of all liens,
encumbrances and pledges, except to purchase money security interests in
specific equipment in an aggregate amount of less than $1,500,000 as long as the
credit facility remains outstanding or any indebtedness thereunder remains
unpaid. Interest on the principal balance outstanding under this line of credit
accrues at a floating interest rate equal to the 30-day London Interbank
Offering Rate (LIBOR), plus an applicable interest rate margin between 62.5 and
150 basis points based on certain financial ratios. The credit facility contains
certain financial covenants requiring the maintenance of cash and cash
equivalents and investments equal to or greater than customer account deposits,
a funded debt to EBITDA ratio of a maximum of 2.5-to-1, a debt service coverage
ratio of not less than 1.35-to-1, as well as the maintenance of a certain funded
debt to tangible net worth ratio. As of July 31, 1998, the Company was in
compliance with all such covenants and there were no amounts outstanding under
the credit facility.

NEW ACCOUNTING PRONOUNCEMENTS

The Company has not adopted SFAS No. 130 "Reporting Comprehensive Income,"
which requires reporting "comprehensive income" for transactions that bypass the
income statement and are reported directly in the equity section of the balance
sheet. This statement is effective for the Company's 1999 fiscal year. Currently
the Company does not expect adoption of this standard to have a material effect
on its financial statements.

The Company has not adopted SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," which requires reporting business segments
and information, including how the segments are determined, products and
services are provided and changes in the measurement of segment accounts from
period to period. This statement is effective for the Company's 1999 fiscal
year. The Company has not yet determined the effect that the adoption of this
standard will have on its financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Registrant's investment portfolio consists primarily of high grade
fixed income investments, such as AA or better rated fixed income municipal
instruments, and consequently the Company believes such portfolio does not
subject it to material market risk exposures.

19
<PAGE> 22

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following financial statements of the Company and its independent
certified public accountant's Report are set forth on pages 23 through 40 of
this report:

Report of Independent Certified Public Accountants.
Consolidated Balance Sheets as of July 31, 1998 and 1997.
Consolidated Statements of Income for the Years Ended July 31, 1998,
1997, and 1996.
Consolidated Statements of Shareholders' Equity for the Years Ended
July 31, 1998, 1997, and 1996.
Consolidated Statements of Cash Flows for the Years Ended July 31,
1998, 1997 and 1996.
Notes to Consolidated Financial Statements.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information to be set forth under the caption "Item 1: Election of
Directors" in the Company's Proxy Statement dated on or about November 16, 1998,
for the Annual Meeting of Shareholders to be held December 22, 1998 (the "Proxy
Statement"), and the information to be set forth under the caption "Section
16(a) Beneficial Ownership Reporting Compliance" in the Proxy Statement are
incorporated herein by reference. The information set forth under "Executive
Officers of the Registrant" in Part I hereof is also incorporated herein by
reference.

ITEM 11. EXECUTIVE COMPENSATION

The information to be set forth under the caption "Executive Compensation"
in the Proxy Statement is incorporated herein by reference; provided, however
that the Company specifically excludes from such incorporation by reference any
information set forth under the captions "Compensation Committee Report on
Executive Compensation" and "Stock Price Performance Graph" in the Proxy
Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security ownership of certain beneficial owners and management to be set
forth under the caption "Principal Shareholders" in the Proxy Statement is
incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) List of documents filed as part of this report:

(1) Financial Statements.

Report of Independent Certified Public Accountants.

Consolidated Balance Sheets as of July 31, 1998 and 1997.

Consolidated Statements of Income for the Years Ended July 31,
1998, 1997, and 1996.

20
<PAGE> 23

Consolidated Statements of Shareholders' Equity for the Years Ended
July 31, 1998, 1997, and 1996.

Consolidated Statements of Cash Flows for the Years Ended July 31,
1998, 1997, and 1996.

Notes to Consolidated Financial Statements.

(2) Financial Statement Schedule.

Report of Independent Certified Public Accountants on The Schedule.

<TABLE>
<CAPTION>
SCHEDULE
NUMBER DESCRIPTION
- -------- -----------
<S> <C> <C>
II -- Valuation and Qualifying Accounts
</TABLE>

(3) Exhibits.

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <C> <S>
3.1 -- Articles of Incorporation of ABR Information Services,
Inc.(1)
3.2 -- Bylaws of ABR Information Services, Inc.(1)
10.1 -- Form of Employment Agreement between ABR Information
Services, Inc. and each of James E. MacDougald and Suzanne
M. MacDougald.(1)
10.2 -- ABR Information Services, Inc. 1995 Non-Employee Director
Stock Option Plan.(2)
10.3 -- ABR Information Services, Inc. 1996 Non-Employee Director
Stock Option Plan, as amended.
10.4 -- ABR Information Services, Inc. Amended and Restated 1987
Stock Option Plan.(4)
10.5 -- ABR Information Services, Inc. Amended and Restated 1993
Stock Option Plan (as amended).(2)
10.6 -- ABR Information Services, Inc. Incentive Bonus Plan.(1)
10.7 -- Revolving Line of Credit Note/Loan Agreement dated June 19,
1998 by and between Barnett Bank, N.A. and ABR Information
Services, Inc.
10.8 -- Services Agreement between Corporate Benefits Delivery of
General Electric Company and ABR Benefits Services, Inc. (as
successor to Bullock Associates, Inc.), as amended on
December 15, 1995.(5)
10.9 -- Agreement and Plan of Reorganization dated as of February 1,
1996 by and among ABR Information Services, Inc., Total
Cobra Services and John M. Hermann.(3)
10.10 -- Agreement and Plan of Reorganization dated as of June 28,
1996 by and among ABR Information Services, Inc., The L.P.
Baier Company and L.P. Baier's shareholders.(3)
10.11 -- Stock Purchase Agreement by and among ABR Information
Services, Inc., Bullock Associates, Inc., W. Carl Bullock,
Barbara A. Biasotti and Nancy L. Clark dated as of December
15, 1995.(6)
10.12 -- Agreement for Sale and Purchase of Property, dated October
2, 1997, by and between Florida Power Corporation (Seller)
and ABR Properties, Inc. (Buyer), including commercial lease
as of the same date.(7)
10.13 -- Stock Purchase Agreement dated February 26, 1998 and
effective February 1, 1998, by and among ABR Information
Services, Inc., Charing Company, Inc. and the shareholders
of Charing Company, Inc.(8)
10.14 -- Stock Purchase Agreement dated February 27, 1998 and
effective February 1, 1998, by and among ABR Information
Services, Inc., Matthews, Malone & Associates, Ltd. and the
shareholders of Matthews, Malone & Associates, Ltd.(8)
</TABLE>

21
<PAGE> 24

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <C> <S>
10.15 -- Agreement and Plan of Reorganization, dated April 30, 1998,
by and among ABR Information Services, Inc., Business
Computer Services, Inc. ("BCSI"), Joseph M. Speroni, Paul J.
Speroni, Robert S. Speroni, Stephen J. Speroni, Joseph F.
Speroni, David M. Speroni, Richard B. Speroni, Rex Haverty,
E. Hale Waller, Nikky Losapio and Christopher Mantua, as the
Shareholders of BCSI, and Samuel N. Klewans, as
Shareholders' Agent.(9)
10.16 -- Stock Purchase Agreement, dated August 12, 1998, and
effective as of August 1, 1998, by and among ABR Information
Services, Inc., MidAtlantic 401(k) Services, Inc., the
Shareholders of MidAtlantic 401(k) Services, Inc., and E.
Franklin De Pew, as Shareholders' Agent.
10.17 -- Stock Purchase Agreement, dated October 22, 1998, by and
among ABR Information Services, Inc., Chowning, Ltd., The
Barrington Group, Ltd., Mark G. FitzGerald, Timothy D. Dyer
and Laura J. LaPinske, as shareholders of Chowning, Ltd.,
and Mark G. FitzGerald, as Shareholders' Agent.(10)
10.18 -- ABR Information Services, Inc. 1997 Stock Option Plan.
10.19 -- Stock Purchase Agreement, dated October 30, 1998, and
effective as of October 1, 1998, by and among ABR
Information Services, Inc., Western Pension Service
Corporation, and Robert A. Jocelyn.
10.20 -- Stock Purchase Agreement, dated November 10, 1998, and
effective as of November 1, 1998, by and among ABR
Information Services, Inc., BMC Consultants, Inc., Jeffrey
J. Berends, D'Nelle L. Macaluso, Frank J. Dobis, Scott A.
Hittner, Carol L. Carlson, Thomas W. Nielsen, Jr., Walter L.
Malles, Jr. and Gene R. Etzig, as Shareholders of BMC
Consultants, Inc., and Jeffrey J. Berends, as Shareholders'
Agent.
10.21 -- Form of Key Executive Employment and Severance Agreement
between ABR Information Services, Inc. and each of James E.
MacDougald and James P. O'Drobinak, executive officers.
21.1 -- List of subsidiaries of ABR Information Services, Inc.
23.1 -- Consent of Grant Thornton LLP.
24.1 -- Powers of Attorney (included on signature page hereto).
27.1 -- Financial Data Schedule (for SEC use only)
</TABLE>

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

(1) Previously filed as part of the Company's Form S-1 Registration Statement
(No. 33-76922) dated May 26, 1994 and incorporated herein by reference.
(2) Previously filed as part of the Company's Form 10-K for the fiscal year
ended July 31, 1995.
(3) Previously filed as part of the Company's Form 10-K for the fiscal year
ended July 31, 1996.
(4) Previously filed as part of the Company's Form 10-K for the fiscal year
ended July 31, 1994.
(5) Previously filed as part of the Company's Form 10-Q for the quarter ended
January 31, 1996.
(6) Previously filed as part of the Company's Form 8-K dated as of December 26,
1995.
(7) Previously filed as part of the Company's Form 10-K for the fiscal year
ended July 31, 1997.
(8) Previously filed as part of the Company's Form 10-Q for the quarter ended
January 31, 1998.
(9) Previously filed as part of the Company's Form 8-K/A dated as of November
13, 1998.
(10) Previously filed as part of the Company's Form 8-K dated as of November 5,
1998.

Exhibits 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.18, and 10.21 represent
management contracts and compensatory plans.

(b) Reports on Form 8-K.

The Company filed a Report on Form 8-K on May 15, 1998 reporting the
acquisition of Business Computer Services, Inc. (d.b.a. Pay America(R)) on April
30, 1998. This report was amended and restated in its entirety pursuant to a
Report on Form 8-K/A filed on November 13, 1998. Included as an exhibit to such
filing is the Agreement and Plan of Reorganization by and among ABR Information
Services, Inc., Business Computer Services, Inc., the Shareholders of Business
Computer Services, Inc., and Samuel N. Klewans, as Shareholders' Agent. No
financial statements were required to be filed as part of either the Form 8-K or
Form 8-K/A.

22
<PAGE> 25

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
ABR Information Services, Inc.

We have audited the accompanying consolidated balance sheets of ABR
Information Services, Inc. as of July 31, 1998 and 1997 and the related
consolidated statements of income, shareholders' equity and cash flows for each
of the three years in the period ended July 31, 1998. 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 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 consolidated financial position of ABR Information
Services, Inc. as of July 31, 1998 and 1997, and the consolidated results of its
operations and its consolidated cash flows for each of the three years in the
period ended July 31, 1998, in conformity with generally accepted accounting
principles.

GRANT THORNTON LLP

Tampa, Florida
November 11, 1998

23
<PAGE> 26

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
JULY 31,
---------------------------
1998 1997
------------ ------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents................................. $ 54,427,446 $ 33,322,734
Investments............................................... 85,912,690 109,486,166
Accounts receivable, net.................................. 13,102,473 7,308,914
Prepaid expenses and other................................ 2,582,277 2,595,306
------------ ------------
Total current assets.............................. 156,024,886 152,713,120
Long-Term Investments....................................... 6,021,873 14,128,644
Property and Equipment, net................................. 47,713,155 27,790,354
Software Development Costs, net............................. 21,276,073 11,767,211
Goodwill, Intangibles and Other Assets, net................. 42,154,560 15,617,519
------------ ------------
Total Assets...................................... $273,190,547 $222,016,848
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable.......................................... $ 1,336,504 $ 613,138
Accrued expenses.......................................... 2,882,668 512,035
Customer accounts deposits................................ 29,147,418 23,133,381
Unearned revenue.......................................... 361,782 594,524
Income taxes payable...................................... 126,508 20,770
------------ ------------
Total current liabilities......................... 33,854,880 24,873,848
------------ ------------
Deferred Income Taxes....................................... 8,720,312 3,047,243
------------ ------------
Shareholders' Equity:
Preferred stock -- authorized 2,000,000 shares of $.01 par
value; no shares issued................................ -- --
Common stock -- authorized 100,250,000 shares of $.01 par
value; issued and outstanding, 28,695,592 and
27,376,356 shares, respectively........................ 286,956 273,763
Additional paid-in capital................................ 200,238,804 170,459,157
Retained earnings......................................... 30,089,595 23,362,837
------------ ------------
Total Shareholders' Equity........................ 230,615,355 194,095,757
------------ ------------
Total Liabilities and Shareholders' Equity........ $273,190,547 $222,016,848
============ ============
</TABLE>

The accompanying notes are an integral part of these statements.

24
<PAGE> 27

CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
YEARS ENDED JULY 31,
---------------------------------------
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Revenue................................................. $74,592,273 $50,078,842 $31,162,181
Operating expenses:
Cost of services...................................... 42,386,859 28,178,925 17,863,588
Selling, general and administrative................... 13,849,617 9,765,500 6,575,390
Acquisition costs..................................... -- -- 361,198
Acquired research and development..................... 11,010,000 -- --
----------- ----------- -----------
Operating income........................................ 7,345,797 12,134,417 6,362,005
Interest income......................................... 5,363,957 7,081,238 2,872,145
Lease revenue, net...................................... 2,817,004 -- --
----------- ----------- -----------
Income before provision for income taxes................ 15,526,758 19,215,655 9,234,150
Income tax provision.................................... 8,800,000 6,987,003 3,560,366
----------- ----------- -----------
Net income.................................... $ 6,726,758 $12,228,652 $ 5,673,784
=========== =========== ===========
Net income per share (basic)............................ $ .24 $ .45 $ .25
=========== =========== ===========
Net income per share (diluted).......................... $ .24 $ .44 $ .25
=========== =========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

25
<PAGE> 28

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
----------------------- PAID-IN RETAINED
SHARES AMOUNT CAPITAL EARNINGS TOTAL
---------- ---------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Balance at July 31, 1995........ 6,640,814 $ 66,408 $ 13,686,162 $ 5,460,401 $ 19,212,971
Common stock split.............. 3,248,882 32,489 (33,917) -- (1,428)
Exercise of stock options....... 145,911 1,459 666,890 -- 668,349
Tax benefit related to exercise
of certain stock options...... -- -- 1,426,563 -- 1,426,563
Shares issued in conjunction
with acquisition.............. 132,712 1,327 3,048,848 -- 3,050,175
Secondary stock offering, net of
offering costs of $381,092.... 3,419,875 34,199 151,085,171 -- 151,119,370
Net income...................... -- -- -- 5,673,784 5,673,784
---------- ---------- ------------ ----------- ------------
Balance at July 31, 1996........ 13,588,194 135,882 169,879,717 11,134,185 181,149,784
Common stock split.............. 13,685,918 136,859 (136,859) -- --
Exercise of stock options....... 102,244 1,022 659,693 -- 660,715
Tax benefit related to exercise
of certain stock options...... -- -- 56,606 -- 56,606
Net income...................... -- -- -- 12,228,652 12,228,652
---------- ---------- ------------ ----------- ------------
Balance at July 31, 1997........ 27,376,356 273,763 170,459,157 23,362,837 194,095,757
Exercise of stock options....... 121,228 1,212 991,516 -- 992,728
Shares issued in conjunction
with acquisition.............. 1,198,008 11,981 28,788,131 -- 28,800,112
Net income...................... -- -- -- 6,726,758 6,726,758
---------- ---------- ------------ ----------- ------------
Balance at July 31, 1998........ 28,695,592 $ 286,956 $200,238,804 $30,089,595 $230,615,355
========== ========== ============ =========== ============
</TABLE>

The accompanying notes are an integral part of these statements.

26
<PAGE> 29

CONSOLIDATED STATEMENTS OF CASH FLOW

<TABLE>
<CAPTION>
YEARS ENDED JULY 31,
---------------------------------------------
1998 1997 1996
------------- ------------- -------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income...................................... $ 6,726,758 $ 12,228,652 $ 5,673,784
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization................ 6,864,895 3,498,034 1,642,754
Deferred income taxes........................ 5,031,147 2,151,688 328,514
Tax benefit related to exercise of certain
stock options.............................. -- 56,606 1,426,563
Provision for losses on accounts
receivable................................. 339,033 91,281 12,692
Acquired research and development............ 11,010,000 -- --
Change in operating assets and liabilities net
of effects from purchases:
Accounts receivable.......................... (3,908,507) (4,516,626) (771,537)
Prepaid expenses and other................... 91,240 (1,312,354) (528,798)
Other assets................................. 26,358 (112,693) (8,953)
Accounts payable............................. 686,329 (2,525) (674,980)
Accrued expenses............................. (42,320) (250,407) (130,668)
Customer accounts deposits................... 5,983,594 5,113,976 4,228,527
Unearned revenue............................. (253,277) (52,569) 23,931
Income taxes payable......................... 17,898 (462,893) 298,695
------------- ------------- -------------
Net cash provided by operating
activities............................ 32,573,148 16,430,170 11,520,524
------------- ------------- -------------
Cash flows from investing activities:
Additions to investments........................ (576,404,831) (394,805,395) (314,607,394)
Maturities of investments....................... 608,085,078 419,288,657 172,470,327
Additions to property and equipment............. (22,432,419) (15,192,338) (12,537,101)
Additions to software development costs......... (11,295,633) (6,275,787) (3,292,648)
Acquisitions, net of cash acquired.............. (10,413,359) (871,684) (10,656,020)
------------- ------------- -------------
Net cash provided by (used in) investing
activities............................ (12,461,164) 2,143,453 (168,622,836)
------------- ------------- -------------
Cash flows from financing activities:
Proceeds from bank borrowings................... 7,198,574 -- 6,000,000
Principal payments under bank borrowings........ (7,198,574) -- (6,000,000)
Exercise of stock options....................... 992,728 660,715 668,248
Public offerings, net of cost................... -- -- 151,119,370
------------- ------------- -------------
Net cash provided by financing
activities............................ 992,728 660,715 151,787,618
------------- ------------- -------------
Net increase (decrease) in cash and cash
equivalents..................................... 21,104,712 19,234,338 (5,314,694)
Cash and cash equivalents at beginning of year.... 33,322,734 14,088,396 19,403,090
------------- ------------- -------------
Cash and cash equivalents at end of year.......... $ 54,427,446 $ 33,322,734 $ 14,088,396
============= ============= =============
</TABLE>

The accompanying notes are an integral part of these statements.

27
<PAGE> 30

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 1998, 1997 AND 1996

NOTE A -- DESCRIPTION OF ORGANIZATION AND BUSINESS

ABR Information Services, Inc. (the "Company") through its wholly-owned
subsidiaries, ABR Benefits Services, Inc., Charing Company, Inc., Matthews,
Malone & Associates, Ltd., Business Computer Services, Inc., MidAtlantic 401(k)
Services, Inc., Chowning, Ltd., Western Pension Service Corporation and BMC
Consultants, Inc., is a leading provider of comprehensive benefits
administration, payroll, and human resource services to employers seeking to
outsource these functions. The Company's operating revenues currently are
generated from three sources: employee health and welfare administration
services, qualified plan administration services, and payroll and human resource
administration services. All services are offered on either an "a la carte" or a
total outsourcing basis, allowing customers to outsource certain benefits
administration tasks which they find too costly or burdensome to perform
in-house, or to outsource the entire benefits administration function.
Additionally, the Company generates non-operating revenue from the short-term
lease (expiring in April 1999) of its St. Petersburg, Florida operations center
through its wholly-owned subsidiary, ABR Properties, Inc.

The Company provides outsourced benefits administration, payroll, and human
resource services to employers ranging in size from 20 to 200,000 employees. ABR
provides portability (primarily COBRA and HIPAA) services through the trade name
CobraServ(R) and payroll and tax deposit services through the trade name
PayAmerica.(R) The Company is headquartered in Palm Harbor, Florida, and employs
approximately 1,400 people in marketing/operations centers in Florida, New
Jersey, Virginia, Maryland, California, Wisconsin and Arizona.

The financial statements have been restated to reflect the three-for-two
stock split completed February 1996 and a two-for-one stock split completed
February 1997.

NOTE B -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. PRINCIPLES OF CONSOLIDATION

The financial statements include the accounts of ABR Information Services, Inc.
and all of its subsidiaries. All material intercompany balances and transactions
have been eliminated.

2. REVENUE RECOGNITION

Revenues are recognized when the related services have been provided. Advance
payments received from customers for services not provided are included in
unearned revenue.

3. COST OF SERVICES

Cost of services includes personnel, occupancy and other costs associated with
providing services to customers, such as mailing and printing costs.

4. CUSTOMER ACCOUNTS DEPOSITS

As part of the services provided to customers, the Company bills and collects
for its customers and maintains the funds in segregated accounts until the funds
are remitted. For financial statement purposes, the segregated funds are
included in cash and investments (as the funds are not restricted) with the
corresponding liability presented as customer accounts deposits.

5. CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments, with a maturity of 30 days
or less when purchased, as cash equivalents.

28
<PAGE> 31
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company presents Cash and Cash Equivalents exclusive of PayAmerica tax
deposits held for future payment on behalf of its payroll customers due to their
restricted and short-term nature. The amount of such tax deposits and related
liability was approximately $65.9 million at July 31, 1998.

As of July 31, 1998 and 1997, substantially all of the Company's cash is
invested in overnight repurchase agreements of mortgage-backed or government
securities. The Company has a security interest in the specific investment
underlying the repurchase agreements.

6. INVESTMENTS

The Company's investments are classified as either "Held-to-Maturity" or
"Available-for-Sale" investment securities in accordance with SFAS No. 115.
"Held-to-Maturity" investments are securities which the Company has the ability
and positive intent to hold to maturity and are stated at cost, adjusted for
amortization of premiums and accretion of discounts which are computed by the
interest method. Declines in fair value that are other than temporary are
recorded as incurred. "Available-for-Sale" securities are measured at fair
value.

7. CONTRACT SET-UP COSTS

Under contractual arrangements with certain customers, the Company incurs
set-up costs. These costs are capitalized and amortized over the contract
period, but no longer than twelve months, using the straight-line method. As of
July 31, 1998 and 1997, unamortized set-up costs of $835,103 and $1,013,789,
respectively, are included in prepaid expenses. During 1998, 1997 and 1996,
amortization of set-up costs totaled $2,453,139, $989,612 and $569,755,
respectively. AICPA Statement of Position 98-5 "Reporting on the Costs of
Start-up Activities" will not impact contract set-up costs.

8. PROPERTY AND EQUIPMENT

Property and equipment is stated at cost. Depreciation expense is computed
using the straight-line method over the estimated useful lives of the assets.
Leasehold improvements are amortized over the lives of the respective leases or
the service lives of the improvements, whichever is shorter. Accelerated methods
are used for income tax purposes.

9. SOFTWARE DEVELOPMENT COSTS

Effective in fiscal 1998, the Company adopted AICPA Statement of Position
98-1 "Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use." This standard states that costs to develop internal-use computer
software during the application development stage as defined in SOP 98-1 should
be capitalized. The adoption of this standard had no material effect on the
Company's financial statements. For fiscal 1997 and 1996, software development
costs consist primarily of purchased software, consulting services, salaries and
certain other expenses related to the development and modification of software
capitalized in accordance with the provisions of SFAS No. 86 "Accounting for the
Costs of Computer Software to be Sold, Leased, or Otherwise Marketed."
Capitalization of such cost begins only upon the establishment of technological
feasibility as defined in SFAS No. 86. Such capitalized costs are amortized when
the software is available to service customers using the straight-line method
over an estimated life of four to five years or based on the ratio of current
gross revenue to the anticipated gross revenue, whichever is greater.
Amortization expense for the years ended 1998, 1997 and 1996 was $1,966,771,
$690,549 and $95,411, respectively. Accumulated amortization of software
development costs totaled $2,790,629 and $911,084 at July 31, 1998 and 1997,
respectively.

Software development costs that were expensed and not capitalized totaled
$5,191,579, $3,113,157 and $1,312,653 for the years ended 1998, 1997 and 1996,
respectively.

29
<PAGE> 32
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Subsequent to year end, the Company's Board of Directors redefined the
strategic design of a number of its completed and in-process software projects.
In conjunction with this strategic change, software projects in the amount of
$14,300,000 will be superceded by new product design or outright eliminated.
Therefore, in the first quarter of fiscal 1999, the Company will take a non-cash
charge of approximately $13,800,000 (pre-tax) for these software projects.

10. INCOME TAXES

Deferred income taxes principally result from expensing certain software
development costs for income tax return purposes while capitalizing and
amortizing certain of these costs for financial statement purposes.

11. NET INCOME PER SHARE

During fiscal 1998, the Company adopted Statement of Financial Accounting
Standard No. 128 "Earnings Per Share" (FAS 128). This Standard became effective
for financial statements issued after December 15, 1997 and eliminates primary
and fully diluted income per share and replaces them with basic and diluted
income per share. Accordingly, all income per share amounts for the prior
periods presented have been restated to conform to the new Standard (see Note
H).

12. RECLASSIFICATIONS

Certain amounts in prior years' financials statements have been
reclassified to conform with the July 31, 1998 presentation.

13. NEW ACCOUNTING PRONOUNCEMENTS

The Company has not adopted SFAS No. 130 "Reporting Comprehensive Income"
which requires reporting "comprehensive income" for transactions that bypass the
income statement and are reported directly in the equity section of the balance
sheet. This statement is effective for the Company's 1999 fiscal year. Currently
the Company does not expect adoption of this standard to have a material effect
on its financial statements.

The Company has not adopted SFAS No. 131 "Disclosures about Segments of an
Enterprise and Related Information" which requires reporting business segments
and information, including how the segments are determined, products and
services are provided and changes in the measurement of segment accounts from
period to period. This statement is effective for the Company's 1999 fiscal
year. The Company has not yet determined the effect that the adoption of this
standard will have on its financial statements.

14. GOODWILL AND OTHER INTANGIBLES

Amortization is based upon the allocation of the total purchase price (see
Note N) and amortization periods, using the straight-line method, as follows:

<TABLE>
<CAPTION>
ESTIMATED
USEFUL
ALLOCATION LIVES
----------- ---------
<S> <C> <C>
Non-competition Agreements.................................. $ 1,104,000 2-5 years
Contracts................................................... $ 2,000,000 10 years
Trademarks.................................................. $ 1,590,000 --
Customer Accounts........................................... $ 1,050,000 10 years
Workforce................................................... $ 1,850,000 10 years
Goodwill.................................................... $37,268,018 25 years
</TABLE>

30
<PAGE> 33
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Amortization expense totaled $1,337,105, $865,603 and $482,708 for the
years ended July 31, 1998, 1997 and 1996, respectively. The accumulated
amortization totaled $2,707,458 and $1,348,310 at July 31, 1998 and 1997,
respectively of which $1,755,050 and $843,311 respectively relate to goodwill.

The Company evaluates the recoverability of goodwill and reviews the
amortization period on an annual basis. Several factors are used to evaluate
goodwill, including management's plans for future operations, recent operating
results and projected undiscounted cash flows. No adjustments to goodwill have
been necessary.

15. FAIR VALUE OF FINANCIAL INSTRUMENTS

At July 31, 1998 and 1997, the carrying amount of cash, accounts
receivable, accounts payable, accrued expenses and customer accounts deposits
approximate fair value because of the short-term maturities of these items.

16. USE OF ESTIMATES

The financial statements are prepared in conformity with generally accepted
accounting principles and, accordingly, include amounts that are based on
management's best estimates and judgements. Actual results could differ from
these estimates.

NOTE C -- INVESTMENTS

The Company classifies debt and equity securities in two categories:
Available-for-Sale securities and Held-to-Maturity securities.
Available-for-Sale securities are measured at fair value, with net unrealized
gains and losses reported in equity. Held-to-Maturity securities are carried at
amortized cost.

The amortized cost, unrealized gains and losses, and fair values of the
Company's Available-for-Sale and Held-to-Maturity investment securities at July
31, 1998 and 1997 are summarized as follows:

<TABLE>
<CAPTION>
ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
------------ ---------- ---------- ------------
<S> <C> <C> <C> <C>
AT JULY 31, 1998:
Available-for-Sale Securities
Obligations of local, state and
federal governmental agencies........ $ 53,627,784 $ -- $ -- $ 53,627,784
Held-to-Maturity Securities Obligations
of local, state and federal
governmental agencies................ 38,306,779 65,200 41,633 38,330,346
------------ ------- -------- ------------
Total........................ $ 91,934,563 $65,200 $ 41,633 $ 91,958,130
============ ======= ======== ============
AT JULY 31, 1997:
Available-for-Sale Securities
Obligations of local, state and
federal governmental agencies........ $ 68,311,065 $ -- $ -- $ 68,311,065
Held-to-Maturity Securities Obligations
of local, state and federal
governmental agencies................ 55,303,745 65,363 107,178 55,261,930
------------ ------- -------- ------------
Total........................ $123,614,810 $65,363 $107,178 $123,572,995
============ ======= ======== ============
</TABLE>

31
<PAGE> 34
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table lists the maturities of debt securities held at July
31, 1998 and 1997 classified as Available-for-Sale and Held-to-Maturity:

<TABLE>
<CAPTION>
AVAILABLE-FOR-SALE HELD-TO-MATURITY
------------------------- -------------------------
ESTIMATED ESTIMATED
AMORTIZED FAIR AMORTIZED FAIR
COST VALUE COST VALUE
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
AT JULY 31, 1998:
Due in one year or less............. $53,627,784 $53,627,784 $32,284,906 $32,247,092
Due after one year through five
years............................. -- -- 6,021,873 6,083,254
----------- ----------- ----------- -----------
Total..................... $53,627,784 $53,627,784 $38,306,779 $38,330,346
=========== =========== =========== ===========
AT JULY 31, 1997:
Due in one year or less............. $68,311,065 $68,311,065 $41,175,101 $41,136,201
Due after one year through five
years............................. -- -- 14,128,644 14,125,729
----------- ----------- ----------- -----------
Total..................... $68,311,065 $68,311,065 $55,303,745 $55,261,930
=========== =========== =========== ===========
</TABLE>

There were no sales of securities classified as Available-for-Sale in 1998
and 1997. The Company uses the specific identification method to determine the
cost of securities sold.

Interest earned on investment securities and cash and cash equivalents was
$7,483,894, $8,252,011 and $3,846,102 for the years ended July 31, 1998, 1997
and 1996, respectively. A portion of these amounts is included in Revenues and
the remainder is reported separately as Interest Income in the Consolidated
Statements of Income.

NOTE D -- PROPERTY AND EQUIPMENT

<TABLE>
<CAPTION>
JULY 31,
------------------------- ESTIMATED
1998 1997 LIFE
----------- ----------- -------------
<S> <C> <C> <C>
Land and buildings............................ $34,680,594 $17,007,404 39 Years
Equipment..................................... 17,494,203 12,908,421 5 Years
Furniture and fixtures........................ 2,968,469 1,930,115 10 Years
Leasehold improvements........................ 332,166 439,085 Life of Lease
----------- -----------
55,475,432 32,285,025
Accumulated depreciation...................... (7,762,277) (4,494,671)
----------- -----------
Total property and equipment, net... $47,713,155 $27,790,354
=========== ===========
</TABLE>

Depreciation expense for the years ended 1998, 1997 and 1996 was
$3,561,018, $1,941,882 and $1,064,635, respectively.

NOTE E -- LINES OF CREDIT

On June 19, 1998, the Company entered into a three-year, $25.0 million
unsecured credit facility. The Company has agreed to maintain all of its assets
free and clear of all liens, encumbrances and pledges, except purchase money
security interests in specific equipment in an aggregate amount of less than
$1,500,000 as long as the credit facility remains outstanding or any
indebtedness thereunder remains unpaid. Interest on the principal balance
outstanding under this line of credit accrues at a floating interest rate equal
to the 30-day London Interbank Offering Rate (LIBOR), plus an applicable
interest rate margin between 62.5 and 150 basis points based on certain
financial ratios. The credit facility contains certain financial covenants
requiring the maintenance of cash and cash equivalents and investments equal to
or greater than customer account deposits, a funded debt to EBITDA ratio of a
maximum of 2.5-to-1, a debt service coverage ratio of not less than 1.35-to-1,
as well as the maintenance of a certain funded debt to tangible net worth ratio.
As of July 31,

32
<PAGE> 35
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1998, the Company was in compliance with all such covenants, and there were no
amounts outstanding under the credit facility.

NOTE F -- SHAREHOLDERS' EQUITY

COMMON STOCK

The authorized Common Stock of the Company consists of 100,000,000 shares
of voting Common Stock, and 250,000 shares of nonvoting Common Stock. The shares
of nonvoting Common Stock have the same rights as the shares of voting Common
Stock, except that the holders of nonvoting Common Stock are not entitled to
vote on matters submitted to shareholders, except as required by applicable law.
As of July 31, 1998, there were no shares of nonvoting Common Stock issued and
outstanding. On July 13, 1995 and February 19, 1996 the Company completed
three-for-two stock splits, on February 19, 1997 the Company completed a
two-for-one stock split, and on June 28, 1996 the Company completed an
acquisition utilizing the pooling of interests method of accounting. The
weighted average shares outstanding, earnings per share and stock options have
been restated to reflect the stock splits and the acquisition by a pooling of
interest.

PREFERRED STOCK

The Board of Directors of the Company has the authority to issue up to
2,000,000 shares of Preferred Stock (par value of $.01 per share) in one or more
series and to fix the number of shares constituting any such series and the
rights and preferences thereof, including dividend rates, terms of redemption
(including sinking fund provision), redemption price or prices, voting rights,
conversion rights and liquidation preferences of the shares constituting such
series. As of July 31, 1998, there were no shares of Preferred Stock issued and
outstanding.

NOTE G -- STOCK OPTIONS

The Company has established the 1987, 1993 and 1997 Stock Option Plans and
the 1996 Non-Employee Director Stock Option Plan. Under the 1987, 1993 and 1997
Plans, 774,000; 1,800,000 and 1,400,000 shares of Common Stock, respectively,
have been authorized for issuance. Under the 1996 Plan (which replaces the
Company's previous 1995 Non-Employee Director Stock Option Plan), 400,000 shares
of Common Stock have been authorized for issuance. During the years ended 1998,
1997 and 1996, all option prices at date of grant equaled or exceeded the
estimated fair value of the Company's Common Stock as determined by the terms of
the stock option plans.

A summary of the status of the Company's fixed stock option plans as of
July 31, 1998, 1997 and 1996, and changes during the years ending on those dates
is present below:

<TABLE>
<CAPTION>
1998 1997 1996
-------------------- -------------------- --------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
--------- -------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of
year...................... 1,373,444 $16.27 1,167,708 $ 8.93 933,602 $ 3.95
Granted................... 551,157 25.82 642,300 25.75 570,376 13.37
Exercised................. (121,228) 8.19 (199,968) 3.31 (291,822) 2.29
Cancelled................. (74,519) 26.37 (236,596) 16.73 (44,448) 5.05
--------- --------- ---------
Outstanding at end of
year................... 1,728,854 19.54 1,373,444 16.27 1,167,708 8.93
========= ========= =========
Exercisable at end of
year................... 589,211 13.37 337,844 7.64 304,921 7.52
========= ========= =========
</TABLE>

33
<PAGE> 36
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table summarizes information concerning currently outstanding
and exercisable stock options:

<TABLE>
<CAPTION>
WEIGHTED AVERAGE
REMAINING WEIGHTED
RANGE OF CONTRACTUAL LIFE AVERAGE
EXERCISE PRICES NUMBER OUTSTANDING (YEARS) EXERCISE PRICE
- --------------- ------------------ ---------------- --------------
<S> <C> <C> <C>
Outstanding Shares
$ 2.07 -- 4.09........................ 67,894 .9 $3.07
$ 6.49 -- 6.77........................ 313,927 7.0 6.60
$13.24 -- 16.63........................ 305,000 7.5 15.80
$20.14 -- 34.33........................ 1,042,033 8.8 25.60
---------
Total.......................... 1,728,854
=========
Exercisable Shares
$ 2.07 -- 4.09........................ 67,894 N/A 3.07
$ 6.49 -- 6.77........................ 219,589 N/A 6.59
$13.24 -- 16.63........................ 152,500 N/A 15.80
$20.14 -- 34.33........................ 149,228 N/A 25.55
---------
Total.......................... 589,211
=========
</TABLE>

The Company has adopted only the disclosure provisions of Financial
Accounting Standard No. 123, "Accounting for Stock-Based Compensation," as it
relates to employment awards. It applies APB Opinion No. 25, "Accounting for
Stock Issued to Employees," and related interpretations in accounting for its
plans and does not recognize compensation expense for its stock-based
compensation plans. If the Company had elected to recognize compensation expense
based upon the fair value at the grant date for awards under these plans
consistent with the methodology prescribed by SFAS No. 123, the Company's net
income and earnings per share would be reduced to the pro forma amounts
indicated below:

<TABLE>
<CAPTION>
1998 1997 1996
---------- ----------- ----------
<S> <C> <C> <C>
Net Income:
As reported..................................... $6,726,758 $12,228,652 $5,673,784
Pro forma (unaudited)........................... $3,383,543 $ 9,874,324 $4,674,893
Net Income per share:
As reported -- Basic............................ $ .24 $ .45 $ .25
As reported -- Diluted.......................... $ .24 $ .44 $ .25
Pro forma (unaudited) -- Basic.................. $ .12 $ .36 $ .20
Pro forma (unaudited) -- Diluted................ $ .12 $ .36 $ .20
</TABLE>

The fair value of each option grant is estimated on the date of grant using
the Binomial options-pricing model with the following weighted-average
assumptions used for grants in 1998, 1997 and 1996, respectively, no dividend
yield for all years, expected volatility of 50% for 1998 and 45% for 1997 and
1996; risk-free interest rates of 5.8%, 6.2% and 5.6% percent, and expected
option holding periods of 3.7, 2.6 and 3.5 years.

The weighted average fair value stock of options granted for the years
ended July 31, 1998, 1997 and 1996 was $10.97, $8.58 and $5.21 per share
respectively.

34
<PAGE> 37
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE H -- NET INCOME PER COMMON SHARE

The following table reconciles the numerators and denominators of the basic
and diluted income per share computations, as computed in accordance with FAS
128:

<TABLE>
<CAPTION>
YEARS ENDED JULY 31,
-------------------------------------
1998 1997 1996
---------- ----------- ----------
<S> <C> <C> <C>
Basic:
Net income available to common shareholders..... $6,726,758 $12,228,652 $5,673,784
========== =========== ==========
Weighted average shares......................... 27,732,054 27,320,151 22,353,986
========== =========== ==========
Basic income per share.......................... $ .24 $ .45 $ .25
========== =========== ==========
Diluted:
Net income available to common shareholders..... $6,726,758 $12,228,652 $5,673,784
========== =========== ==========
Weighted average shares........................... 27,732,054 27,320,151 22,353,986
Effect of dilutive stock options.................. 462,024 571,773 677,214
---------- ----------- ----------
Adjusted weighted average shares................ 28,194,078 27,891,924 23,031,200
========== =========== ==========
Diluted income per share.......................... $ .24 $ .44 $ .25
========== =========== ==========
Options not included in diluted income per share
because exercise price was greater than average
market price: First Quarter..................... 815,834 N/A N/A
Second Quarter.................................. 921,418 2,000 N/A
Third Quarter................................... 62,000 512,771 N/A
Fourth Quarter.................................. 896,433 427,203 N/A
Price Range....................................... $ 23.65 to $ 22.37 to N/A
$ 34.33 $ 34.33
</TABLE>

NOTE I -- INCOME TAXES

The following tables summarize the Company's income tax position:

<TABLE>
<CAPTION>
YEARS ENDED JULY 31,
---------------------------------------
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Currently payable
Federal....................................... $ 2,880,813 $ 3,957,785 $ 1,492,683
State......................................... 888,040 820,924 312,606
----------- ----------- -----------
3,768,853 4,778,709 1,805,289
Deferred........................................ 5,031,147 2,151,688 328,514
Tax benefit from the exercise of certain stock
options....................................... -- 56,606 1,426,563
----------- ----------- -----------
Total income tax provision............ $ 8,800,000 $ 6,987,003 $ 3,560,366
=========== =========== ===========
</TABLE>

35
<PAGE> 38
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Reconciliation of the federal statutory income tax rate to the Company's
effective income tax rates are as follows:

<TABLE>
<CAPTION>
YEARS ENDED JULY 31,
---------------------
1998 1997 1996
----- ----- -----
<S> <C> <C> <C>
Federal statutory income tax rate........................... 35.0% 35.0% 34.0%
State income taxes, net of federal income tax benefit....... 6.5 4.3 3.6
Tax-exempt interest......................................... (6.4) (2.6) (0.4)
Acquisition costs........................................... -- -- 3.4
Acquired research and development........................... 24.8 -- --
Research and experimentation tax credit..................... (3.4) -- --
Other....................................................... (0.2) (0.3) (2.0)
---- ---- ----
Effective income tax rate................................... 56.7% 36.4% 38.6%
==== ==== ====
</TABLE>

Deferred tax asset and liability components are as follows:

<TABLE>
<CAPTION>
JULY 31,
-----------------------
1998 1997
---------- ----------
<S> <C> <C>
Deferred tax assets:
Acquired net operating loss carryforward.................. $ -- $ 265,000
Reserve for doubtful accounts............................. 187,553 60,000
Other..................................................... 38,325 113,757
---------- ----------
225,878 438,757
---------- ----------
Deferred tax liabilities:
Depreciation and asset basis differences.................. 1,571,020 220,000
Software development costs................................ 7,375,170 3,266,000
---------- ----------
8,946,190 3,486,000
---------- ----------
Net deferred tax liability........................ $8,720,312 $3,047,243
========== ==========
</TABLE>

NOTE J -- COMMITMENTS AND CONTINGENCIES

The Company leases office space under noncancellable leases which are
accounted for as operating leases. The leases are subject to an escalation
clause using a CPI index. The leases expire between June 1999 and May 2005.

Future minimum lease payments under noncancellable operating leases are as
follows as of July 31, 1998:

<TABLE>
<CAPTION>
JULY 31,
- --------
<S> <C>
1999...................................... $1,713,464
2000...................................... 1,104,752
2001...................................... 888,660
2002...................................... 274,143
2003...................................... 254,601
Thereafter................................ 415,941
</TABLE>

Rent expense for all operating leases for the years ending July 31, 1998,
1997 and 1996 was $1,117,991, $1,083,000 and $1,129,738, respectively.

In October 1997, the Company acquired a 383,000 square foot office campus
in St. Petersburg, Florida for $13.5 million. The Company expects to spend
approximately $23 million to expand and renovate the facility over the next
three years.

36
<PAGE> 39
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Management estimates that as of July 31, 1998, approximately $13.0 million
will be required in order for the Company to purchase additional equipment,
furniture and hardware and to complete its currently defined software projects.

The Company is engaged in various litigation arising from the ordinary
course of its business. In the opinion of management, the ultimate outcome of
such litigation is not expected to be material to the Company's financial
position, results of operations or liquidity.

As a provider for portability compliance and administration services, the
Company is subject to excise taxes for noncompliance with certain provisions of
COBRA and HIPAA. In addition, the Company accepts financial responsibility for
certain liabilities incurred by its customers that are attributable to the
Company's failure to fulfill its obligations to its customers under its
agreements. The Company maintains a professional liability policy, with a
deductible of $25,000 per occurrence, and an annual per aggregate limit on
coverage of $5.0 million. Although there can be no assurance that the Company
will not incur any material liability for noncompliance with COBRA or HIPAA for
its failure to comply its agreement with any customer, from the Company's
inception through July 31, 1998, the Company has not incurred any material
liability as a provider.

NOTE K -- INCENTIVE BONUS PLAN AND SAVINGS PLAN

Effective January 1, 1992, the Company established a defined contribution
savings plan (the "Savings Plan") covering substantially all employees. The
Savings Plan consists of an employee elective contribution and a Company
matching contribution for each eligible participant. The Company's matching
contribution is determined by the Board of Directors on a discretionary basis.
The Company's contributions under the Savings Plan in fiscal 1998, 1997 and 1996
were approximately $357,054, $261,944 and $167,969, respectively.

Effective August 1, 1993, the Company adopted an incentive bonus plan (the
"Incentive Bonus Plan"), which provides for the discretionary payment of annual
incentive awards to key employees from a pool equal to 10% of the Company's
pre-tax profits (income before income taxes), adjusted upward or downward based
on the attainment of pre-established goals related to the Company's pre-tax
margin (income before income taxes divided by revenues) and its revenue growth
(based on annual increases in revenues). Payments under the Incentive Bonus Plan
are discretionary, based on the determination of the Board of Directors of the
Company and are subject to certain limitations as provided in the Incentive
Bonus Plan. In fiscal 1998, 1997 and 1996, $1,048,496, $1,112,809 and $790,000,
respectively, of incentive bonus was expensed.

NOTE L -- MAJOR CUSTOMER

During fiscal 1998, 1997 and 1996, one of the Company's customers accounted
for approximately 10.5%, 14.5% and 15.0%, respectively, of revenues. This
customer became a client of the Company as a result of the New Jersey
acquisition and signed a three year renewal in fiscal 1998.

37
<PAGE> 40
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE M -- QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The following is a summary of the quarterly results of operations for the
quarterly periods of fiscal 1998, 1997 and 1996:

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH TOTAL
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1998
Revenue................. $15,234,938 $16,711,144 $18,618,383 $24,027,808 $74,592,273
Operating income
(loss)................ 3,735,474 4,044,759 (6,472,706) 6,038,270 7,345,797
Net income (loss)....... 3,500,960 4,150,975 (6,442,970) 5,517,793 6,726,758
Net income (loss) per
share (diluted)....... $ .13 $ .15 $ (.23) $ .19 $ .24
1997
Revenue................. $10,389,193 $11,714,389 $13,188,827 $14,786,433 $50,078,842
Operating income........ 2,267,008 2,796,707 3,275,809 3,794,893 12,134,417
Net income.............. 2,611,363 2,936,465 3,184,585 3,496,239 12,228,652.
Net income per share
(diluted)............. $ .09 $ .11 $ .12 $ .13 $ .44
1996
Revenue................. $ 5,614,304 $ 6,851,136 $ 9,067,901 $ 9,628,840 $31,162,181
Operating income........ 1,138,977 1,597,305 1,768,907 1,856,816 6,362,005
Net income.............. 783,436 1,047,632 1,645,273 2,197,443 5,673,784
Net income per share
(diluted)............. $ .04 $ .05 $ .07 $ .08 $ .25
</TABLE>

NOTE N -- ACQUISITIONS

On December 15, 1995, The Company, in an acquisition accounted for as a
purchase, acquired all of the outstanding capital stock of Bullock Associates,
Inc. ("Bullock), for $12.5 million, with an additional $2.0 million payable upon
the attainment of certain revenue requirements during 1996 and 1997. During
fiscal 1997 and 1998, $863,053 and $1,136,947, respectively, of this additional
amount was paid for the attainment of these revenue requirements. Bullock, now
part of ABR Benefits Services, Inc., is located in Princeton, New Jersey and,
when acquired, provided COBRA administration, retiree insurance administration,
insurance continuation billing and collection, pension benefits administration
services, QDRO administration and educational benefit administration services as
well as administration for other employee benefits programs such as employee
discount plans, adoption programs, program rebates and emergency loans.

Effective February 1, 1996, the Company acquired all of the outstanding
capital stock of Total Cobra Services, Inc. ("TCS" for 265,424 (adjusted for
stock splits) shares of restricted Common Stock. This acquisition was accounted
for as a purchase. TCS is located in Irvine, California and provides COBRA
administration and retiree billing services. Pro forma financial information is
not provided for TCS due to its immateriality.

On June 28, 1996, the Company completed a merger of The L.P. Baier Company
("LPB") where 286,020 shares of the Company's stock was exchanged for all of the
outstanding stock of LPB. LPB is located in Fairfax, Virginia and provides
primarily FSA (Flexible Spending Account) administration services and COBRA
administration. The merger was accounted for as a pooling of interests, and
accordingly, the accompanying financial statements have been restated to include
the accounts and operations of LPB for all periods prior to the merger,
including restating the retained earnings at July 31, 1994 to reflect the
difference between the par value of the Company stock issued and the total
shareholders' equity of LPB. In connection with this merger, $361,198 of
acquisition costs were incurred and have been charged to expense in the fourth
quarter of 1996.

38
<PAGE> 41
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Effective February 1, 1998, the Company, in an acquisition accounted for as
a purchase, acquired all of the outstanding capital stock of Charing Company,
Inc. ("Charing") for $7.5 million in cash and an additional amount to be paid
contingent upon future earnings. The contingent payment, if any will be charged
to goodwill. Charing is located in Wisconsin and provides qualified plan
administration, Section 125 administration, consulting services and
comprehensive employee benefits statement reporting. Goodwill of approximately
$7.5 million resulting from the acquisition is being amortized over a period of
25 years on a straight-line method. Pro forma financial information is not
provided for Charing due to its immateriality.

Effective February 1, 1998, the Company, in an acquisition accounted for as
a purchase, acquired all of the outstanding capital stock of Matthews, Malone &
Associates, Ltd. ("Matthews/Malone") for $2.9 million in cash and an additional
amount to be paid contingent upon future earnings. Potential contingent payments
could range between $0 and $500,000 and would be charged to goodwill if paid.
Matthews/Malone is located in Arizona and provides defined benefit and defined
contribution plan administration services as well as Section 125 administration
and non-qualified plan administration services. Goodwill of approximately $2.5
million resulting from the acquisition is being amortized over a period of 25
years on a straight-line method. Pro forma financial information is not provided
for Matthews/Malone due to its immateriality.

On April 30, 1998, the Company, in an acquisition accounted for as a
purchase, acquired all of the outstanding capital stock of Business Computer
Services, Inc. ("BCSI") d/b/a PayAmerica ("PayAmerica"(R)) in exchange for
1,198,008 shares of the Company's voting common stock valued at $28.8 million,
reflecting a 20% discount for the large block of common stock and restricted
status thereof. The purchase price was allocated to the net assets acquired and
to purchased in-process research and development ("R&D"). Purchased R&D includes
the value of products in the development stage and not considered to have
reached technological feasibility. In accordance with applicable accounting
rules, purchased in-process R&D is required to be expensed. Accordingly
$11,010,000 (which amount was determined by a third-party valuation) of the
acquisition cost was expensed in the third quarter of fiscal 1998. BCSI is
located in McLean, Virginia and has offices in Maryland and New Jersey. BCSI
provides payroll and tax deposit services, along with human resource
administration services. Goodwill of approximately $11.8 million resulting from
the acquisition is being amortized over a period of 25 years on a straight-line
method. Pro forma financial information is not provided for BCSI due to its
immateriality.

The following pro forma balances have been derived from the historical
financial statements of the Company, Charing, Matthews/Malone and BCSI and
adjusts such information to give effect to the acquisitions of Charing,
Matthews/Malone and BCSI. The balances for the years ended July 31, 1998 and
1997 assume that these acquisitions occurred on August 1, 1996. The unaudited
pro forma financial information is not necessarily indicative of the results
which would actually have occurred had the transactions been in effect on the
dates and for the periods indicated or which may result in the future.

<TABLE>
<CAPTION>
YEARS ENDED JULY 31,
--------------------
1998 1997
-------- --------
(IN THOUSANDS EXCEPT
PER SHARE DATA)
<S> <C> <C>
Revenue.................................. $84,350 $62,725
Operating income......................... 19,582 2,673
Net income............................... 18,274 1,947
Net income per share (diluted)........... $ 0.63 $ 0.07
</TABLE>

Effective August 1, 1998, the Company, in an acquisition accounted for as a
purchase, acquired all of the capital stock of MidAtlantic 401(k) Services, Inc.
("MidAtlantic") for $10.9 million in cash and an additional amount to be paid
contingent upon future earnings. Potential contingent payments could range
between $0 and $2.0 million and would be charged to goodwill if paid. The
majority of the purchase price is allocated to goodwill and amortized over 25
years.

39
<PAGE> 42
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Effective October 22, 1998, the Company, in an acquisition accounted for as
a purchase, acquired all of the outstanding capital stock of Chowning, Ltd.,
d/b/a The Barrington Group, for $15.9 million in cash and an additional amount
to be paid contingent upon future earnings. Potential contingent payments could
range between $0 and $800,000 and would be charged to goodwill if paid. Chowning
is headquartered in Milwaukee, Wisconsin, and has additional offices in
Maryland, Pennsylvania and California. The Barrington Group administers Section
125 benefit plans (full cafeteria plans, flexible spending accounts and pre-tax
premium plans). The majority of the purchase price is allocated to goodwill and
amortized over 25 years.

Effective October 1, 1998, the Company, in an acquisition accounted for as
a purchase, acquired all of the outstanding capital stock of Western Pension
Service Corporation ("Western Pension") for $7.0 million in cash and an
additional amount to be paid contingent upon future earnings. The potential
contingent payment could be $1.0 million and would be charged to goodwill if
paid. Western Pension is headquartered in San Rafael, California and administers
qualified retirement plans. The majority of the purchase price is allocated to
goodwill and amortized over 25 years.

Effective November 1, 1998, the Company, in an acquisition accounted for as
a purchase, acquired all of the outstanding capital stock of BMC Consultants,
Inc. ("BMC") for $3.0 million in cash and an additional amount to be paid
contingent upon future earnings. Potential contingent payments could range
between $0 and $800,000 and would be charged to goodwill if paid. BMC is
headquartered in Englewood, Colorado and provides defined contribution and
defined benefit plan administration services. The majority of the purchase price
is allocated to goodwill and amortized over 25 years.

NOTE O -- CASH FLOW INFORMATION

Non-cash investing and financing activities:

During the years presented, the Company has completed certain acquisitions
(see Note N). In connection with these acquisitions liabilities were assumed as
follows:

<TABLE>
<CAPTION>
YEARS ENDED JULY 31,
----------------------------------------
1998 1997 1996
------------ ---------- ------------
<S> <C> <C> <C>
Fair Value of Assets Acquired.................. $ 33,065,835 $ 871,684 $ 12,896,190
Cash Paid for Capital Stock.................... (11,608,599) (871,684) (11,288,020)
------------ ---------- ------------
Stock Exchanged for Capital Stock.............. (28,800,112) -- --
Acquired Research and Development.............. 11,010,000 -- --
------------
Liabilities assumed............................ $ 3,667,124 $ -- $ 1,608,170
============ ========== ============
Stock Issued in Connection with Acquisition.... $ -- $ -- $ 3,050,176
============ ========== ============

Cash Paid during the Year for Income Taxes..... $ 3,253,574 $5,241,601 $ 1,663,102
============ ========== ============
</TABLE>

40
<PAGE> 43

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
ON THE SCHEDULE

Board of Directors
ABR Information Services, Inc.

In connection with our audit of the consolidated financial statements of
ABR Information Services, Inc. referred to in our report dated November 11,
1998, which is included on page 23 of this Form 10-K for the year ended July 31,
1998, we have also audited Schedule II for each of the three years in the period
ended July 31, 1998. In our opinion, the schedule presents fairly, in all
material respects, the information required to be set forth therein.

GRANT THORNTON LLP

Tampa, Florida
November 11, 1998

41
<PAGE> 44

SCHEDULE II
ABR INFORMATION SERVICES, INC.

VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- --------------------------------------- ---------- ----------------------------- ---------- ----------
ADDITIONS
-----------------------------
BALANCE AT CHARGED CHARGED TO DEDUCTIONS BALANCE AT
BEGINNING TO COSTS OTHER ACCOUNTS DESCRIBE END OF
DESCRIPTION OF PERIOD AND EXPENSES -- DESCRIBE (1) PERIOD
- ----------- ---------- ------------ -------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Year Ended July 31, 1996
Deducted from asset accounts:
Allowance for doubtful accounts... 26,202 20,000 -- 7,308 38,894
Year Ended July 31, 1997
Deducted from asset accounts:
Allowance for doubtful accounts... 38,894 91,500 -- 219 130,175
Year Ended July 31, 1998
Deducted from asset accounts:
Allowance for doubtful accounts...... 130,175 339,033 -- 41,894 427,314
</TABLE>

42
<PAGE> 45

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

ABR INFORMATION SERVICES, INC.

By: /s/ JAMES P. O'DROBINAK
------------------------------------
James P. O'Drobinak
Senior Vice President and Chief
Financial Officer

November 13, 1998

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints James E. MacDougald and James P. O'Drobinak, and
each of them, his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign any and all amendments to
this report, and to file the same, with all exhibits thereto, and any other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to 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 or
she might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or either of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES AND EXCHANGE ACT OF 1934,
THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES INDICATED ON NOVEMBER 13, 1998.

/s/ JAMES E. MACDOUGALD /s/ SUZANNE M. MACDOUGALD
- ----------------------------------------------------- -----------------------------------------------------
James E. MacDougald Suzanne M. MacDougald
Chairman of the Board, Senior Vice President, Secretary and Director
President and Chief Executive Officer and
Director (Principal Executive Officer)

/s/ JAMES P. O'DROBINAK /s/ THOMAS F. COSTELLO
- ----------------------------------------------------- -----------------------------------------------------
James P. O'Drobinak Thomas F. Costello
Senior Vice President and Director
Chief Financial Officer
(Principal Financial and Accounting Officer)

/s/ MARK M. GOLDMAN /s/ PETER A. SULLIVAN
- ----------------------------------------------------- -----------------------------------------------------
Mark M. Goldman Peter A. Sullivan
Director Director
</TABLE>

43
<PAGE> 46

EXHIBITS TO FORM 10-K
FOR THE FISCAL YEAR ENDED JULY 31, 1998

ABR INFORMATION SERVICES, INC.
FILE NO. 0-24132
<PAGE> 47

ABR INFORMATION SERVICES, INC.

EXHIBIT INDEX TO ANNUAL REPORT ON FORM 10-K
FOR FISCAL YEAR ENDED JULY 31, 1998

<TABLE>
<CAPTION>
EXHIBIT FILED
NUMBER DESCRIPTION HEREWITH
- ------- ----------- --------
<C> <C> <S> <C>
3.1 -- Articles of Incorporation of ABR Information Services, Inc.*
3.2 -- Bylaws of ABR Information Services, Inc.*
10.1 -- Form of Employment Agreement between ABR Information
Services, Inc. and each of James E. MacDougald and Suzanne
M. MacDougald, executive officers.*
10.2 -- ABR Information Services, Inc. 1995 Non-Employee Director
Stock Option Plan.*
10.3 -- ABR Information Services, Inc. 1996 Non-Employee Director
Stock Option Plan, as amended. X
10.4 -- ABR Information Services, Inc. Amended and Restated 1987
Stock Option Plan.*
10.5 -- ABR Information Services, Inc. Amended and Restated 1993
Stock Option Plan (as amended).*
10.6 -- ABR Information Services, Inc. Incentive Bonus Plan.*
10.7 -- Revolving Line of Credit Note/Loan Agreement dated June 19,
1998 by and between Barnett Bank, N.A. and ABR Information
Services, Inc. X
10.8 -- Services Agreement between Corporate Benefits Delivery of
General Electric Company and ABR Benefits Services, Inc. (as
successor to Bullock Associates, Inc.), as amended on
December 15, 1995.*
10.9 -- Agreement and Plan of Reorganization dated as of February 1,
1996 by and among ABR Information Services, Inc., Total
Cobra Services and John M. Hermann.*
10.10 -- Agreement and Plan of Reorganization dated as of June 28,
1996 by and among ABR Information Services, Inc., The L.P.
Baier Company and L.P. Baier's shareholders.*
10.11 -- Stock Purchase Agreement by and among ABR Information
Services, Inc., Bullock Associates, Inc., W. Carl Bullock,
Barbara A. Biasotti and Nancy L. Clark dated as of December
15, 1995.*
10.12 -- Agreement for Sale and Purchase of Property, dated October
2, 1997, by and between Florida Power Corporation (Seller)
and ABR Properties, Inc. (Buyer) including commercial lease
as of the same date.*
10.13 -- Stock Purchase Agreement dated February 26, 1998 and
effective February 1, 1998, by and among ABR Information
Services, Inc., Charing Company, Inc. and the shareholders
of Charing Company, Inc.*
10.14 -- Stock Purchase Agreement dated February 27, 1998 and
effective February 1, 1998, by and among ABR Information
Services, Inc., Matthews, Malone & Associates, Ltd. and the
shareholders of Matthews, Malone & Associates, Ltd.*
10.15 -- Agreement and Plan of Reorganization, dated April 30, 1998,
by and among ABR Information Services, Inc., Business
Computer Services, Inc. ("BCSI"), Joseph M. Speroni, Paul J.
Speroni, Robert S. Speroni, Stephen J. Speroni, Joseph F.
Speroni, David M. Speroni, Richard B. Speroni, Rex Haverty,
E. Hale Waller, Nikky Losapio and Christopher Mantua, as the
Shareholders of BCSI, and Samuel N. Klewans, as
Shareholders' Agent.*
10.16 -- Stock Purchase Agreement, dated August 12, 1998, and
effective as of August 1, 1998, by and among ABR Information
Services, Inc., MidAtlantic 401(k) Services, Inc., the
Shareholders of MidAtlantic 401(k) Services, Inc., and E.
Franklin DePew, as Shareholders' Agent. X
</TABLE>
<PAGE> 48

<TABLE>
<CAPTION>
EXHIBIT FILED
NUMBER DESCRIPTION HEREWITH
- ------- ----------- --------
<C> <C> <S> <C>
10.17 -- Stock Purchase Agreement, dated October 22, 1998, by and
among ABR Information Services, Inc., Chowning, Ltd., The
Barrington Group, Ltd., Mark G. FitzGerald, Timothy D. Dyer
and Laura J. LaPinske, as shareholders of Chowning, Ltd.,
and Mark G. Fitzgerald, as Shareholders' Agent.*
10.18 -- ABR Information Services, Inc. 1997 Stock Option Plan. X
10.19 -- Stock Purchase Agreement, dated October 30, 1998, and
effective as of October 1, 1998, by and among ABR
Information Services, Inc., Western Pension Service
Corporation, and Robert A. Jocelyn. X
10.20 -- Stock Purchase Agreement, dated November 10, 1998, and
effective as of November 1, 1998, by and among ABR
Information Services, Inc., BMC Consultants, Inc., Jeffrey
J. Berends, D'Nelle L. Macaluso, Frank J. Dobis, Scott A.
Hittner, Carol L. Carlson, Thomas W. Neilsen, Jr., Walter L.
Malles, Jr. and Gene R. Etzig, as Shareholders of BMC
Consultants, Inc., and Jeffrey J. Berends, as Shareholders'
Agent. X
10.21 -- Form of Key Executive Employment and Severance Agreement
between ABR Information Services, Inc. and each of James E.
MacDougald and James P. O'Drobinak, executive officers. X
21.1 -- List of subsidiaries of ABR Information Services, Inc. X
23.1 -- Consent of Grant Thornton LLP. X
24.1 -- Powers of Attorney (included on signature page hereto).
27.1 -- Financial Data Schedule (for SEC use only).
</TABLE>

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

* Incorporated by reference.

<PAGE> 1

EXHIBIT 10.3

ABR INFORMATION SERVICES, INC.
1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
(as amended on September 12, 1997)

1. PURPOSE OF PLAN

The purpose of this Plan is to enable ABR Information Services, Inc. (the
"Company") and its Subsidiaries to compete successfully in attracting,
motivating and retaining Non-Employee Directors with outstanding abilities by
making it possible for them to purchase Shares on terms that will give them a
direct and continuing interest in the future success of the businesses of the
Company and its Subsidiaries and encourage them to remain as directors of the
Company or one or more of its Subsidiaries.

2. DEFINITIONS

For purposes of the Plan, except where the context clearly indicates
otherwise, the following terms shall have the meanings set forth below:

(a) "Board" means the Board of Directors of the Company.

(b) "Code" means the United States Internal Revenue Code of 1986, as
amended.

(d) "Fair Market Value" means, with respect to a Share, if the Shares
are then listed and traded on a registered national or regional securities
exchange, or quoted on The National Association of Securities Dealers'
Automated Quotation System (including The Nasdaq Stock Market's National
Market), the average closing price of a Share on such exchange or quotation
system for the five trading days immediately preceding the date of grant of
an Option, or, if Fair Market Value is used herein in connection with any
event other than the grant of an Option, then such average closing price
for the ten trading days immediately preceding the date of such event. If
the Shares are not traded on a registered securities exchange or quoted in
such a quotation system, the Board shall determine the Fair Market Value of
a Share.

(e) "Non-Employee Director" shall mean any member of the Company's
Board of Directors who is not an employee of the Company or any Subsidiary.

(f) "Option" means an option granted under this Plan, which Option
shall not be an incentive stock option within the meaning of Section 422 of
the Code, or the corresponding provision of any subsequently enacted tax
statute.

(g) "Optionee" means any person who has been granted an Option which
Option has not expired or been fully exercised or surrendered.

(h) "Plan" means the Company's 1996 Non-Employee Director Stock Option
Plan.

(i) "Rule 16b-3" means Rule 16b-3 promulgated pursuant to Section
16(b) of the Securities Exchange Act of 1934, as amended, or any successor
rule.

(j) "Share" means one share of voting common stock, par value $.01 per
share, of the Company, and such other stock or securities that may be
substituted therefor pursuant to Section 5 hereof.

(k) "Subsidiary" means any "subsidiary corporation" within the meaning
of Section 424(f) of the Code.

3. LIMITS ON OPTIONS

The total number of Shares with respect to which Options may be granted
under the Plan shall not exceed in the aggregate 200,000 Shares, subject to
adjustment as provided in Section 5 hereof. If any Option

1
<PAGE> 2

expires, terminates or is terminated for any reason prior to its exercise in
full, the Shares that were subject to the unexercised portion of such Option
shall be available for future grants under the Plan.

4. GRANTING AND TERMS OF OPTIONS

(a) On the date on which a Non-Employee Director, other than a Non-Employee
Director who is serving as such on the Effective Date, is first elected or
appointed as a Non-Employee Director during the existence of the Plan, such
Non-Employee Director shall automatically be granted an Option to purchase 5,000
Shares. Each Non-Employee Director as of the Effective Date shall, on the
Effective Date, automatically be granted an Option to purchase 5,000 Shares.

(b) Each Non-Employee Director (if he or she continues to serve in such
capacity) shall, on the day following the annual meeting of shareholders in each
year during the time the Plan is in effect, automatically be granted an Option
to purchase 5,000 Shares; provided, however, that a Non-Employee Director who
receives, in any year, an Option pursuant to Section 4.(a) hereof shall not be
eligible to begin to receive grants pursuant to this Section 4.(b) until the
following year.

(c) Notwithstanding the provisions of Section 4.(a) and 4.(b) hereof,
Options shall be automatically granted to Non-Employee Directors under the Plan
only for so long as the Plan remains in effect and a sufficient number of Shares
are available hereunder for the granting of such Options.

(d) The exercise price of each Share subject to an Option shall be equal to
100% of the Fair Market Value of the Shares on the date of grant of such Option.

(e) Options shall not be assignable or transferable by the Optionee other
than by will or by the laws of descent and distribution.

(f) Each Option shall expire and all rights thereunder shall end at the
expiration of ten (10) years after the date on which it was granted, subject in
all cases to earlier expiration as provided in subsections (g) and (h) of this
Section 4.

(g) During the life of an Optionee, an Option shall be exercisable only by
such Optionee and only within one (1) month after the date on which the Optionee
ceases to be a Non-Employee Director, other than by reason of the Optionee's
death or resignation from the Board with the consent of the Company as provided
in subsection (h) of this Section 4, but only if and to the extent the Option
was exercisable immediately prior to such date, and subject to the provisions of
the subsections (f) and (i) of this Section 4. If the Optionee is removed as a
Director for cause (as defined in the Company's Articles of Incorporation, as
amended from time to time), all Options of the Optionee shall terminate
immediately on the date of removal.

(h) If an Optionee: (i) dies while a Non-Employee Director or within the
period when an Option could have otherwise been exercised by the Optionee; or
(ii) ceases to be a Non-Employee Director as a result of such Optionee's
resignation from the Board, provided that the Company has consented in writing
to such Optionee's resignation, then, in each such case, such Optionee, or the
duly authorized representatives of such Optionee, shall have the right, at any
time within three (3) months after the death or after such resignation of the
Optionee, as the case may be, and prior to the termination of the Option
pursuant to subsections (f) and (i) of this Section 4, to exercise any Option to
the extent such Option was exercisable by the Optionee immediately prior to such
Optionee's death or resignation.

(i) The Optionee may exercise the Option (subject to the limitations on
exercise set forth in subsection (f) of this Section 4), in whole or in part,
one (1) year following the date of grant.

(j) An Option may be exercised in whole at one time or in part from time to
time, subject to subsection (i) of this Section 4.

2
<PAGE> 3

5. EFFECT OF CHANGES IN CAPITALIZATION

(a) If the number of outstanding Shares is increased or decreased or
changed into or exchanged for a different number or kind of shares or other
securities of the Company by reason of any recapitalization, reclassification,
stock split, combination of shares, exchange of shares, stock dividend or other
distribution payable in capital stock, or other increase or decrease in such
shares effected without receipt of consideration by the Company, a proportionate
and appropriate adjustment shall be made by the Board of Directors in (i) the
number and type of Shares subject to the Plan and which thereafter may be made
the subject of Options under the Plan, and (ii) the number and kind of shares
for which Options are outstanding, so that the proportionate interest of the
Optionee immediately following such event shall, to the extent practicable, be
the same as immediately prior to such event. Any such adjustment in outstanding
Options shall not change the aggregate option price payable with respect to
Shares subject to the unexercised portion of the Options outstanding but shall
include a corresponding proportionate adjustment in the option price per Share.

(b) Subject to Section 5.(c) hereof, if the Company shall be the surviving
corporation in any reorganization, merger, share exchange or consolidation of
the Company with one or more other corporations or other entities, any Option
theretofore granted shall pertain to and apply to the securities to which a
holder of the number of Shares subject to such Option would have been entitled
immediately following such reorganization, merger, share exchange or
consolidation, with a corresponding proportionate adjustment of the option price
per Share so that the aggregate option price thereafter shall be the same as the
aggregate option price of the Shares remaining subject to the Option immediately
prior to such reorganization, merger, share exchange or consolidation.

(c) In the event of: (i) the adoption of a plan of reorganization, merger,
share exchange or consolidation of the Company with one or more other
corporations or other entities as a result of which the holders of the Shares as
a group would receive less than fifty percent (50%) of the voting power of the
capital stock or other interests of the surviving or resulting corporation or
entity; (ii) the adoption of a plan of liquidation or the approval of the
dissolution of the Company; (iii) the approval by the Board of an agreement
providing for the sale or transfer of the assets of the Company; or (iv) the
acquisition of more than fifty percent (50%) of the outstanding shares by any
person within the meaning of Rule 13(d)(3) under the Securities Exchange Act of
1934 if such acquisition is not preceded by a prior expression of approval by
the Board, then, in each such case, any Option granted hereunder shall become
immediately exercisable in full, subject to any appropriate adjustments in the
number of Shares subject to such Option and the option price, regardless of any
provision contained in the Plan with respect thereto limiting the exercisability
of the Option for any length of time. Notwithstanding the foregoing, if a
successor corporation or other entity as contemplated in clause (i) or (iii) of
the preceding sentence agrees to assume the outstanding Options or to substitute
substantially equivalent options, then the outstanding Options issued hereunder
shall not be immediately exercisable, but shall remain exercisable in accordance
with the terms of the Plan and the applicable stock option agreements.

(d) Adjustments under this Section 5 relating to Shares or securities of
the Company shall be made by the Board, whose determination in that respect
shall be final and conclusive. Options subject to grant or previously granted
under the Plan at the time of any event described in this Section 5 shall be
subject to only such adjustments as shall be necessary to maintain the
proportionate interest of the Options and preserve, without exceeding, the value
of such Options. No fractional Shares or units of other securities shall be
issued pursuant to any such adjustment, and any fractions resulting from any
such adjustment shall be eliminated in each case by rounding upward to the
nearest whole Share or unit.

(e) The grant of an Option pursuant to the Plan shall not affect or limit
in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge, consolidate, dissolve or liquidate, or to sell or
transfer all or any part of its business or assets.

6. DELIVERY AND PAYMENT FOR SHARES

(a) No Shares shall be delivered upon the exercise of an Option until the
option price for the Shares acquired has been paid in full. No shares shall be
issued or transferred under the Plan unless and until all legal

3
<PAGE> 4

requirements applicable to the issuance or transfer of such Shares have been
complied with to the satisfaction of the Board. Any Shares issued by the Company
to an Optionee upon exercise of an Option may be made only in strict compliance
with and in accordance with applicable state and federal securities laws.

(b) Payment of the option price for the Shares purchased pursuant to the
exercise of an Option shall be made: (i) in cash or by check payable to the
order of the Company; (ii) through the tender to the Company of Shares, which
Shares shall be valued, for purposes of determining the extent to which the
option price has been paid thereby, at their Fair Market Value on the date of
exercise; or (iii) by a combination of the methods described in (i) and (ii)
hereof.

7. NO CONTINUATION AS A DIRECTOR AND DISCLAIMER OF RIGHTS

No provision in the Plan or in any Option granted or option agreement
entered into pursuant to the Plan shall be construed to confer upon any
individual the right to remain a director of the Company or any Subsidiary. The
Plan shall in no way be interpreted to require the Company to transfer any
amounts to a third party trustee or otherwise hold any amounts in trust or
escrow for payment to any Optionee or beneficiary under the terms of the Plan.
An Optionee shall have none of the rights of a shareholder of the Company until
all or some of the Shares covered by an Option are fully paid and issued to such
Optionee.

8. ADMINISTRATION

The Plan is intended to meet the requirements of Rule 16b-3(c)(2)(ii)
adopted under the Securities Exchange Act of 1934, as amended, and accordingly
is intended to be self-governing. To this end, the Plan requires no
discretionary action by any administrative body with regard to any transaction
under the Plan. To the extent, if any, that any questions of interpretation
arise, these shall be resolved by the Board.

9. NO RESERVATION OF SHARES

The Company shall be under no obligation to reserve or to retain in its
treasury any particular number of Shares in connection with its obligations
hereunder.

10. AMENDMENT OF PLAN

The Board, without further action by the shareholders, may amend this Plan
from time to time as it deems desirable; provided, that (i) no such amendment
shall be made without shareholder approval if such approval would be required to
comply with Rule 16b-3 and (ii) the provisions of Sections 4.(a) and 4.(b) shall
not be amended more than once every six months, other than to comport with
changes in the Code, the Employee Retirement Income Security Act of 1974, as
amended, or the rules and regulations promulgated thereunder.

11. TERMINATION OF PLAN

This Plan shall terminate ten (10) years from the Effective Date. The Board
may, in its discretion, suspend or terminate the Plan at any time prior to such
date, but such termination or suspension shall not adversely affect any right or
obligation with respect to any outstanding Option.

12. EFFECTIVE DATE

The Plan shall become effective on the Effective Date and Options hereunder
may be granted at any time on or after that date, subject to approval of the
Plan by the Company's shareholders within one year after the Effective Date by a
majority of the votes cast at a duly held meeting of the shareholders of the
Company at which a quorum representing a majority of all outstanding stock is
present, either in person or by proxy, and in a manner that satisfies the
requirements of Rule 16b-3. Upon approval of the Plan by the shareholders of the
Company as set forth above, all Options granted under the Plan on or after the
Effective Date shall be fully effective as if the shareholders of the Company
had approved the Plan on the Effective Date.

<PAGE> 1
Exhibit 10.7

REVOLVING LINE OF CREDIT NOTE

$25,000,000.00 , Georgia
---------------
, 1998
------------------

FOR VALUE RECEIVED, the undersigned, ABR INFORMATION SERVICES, INC., a
Florida corporation (the "Borrower"), promises to pay to the order of BARNETT
BANK, N.A., a national banking association (the "Lender"), the principal sum of
TWENTY-FIVE MILLION AND NO/100 DOLLARS ($25,000,000.00), together with interest
on the principal balance remaining unpaid from time to time at the rates set
forth below.

Revolving Line-of-Credit. This Note evidences a revolving line-of-credit
extended by the Lender to the Borrower on the date hereof (the "Loan"). Proceeds
of this Note may be disbursed by the Lender to the Borrower and shall be repaid
by the Borrower to the Lender in the manner set forth below in this Note and in
accordance with a Loan Agreement being executed by the Lender, the Borrower and
the guarantors as described therein on or about the date hereof (the "Loan
Agreement"). Proceeds that are disbursed and repaid from time to time shall be
thereafter available for redisbursement under this Note as provided in the Loan
Agreement. Provided however, the principal amount outstanding under this Note
shall not at any time exceed the principal sum shown above, nor the maximum
amount permitted under the terms of the Loan Agreement.

Term. The term of this Note is from the date of this Note through and
including June, 1, 2001 (the "Term"). The last day of the Term will be sometimes
referred to below as the "Maturity Date".

Interest. The principal balance of this Note remaining unpaid from time to
time shall bear interest strictly as provided in the Loan Agreement.

Manner of Calculation. Interest shall be calculated on the basis of a
three hundred sixty (360) day year for actual days elapsed. Interest will be
charged on the principal balance of the loan that remains outstanding from time
to time.

Interest Limitation. Notwithstanding any other provision of this Note or
of any instrument securing this Note or any other instrument executed in
connection with the Loan evidenced hereby, it is expressly agreed that the
amounts payable under this Note or under the other aforesaid instruments for the
payment of interest or any other payment in the nature of or which would be
considered as interest or other charge for the use or loan of money shall not
exceed the highest rate allowed by law, from time to time, to be charged by
Lender. In the event the provisions of this Note or of any instruments referred
to in this paragraph, regarding the payment of interest or

Signed for Identification

By:
----------------------------------
- ----------------------------------
The Authorized Agent of Borrower

<PAGE> 2

other payments in the nature of or which would be considered as interest or
other charge for the use or loan of money operate to produce a rate that exceeds
such limitation, then the excess over such limitation will not be payable and
the amount otherwise agreed to have been paid shall be reduced by the excess so
that such limitation will not be exceeded, and if any payment actually made
shall result in such limitation being exceeded, the amount of the excess shall
constitute and be treated as a payment on the principal hereof and shall operate
to reduce such principal by the amount of such excess, or if in excess of the
principal indebtedness, such excess shall be refunded.

Payments. Principal and interest shall be due and payable and shall be
paid at Post Office Box 12288, St. Petersburg, Florida 33733-2288, ATTN.:
Commercial Loan Department, or at such other place as the Lender may designate
from time to time as follows:

(i) Monthly Payments. Accrued interest shall be due and payable and shall
be paid monthly, commencing on the date that is exactly one (1) month following
the date of this Note, and on the same day of each succeeding monthly period
thereafter through and including the same day of the month next preceding the
Maturity Date.

(ii) Principal Reductions. Principal payments shall be made from time to
time as provided in the Loan Agreement being executed on or about the date
hereof.

(iii) Maturity Date. On the Maturity Date, all indebtedness evidenced by
this Note (whether unpaid principal, accrued interest or otherwise) that remains
unpaid shall be due and payable and shall be paid.

Late Charge. Any installment not received within ten (10) days when due
shall be subject to, and it is agreed that the Lender shall collect thereon and
therewith a "late charge" in the amount of five percent (5%) of the payment upon
each such delinquent installment. Said "late charge" shall be immediately due
and payable and shall be paid by the Borrower without notice or demand of the
holder hereof.

Prepayment. Borrower shall have the option of prepaying all or any part of
the principal of this Note at any time during the term of this Note, without
notice, premium or penalty for the privilege of such prepayments. The Lender may
require that any partial prepayments be made on the date payments are due. In
the event of any full prepayment, all accrued interest and other charges
evidenced by this Note and the instruments of security for this Note shall be
paid at the same time as such full principal prepayments.

Consent and Waiver. Each Obligor (which term shall mean and include the
Borrower, each guarantor, each endorser, and all others who may become liable
for all or any part of the obligations evidenced and secured hereby), does
hereby, jointly and severally: (a) consent to any

Signed for Identification

By:
----------------------------------
- ----------------------------------
The Authorized Agent of Borrower

2
<PAGE> 3

forbearance or extension of the time or manner of payment hereof and to the
release of all or any part of any security held by the Lender to secure payment
of this Note and to the subordination of any instrument of security securing
this Note as to all or any part of the property encumbered thereby, all without
notice or consent of that party; (b) agree that no course of dealing or delay or
omission or forbearance on the part of the Lender in exercising or enforcing any
of its rights or remedies hereunder or under any instrument securing this Note
shall impair or be prejudicial to any of the Lender's rights and remedies
hereunder or to the enforcement hereof and that the Lender may extend or
postpone the time and manner of payment and performance of this Note and any
instrument securing this Note, may grant forbearances and may release, wholly or
partially, any security held by the Lender as security for this Note and
release, partially or wholly, any person or party primarily or secondarily
liable with respect to this Note, all without notice to or consent by any party
primarily or secondarily liable hereunder and without thereby releasing,
discharging or diminishing its rights and remedies against any other party
primarily or secondarily liable hereunder; and (c) except as otherwise set forth
in this Note and the instruments of security for this Note, waive notice of
acceptance of this Note, notice of the occurrence of any default hereunder or
under any instrument securing this Note and presentment, demand, protest, notice
of dishonor and notice of protest and notices of any and all action at any time
taken or omitted by the Lender in connection with this Note or any instrument
securing this Note and waives all requirements necessary to hold that party to
the liability of that party.

Cross Default. A default under this Note shall be and constitute a default
under any and all other notes or other evidence of indebtedness and any
instruments of security therefor in which an Obligor is liable and of which the
Lender is the holder (collectively the "Other Notes"). A default under any other
notes or other evidence of indebtedness or any instrument of security therefor
in which an Obligor is liable and the Lender is the holder, including, without
limitation, under the Other Notes, shall constitute a default under this Note
and any instruments of security therefor.

Events of Default. The happening of any of the following events shall
constitute a default hereunder: (a) failure of any Obligor to pay any principal,
interest or any other sums required hereunder when due under this Note; or (b) a
default shall occur in any instrument securing this Note or in any other
instrument executed in connection with the Loan evidenced hereby, which is not
cured within the applicable curative period set forth in such instruments; or
(c) a default shall occur under the Other Notes.

Acceleration. If a default shall occur hereunder which is not cured within
thirty (30) days, then at the option of the Lender, the entire principal sum
then remaining unpaid and accrued interest shall immediately become due and
payable without notice or demand, and said principal shall bear interest from
such date at the highest legal rate permitted by law, from time to time, to be
charged by Lender; it being agreed that interest not paid when due shall, at the
option of the

Signed for Identification

By:
----------------------------------
- ----------------------------------
The Authorized Agent of Borrower

3
<PAGE> 4

Lender, draw interest at the rate provided for in this paragraph. Failure to
exercise the above options shall not constitute a waiver of the right to
exercise the same in the event of any subsequent default.

Attorneys' Fees. All parties liable for the payment of this Note agree to
pay the Lender reasonable attorneys' fees and costs, whether or not an action be
brought, for the services of counsel employed after maturity or default to
collect this Note or any principal or interest due hereunder, or to protect the
security, if any, or enforce the performance of any other agreement contained in
this Note or in any instrument of security executed in connection with the Loan,
including costs and attorneys' fees on any appeal, or in any proceedings under
the National Bankruptcy Code or in any post judgment proceedings.
Notwithstanding anything contained in this Note, the instruments of security, or
any other documents executed in connection therewith to the contrary, the
Borrower hereby expressly waives its statutory right under Section 57.105(2) of
the Florida Statutes to receive attorneys' fees in any cause of action or other
litigation based in whole or in part, directly or indirectly, upon the foregoing
documents. Such waiver by the Borrower constitutes a material inducement for the
Lender to make the Loan to the Borrower.

Set Off. The Obligors shall have no right of set off against the Lender
under this Note or under any instruments securing this Note or executed in
connection with the Loan evidenced hereby. The Lender, however, shall have the
right, immediately and without further action by it, to set off against this
Note all money owed by the Lender in any capacity to each or any Obligor,
whether or not due.

Borrower. The Borrower warrants and represents to Lender that it is a
corporation duly formed, presently existing and in good standing under the laws
of the State of Florida.

Waiver of Jury Trial. Borrower hereby voluntarily and irrevocably waives
the right to a trial by jury in connection with any litigation, action or cause
of action arising out of or by virtue of: (i) this instrument; or (ii) any other
agreement or document executed or contemplated to be in connection with the Loan
evidenced or secured hereby, or incident hereto; or (iii) any course of conduct,
course of dealing, representation, statement or other action of any party in
connection with the Loan. The parties to the Loan have discussed this waiver,
have agreed that it is an essential and material part of their agreement
concerning the Loan, and that no officer or representative of Lender has the
authority to modify, orally or in writing, the terms of this paragraph. This
agreement shall be binding on the Borrower, and, if applicable, on all Obligors
as defined herein, and constitutes a material inducement for Lender entering
into the Loan transaction.

Florida Law. This Note is executed under seal and constitutes a contract
under the laws of the State of Florida, and shall be enforceable in a Court of
competent jurisdiction in that State, regardless of in which jurisdiction this
Note is being executed.

Signed for Identification

By:
----------------------------------
- ----------------------------------
The Authorized Agent of Borrower

<PAGE> 5

Headings. The headings of the paragraphs contained in this Note are for
convenience of reference only and do not form a part hereof and in no way
modify, interpret or construe the meaning of the parties hereto.

Documentary Stamps. This instrument was made, executed and delivered
outside the State of Florida, and no Florida Documentary Stamps tax is due
hereon in accordance with F.A.C. 12B-4.053(35).

Identification. This Note consists of six (6) pages, all but the last of
which have been signed only for identification by Robert A. Smolinski, the
Authorized Agent of the Borrower, on behalf of the Borrower.

[Remainder of page intentionally left blank]

Signed for Identification

By:
----------------------------------
- ----------------------------------
The Authorized Agent of Borrower

5
<PAGE> 6

THE UNDERSIGNED ACKNOWLEDGES THAT THE LOAN EVIDENCED HEREBY IS FOR
COMMERCIAL PURPOSES ONLY AND NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES.

Signed, sealed and delivered ABR INFORMATION SERVICES, INC.,
in the presence of: a Florida corporation

By:
- ------------------------------ ------------------------------
SIGNATURE Its Authorized Agent

- ------------------------------
NAME LEGIBLY PRINTED, (CORPORATE SEAL)
TYPEWRITTEN OR STAMPED

- ------------------------------
SIGNATURE

- ------------------------------
NAME LEGIBLY PRINTED,
TYPEWRITTEN OR STAMPED

As to Borrower

STATE OF GEORGIA )
COUNTY OF )
------------------

The foregoing instrument was acknowledged before me this _____ day of
__________, 1998, by ROBERT A. SMOLINSKI, the Authorized Agent of ABR
INFORMATION SERVICES, INC., a Florida corporation, on behalf of the corporation.

PERSONALLY KNOWN ________ OR PRODUCED IDENTIFICATION
TYPE OF IDENTIFICATION PROVIDED ____________________

----------------------------------
SIGNATURE

----------------------------------
NAME LEGIBLY PRINTED,
TYPEWRITTEN OR STAMPED

(SEAL)
NOTARY PUBLIC
My Commission Expires:

6
<PAGE> 7
LOAN AGREEMENT

THIS LOAN AGREEMENT (the "Agreement") is entered into as of the _________
day of __________________, 1998, by and between BARNETT BANK, N.A., a national
banking association (the "Lender"), ABR INFORMATION SERVICES, INC., a Florida
corporation (the "Borrower"), and ABR BENEFITS SERVICES, INC., a Florida
corporation and ABR PROPERTIES, INC., a Florida corporation (collectively the
"Guarantors") (the Borrower and the Guarantors will be sometimes collectively
referred to below as the "Borrower Group"), and is made in reference to the
following facts:

(A) On or about the date hereof, the Lender has made a revolving line of
credit loan to the Borrower in the original principal amount of TWENTY FIVE
MILLION AND NO/100 DOLLARS ($25,000,000.00) (the "Loan"). The Loan is evidenced
and secured, among other things, by the following:

(i) Revolving Line of Credit Note executed by the Borrower in favor
of the Lender in the original principal amount of the Loan (the "Note");

(ii) Agreement Not to Encumber executed by the Borrower in favor of
the Lender, and which will be recorded in the Public Records of Pinellas County,
Florida (the "Agreement Not to Encumber");

(iii) Negative Pledge Agreement executed by Borrower Group in favor
of Lender (the "Negative Pledge Agreement");

(iv) UCC-1 Financing Statement executed by Borrower Group, as
debtors, and Lender, as secured party (the "UCC");

(v) A Guaranty Agreement executed by the Guarantors in favor of the
Lender (the "Guaranty Agreement");

(vi) This Agreement being executed by the Lender and Borrower Group
(the "Loan Agreement"); and

(vii) Numerous other documents and instruments executed by the
Borrower, and, as applicable, Guarantors and/or Lender, in connection with the
Loan (collectively the "Other Documents").

The Agreement Not to Encumber, Negative Pledge Agreement, UCC, Guaranty
Agreement, Loan Agreement, and the Other Documents will be sometimes
collectively referred to below as the "Instruments of Security". The Note and
the Instruments of Security will be sometimes collectively referred to below as
the "Loan Documents".

<PAGE> 8

(B) The Lender has required the execution and delivery of this Agreement
by the Borrower Group as a condition to making the Loan to the Borrower, and the
Borrower Group is agreeable to such.

NOW THEREFORE, for and in consideration of the mutual covenants and
conditions contained herein and other valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties covenant and agree as
follows:

ARTICLE I - INTRODUCTORY PROVISIONS

1.1 Recitals. The statements contained in the recitals of fact set
forth above (the "Recitals") are true and correct, and the Recitals by this
reference are made a part of this Agreement.

1.2 Exhibits. All exhibits attached to this Agreement are by this
reference incorporated in and made a part hereof.

1.3 Abbreviations and Definitions. The following abbreviations and
definitions will be used for purposes of this Agreement:

(a) The abbreviations for the parties set forth in the Preamble will
be used for purposes of this Agreement.

(b) The abbreviations and definitions set forth in the Recitals will
be used for purposes of this Agreement.

(c) "Advance" shall mean individually and collectively the proceeds
of the Loan disbursed from time to time by the Lender pursuant to Section 2.1
hereof.

(d) "Agreement" shall mean the Loan Agreement between the parties
set forth herein.

(e) "Applicable Interest Addition" shall mean for LIBOR Loans the
following: The amount of the Applicable Interest Addition shall be based on the
Borrower's Funded Debt to EBITDA Ratio (as defined below), and shall be
calculated as follows:

<TABLE>
<CAPTION>
Funded Debt to
EBITDA Ratio Applicable Interest Addition
-------------- ----------------------------
<S> <C>
</= .50 + 62.5 Basis Points
> .50 </= 1.00 + 100 Basis Points
> 1.00 </= 1.75 + 125 Basis Points
> 1.75 + 150 Basis Points
</TABLE>

<PAGE> 9

(f) "Authorized Officers" shall mean James E. MacDougald, James P.
O'Drobinak, Robert A. Smolinski and Ross Wilt.

(g) "Banking Day" shall mean each day other than a Saturday, Sunday
or any holiday on which commercial banks in Jacksonville, Florida are closed for
business.

(h) "Base LIBOR Rate" shall mean with respect to any Interest Period
for any LIBOR Loan, the offered rate for deposits in United States dollars in
the London Interbank market for a one month period which appears on the Libor
Rate Reference Page as of 11:00 a.m. (London time) on the day that is two London
Banking Days preceding the first London Banking Day of the Interest Period. If
at least two such offered rates appear on the Libor Rate Reference Page, the
rate will be the arithmetic mean of such offered rates.

(i) "Base Rate" shall mean the interest rate announced or published
from time to time by Barnett Banks, N.A., as its "Prime Lending Rate" (which
interest rate is only a benchmark and is not necessarily the best or lowest rate
of interest charged to borrowers of Barnett Banks, N.A.).

(j) "Base Rate Loan" shall mean any Loan made by Lender whose
interest rate is based upon the Base Rate.

(k) "Cash Flow Coverage Ratio" shall mean the ratio of the
Borrower's EBITDA less cash taxes, divided by interest expense plus any
scheduled principal payments of long-term debt or capital leases, plus twenty
percent (20%) of the total indebtedness of the Loan outstanding from time to
time.

(l) "Default Rate" shall mean the highest rate of interest permitted
to be charged by Lender from time to time by applicable law.

(m) "Dollars" or the symbol "$" shall mean lawful money of the
United States of America.

(n) "EBITDA" shall mean the Borrower's consolidated income from
continuing operations and interest income (excluding one-time, non-cash
restructuring charges) plus consolidated depreciation and amortization. The
Borrower's EBITDA for purposes of calculating the interest rate and each
financial covenant contained in this Agreement shall be calculated for each
fiscal quarter of Borrower, such that no later than forty-five (45) days
following the end of every fiscal quarter of Borrower, Lender shall calculate
the Borrower's EBITDA in accordance with GAAP. Lender's calculation of
Borrower's EBITDA shall be presumed correct absent manifest error. The Lender
shall include the EBITDA of any entity acquired by the Borrower, as if such
entity had been owned by the Borrower for twelve (12) months prior to the
acquisition date.

<PAGE> 10

(o) "Events of Default" shall mean the events of default specified
in Article Ten of this Agreement, each of which shall be an "Event of Default".

(p) "Funded Debt to EBITDA Ratio" shall mean the ratio of the
Borrower's Funded Debt to EBITDA, determined by Lender as follows:

(i) Upon receipt by Lender of the Borrower's quarterly financial
statement as described in Subsection 3.1(b) below (a "Quarterly Financial"),
Lender shall calculate the Borrower's Funded Debt to EBITDA Ratio. Such ratio
shall be calculated by Lender in accordance with GAAP, and shall be presumed
correct absent manifest error.

(ii) Upon Lender's determination of the Funded Debt to EBITDA
Ratio as aforesaid, the Applicable Interest Addition shall be determined by
Lender and shall apply for the fiscal quarterly period following the fiscal
quarterly period described in the Second Quarterly Financial submitted by
Borrower to Lender. For example, and without limitation, the Borrower shall
provide to Lender a Quarterly Financial covering the period February 1, 1998
through April 30, 1998, which shall be provided to Lender no later than June 15,
1998. Based on the Lender's calculation of the Borrower's Funded Debt to EBITDA
Ratio for such Quarterly Financial, the Applicable Interest Addition for the
Loan shall be calculated as aforesaid and shall apply from the period of August
1, 1998 through October 31, 1998 (with similar calculations to apply in the
future during the term of the Loan). Should Borrower fail to timely submit a
Quarterly Financial to Lender, Lender shall be entitled to set the Applicable
Interest Addition at one hundred fifty (150) basis points.

(iii) The initial Applicable Interest Addition which shall cover
the period of time from the date hereof through and including August 1, 1998
shall be sixty-two and 50/100 (62.5) basis points.

(iv) Lastly, and notwithstanding anything set forth above to the
contrary, the Lender hereby agrees that the Applicable Interest Addition shall
be sixty-two and a half (62.5) basis points for each fiscal quarterly period, as
determined by Lender, that the Borrower's cash and cash equivalents (net of
customer deposits) plus total liquid investments at the fiscal quarter end, are
in excess of the average outstanding principal balance of the Loan for that same
fiscal quarterly period. Such determination shall be made by Lender based upon
the Quarterly Financials that are provided by Borrower to Lender, shall be
determined in accordance with GAAP, and shall be presumed correct absent
manifest error.

(q) "Funded Debt to Tangible Net Worth" shall mean the ratio of
Borrower's Funded Debt to its Tangible Net Worth, determined by Lender in
accordance with GAAP annually, and Lender's calculation of Borrower's Funded
Debt to Tangible Net Worth shall be presumed correct absent manifest error.

<PAGE> 11
(r) "Funded Debt" shall mean all indebtedness of Borrower for
borrowed money, letters of credit and guarantees that may be outstanding from
time to time (excluding non-recourse debts approved in writing by Lender).

(s) "GAAP" shall mean generally accepted accounting principles
consistently applied to the particular item.

(t) "Interest Period" shall mean: (i) with respect to a Base Rate
Loan, once the Base Rate is elected, until a new interest rate is determined by
Lender; and (ii) with respect to a LIBOR Loan, a one-month period.

(u) "Interest Rate Determination Date" shall mean each date for
calculating the LIBOR for purposes of determining the interest rate in respect
of an Interest Period. The Interest Rate Determination Date shall be the date
two (2) Banking Days prior to the first Banking Day of the related Interest
Period for a LIBOR Loan.

(v) "LIBOR" shall mean for the Interest Period for any LIBOR Loan,
the rate of interest determined pursuant to the following formula:

<TABLE>
<S> <C> <C>
Base LIBOR Rate Applicable Interest
LIBOR = + Addition as set forth in
Section 1.3(e).
</TABLE>

(w) "LIBOR Loan" shall mean any Loan made by the Lender and bearing
interest at rates determined by reference to LIBOR.

(x) "Libor Rate Reference Page" shall mean either (i) the Reuters
Screen LIBO Page, (ii) the Dow Jones Telerate Page 3750 or (iii) such other
nationally recognized source, as either may from time to time by used by Lender
in its sole discretion as a reference for determining any applicable Libor Rate.

(y) "London Banking Day" shall mean each day other than a Saturday,
a Sunday or any holiday on which commercial banks in London, England are closed
for business.

(z) "Obligations" shall mean, individually and collectively, the
payment and performance duties, obligations and liabilities of the Borrower to
the Lender, evidenced by the Note, together with all accrued but unpaid interest
thereon, and all other payment and performance, duties, obligations and
liabilities of the Borrower to the Lender, however and whenever incurred,
acquired or evidenced, whether primary or secondary, direct or indirect,
absolute or contingent, sole or joint and several, or due or to become due,
including, without limitation, all such duties, obligations and liabilities of
the Borrower to the Lender, under and pursuant to this Agreement, the Note and
the Loan Documents and all renewals, modifications or extensions of any thereof.

<PAGE> 12

(aa) "Person" shall mean any individual, joint venturer,
partnership, firm, corporation, trust, unincorporated organization or other
organization or entity, or a governmental body or any department or agency
thereof, and shall include both the singular and the plural.

(bb) "Principal Place of Business" shall mean the principal place
of business and the headquarters of the Borrower at which all of its records
are kept, currently at 34125 U.S. Highway 19, North, Palm Harbor, Florida
34684-2116.

(cc) "Property" shall mean the real property legally described on
Exhibit "A" attached hereto.

(dd) "Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System, as the same may be amended or
supplemented from time to time.

(ee) "Regulatory Change" shall mean any change effective after the
date of this Agreement in United States Federal or state laws or regulations
(including Regulation D and capital adequacy regulations) or foreign laws or
regulations or the adoption or making after such date of any interpretations,
directives or requests applying to a class of banks which includes the Lender,
under any United States Federal or state or foreign laws or regulations (whether
or not having the force of law) by any court or governmental or monetary
authority charged with the interpretation or administration thereof.

(ff) "Tangible Net Worth" shall mean the total of all assets
appearing on a balance sheet prepared in accordance with GAAP for the Borrower
after deducting therefrom (without duplication or deductions):

(i) any write-up in the book carrying value of any asset
resulting from a re-evaluation thereof subsequent to the date of the balance
sheet referred to above;

(ii) all reserves, including, but not limited to, reserves for
liabilities, fixed or contingent, deferred income taxes, obsolescence,
depletion, insurance and inventory valuation, which are not deducted from
assets;

(iii) the amount, if any, at which shares of stock of the
Borrower appears on the asset side of such balance sheet;

(iv) all indebtedness of the Borrower; and

(v) all goodwill, research and development, and other
intangible items of any kind appearing on the asset side of such balance sheet.

(gg) "Total Liabilities" or "Liabilities" shall mean all liabilities
and obligations of the Borrower, all as determined in accordance with GAAP.

<PAGE> 13

1.4 Accounting Terms. All accounting terms used herein shall be
construed in accordance with GAAP (unless such terms are specifically defined
otherwise herein) consistently applied and all financial data submitted pursuant
to this Agreement shall be prepared in accordance with GAAP. In the event of
ambiguities or changes in GAAP, the more conservative principle or
interpretation shall be used.

ARTICLE II - LOAN

2.1 Loan. On or about the date hereof, the Borrower has executed in
favor of Lender the Note, which evidences the Loan. The principal of the Note
that is disbursed by Lender to Borrower shall bear interest and be repaid in the
manner set forth in the Note and as set forth in this Article Two.

(a) Revolving Line of Credit. Borrower will request and Lender may
advance amounts at various times according to Borrower's needs in the manner and
for the purposes set forth in this Section 2.1. Amounts so advanced under the
Note shall be repaid by Borrower to Lender as provided in this Section 2.1 or in
the Note. Any such funds so advanced and repaid will be available for future
advances during the term of the Note, provided however, the aggregate of all
amounts advanced and outstanding and remaining unpaid from time to time shall in
no event exceed at any time the face amount of the Note or the amount set forth
in this Agreement.

(b) Purpose. The purpose of the Note is to provide working capital
for the support of Borrower's business, to fund improvements at the Borrower's
new premises in St. Petersburg, Florida, and for new acquisitions by Borrower.
The specific use of such Loan proceeds shall be determined by Borrower in its
discretion.

(c) Manner of Disbursement. Proceeds from the Note may be disbursed
at any time based upon the following conditions first occurring: (i) Borrower
shall submit a written Application for Disbursement in the form set forth in
Exhibit "B"; (ii) the amount of the requested disbursement, together with the
then outstanding principal balance of the Note, shall not exceed the face amount
of the Note; and (iii) the Loan Documents and this Agreement are fully current
and no default shall exist thereunder or hereunder. If such conditions are met,
then Lender shall deliver the Note proceeds from the Note so requested as
provided in this Section 2.1.

(d) Manner of Repayment. Accrued interest under the Note shall be
due and payable monthly to Lender. Principal shall be repaid in full upon the
earlier of: (i) the occurrence of an Event of Default; or (ii) the Maturity Date
set forth in the Note.

2.2 Interest on the Note. Except as provided in the next following
sentence, the Loan shall bear interest on the unpaid principal amount thereof
from the date made through maturity (whether by acceleration or otherwise) at a
rate determined by reference to LIBOR. From and after an Event of Default, or
the maturity or acceleration of the indebtedness of the Note, interest shall

<PAGE> 14

accrue on the unpaid principal balance of the Loan and on all accrued but unpaid
interest thereon, or on any defaulted payment, at the Default Rate. Such
interest shall continue to accrue until the date of payment in full of all
principal and accrued interest of the Loan.

2.3 Procedure for Advances. Advances shall be disbursed by the Lender on
behalf of the Borrower pursuant to this Section 2.3. Any Authorized Officer may
give the Lender written notice of a requested Advance hereunder, in the form of
an Application for Disbursement. The Lender shall have no duty or obligation to
verify or confirm the authority of any Authorized Officer of the Borrower
requesting any such Advance. Should there occur an Event of Default under this
Agreement, the Lender's commitment to advance funds to the Borrower shall
automatically terminate.

2.4 Method of Prepayment. The Borrower may at any time prepay all or any
part of the principal amount of the Loan outstanding; provided, however, that
each partial prepayment shall be applied to the reduction of the Loan, as the
Lender may, in its sole discretion, elect and, further provided, that on the
date of the prepayment, there shall exist no Event of Default. Each prepayment
other than full payment shall be made prior to 2:00 pm (Eastern Standard Time)
on the date of the prepayment, and shall be made on a Banking Day in immediately
available funds. Any prepayment made by the Borrower shall be applied first to
accrued interest and then to the principal balance of the Loan. Prepayment shall
either be made at the end of an Interest Period, or the Borrower shall pay a
prepayment fee equal to the excess, if any, of (i) the total amount of interest
that would have been paid on the prepayment amount under the remaining original
term of the Note from the date of prepayment to the end of the Interest Period
calculated at the interest rate provided for therein, (ii) less the amount that
would be yielded from investing the average of the prepayment amount that would
have been outstanding during such Interest Period from the date of prepayment if
said average amount was fully invested on the date of prepayment in United
States Treasury Notes maturing on the end of such Interest Period (or in the
event there are no U.S. Treasury Notes having such a maturity date, the U.S.
Treasury Note maturing on the day closest to the end of the Interest Period),
and trading in the secondary market in reasonable volume at a price within five
percent (5%) of par (or if none are so trading, then the average yield on those
trading closest to par). Notwithstanding the above, the amount of prepayment
charge shall never exceed the total amount of interest that would have been paid
under the original term of the Note had it not been prepaid.

In addition to the foregoing, if an Event of Default occurs under the Note
or related documents, and the maturity date of the Note shall be accelerated by
Lender, then a tender of payment by the Borrower, or by anyone on behalf of the
Borrower, of the amount necessary to pay all sums due hereunder made at any time
prior to the sale of the secured property pursuant to a judgment, shall
constitute an evasion of the payment and prepayment terms hereof. In such event,
any such payment to the extent permitted by law, shall include a fee equal to
the prepayment premium which would have been due in the event of a voluntary
prepayment.

<PAGE> 15

2.5 Application of Payments. All payments made on the Note shall be
applied in the manners set forth in the Note, however, should an Event of
Default occur, payments shall be applied first to any costs or expenses,
including attorneys fees and costs, that the Lender may incur in exercising its
rights under the Loan Documents, as the Lender may determine.

2.6. Special Provisions Governing LIBOR Loans. Notwithstanding other
provisions of this Agreement, the following provisions shall govern with respect
to LIBOR Loans as to the matters covered:

(a) Determination of Interest Rate. As soon as practicable after
11:00 a.m. (Eastern Standard Time) on the Interest Rate Determination Date,
Lender shall determine (which determination shall, absent manifest error, be
final, conclusive and binding upon all parties) the interest rate which shall
apply to any LIBOR Loan.

(b) Inability to Determine Rate. In the event Lender is unable to
determine LIBOR (e.g. LIBOR ceases to exist or is no longer a generally
available published rate), Lender shall have no obligation to offer LIBOR Loans
to the Borrower, and all indebtedness of the Loans will be immediately converted
to a Base Rate indebtedness.

(c) Illegality; Termination of Commitment. Notwithstanding any other
provisions of this Agreement, if any law, treaty, rule or regulation, or
determination of a court or other governmental authority, or any change therein
or in the interpretation or application thereof, shall make it unlawful or
impractical for Lender to make or maintain LIBOR Loans, as contemplated by this
Agreement, then, and in any such event, Lender shall give notice (by telephone
confirmed in writing) to Borrower of such determination, and the obligation of
Lender to make LIBOR Loans shall be terminated, and its obligation to maintain
its LIBOR Loans during such period shall be terminated at the earlier of the
termination of the Interest Period then in effect or when required by law.
Thereafter, and until such notice has been withdrawn by Lender, Lender shall
have no obligation to make LIBOR Loans, and any LIBOR Loans then outstanding
shall be converted into Base Rate Loans.

(d) LIBOR Loans After Default. After the occurrence of and during
the continuance of an Event of Default, Borrower may not elect to have a Loan be
made or continued as, or converted to a LIBOR Loan.

2.7 Additional Costs.

(a) Regulatory Changes. The Borrower shall promptly pay to the
Lender from time to time, such amounts as Lender may determine to be necessary
to compensate it for any reasonable costs incurred by Lender which it determines
are attributable to its making or maintaining any Loan, or any reduction in any
amount receivable by Lender under this Agreement including reductions in the
rate of return on a Lender's capital (such increases in costs and reductions in
amounts receivable and returns being herein called "Additional Costs"),
resulting from any

<PAGE> 16

Regulatory Change which: (i) changes the basis of taxation of any amounts
payable to Lender under this Agreement or the Note in respect of the Loan (other
than taxes imposed on the income of Lender by any jurisdiction in which the
Lender is located); or (ii) imposes or modifies any reserve, special deposit, or
similar requirements relating to any extensions of credit or other assets of, or
any deposits with or other liabilities of, Lender (other than any such reserve,
deposit or requirement reflected in the Base Rate or the LIBOR Rate, in each
case computed in accordance with the respective definitions of such terms set
forth in this Agreement); or (iii) has or would have the effect of reducing the
rate of return on capital of Lender to a level below that which the Lender could
have achieved but for such Regulatory Change (taking into consideration Lender's
policies with respect to capital adequacy); or (iv) imposes any other condition
affecting this Agreement or the Note (or any of such extensions of credit or
liabilities); provided that, if any such increased cost or reduction results
from any circumstances described in clauses (ii) through (iv) of this
subsection, the Borrower shall not be obligated to compensate Lender for such
increased costs or reductions occurring more than 180 days prior to the time
Lender first notifies the Borrower of such circumstances. Lender will notify
Borrower of any event occurring after the date hereof which would entitle it to
compensation pursuant to this Section 2.7 as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation.

(b) Termination of LIBOR Loans. Without limiting the effect of the
foregoing provisions of this Section 2.7, in the event that, by reason of any
Regulatory Change, Lender either (i) incurs Additional Costs based on or
measured by the excess above a specified level of the amount of a category of
deposits or other liabilities of the Lender which includes deposits by reference
to which the interest rate on LIBOR Loans is determined as provided in this
Agreement or a category of extensions of credit or other assets of Lender which
includes LIBOR Loans or (ii) becomes subject to restrictions on the amount of
such a category of liabilities or assets which it may hold, then, if the Lender
so elects, the obligation of Lender to make LIBOR Loans hereunder shall be
suspended until the date such Regulatory Change ceases to be in effect and the
Borrower shall, on the last day(s) of the then current Interest Period(s) for
outstanding LIBOR Loans, convert such LIBOR Loans into Base Rate Loans in
accordance with this Agreement.

2.9 Option to Term Out Loan. Provided the conditions precedent set forth
below are fulfilled to Lender's satisfaction, on the date exactly twenty-four
(24) months following the date hereof (the "Term Loan Option Date"), Borrower
shall have the option to convert the then-outstanding principal balance of the
Loan (the "Term Loan Principal") to a term loan, whereupon the Term Loan
Principal shall be repaid by Borrower to Lender in sixty (60) equal monthly
installments of principal and interest (collectively the "Term Loan Payments").
The amount of the Term Loan Payments will be calculated by Lender based upon:
(i) the Term Loan Principal amount; (ii) the interest rate determined by Lender
in its sole discretion; and (iii) a ten (10) year amortization from the Term
Loan Option Date, with a five (5) year balloon as aforesaid. Monthly principal
and interest payments will be made in sixty (60) equal to installments
commencing one (1) month following the Term Loan Option Date.

<PAGE> 17

Provided however, the Borrower may only exercise the option described
above upon fulfillment of all of the following conditions precedent, all of
which must be fulfilled to the satisfaction of Lender in its sole discretion:

(a) The Borrower shall provide written notice to Lender no later
than ninety (90) days prior to the Term Loan Option Date of its intention to
convert the Loan to a term loan.

(b) Included with the aforesaid notice, Borrower shall pay to Lender
a commitment fee equal to one-eighth percent (1/8%) of the amount of the Term
Loan Principal.

(c) At all times during the term of this Agreement, the Loan and all
Loan Documents must have been fully current with no defaults existing
thereunder.

(d) At the time of exercise of the option and at the closing of the
conversion of the Loan to the term loan (the "Term Loan Closing"), the Loan and
Loan Documents shall be fully current and no default shall exist thereunder.

(e) Prior to the Term Loan Closing, Lender shall have received, at
Borrower's expense, a Title Insurance Commitment acceptable to Lender in its
sole discretion indicating that, upon recordation of a Mortgage and other
instruments of security (as determined by Lender), and which will encumber the
Property more particularly described on Exhibit "B" attached hereto, Lender's
Mortgage will be the first and paramount lien on such Property as security for
the Term Loan Principal.

(f) The Borrower shall provide to Lender a survey of the Property,
acceptable to Lender in its sole and absolute discretion.

(g) Lender shall receive a UCC search and retrieval indicating that,
following the Term Loan Closing, Lender shall have the first and paramount lien
on all tangible and intangible personal property of Borrower including, without
limitation, that located on the Property.

(h) The Borrower shall pay all costs and expenses associated with
the Term Loan Closing including, without limitation, all recording and filing
fees (including documentary stamp tax, intangible tax), title insurance
premiums, Lender's attorneys' fees and costs, etc).

(i) No proceedings shall have been commenced by or against any of
the parties comprising the then-Borrower Group or their assets, either under
federal or state law or both, regarding insolvency, reorganization,
receivership, dissolution, or other arrangements with creditors.

(j) The Loan shall have had a payment history acceptable to Lender.

(k) Such other requirements as Lender may require in its sole
discretion.

<PAGE> 18

Provided all the foregoing conditions precedent are fulfilled as aforesaid, and
provided the Borrower timely complies with all of its obligations in the
paragraphs set forth above, the parties shall proceed to the Term Loan Closing
whereupon the Borrower shall execute such documents as Lender shall require in
its sole discretion, which shall include, but not be limited to, a Promissory
Note, First Mortgage, Assignment of Rents, Leases, Contracts, Accounts
Receivable, Accounts and Deposit Accounts, Security Agreement, UCC-1 Financing
Statements, Environmental Compliance and Indemnity Agreement, Agreement Waiving
Right to Jury Trial, Loan Agreement, Corporate Resolutions, Lien Affidavit, and
settlement statement.

ARTICLE III - ADDITIONAL LOAN PROVISIONS

3.1 Financial and Operational Disclosures.

(a) No later than one hundred twenty (120) days following the end of
each fiscal year end of Borrower during the term of the Loan, the Borrower shall
provide to Lender a copy of its 10-K report and Annual Report which shall
include a consolidated balance sheet and income statement of the Borrower and
all subsidiary guarantors on a consolidated basis, prepared in accordance with
GAAP on an audited basis, including statements of financial condition, income,
cash flow, and changes in shareholders' equity, and, if applicable, which is
under the same form provided to the Securities and Exchange Commission.

(b) No later than forty five (45) days following the end of each
fiscal quarter of the Borrower during the term of the Loan, Borrower shall
provide to Lender a copy of its 10-Q report of the Borrower and all subsidiary
guarantors, on a consolidated basis, including a consolidated balance sheet and
income statement which, if applicable, shall be in the form provided to the
Securities and Exchange Commission.

(c) Accompanying each financial statement of the Borrower submitted
to the Lender, Borrower shall also submit a calculation of each financial
covenant set forth in this Agreement and a certification by an officer of the
Borrower that the Borrower is in compliance with all terms and provisions of the
Loan Documents.

(d) Promptly upon becoming available to the public and in any event
no later than the date when released, Borrower shall provide to Lender copies of
all regular, periodic or special reports, schedules, and other materials,
financial or otherwise, which the Borrower or any of its subsidiary guarantors
may now or hereafter be required to file with the Securities and Exchange
Commission.

(e) Accompanying the annual audited financial statements provided to
Lender, Borrower shall also provide to Lender a copy of the management letter
(if prepared and available) prepared by the independent certified public
accounting firm which prepares the audited financial statements of Borrower.

<PAGE> 19

All of the foregoing reports must be provided timely by Borrower Group to Lender
in a form acceptable to Lender in its sole discretion. Failure of the Borrower
Group to provide any of the aforementioned financial documentation or
information to Lender within thirty (30) days of the date of providing of
written notice from Lender to the Borrower Group, specifying which financial
documentation or information has not been timely received by Lender, shall
constitute a default under all Loan Documents, and shall entitle Lender to
immediately accelerate the same, without further notice, grace or curative
period (notwithstanding anything contained herein or the Loan Documents to the
contrary).

3.2 New Subsidiaries. No later than ten (10) days following to the date
that Borrower shall acquire any new subsidiary (a "Subsidiary"), such new
Subsidiary must execute an unconditional guaranty of the Loan and Loan Documents
in favor of Lender, on a form acceptable to Lender.

ARTICLE IV - CROSS DEFAULT

The Borrower Group hereby acknowledges and agrees that a default under the
Loan Documents shall be and constitute a default under any and all other notes
or other evidence of indebtedness and any instruments of security therefor in
which an Obligor (which term shall mean and include the Borrower, each
Guarantor, each endorser, and all others who may become liable for all or any
part of the obligations evidenced and secured hereby) is liable and of which the
Lender is the holder. A default under any other notes or other evidence of
indebtedness or any instrument of security therefor in which an Obligor is
liable and the Lender is the holder shall constitute a default under the Loan
Documents.

ARTICLE V - USURY

It is not the intention of the parties hereto to make any agreement which
shall be violative of the laws of the State of Florida relating to usury. In no
event shall Borrower or Lender accept or charge any interest which, together
with any other charges upon the principal or any portion thereof, howsoever
computed, shall exceed the maximum legal rate of interest allowable under the
laws of the State of Florida. Should any provisions of this Agreement or any
existing or further Notes, Loan Agreements or any other agreements between the
parties be construed to require the payment of interest which, together with any
other charges upon the principal, or any portion thereof, exceeds such maximum
legal rate of interest, then any such excess shall be and is hereby expressly
waived, and shall be credited to the outstanding principal balance.

ARTICLE VI - REPRESENTATIONS AND WARRANTIES

The Borrower Group represents and warrants to the Lender as follows:

6.1 Organization, Standing, Corporate Power. The Borrower is a
corporation duly formed, validly existing and in good standing under the laws of
the State of Florida, and is duly

<PAGE> 20

authorized to do business in all other states in which it transacts business.
The Borrower has appropriate power and authority to own its properties and to
carry on its business as now being conducted, and the Borrower has appropriate
power and authority to execute and perform this Agreement and to deliver the
Note and all other documents, instruments and agreements provided for herein.

6.2 This Agreement. The execution and performance by the Borrower of
this Agreement, the borrowing hereunder, and the execution and delivery of the
Note and all other documents, instruments and agreements provided for herein (a)
have been duly authorized by all requisite corporate action; (b) will not
violate any provision of law or of the Borrower's Articles of Incorporation or
Bylaws as amended to the date hereof; and (c) will not violate or be in conflict
with, result in a breach of, or constitute a default under any indenture,
agreement and other instrument to which the Borrower is a party or by which it
or any of its properties is bound, or any order, writ, injunction or decree of
any court or governmental institution.

6.3 Litigation. There are no actions, suits or proceedings pending, or
to the knowledge of the Borrower, threatened against or adversely affecting the
Borrower at law or in equity or before or by any federal agency or
instrumentality, domestic or foreign, which involve any of the transactions
herein contemplated or the possibility of any judgment or liability which may
result in any material and adverse change in the business, operations,
prospects, property or assets, or in the condition, financial or otherwise, of
the Borrower, to the best of Borrower's knowledge. The Borrower is not in
default with respect to any judgment, order, writ, injunction, decree, rule or
regulation of any court, or federal, state, municipal or other governmental
department.

6.4 Financial Statements. The Borrower has heretofore furnished to the
Lender balance sheets, annual statements, and other financial information which
are, to the best of its knowledge, correct and complete and accurately present
the financial condition and the results of the operation of the Borrower as of
the dates thereof. Since the date of the last furnishing of said financial
statements, there has been no material adverse change in the financial condition
of the Borrower.

6.5 Taxes. The Borrower has filed or caused to be filed all federal and
state tax returns which, to the knowledge of the officers thereof, are required
to be filed, and has paid or caused to be paid all taxes as shown on said
returns or on any assessment received by it and not being contested in good
faith, to the extent that such taxes have become due.

6.6 Other Instruments. Except as reflected on the financial statements,
the Borrower is not a party to any agreement or instrument or subject to any
charter or other restrictions materially adversely affecting its business,
properties or assets, operations or condition, financial or otherwise.

6.7 Property and Assets. The Borrower has good and marketable title to
all the property and assets reflected on the most recent financial statement
furnished to the Lender, except

<PAGE> 21

such as have been disposed of in the ordinary course of business since the date
of said financial statement and all such property and assets are free and clear
of mortgages, pledges, liens, charges or other encumbrances, except as are
reflected on the financial statements.

6.8 Regulation U. No part of the proceeds of the Loan will be used to
purchase or carry, or to reduce or retire any loan incurred to purchase or
carry, any margin stocks (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System) or to extend credit to others for the
purpose of purchasing or carrying any such margin stocks. The Borrower is not
engaged in the business of extending credit, nor is one of the Borrower's
important activities extending of credit, for the purpose of purchasing or
carrying such margin stocks. If requested by the Lender, the Borrower shall
furnish to the Lender in connection with any loan hereunder a statement in
conformity with the requirements of Federal Reserve Form U-1 referred to in said
regulation.

6.9 Continuity of Representations and Warranties. All of the foregoing
representations and warranties shall be true and correct at the time of the
making of each advance under the Loan pursuant to this Agreement and thereafter
until such Loan is paid in full as though made as of such time, and the Borrower
shall not then be in default hereunder, nor shall any event have occurred or
failed to occur that with the passage of time, or service of notice, or both,
would constitute a default. The Lender may consider the conditions specified in
this Section 6.9 to be fulfilled if no prior written notice to the contrary is
received from the Borrower.

ARTICLE VII - CONDITIONS PRECEDENT

The obligation of the Lender to make the Loan hereunder is subject to the
following conditions precedent:

(a) Representations and Warranties. In order to induce the Lender to
enter into this Agreement and to make the Loan herein provided for and
disbursements thereunder, the Borrower represents and warrants to the Lender
that on the date of each borrowing or disbursement hereunder, the
representations and warranties set forth in this Agreement shall be true and
correct on and as of the date of such borrowing or disbursement, with the same
force and effect as though such representations and warranties had been made on
and as of such date.

(b) No Default. At the time of each borrowing or disbursement
hereunder, the Borrower has observed and performed all of the terms, conditions
and agreements set forth herein on its part to be observed or performed and no
Event of Default specified below, nor any event which, upon notice or lapse of
time or both, would constitute such an Event of Default, shall have occurred and
be continuing.

(c) Officer's Certificate. If required by Lender, at the end of each
fiscal year, the Borrower shall deliver to the Lender a certificate signed by
the Treasurer, Controller or CFO of the Borrower dated such date confirming
that: no default exists hereunder, and no event which

<PAGE> 22

would become an Event of Default upon notice or lapse of time or both has
occurred and is then continuing; there is no litigation or proceeding pending or
threatened against or affecting the Borrower, the result of which might
substantially affect the financial condition, business or operations of the
Borrower; and there has been no materially adverse change in the financial
condition of the Borrower since the date of the latest financial statement of
Borrower submitted to the Lender.

(d) Financial Statements. All financial statements, information and
other data furnished by the Borrower to the Lender in connection with the
Borrower's application for credit hereunder are, in all material respects,
accurate and correct; the financial statements have been prepared in accordance
with generally accepted accounting practices and accurately represent the
financial condition of the Borrower; no materially adverse changes have occurred
since the date of said statements; and no liabilities, contingent or otherwise,
not shown on said financial statements exist.

(e) Liens and Encumbrances. The properties and assets of the
Borrower, real, personal and mixed, are not subject to any liens, encumbrances
or security interests or outstanding financing statements, whether filed or
unfiled, except for liens for taxes not yet due, and liens, encumbrances or
security interests on personal or real property as reflected in the Borrower's
audited financial statements submitted to Lender.

(f) Litigation. There are no actions, suits, proceedings or claims
pending or threatened against or affecting the Borrower, the result of which
might substantially affect the financial condition, business or operations of
the Borrower.

(g) Authority. This Agreement and the other Loan Documents are valid
and binding obligations of the Borrower.

ARTICLE VIII - AFFIRMATIVE COVENANTS

The Borrower Group covenants and agrees with the Lender that from the date
hereof and so long as any sums are outstanding or may be borrowed hereunder,
unless the Lender shall otherwise consent in writing delivered to the Borrower
Group, it will:

8.1 Corporate Existence. Do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its corporate existence, and
all its rights, licenses, permits and franchises required at the date hereof, or
which may be required in the future conduct of its business, and comply with all
laws and regulations applicable to it that materially affect the Borrower, and
conduct and operate its business in the same lines and in substantially the same
manner in which presently conducted and operated (subject to changes in the
ordinary course of business), and at all times maintain, preserve and protect
all property used and useful in the conduct of its business, and maintain same
in good working order and condition.

<PAGE> 23

8.2 Insurance. Keep its insurable properties adequately insured at all
times by financially sound and reputable insurers, and maintain such insurance
to such extent and against such risks, including liability insurance, fire,
windstorm, and other risks insured against by extended coverage. Additionally,
Borrower shall maintain errors and omissions insurance in a minimum amount of
FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00), and Borrower shall notify
Lender within thirty (30) days if any claim of ONE HUNDRED THOUSAND AND NO/100
DOLLARS ($100,000.00) or more is paid.

8.3 Obligations and Taxes. Pay all indebtedness and obligations promptly
and in accordance with normal terms, and pay and discharge promptly all taxes,
assessments and governmental charges or levies imposed upon it or in respect of
its property, before the same shall become in default, as well as all lawful
claims for labor, materials and supplies or otherwise which, if unpaid, might
become a lien or charge upon such properties or any part thereof; provided,
however, that the Borrower shall not be required to pay and discharge or cause
to be paid and discharged any such tax assessment, charge, levy or claim so long
as the validity thereof shall be contested in good faith by appropriate
proceedings and the Borrower shall set aside on its books adequate reserves with
respect to any such tax, assessment, charge, levy or claim so contested.

8.4 Financial Ratios. Borrower will maintain, at all times during the
term of the Loan:

(a) a minimum Cash Flow Coverage Ratio of 1.35 to 1.00.

(b) a maximum Funded Debt to EBITDA Ratio of 2.50 to 1.00.

All of the foregoing financial ratios will be determined by Lender from time to
time in accordance with GAAP as provided in this Agreement. The failure of
Borrower to achieve or maintain any of the aforementioned financial ratios shall
constitute a default under the Loan and all Loan Documents.

8.5 Notice of Default. Give prompt written notice to Lender of all
events of default under any of the terms and provisions of this Agreement, the
Note, or of any other agreement, contract, indenture, document or instrument
entered, or to be entered into by it; if applicable, changes in management,
litigation, and of any other matter which has resulted in, or might result in, a
materially adverse change in its financial condition or operation.

8.6 Records. Keep and maintain full and accurate accounts and records of
its operations according to GAAP and practices, and will permit Lender and its
designated officers, employees, agents and representatives, to have access
thereto and to make examination thereof at all reasonable times, to make audits,
and to inspect and otherwise check its properties, real, personal and mixed.

<PAGE> 24

8.7 Execution of Other Documents. Promptly, upon demand by Lender,
execute all such additional agreements, contracts, indentures, financing
statements, documents and instruments in connection with this Agreement as
Lender, in its sole discretion, may reasonably deem necessary.

8.8 Time Deposit. Maintain a twelve (12) month, annually renewable time
deposit with Lender in the minimum principal amount of TWO MILLION FIVE HUNDRED
THOUSAND AND NO/100 DOLLARS ($2,500,000.00) at all times.

ARTICLE IX - NEGATIVE COVENANTS

The Borrower Group covenants and agrees with Lender that from the date
hereof and so long as any sums are outstanding or may be borrowed under the
Loans, unless the Lender shall otherwise consent in writing delivered to the
Borrower, it will not:

9.1. Indebtedness. Create or incur any indebtedness except in the
ordinary course of business, and will not incur, create, assume or permit to
exist any indebtedness or liability for borrowed money or any indebtedness
evidenced by notes, bonds, debentures or similar obligations, except for: (i)
the Note; (ii) purchase money security interests less than ONE MILLION, FIVE
HUNDRED THOUSAND AND NO/100 DOLLARS ($1,500,000.00) in the aggregate; (iii)
additional borrowings not greater than FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($500,000.00) in the aggregate; and (iv) through an acquisition transaction,
indebtedness of the acquired entity and/or liens on the assets of the entity
being acquired.

9.2 Acquisitions. Until such time as the Borrower's Liquid Assets equal
TEN MILLION AND NO/100 DOLLARS ($10,000,000.00) (net of customer deposit) or
less, Borrower shall not be required to obtain Lender's approval for an
acquisition of a third party's assets or business of any size, provided that
such acquisition will not cause the Borrower to be out of compliance with any of
the covenants or other provisions set forth in this Agreement. However, at such
time as the Borrower's Liquid Assets total less than TEN MILLION AND NO/100
DOLLARS ($10,000.000.00), Borrower must obtain Lender's prior written approval
for any acquisition as aforesaid. For purposes of this subsection, Lender shall
determine the meaning of the term "Liquid Assets" in its sole discretion.

9.3 Loans. Make any loans to any person, firm or corporation, nor pledge
credit in any manner, directly or indirectly, except in the ordinary course of
its business.

9.4 Liens. Incur, create, assume or permit to exist any mortgage,
pledge, lien, charge, security interest or other encumbrance of any nature
whatsoever on any property or assets now owned or hereafter acquired by the
Borrower, except to Lender, other than: (a) liens for taxes or assessments and
similar charges either: (i) not delinquent; or (ii) being contested in good
faith by appropriate proceedings and as to which the Borrower shall have set
aside on its books adequate reserves; (b) currently existing indebtedness
consented to in writing by Lender; (c) secondary liens

<PAGE> 25

that in the aggregate are less than or equal to FIVE HUNDRED THOUSAND AND NO/100
DOLLARS ($500,000.00); and (d) purchase money security interests that are less
than ONE MILLION FIVE HUNDRED THOUSAND AND NO/100 ($1,500,000.00) in the
aggregate.

9.5 Default Under Other Agreements or Contracts. Commit to do or fail to
commit to do, any act or thing which would constitute an event of default under
any of the terms or provisions of any other agreement, mortgage, contract,
indenture, document or instrument executed by it, except those that may be
contested in good faith, and would not, if settled unfavorably, materially and
adversely affect the financial condition of the Borrower.

9.6 Compliance with Law Generally. Be in violation of any law,
ordinance, governmental rules or regulations to which Borrower is subject, or
fail to obtain any licenses, permits, franchises or other governmental
authorizations necessary to the ownership of the properties of Borrower or to
the conduct of its business, which violation or failure to obtain might
materially adversely affect the business, prospects, profits, properties or
condition (financial or otherwise) of Borrower.

9.7 Ordinary Course of Business. Enter into any transaction except in
the ordinary course of business.

ARTICLE X - DEFAULTS AND REMEDIES

10.1 Events of Default. If any one or more of the following events
(herein called "Events of Default") shall occur for any reason whatsoever (and
whether such occurrences shall be voluntary or involuntary, or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court, or any order, rule or regulation of any
administrative or governmental body), then Lender shall be entitled to the
remedies set forth in Section 10.2 of this Agreement. The Events of Default
shall include, but not be limited to, the following:

(a) Any representation or warranty made herein or in any report,
certificate, financial statement or other instrument furnished in connection
with this Agreement, or the borrowing hereunder shall prove to be false or
misleading in any material respect;

(b) Default shall occur in the payment of interest or principal on
any indebtedness referred to herein, including the Note, when and as the same
shall become due and payable, whether at the due date thereof or by acceleration
or otherwise, or failure of the Borrower to make payment of principal or
interest on any other obligation for borrowed money beyond any period of grace
provided with respect thereto, or in the performance of any other agreement,
term or condition contained in any agreement under which any such obligation is
created, if the effect of such default is to cause or permit the holder or
holders of such obligation to accelerate the maturity thereof;

<PAGE> 26

(c) Any default shall occur in the due observance or performance of
any covenant, agreement or other provision of this Agreement or the Instruments
of Security referred to above other than for the payment of money;

(d) Any of the Borrower Group shall: (i) apply for or consent to the
appointment of a receiver, trustee in bankruptcy for benefit of creditors, or
liquidator of it or any of its property; (ii) admit in writing its inability to
pay its debts as they mature; (iii) make a general assignment for the benefit of
creditors; (iv) be adjudicated a bankrupt or insolvent; (v) file a voluntary
petition in bankruptcy, or a petition or an answer seeking reorganization or an
arrangement with creditors, or seeking to take advantage of any bankruptcy,
reorganization, insolvency, readjustment of debt, dissolution or liquidation law
or statute or an answer admitting an act of bankruptcy alleged in a petition
filed against it in any proceeding under any such law; or (vi) take any action
for the purposes of effecting any of the foregoing;

(e) An order, judgment or decree shall be entered against the
Borrower with the application, approval or consent of the Borrower by any court
of competent jurisdiction, approving a petition seeking its reorganization or
appointing a receiver, trustee or liquidator of the Borrower, or of all or a
substantial part of the assets thereof, and such order, judgement or decree
shall continue unstayed and in effect for any period of sixty (60) days from the
date of entry thereof;

(f) Final judgments for the payment of money in excess of an
aggregate of ONE HUNDRED THOUSAND AND NO/100 DOLLARS ($100,000.00), excluding
claims covered by insurance, shall be rendered against the Borrower and the same
shall remain undischarged for a period of thirty (30) consecutive days during
which execution shall not be effectively stayed, provided that a judgment shall
be deemed "final" only when the time for appeal shall have expired without an
appeal having been claimed, or all appeals and further review claimed to have
been determined adversely to the Borrower; or

(g) Default by the Borrower in the terms and provisions of any
mortgages on its facilities which are not cured within any applicable grace
period.

10.2 Remedy. Upon the occurrence of any such Event of Default which is
not cured within thirty (30) days, Lender may, at its option, declare all
indebtedness of principal and interest due and payable, whereupon the Note
(notwithstanding any provisions hereof) shall be immediately due and payable,
and Lender shall have and may exercise from time to time any and all rights and
remedies available to it under any applicable law; and Borrower shall promptly
pay all costs of Lender of collection of any and all liabilities, and
enforcement of rights hereunder, including reasonable attorneys' fees and
expenses. All rights, powers and remedies contained herein or in any other
agreement, instrument or document executed in connection herewith are
cumulative.

<PAGE> 27

ARTICLE XI - MISCELLANEOUS

11.1 Notices. Any notice shall be conclusively deemed to have been
received by the Borrower and be effective on the day on which delivered to the
Borrower, or if sent by registered or certified mail, addressed to Borrower at
said address, on the second business day after the day on which the return
receipt indicates the notice was delivered.

11.2 Survival of Representations. All covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the making by Lender of the Loan herein
contemplated and the execution and delivery to Lender of the Note evidencing
such Loan and shall continue in full force and effect so long as any
indebtedness created hereunder is outstanding and unpaid. All covenants and
agreements by or on behalf of either party which are contained or incorporated
in this Agreement shall bind and inure to the benefit of the successors and
assigns of both parties hereto.

11.3 Effect of Delay. Neither any failure nor any delay on the part of
Lender in exercising any right, power or privilege hereunder or under the Note
shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise or the exercise of any other
right, power or privilege.

11.4 Expenses. The Borrower will pay all out-of-pocket expenses
reasonably incurred by Lender in connection with the preparation of this
Agreement, the borrowings hereunder, and the enforcement of the rights of Lender
in connection with this Agreement, or with the Loan made or the Note issued
hereunder, including but not limited to the fees of and expenses of counsel for
Lender.

11.5 Modification and Waivers. No modification or waiver of any provision
of this Agreement or of the Note nor consent to any departure by the Borrower
therefrom shall in any event be effective unless the same shall be in writing,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No notice to or demand on the Borrower in
any case shall thereby entitle the Borrower to any other or further notice or
demand in the same, similar or other circumstances.

11.6 Business Day. Should any installment on the Note become due and
payable on other than a business day of the Lender, the maturity thereof shall
be extended to the next succeeding business day with interest on the principal
amount thereof at the rate set forth herein.

11.7 Remedies Cumulative. Any rights or remedies of the Lender hereunder
or under the Note, or any other security agreement or writing shall be
cumulative and in addition to every other right or remedy contained therein or
herein, whether now existing or hereafter at law or in equity or by statute or
otherwise.

<PAGE> 28

11.8 Binding Agreement. This Agreement shall be binding upon Borrower and
its successors and assigns and the terms hereof shall inure to the benefit of
Lender and its successors and assigns.

11.9 Exhibits. All references to "Exhibits" contained herein are
references to exhibits attached to the Agreement, the terms and conditions of
which are made a part hereof for all purposes, the same as if set forth herein
verbatim.

11.10 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.

11.11 Captions. The captions, headings, and arrangements used in this
Agreement are for convenience only and do not in any way affect, limit, amplify,
or modify the terms and provisions hereof.

11.12 Invalid Provisions. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the term of this Agreement, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part.

11.13 All Loans One Loan. All loans and/or advances made hereunder shall
constitute one loan and the obligations of such loans and/or advances shall
constitute one obligation.

11.14 Governing Law. All documents executed pursuant to the transactions
contemplated herein, including, without limitation, this Agreement and each of
the Loan Documents, shall be deemed to be contracts made under, and for all
purposes shall be construed in accordance with, the internal laws and judicial
decisions of the State of Florida even though executed outside thereof. The
Borrower hereby submits to the jurisdiction and venue of the state and federal
courts of Florida for the purposes of resolving disputes hereunder or for the
purposes of collection.

<PAGE> 29

IN WITNESS WHEREOF, the parties hereto have executed this
Agreement the day and year first above set forth.

Signed, sealed and delivered BARNETT BANK, N.A., a national
in the presence of: banking association

By:
- ------------------------------ -------------------------------
SIGNATURE Its President
------------
- ------------------------------
NAME LEGIBLY PRINTED, (CORPORATE SEAL)
TYPEWRITTEN OR STAMPED

- ------------------------------
SIGNATURE

- ------------------------------
NAME LEGIBLY PRINTED
TYPEWRITTEN OR STAMPED

As to Lender
ABR INFORMATION SERVICES, INC.,
a Florida corporation

By:
- ------------------------------ -------------------------------
SIGNATURE Its Authorized Agent

- ------------------------------
NAME LEGIBLY PRINTED, (CORPORATE SEAL)
TYPEWRITTEN OR STAMPED

- ------------------------------
SIGNATURE

- ------------------------------
NAME LEGIBLY PRINTED
TYPEWRITTEN OR STAMPED

As to Borrower

<PAGE> 30

ABR BENEFITS SERVICES, INC., a
Florida corporation

By:
- ------------------------------ -------------------------------
SIGNATURE Its Authorized Agent

- ------------------------------
NAME LEGIBLY PRINTED, (CORPORATE SEAL)
TYPEWRITTEN OR STAMPED

- ------------------------------
SIGNATURE

- ------------------------------
NAME LEGIBLY PRINTED
TYPEWRITTEN OR STAMPED

As to Guarantor

ABR PROPERTIES, INC., a Florida
corporation

By:
- ------------------------------ -------------------------------
SIGNATURE Its Authorized Agent

- ------------------------------
NAME LEGIBLY PRINTED, (CORPORATE SEAL)
TYPEWRITTEN OR STAMPED

- ------------------------------
SIGNATURE

- ------------------------------
NAME LEGIBLY PRINTED
TYPEWRITTEN OR STAMPED

As to Guarantor

24
<PAGE> 31

STATE OF GEORGIA )
COUNTY OF )
------------------

The foregoing instrument was acknowledged before me this ________ day of
______________, 1998, by ____________________________, the _______ President of
BARNETT BANK, N.A., a national banking association, on behalf of the
association.

PERSONALLY KNOWN ________ OR PRODUCED IDENTIFICATION
TYPE OF IDENTIFICATION PROVIDED ____________________

-------------------------------
SIGNATURE

-------------------------------
NAME LEGIBLY PRINTED,
TYPEWRITTEN OR STAMPED

(SEAL) NOTARY PUBLIC

My Commission Expires:

STATE OF GEORGIA )
COUNTY OF )
------------------

The foregoing instrument was acknowledged before me this ________ day of
______________, 1998, by ROBERT A. SMOLINSKI, the Authorized Agent of ABR
INFORMATION SERVICES, INC., a Florida corporation, on behalf of the corporation.

PERSONALLY KNOWN ________ OR PRODUCED IDENTIFICATION
TYPE OF IDENTIFICATION PROVIDED ____________________

-------------------------------
SIGNATURE

-------------------------------
NAME LEGIBLY PRINTED,
TYPEWRITTEN OR STAMPED

(SEAL) NOTARY PUBLIC

My Commission Expires:

<PAGE> 32

STATE OF GEORGIA )
COUNTY OF )
------------------

The foregoing instrument was acknowledged before me this ________ day of
______________, 1998, by ROBERT A. SMOLINSKI, Authorized Agent of ABR BENEFITS
SERVICES, INC., a Florida corporation, on behalf of the corporation.

PERSONALLY KNOWN ________ OR PRODUCED IDENTIFICATION
TYPE OF IDENTIFICATION PROVIDED ____________________

-------------------------------
SIGNATURE

-------------------------------
NAME LEGIBLY PRINTED,
TYPEWRITTEN OR STAMPED

(SEAL) NOTARY PUBLIC

My Commission Expires:

STATE OF GEORGIA )
COUNTY OF )
------------------

The foregoing instrument was acknowledged before me this ________ day of
______________, 1998, by ROBERT A. SMOLINSKI, the Authorized Agent of ABR
PROPERTIES, INC., a Florida corporation, on behalf of the corporation.

PERSONALLY KNOWN ________ OR PRODUCED IDENTIFICATION
TYPE OF IDENTIFICATION PROVIDED ____________________

-------------------------------
SIGNATURE

-------------------------------
NAME LEGIBLY PRINTED,
TYPEWRITTEN OR STAMPED

(SEAL) NOTARY PUBLIC

My Commission Expires:

<PAGE> 33

EXHIBIT "A"

LEGAL DESCRIPTION OF PROPERTY

<PAGE> 34

EXHIBIT "B"

APPLICATION FOR DISBURSEMENT

ABR INFORMATION SERVICES, INC., a Florida corporation (the "Borrower")
hereby applies to BARNETT BANK, N.A., a national banking association (the
"Lender"), to disburse $______________ to Borrower in accordance with the
revolving line of credit loan extended by Lender to Borrower on or about
_______________ , 1998, in the maximum principal amount of TWENTY FIVE MILLION
AND NO/100 DOLLARS ($25,000,000.00). All defined terms contained in the Loan
Agreement to which this Exhibit "A" is attached are incorporated herein by this
reference.

As an inducement for Lender to make such disbursement to Borrower,
Borrower warrants and represents to Lender that: (i) such Loan and all
instruments evidencing, securing or otherwise executed in connection with such
Loan are fully current and no default exists thereunder; (ii) the warranties,
representations, covenants and agreements of Borrower Group in the Loan
Agreement executed by Borrower Group and Lender are true and correct and are in
full force and effect; (iii) there is no litigation or proceeding pending or
threatened against or affecting the Borrower, the result of which might
substantially affect the financial condition, business or operations of the
Borrower; (iv) there has been no materially adverse change in the financial
condition of the Borrower Group since the date of the latest financial statement
of Borrower Group submitted to Lender; and (v) the amount of the disbursement
requested, together with the outstanding principal balance of the Loan, will not
exceed the face amount of the Loan.

Dated, this _______ day of ______________________, 1998.

ABR INFORMATION SERVICES, INC.,
a Florida corporation

By:
---------------------------------
Its Authorized Agent

(CORPORATE SEAL)

<PAGE> 1
EXHIBIT 10.16

STOCK PURCHASE AGREEMENT

dated August 12, 1998,
and effective as of August 1, 1998,

by and among

ABR INFORMATION SERVICES, INC.,
a Florida corporation,

MIDATLANTIC 401(k) SERVICES, INC.,
a Virginia corporation,

E. FRANKLIN DePEW,
CAROL JOY DePEW and
ROBERT L. MUSICK, JR.,

as Shareholders,

and

E. FRANKLIN DePEW,
as Shareholders' Agent

<PAGE> 2

STOCK PURCHASE AGREEMENT
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C> <C> <C>
----
1. PURCHASE AND SALE OF SHARES...................................................... 1

2. PURCHASE PRICE - PAYMENT......................................................... 1
2.1. Purchase Price......................................................... 1
2.2. Payment of Purchase Price.............................................. 4

3. JOINT AND SEVERAL REPRESENTATIONS AND WARRANTIES OF COMPANY AND SHAREHOLDERS..... 6
3.1. Corporate.............................................................. 6
3.2. Shareholders........................................................... 7
3.3. No Violation........................................................... 7
3.4. Financial Statements................................................... 8
3.5. Tax Matters............................................................ 8
3.6. Accounts Receivable.................................................... 10
3.7. Absence of Certain Changes............................................. 10
3.8. Absence of Undisclosed Liabilities..................................... 12
3.9. No Litigation.......................................................... 12
3.10. Compliance With Laws and Orders........................................ 12
3.11. Title to and Condition of Properties................................... 14
3.12. Insurance.............................................................. 16
3.13. Contracts and Commitments.............................................. 17
3.14. Labor Matters.......................................................... 19
3.15. Employee Benefit Plans................................................. 19
3.16. Employment Compensation................................................ 23
3.17. Trade Rights........................................................... 24
3.18. Major Customers and Suppliers.......................................... 25
3.19. Service Warranty and Liability......................................... 25
3.20. Bank Accounts.......................................................... 26
3.21. Affiliates' Relationships to Company................................... 26
3.22. Assets Necessary to Business........................................... 26
3.23. No Brokers or Finders.................................................. 26
3.24. Year 2000 Compliance................................................... 26
3.25. Systems Performance.................................................... 27
3.26. Software Ownership; Non Infringement................................... 27
3.27. Disclosure............................................................. 28

4. REPRESENTATIONS AND WARRANTIES OF BUYER.......................................... 29
4.1. Corporate.............................................................. 29
4.2. Authority.............................................................. 29
4.3. No Brokers or Finders.................................................. 29
4.4. Disclosure............................................................. 29
4.5. Investment Intent...................................................... 30

5. COVENANTS....................................................................... 30
5.1. Employment and Noncompetition Agreements............................... 30
5.2. Noncompetition; Confidentiality........................................ 30
5.3. General Releases....................................................... 32
5.4. Section 338(h)(10) Election............................................ 32
</TABLE>

<PAGE> 3

<TABLE>
<CAPTION>
Page
<S> <C> <C> <C>
----
5.5. Continuation of First American Agreement............................... 32
5.6. E&O Insurance Coverage................................................. 33

6. INDEMNIFICATION.................................................................. 33
6.1. By Shareholders........................................................ 33
6.2. By Buyer............................................................... 34
6.3. Indemnification of Third-Party Claims.................................. 34
6.4. Payment................................................................ 35
6.5. Indemnification for Environmental Matters.............................. 36
6.6. Limitations on Indemnification......................................... 36
6.7. No Waiver.............................................................. 37

7. CLOSING.......................................................................... 38
7.1. Documents to be Delivered by Company and Shareholders.................. 38
7.2. Documents to be Delivered by Buyer..................................... 40

8. TERMINATION...................................................................... 41

9. RESOLUTION OF DISPUTES........................................................... 41
9.1. Arbitration............................................................ 41
9.2. Arbitrators............................................................ 42
9.3. Procedures; No Appeal.................................................. 42
9.4. Authority.............................................................. 42
9.5. Entry of Judgment...................................................... 42
9.6. Confidentiality........................................................ 43
9.7. Continued Performance.................................................. 43
9.8. Tolling................................................................ 43

10. MISCELLANEOUS.................................................................... 43
10.1. Disclosure Schedule.................................................... 43
10.2. Further Assurance...................................................... 43
10.3. Disclosures and Announcements.......................................... 43
10.4. Assignment; Parties in Interest........................................ 44
10.5. Law Governing Agreement................................................ 44
10.6. Amendment and Modification............................................. 44
10.7. Notice................................................................. 44
10.8. Expenses............................................................... 46
10.9. Shareholders' Agent; Power of Attorney................................. 47
10.10. Entire Agreement....................................................... 48
10.11. Counterparts; Facsimile Signatures..................................... 48
10.12. Headings............................................................... 49
10.13. Glossary of Terms...................................................... 49
</TABLE>

iii

<PAGE> 4

Disclosure Schedule

<TABLE>
<S> <C>
Schedule 3.1.(c) - Foreign Corporation Qualification
Schedule 3.1.(d) - Ownership Interests
Schedule 3.1.(e) - Directors and Officers of the Company
Schedule 3.1.(f) - Shareholder List
Schedule 3.3 - Violation, Conflict, Default
Schedule 3.4 - Financial Statements
Schedule 3.5.(b) - Tax Returns (Exceptions to Representations)
Schedule 3.5.(c) - Tax Audits
Schedule 3.5.(f) - Tax, Other
Schedule 3.6 - Accounts Receivable (Aged Schedule)
Schedule 3.7 - Certain Changes
Schedule 3.8 - Off-Balance Sheet Liabilities
Schedule 3.9 - Litigation Matters
Schedule 3.10.(a) - Non-Compliance with Laws
Schedule 3.10.(b) - Licenses and Permits
Schedule 3.10.(c) - Environmental Matters (Exceptions to Representations)
Schedule 3.11 - Liens
Schedule 3.11.(c) - Real Property
Schedule 3.12 - Insurance
Schedule 3.13.(b) - Personal Property Leases
Schedule 3.13.(d) - Sales Commitments
Schedule 3.13.(g) - Collective Bargaining Agreements
Schedule 3.13.(h) - Loan Agreements, etc.
Schedule 3.13.(i) - Guarantees
Schedule 3.13.(l) - Material Contracts
Schedule 3.14 - Labor Matters
Schedule 3.15.(a) - Employee Plans/Agreements
Schedule 3.16 - Employment Compensation
Schedule 3.17 - Trade Rights
Schedule 3.18.(a) - Major Customers
Schedule 3.18.(b) - Major Suppliers
Schedule 3.18.(c) - Sales Representatives
Schedule 3.19 - Service Warranty, Warranty Expense and Liability Claims
Schedule 3.20 - Bank Accounts
Schedule 3.21.(a) - Contracts with Affiliates
Schedule 3.21.(c) - Obligations of and to Affiliates
Schedule 3.24 - Year 2000 Noncompliance
Schedule 3.26 - Software Ownership Exceptions
Schedule 5.5 - Purchase Price Allocation
</TABLE>

<PAGE> 5

STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT (this "Agreement"), dated August 12, 1998,
and effective as of August 1, 1998, by and among ABR Information Services,
Inc., a Florida corporation ("Buyer"), MidAtlantic 401(k) Services, Inc., a
Virginia corporation ("Company"), E. Franklin DePew, Carol Joy DePew and Robert
L. Musick, Jr. (individually "Shareholder" and together the "Shareholders"),
and E. Franklin DePew (the "Shareholders' Agent").

RECITALS

1. Company is engaged in the business of providing pension
administrative services to third parties (the "MidAtlantic Business").
Shareholders own all of the issued and outstanding shares (the "Shares") of
capital stock of Company.

2. Company's facilities consist solely of leased offices at One Park
West Circle, Suite 300, Midlothian, Virginia (the "Facilities").

3. Buyer desires to purchase the Shares from Shareholders and
Shareholders desire to sell the Shares to Buyer, upon the terms and conditions
herein set forth.

4. Shareholders wish to designate E. Franklin DePew as their agent and
attorney-in-fact, with the authority to act on their behalf in connection with
the sale of the Shares to Buyer.

NOW THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and intending to be legally bound hereby, the parties hereto agree
as follows.

1. PURCHASE AND SALE OF SHARES

Subject to the terms and conditions of this Agreement, effective as of
the Effective Date (as hereinafter defined) Shareholders shall sell to Buyer
and Buyer shall purchase from Shareholders all of the Shares.

2. PURCHASE PRICE - PAYMENT

2.1. Purchase Price.

2.1.(a) Amount. The aggregate purchase price (the "Purchase
Price") payable for the Shares shall be the sum of (a) TEN MILLION EIGHT
HUNDRED NINETY-ONE THOUSAND AND NO/100 DOLLARS ($10,891,000) and (b) a
contingent payment (the "Contingent Payment") based on the MidAtlantic
Business' net earnings before income taxes ("EBIT") for the twelve-month
period commencing as of the Effective Date (the "Contingent Payment
Period"). All payments of Purchase Price are to be

<PAGE> 6

made for pro rata distribution among the Shareholders in accordance with
their respective shareholdings in the Company as set forth in Schedule
3.1(f) hereto.

2.1.(b) Calculation of Contingent Payment. The Contingent
Payment shall equal (i) ONE MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS
($1,250,000), in the event the MidAtlantic Business' EBIT for the
Contingent Payment Period equals or exceeds $2,250,000, or (ii) TWO
MILLION DOLLARS ($2,000,000), in the event the MidAtlantic Business'
EBIT for the Contingent Payment Period equals or exceeds $2,500,000. No
Contingent Payment shall be due or payable in the event the MidAtlantic
Business' EBIT for the Contingent Payment Period is less than
$2,250,000.

2.1.(c) Calculation of EBIT. The calculation of the
MidAtlantic Business' EBIT for the Contingent Payment Period shall
include revenue received from pension administration services but shall
not include revenue received from COBRA administration services or other
services not performed by Company as of the date hereof but offered by
Buyer or any of its subsidiaries or affiliates. Except as expressly
provided herein, the calculation of EBIT shall be made in accordance
with generally accepted accounting principles applied on a consistent
basis, subject to the following adjustments:

(i) Any depreciation or amortization adjustments
resulting solely from the transactions contemplated by this
Agreement shall not be included for purposes of calculating
EBIT for the Contingent Payment Period.

(ii) Notwithstanding Company's actual expenses for
the Contingent Payment Period relating to items and functions
(such as property and casualty insurance, errors and omissions
insurance, health and welfare programs and human resource
functions) that Company and Buyer mutually agree shall be
provided by Buyer or another subsidiary thereof, Company shall
accrue as an expense for purposes of calculating EBIT for the
Contingent Payment Period the same dollar amount as it accrued
in the twelve months preceding the Effective Date with respect
to such items and functions.

(iii) The calculation of EBIT for the Contingent
Payment Period shall not exclude any expense item (or series
of related items) relating to personnel matters or exceeding
$10,000 annually, unless such exclusion has been preapproved
in writing by Buyer.

<PAGE> 7

(iv) Company shall review with Buyer on a monthly
basis any and all expense items Company intends to exclude for
purposes of calculating EBIT for the Contingent Payment
Period.

(v) In the event Buyer (or any subsidiary thereof)
generates new pension administration services business for
Company during the Contingent Payment Period, and/or Company
generates new COBRA administration services business (or other
new business for similar administrative services not performed
by Company as of the date hereof), Buyer and Company agree to
make a reasonable allocation of sales and other reasonable
costs associated with obtaining such new business for purposes
of calculating Company's EBIT for the Contingent Payment
Period.

(vi) The imputed interest expense on the Buyer Loan
(as hereinafter defined) shall be included in the calculation
of EBIT for the MidAtlantic Business for the Contingent
Payment Period.

2.1.(d) Buyer Loan. Buyer agrees to loan Company on the
Closing Date the sum of $151,670.31 (including the aggregate amount
paid by Buyer to Crestar Bank pursuant to Section 7.2.(e) below), and
thereafter prior to the end of the Contingent Payment Period such
additional amounts as may be reasonably necessary to provide working
capital for Company during the Contingent Payment Period. The loan(s)
described in this Section 2.1.(d) are referred to herein collectively as
the "Buyer Loan." The proceeds of the Buyer Loan (other than the
aggregate amount paid by Buyer to Crestar Bank pursuant to Section
7.2.(e) below) shall be used solely as working capital for Company
during the Contingent Payment Period. The Buyer Loan shall be repaid in
full by Company to Buyer during the Contingent Payment Period. To the
extent that it is repaid after such time, the unpaid principal balance
as of the end of the Contingent Payment Period shall be charged in full
against the MidAtlantic Business' EBIT for the Contingent Payment
Period.

2.1.(e) Interest on Buyer Loan. The calculation of the
MidAtlantic Business' EBIT for the Contingent Payment Period shall
include an imputed interest expense to Company equal to interest
calculated on the outstanding principal balance of the Buyer Loan which
remains unpaid from time to time, at the rate announced from time to time
by NationsBank, N.A. (or its successor) as its prime rate. Interest on
the Buyer Loan calculated under the Section 2.1(e) shall commence on the
date the Buyer Loan is made to Company and continue until the Buyer Loan
is repaid in full.

<PAGE> 8

2.2. Payment of Purchase Price. The Purchase Price shall be paid by
Buyer as follows:

2.2.(a) Cash to Shareholders' Agent. At the Closing, Buyer
shall deliver to the Shareholders' Agent the sum of NINE MILLION EIGHT
HUNDRED NINETY-ONE THOUSAND AND NO/100 DOLLARS ($9,891,000).

2.2.(b) Contingent Payment. The initial calculation of the
Contingent Payment shall be made by Buyer, which shall deliver its
calculation within ninety (90) days following the first anniversary of
the Effective Date to Shareholders' Agent for his review and comment. If
Buyer and Shareholder's Agent are able to agree in writing upon the
amount of the Contingent Payment within fifteen (15) days following
delivery of the initial calculation to Shareholders' Agent, then Buyer
shall pay such amount. Such payment of the Contingent Payment, if any,
shall be made to the Shareholders' Agent within one hundred twenty (120)
days following the first anniversary of the Effective Date. In the event
Buyer and Shareholders' Agent cannot agree on the amount of the
Contingent Payment within one hundred twenty (120) days following the
first anniversary of the Effective Date, then the determination of the
Contingent Payment shall be submitted to binding arbitration in
accordance with Article 9 of this Agreement.

2.2.(c) Purchase Price Holdback.

(i) On the Closing Date, Buyer will transfer the
sum of One Million Dollars ($1,000,000) to a segregated
interest-bearing account with a bank or other financial
institution with a combined capital and surplus in excess of
$50,000,000, which amount shall be held by Buyer in such
account for the purpose of securing the indemnification
obligations of Company and Shareholders under this Agreement.
For purposes hereof, "Holdback Period" shall mean the period
commencing on the date hereof and ending on January 15, 1999,
subject to extension as hereinafter provided.

<PAGE> 9

set forth in the Claim Notice) from the segregated account. If
the Shareholders' Agent shall timely deliver to Buyer such
written notice of objection, then Buyer shall not make a
withdrawal from the segregated account with respect to the
claim set forth in the Claim Notice until: (x) Buyer and
Shareholders' Agent have executed joint written instructions
referring to such Claim Notice and directing Buyer to
withdraw, for Buyer's own account, funds from the segregated
account; or (y) Buyer has received a copy of a judgment,
decree or order of a court, or copy of an arbitration award,
adjudicating the dispute with respect to such claim for
indemnification; whereupon Buyer shall withdraw from the
segregated account, for Buyer's own account, such amount as
provided therein.

(iii) If Buyer has not delivered a Claim Notice to
Shareholders' Agent prior to the expiration of the Holdback
Period, or if any and all Claim Notices delivered to
Shareholders' Agent during the Holdback Period have been
resolved pursuant to subsection (ii) above, then Buyer shall
deliver to Shareholders' Agent the portion of the funds held
in the segregated account equal to (x) $1,000,000, less (y)
any amounts withdrawn by Buyer as provided herein, plus (z)
any interest earned with respect to such amount. Buyer shall
deliver such amount to the Shareholders' Agent promptly after
the expiration of the Holdback Period, unless one or more
Claim Notice(s) have not been finally resolved pursuant to
subsection (ii) above, in which case Buyer shall retain such
amount in the segregated account until: (a) Buyer and
Shareholders' Agent have executed joint written instructions
referring to such Claim Notice(s) and directing Buyer as to
the disbursement of the funds in the segregated account; or
(b) Buyer has received a copy of a judgment, decree or order
of a court, or copy of an arbitration award, adjudicating the
dispute with respect to such Claim Notice(s); whereupon Buyer
shall disburse the funds in the segregated account as provided
therein.

2.2.(d) Method of Payment. All payments under this
Section 2.2 shall be made in the form of certified or bank cashier's
check payable to the order of the recipient or, at the recipient's
option, by wire transfer of immediately available funds to an account
previously designated by the recipient in writing.

<PAGE> 10

3. JOINT AND SEVERAL REPRESENTATIONS AND WARRANTIES OF COMPANY AND
SHAREHOLDERS

Company and Shareholders, jointly and severally, make the following
representations and warranties to Buyer, each of which was true and correct on
the Effective Date (other than Section 3.2(b)), remains true as of the Closing
Date, shall be unaffected by any investigation heretofore or hereafter made by
or on behalf of Buyer, or any knowledge of Buyer other than as specifically
disclosed in the Disclosure Schedule delivered to Buyer at the time of the
execution of this Agreement, and shall survive the Closing of the transactions
provided for herein. Regardless of the foregoing, the representations and
warranties set forth in Section 3.2 are made severally by each Shareholder,
with respect to such Shareholder only.

3.1. Corporate.

3.1.(a) Organization. Company is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Virginia.

3.1.(b) Corporate Power. Company has all requisite corporate
power and authority to own, operate and lease its properties and to
carry on its business as and where such is now being conducted.

3.1.(c) Qualification. Company is duly licensed or qualified
to do business as a foreign corporation, and is in good standing, in
each jurisdiction wherein the character of the properties owned or
leased by it, or the nature of its business, makes such licensing or
qualification necessary. The states in which Company is licensed or
qualified to do business are listed in Schedule 3.1.(c).

3.1.(d) Subsidiaries. Except as set forth in
Schedule 3.1.(d), Company does not own any interest in any corporation,
partnership or other entity.

3.1.(e) Corporate Documents, etc. The copies of the Articles
of Incorporation and By-Laws of the Company, including any amendments
thereto, which have been delivered by Shareholders to Buyer are true,
correct and complete copies of such instruments as presently in effect.
The corporate minute book and stock records of the Company which have
been furnished to Buyer for inspection are true, correct and complete
and accurately reflect all material corporate action taken by the
Company. The directors and officers of the Company are listed in
Schedule 3.1.(e).

3.1.(f) Capitalization of the Company. The authorized capital
stock of the Company consists entirely of

<PAGE> 11

Five Thousand (5,000) shares of common stock, no par value. No shares of
such capital stock are issued or outstanding except for One Thousand
Seventy-Seven and 02/100 (1,077.02) shares of common stock of the
Company which are owned of record and beneficially by Shareholders in
the respective numbers set forth in Schedule 3.1.(f). All such shares of
capital stock of the Company are validly issued, fully paid and
nonassessable. Except as set forth in Schedule 3.1.(f), there are no (a)
securities convertible into or exchangeable for any of the Company's
capital stock or other securities, (b) options, warrants or other rights
to purchase or subscribe to capital stock or other securities of the
Company or securities which are convertible into or exchangeable for
capital stock or other securities of the Company, or (c) contracts,
commitments, agreements, understandings or arrangements of any kind
relating to the issuance, sale or transfer of any capital stock or other
equity securities of the Company, any such convertible or exchangeable
securities or any such options, warrants or other rights.

3.2. Shareholders.

3.2.(a) Power. Each Shareholder has full power, legal right
and authority to enter into, execute and deliver this Agreement and the
other agreements, instruments and documents contemplated hereby (such
other documents sometimes referred to herein as "Ancillary
Instruments"), and to carry out the transactions contemplated hereby and
thereby.

3.2.(b) Validity. This Agreement has been duly and validly
executed and delivered by each Shareholder and is, and when executed and
delivered each Ancillary Instrument will be, the legal, valid and
binding obligation of such Shareholder, enforceable in accordance with
its terms, except as such may be limited by bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights generally, and
by general equitable principles.

3.2.(c) Title. Each Shareholder has, and Buyer is receiving,
good and marketable title to the Shares to be sold by such Shareholder
hereunder, free and clear of all Liens (as defined in Section 3.12)
including, without limitation, voting trusts or agreements, proxies,
marital or community property interests.

<PAGE> 12

department, commission, board, bureau, agency, authority, instrumentality or
other body, whether federal, state, municipal, foreign or other (collectively,
"Government Entities"), (b) will require any authorization, consent, approval,
exemption or other action by or notice to any Government Entity (including,
without limitation, under any "plant-closing" or similar law), or (c) subject
to obtaining the consents referred to in Schedule 3.3, will violate or conflict
with, or constitute a default (or an event which, with notice or lapse of time,
or both, would constitute a default) under, or will result in the termination
of, or accelerate the performance required by, or result in the creation of any
Lien upon any of the assets of Company (or the Shares) under, any term or
provision of the Articles of Incorporation or By-Laws of Company or of any
contract, commitment, understanding, arrangement, agreement or restriction of
any kind or character to which Company or any Shareholder is a party or by
which Company or any Shareholder or any of its or their assets or properties
may be bound or affected.

3.4. Financial Statements. Included as Schedule 3.4 are true and
complete copies of the financial statements of Company consisting of (i) balance
sheets of Company as of December 31, 1997 and May 31, 1998, and the related
statements of income and cash flows for the year and five months then ended
(including the notes contained therein or annexed thereto), respectively, which
financial statements have been reported on, and are accompanied by, the signed,
unqualified opinions of Keiter, Stephens, Hurst, Gary & Shreaves, P.C.,
independent auditors for Company for such periods, and (ii) an unaudited balance
sheet of Company as of July 31, 1998. The audited balance sheet of the Company
as of May 31, 1998 is hereinafter referred to as the "Recent Balance Sheet." All
of such financial statements (including all notes and schedules contained
therein or annexed thereto) are true, complete and accurate, have been prepared
in accordance with generally accepted accounting principles (except, in the case
of the unaudited balance sheet as of July 31, 1998, for the absence of footnote
disclosure) applied on a consistent basis, have been prepared in accordance with
the books and records of Company, and fairly present, in accordance with
generally accepted accounting principles, the assets, liabilities and financial
position, the results of operations and cash flows of Company as of the dates
and for the years and periods indicated. In addition to the foregoing, from and
after July 31, 1998, Company had, and presently has, a tangible net worth (i.e.,
stockholders' equity) of a minimum of $791,071.

3.5. Tax Matters.

3.5.(a) Provision For Taxes. The provision made for taxes on
the Recent Balance Sheet is sufficient for the payment of all federal,
state, foreign, county, local and other income, ad valorem, excise,
profits, franchise,

<PAGE> 13

occupation, property, payroll, sales, use, gross receipts and other
taxes (and any interest and penalties) and assessments, whether or not
disputed, at the date of the Recent Balance Sheet and for all years and
periods prior thereto. Since the date of the Recent Balance Sheet,
Company has not incurred any taxes other than (i) taxes incurred in the
ordinary course of business consistent in type and amount with past
practices of Company and (ii) income taxes payable by the Corporation
for the period following the termination of Company's S Corp (as defined
in Section 3.5(e)) status as a result of the transactions contemplated
hereby, which shall in no event occur prior to August 1, 1998.

3.5.(b) Tax Returns Filed. Except as set forth on Schedule
3.5.(b), all federal, state, foreign, county, local and other tax
returns required to be filed by or on behalf of Company have been timely
filed and when filed were true and correct in all material respects, and
the taxes shown as due thereon were paid or adequately accrued. True and
complete copies of all tax returns or reports filed by Company for each
of its three most recent fiscal years have been delivered to Buyer.
Company has duly withheld and paid all taxes which it is required to
withhold and pay relating to salaries and other compensation heretofore
paid to the employees of Company.

3.5.(c) Tax Audits. The federal and state income tax returns
of Company have been audited by the Internal Revenue Service and
appropriate state taxing authorities for the periods and to the extent
set forth in Schedule 3.5.(c), and Company has not received from the
Internal Revenue Service or from the tax authorities of any state,
county, local or other jurisdiction any notice of underpayment of taxes
or other deficiency which has not been paid nor any objection to any
return or report filed by Company. There are outstanding no agreements
or waivers extending the statutory period of limitations applicable to
any tax return or report.

3.5.(d) No Consolidated Group. Company has never been a
member of an affiliated group of corporations that filed a consolidated
tax return. Company does not have any liability for the taxes of any
person or entity under Sections 1.1502-6 or 1.1502-78 of Title 26 of the
Code of Federal Regulations (or any similar provisions of state, local
or foreign income tax laws).

<PAGE> 14

under the laws of Virginia. Such elections have remained in effect since
May 6, 1991. Except for transactions contemplated by this Agreement,
neither Company nor any of the Shareholders has taken any action, nor
has any event occurred, that would result in the revocation or
termination of any of such elections effective on or after May 6, 1991.
Company is not subject to the tax imposed by Section 1374 of the Code
(or any equivalent state statute) and Company does not have a "net
unrealized built-in gain" as such phrase is defined in Section 1374(d)
of the Code (or any equivalent state statute).

3.5.(f) Other. Except as set forth in Schedule 3.5.(f), since
its incorporation Company has not (i) filed any consent or agreement
under Section 341(f) of the Internal Revenue Code of 1986, as amended
(the "Code"), (ii) applied for any tax ruling, (iii) entered into a
closing agreement with any taxing authority, (iv) filed an election
under Section 338(g) or Section 338(h)(10) of the Code (nor has a deemed
election under Section 338(e) of the Code occurred), except as
contemplated hereby, (v) made any payments, or been a party to an
agreement (including this Agreement) that under any circumstances could
obligate it to make payments that will not be deductible because of
Section 280G of the Code, or (vi) been a party to any tax allocation or
tax sharing agreement. The Company is not a "United States real property
holding company" within the meaning of Section 897 of the Code.

3.6. Accounts Receivable. All accounts receivable of Company
reflected on the Recent Balance Sheet, and all accounts receivable incurred in
the normal course of business since the date thereof, represent arm's length
sales actually made in the ordinary course of business; are collectible (net of
the reserve shown on the Recent Balance Sheet for doubtful accounts) in the
ordinary course of business without the necessity of commencing legal
proceedings; are subject to no counterclaim or setoff; and are not in dispute.
Schedule 3.6 contains a true and correct aged schedule of accounts receivable
as of July 31, 1998.

3.7. Absence of Certain Changes. Except as and to the extent set
forth in Schedule 3.7, since the date of the Recent Balance Sheet there has not
been:

3.7.(a) No Adverse Change. Any adverse change in the
financial condition, assets, liabilities, business, prospects or
operations of Company;

3.7.(b) No Damage. Any loss, damage or destruction, whether
covered by insurance or not, affecting the Company, its properties or
the MidAtlantic Business;

3.7.(c) No Increase in Compensation. Any increase in the
compensation, salaries or wages payable or to become

<PAGE> 15

payable to any employee or agent of Company (including, without
limitation, any increase or change pursuant to any bonus, pension,
profit sharing, retirement or other plan or commitment), or any bonus or
other employee benefit granted, made or accrued; or any payment to E.
Franklin DePew, except pursuant to the terms of the Employment and
Noncompetition Agreement described in Section 5.1 below;

3.7.(d) No Labor Disputes. Any labor dispute or disturbance,
other than routine individual grievances which are not material to the
business, financial condition or results of operations of Company;

3.7.(e) No Commitments. Any commitment or transaction by
Company (including, without limitation, any borrowing or capital
expenditure) other than in the ordinary course of business consistent
with past practice;

3.7.(f) No Dividends. Any declaration, setting aside, or
payment of any dividend or any other distribution in respect of
Company's capital stock; any redemption, purchase or other acquisition
by Company of any capital stock of Company, or any security relating
thereto; or any other payment to any shareholder of Company as such a
shareholder;

3.7.(g) No Disposition of Property. Any sale, lease or other
transfer or disposition of any properties or assets of Company;

3.7.(h) No Indebtedness. Any indebtedness for borrowed money
incurred, assumed or guaranteed by Company;

3.7.(i) No Liens. Any mortgage, pledge, lien or encumbrance
made on any of the properties or assets of Company;

3.7.(j) No Amendment of Contracts. Any entering into,
amendment or termination by Company of any contract, or any waiver of
material rights thereunder, other than in the ordinary course of
business;

3.7.(k) Loans and Advances. Any loan or advance (other than
advances to employees in the ordinary course of business for travel and
entertainment in accordance with past practice) to any person including,
but not limited to, any Affiliate (for purposes of this Agreement, the
term "Affiliate" shall mean and include: John F. DePew, all
Shareholders, directors and officers of Company; the spouse of any such
person; any person who would be the heir or descendant of any such
person if he or she were not living; and any entity in which any of the
foregoing has a direct or indirect interest, except through ownership of
less than 5% of

<PAGE> 16

the outstanding shares of any entity whose securities are listed on a
national securities exchange or traded in the national over-the-counter
market);

3.7.(l) Credit. Any grant of credit to any customer or
distributor on terms or in amounts more favorable than those which have
been extended to such customer or distributor in the past, any other
change in the terms of any credit heretofore extended, or any other
change of Company's policies or practices with respect to the granting
of credit; or

3.7.(m) No Unusual Events. Any other event or condition not
in the ordinary course of business of Company.

3.8. Absence of Undisclosed Liabilities. Except as and to the extent
specifically disclosed in the Recent Balance Sheet, or in Schedule 3.8, Company
does not have any liabilities, commitments or obligations (secured or
unsecured, and whether accrued, absolute, contingent, direct, indirect or
otherwise), other than commercial liabilities and obligations incurred since
the date of the Recent Balance Sheet in the ordinary course of business and
consistent with past practice and none of which has or will have a material
adverse effect on the business, financial condition or results of operations of
Company. Except as and to the extent described in the Recent Balance Sheet or
in Schedule 3.8, neither Company nor any Shareholder has knowledge of any basis
for the assertion against Company of any liability and there are no
circumstances, conditions, happenings, events or arrangements, contractual or
otherwise, which may give rise to liabilities, except commercial liabilities
and obligations incurred in the ordinary course of Company's business and
consistent with past practice.

3.9. No Litigation. Except as set forth in Schedule 3.9 there is no
action, suit, arbitration, proceeding, investigation or inquiry, whether civil,
criminal or administrative ("Litigation"), pending or threatened against
Company, its directors (in such capacity), its business or any of its assets,
nor does Company or any Shareholder know, or have grounds to know, of any basis
for any Litigation. Schedule 3.9 also identifies all Litigation to which
Company or any of its directors (in such capacity) have been parties since
January 1, 1997. Except as set forth in Schedule 3.9, neither Company nor its
business or assets is subject to any Order of any Government Entity.

3.10. Compliance With Laws and Orders.

<PAGE> 17

safety and health, trade practices, competition and pricing, product
warranties, zoning, building and sanitation, employment, retirement and
labor relations, product advertising and the Environmental Laws as
hereinafter defined. Except as set forth in Schedule 3.10.(a), Company
has not received notice of any violation or alleged violation of, and is
subject to no Liability for past or continuing violation of, any Laws or
Orders. All reports and returns required to be filed by Company with any
Government Entity have been filed, and were accurate and complete when
filed. Without limiting the generality of the foregoing:

(i) The operation of Company's business as it is
now conducted does not, nor does any condition existing at any
of the Facilities, in any manner constitute a nuisance or
other tortious interference with the rights of any person or
persons in such a manner as to give rise to or constitute the
grounds for a suit, action, claim or demand by any such person
or persons seeking compensation or damages or seeking to
restrain, enjoin or otherwise prohibit any aspect of the
conduct of such business or the manner in which it is now
conducted.

(ii) Company has made all required payments to its
unemployment compensation reserve accounts with the
appropriate governmental departments of the states where it is
required to maintain such accounts, and each of such accounts
has a positive balance.

(iii) During the past five (5) years, Company has
not been required to make any reports or filings under, and
has not received any reports or other correspondence from any
agency or other governmental body under or relating to, the
federal Occupational Safety and Health Act of 1970, as
amended, or any other applicable health and safety laws and
regulations.

3.10.(b) Licenses and Permits. Company has all licenses,
permits, approvals, authorizations and consents of all Government
Entities and all certification organizations required for the conduct of
the business (as presently conducted and as proposed to be conducted)
and operation of the Facilities. All such licenses, permits, approvals,
authorizations and consents are described in Schedule 3.10.(b), are in
full force and effect and will not be affected or made subject to loss,
limitation or any obligation to reapply as a result of the transactions
contemplated hereby. Except as set forth in Schedule 3.10.(b), Company
(including its operations, properties and assets) is and has

<PAGE> 18

been in compliance with all such permits and licenses, approvals,
authorizations and consents.

3.10.(c) Environmental Matters. The applicable Laws relating
to pollution or protection of the environment, including Laws relating
to emissions, discharges, generation, storage, releases or threatened
releases of pollutants, contaminants, chemicals or industrial, toxic,
hazardous or petroleum or petroleum-based substances or wastes ("Waste")
into the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata) or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Waste including,
without limitation, the Clean Water Act, the Clean Air Act, the Resource
Conservation and Recovery Act, the Toxic Substances Control Act and the
Comprehensive Environmental Response Compensation Liability Act
("CERCLA"), as amended, and their state and local counterparts are
herein collectively referred to as the "Environmental Laws". Without
limiting the generality of the foregoing provisions of this Section
3.10, Company is in full compliance with all limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in the Environmental Laws or
contained in any regulations, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or
approved thereunder. Except as set forth in Schedule 3.10.(c), there is
no Litigation nor any demand, claim, hearing or notice of violation
pending or threatened against Company relating in any way to the
Environmental Laws or any Order issued, entered, promulgated or approved
thereunder. Except as set forth in Schedule 3.10.(c), there are no past
or present (or, to the best of Company's and the Shareholders'
knowledge, future) events, conditions, circumstances, activities,
practices, incidents, actions, omissions or plans which may interfere
with or prevent compliance or continued compliance with the
Environmental Laws or with any Order issued, entered, promulgated or
approved thereunder, or which may give rise to any liability, including,
without limitation, liability under CERCLA or similar state or local
Laws, or otherwise form the basis of any Litigation, hearing, notice of
violation, study or investigation, based on or related to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling, or the emission, discharge, release or
threatened release into the environment, of any Waste.

3.11. Title to and Condition of Properties.

3.11.(a) Marketable Title. Company has good and marketable
title to all of Company's assets, business and properties, including,
without limitation, all such properties

<PAGE> 19

(tangible and intangible) reflected in the Recent Balance Sheet, free
and clear of all mortgages, liens, (statutory or otherwise) security
interests, claims, pledges, licenses, equities, options, conditional
sales contracts, assessments, levies, easements, covenants,
reservations, restrictions, rights-of-way, exceptions, limitations,
charges or encumbrances of any nature whatsoever (collectively, "Liens")
except those described in Schedule 3.11 and, in the case of real
property, Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings (and which have been sufficiently
accrued or reserved against in the Recent Balance Sheet), municipal and
zoning ordinances and easements for public utilities, none of which
interfere with the use of the property as currently utilized. Except as
set forth in Schedule 3.11., none of Company's assets, business or
properties are subject to any restrictions with respect to the
transferability thereof; and the Company's title thereto will not be
affected in any way by the transactions contemplated hereby.

3.11.(b) Condition. All property and assets owned or utilized
by Company are in good operating condition and repair, free from any
defects (except such minor defects as do not interfere with the use
thereof in the conduct of the normal operations of Company), have been
maintained consistent with the standards generally followed in the
industry and are sufficient to carry on the business of Company as
conducted during the preceding 12 months. All buildings, plants and
other structures owned or otherwise utilized by Company are in good
condition and repair and have no structural defects or defects affecting
the plumbing, electrical, sewerage, or heating, ventilating or air
conditioning systems.

3.11.(c) Real Property. Company does not own any real
property. The only real property used or occupied by Company (the "Real
Property") is leased from an unaffiliated third party lessor, and
Schedule 3.11.(c) sets forth the material terms of each such lease. To
the best of Company's and Shareholders' knowledge, there are now in full
force and effect duly issued certificates of occupancy permitting the
Real Property and improvements located thereon to be legally used and
occupied as the same are now constituted. To the best of Company's and
Shareholders' knowledge, all of the Real Property has permanent rights
of access to dedicated public highways. Neither Company nor any
Shareholder has notice or knowledge of any (i) fact or condition which
would prohibit or adversely affect the ordinary rights of access to and
from the Real Property from and to the existing highways and roads or
(ii) pending or threatened restriction or denial, governmental or
otherwise, upon such ingress and egress. Neither Company nor any
Shareholder has notice or knowledge of any (i) planned or proposed
increase in assessed valuations of any Real

<PAGE> 20

Property, (ii) Order requiring repair, alteration, or correction of any
existing condition affecting any Real Property or the systems or
improvements thereat, (iii) condition or defect which could give rise to
an order of the sort referred to in "(ii)" above, (iv) underground
storage tanks, or any structural, mechanical, or other defects of
material significance affecting any Real Property or the systems or
improvements thereat (including, but not limited to, inadequacy for
normal use of mechanical systems or disposal or water systems at or
serving the Real Property), or (v) work that has been done or labor or
materials that has or have been furnished to any Real Property during
the period of six (6) months immediately preceding the date of this
Agreement for which liens could be filed against any of the Real
Property.

3.11.(d) No Condemnation or Expropriation. Neither the whole
nor any portion of the property or any other assets of Company is
subject to any Order to be sold or is being condemned, expropriated or
otherwise taken by any Government Entity with or without payment of
compensation therefor, nor to the best of Company's and Shareholders'
knowledge has any such condemnation, expropriation or taking been
proposed.

<PAGE> 21

operations of the business nor has its coverage been limited by any insurance
carrier to which it has applied for insurance or with which it has carried
insurance during the last three years. Company has duly and timely made all
claims it has been entitled to make under each policy of insurance. There is no
claim by Company pending under any such policies as to which coverage has been
questioned, denied or disputed by the underwriters of such policies, and
neither Company nor any of the Shareholders knows of any basis for denial of
any claim under any such policy. Company has not received any written notice
from or on behalf of any insurance carrier issuing any such policy that
insurance rates therefor will hereafter be substantially increased (except to
the extent that insurance rates may be increased for all similarly situated
risks) or that there will hereafter be a cancellation or an increase in a
deductible (or an increase in premiums in order to maintain an existing
deductible) or nonrenewal of any such policy. Such policies are sufficient in
all material respects for compliance by Company with all requirements of law
and with the requirements of all material contracts to which Company is a
party. All general liability policies maintained by or for the benefit of
Company since its inception have been "occurrence" policies and not "claims
made" policies (except for Company's errors and omissions policies, which have
been "claims made" and not "occurrence" policies).

3.13. Contracts and Commitments.

3.13.(a) Real Property Leases. Except as set forth in Schedule
3.11.(c), Company has no leases of real property.

3.13.(b) Personal Property Leases. Except as set forth in
Schedule 3.13.(b), Company has no leases of personal property involving
consideration or other expenditure in excess of $5,000 or involving
performance over a period of more than three months.

3.13.(c) Purchase Commitments. Company has no purchase
commitments for inventory items or supplies that, together with amounts
on hand, constitute in excess of three months normal usage, or which are
at an excessive price.

3.13.(d) Sales Commitments. Except as set forth in Schedule
3.13.(d), Company has no sales or service contracts or commitments to
customers which aggregate in excess of $ 25,000 to any one customer (or
group of affiliated customers). Company has no sales contracts or
commitments except those made in the ordinary course of business, at
arm's length, and no such contracts or commitments are for a sales price
which would result in a loss to the Company.

3.13.(e) Contracts With Affiliates and Certain Others. Company
has no agreement, understanding, contract or

<PAGE> 22

commitment (written or oral) with any Affiliate or any employee, agent,
consultant, distributor, dealer or franchisee that is not immediately
cancelable by Company without liability, penalty or premium of any
nature or kind whatsoever.

3.13.(f) Powers of Attorney. The Company has not given a power
of attorney, which is currently in effect, to any person, firm or
corporation for any purpose whatsoever.

3.13.(g) Collective Bargaining Agreements. Except as set forth
in Schedule 3.13.(g), Company is not a party to any collective
bargaining agreements with any unions, guilds, shop committees or other
collective bargaining groups. Copies of all such agreements have
heretofore been delivered to Buyer.

3.13.(h) Loan Agreements. Except as set forth in Schedule
3.13.(h), Company is not obligated under any loan agreement, promissory
note, letter of credit, or other evidence of indebtedness as a
signatory, guarantor or otherwise.

3.13.(i) Guarantees. Except as disclosed on Schedule 3.13.(i),
Company has not guaranteed the payment or performance of any person,
firm or corporation, agreed to indemnify any person or act as a surety,
or otherwise agreed to be contingently or secondarily liable for the
obligations of any person.

3.13.(j) Contracts Subject to Renegotiation. Company is not a
party to any contract with any governmental body which is subject to
renegotiation.

3.13.(k) Burdensome or Restrictive Agreements. Company is not
a party to nor is it bound by any agreement, deed, lease or other
instrument which is so burdensome as to materially affect or impair the
operation of Company. Without limiting the generality of the foregoing,
Company is not a party to nor is it bound by any agreement requiring
Company to assign any interest in any trade secret or proprietary
information, or prohibiting or restricting Company from competing in any
business or geographical area or soliciting customers or otherwise
restricting it from carrying on its business anywhere in the world.

3.13.(l) Other Material Contracts. Company has no lease,
contract or commitment of any nature involving consideration or other
expenditure in excess of $ 5,000, or involving performance over a period
of more than three months, or which is otherwise individually material
to the operations of Company, except as explicitly described in Schedule
3.13.(l).

<PAGE> 23

3.13.(m) No Default. Company is not in default under any
lease, contract or commitment, nor has any event or omission occurred
which through the passage of time or the giving of notice, or both,
would constitute a default thereunder or cause the acceleration of any
of Company's obligations or result in the creation of any Lien on any of
the assets owned, used or occupied by Company. No third party is in
default under any lease, contract or commitment to which Company is a
party, nor has any event or omission occurred which, through the passage
of time or the giving of notice, or both, would constitute a default
thereunder or give rise to an automatic termination, or the right of
discretionary termination, thereof.

3.14. Labor Matters. Except as set forth in Schedule 3.14, within the
last five years Company has not experienced any labor disputes, union
organization attempts or any work stoppage due to labor disagreements in
connection with its business. Except to the extent set forth in Schedule 3.14,
(a) Company is in compliance with all applicable laws respecting employment and
employment practices, terms and conditions of employment and wages and hours,
and is not engaged in any unfair labor practice; (b) there is no unfair labor
practice charge or complaint against Company pending or threatened; (c) there
is no labor strike, dispute, request for representation, slowdown or stoppage
actually pending or threatened against or affecting Company nor any secondary
boycott with respect to products of Company; (d) no question concerning
representation has been raised or is threatened respecting the employees of
Company; (e) no grievance which might have a material adverse effect on
Company, nor any arbitration proceeding arising out of or under collective
bargaining agreements, is pending and no such claim therefor exists; and (f)
there are no administrative charges or court complaints against Company
concerning alleged employment discrimination or other employment related
matters pending or threatened before the U.S. Equal Employment Opportunity
Commission or any Government Entity.

3.15. Employee Benefit Plans.

<PAGE> 24

Security Act of 1974, as amended ("ERISA")), all employee manuals, and
all written or binding oral statements of policies, practices or
understandings relating to employment, which are provided to, for the
benefit of, or relate to, any persons ("Company Employees") employed by
Company. The items described in the foregoing sentence are hereinafter
sometimes referred to collectively as "Employee Plans/Agreements," and
each individually as an "Employee Plan/Agreement." True and correct
copies of all the Employee Plans/Agreements, including all amendments
thereto, have heretofore been provided to Buyer. Each of the Employee
Plans/Agreements is identified on Schedule 3.15.(a), to the extent
applicable, as one or more of the following: an "employee pension
benefit plan" (as defined in Section 3(2) of ERISA), a "defined benefit
plan" (as defined in Section 414 of the Code), an "employee welfare
benefit plan" (as defined in Section 3(1) of ERISA), and/or as a plan
intended to be qualified under Section 401 of the Code. No Employee
Plan/Agreement is a "multiemployer plan" (as defined in Section 4001 of
ERISA), and Company has never contributed nor been obligated to
contribute to any such multiemployer plan.

3.15.(b) Terminations, Proceedings, Penalties, etc. With
respect to each employee benefit plan (including, without limitation,
the Employee Plans/Agreements) that is subject to the provisions of
Title IV of ERISA and with respect to which the Company or any of its
assets may, directly or indirectly, be subject to any Liability,
contingent or otherwise, or the imposition of any Lien (whether by
reason of the complete or partial termination of any such plan, the
funded status of any such plan, any "complete withdrawal" (as defined in
Section 4203 of ERISA) or "partial withdrawal" (as defined in Section
4205 of ERISA) by any person from any such plan, or otherwise):

(i) no such plan has been terminated so as to
subject, directly or indirectly, any assets of Company to any
liability, contingent or otherwise, or the imposition of any
lien under Title IV of ERISA;

(ii) no proceeding has been initiated or threatened
by any person (including the Pension Benefit Guaranty
Corporation ("PBGC")) to terminate any such plan;

(iii) no condition or event currently exists or
currently is expected to occur that could subject, directly or
indirectly, any assets of Company to any liability, contingent
or otherwise, or the imposition of any lien under Title IV of
ERISA, whether to the PBGC or to any other person or otherwise
on account of the termination of any such plan;

<PAGE> 25

(iv) if any such plan were to be terminated as of
the Closing Date, no assets of Company would be subject,
directly or indirectly, to any liability, contingent or
otherwise, or the imposition of any lien under Title IV of
ERISA;

(v) no "reportable event" (as defined in Section
4043 of ERISA) has occurred with respect to any such plan;

(vi) no such plan which is subject to Section 302 of
ERISA or Section 412 of the Code has incurred any "accumulated
funding deficiency" (as defined in Section 302 of ERISA and
Section 412 of the Code, respectively), whether or not waived;
and

(vii) no such plan is a multiemployer plan or a plan
described in Section 4064 of ERISA.

3.15.(c) Prohibited Transactions, etc. There have been no
"prohibited transactions" within the meaning of Section 406 or 407 of
ERISA or Section 4975 of the Code for which a statutory or
administrative exemption does not exist with respect to any Employee
Plan/Agreement, and no event or omission has occurred in connection with
which the Company or any of its assets or any Employee Plan/Agreement,
directly or indirectly, could be subject to any liability under ERISA,
the Code or any other Law or Order applicable to any Employee
Plan/Agreement, or under any agreement, instrument, Law or Order
pursuant to or under which Company has agreed to indemnify or is
required to indemnify any person against liability incurred under any
such Law or Order.

3.15.(d) Full Funding. The funds available under each Employee
Plan/Agreement which is intended to be a funded plan exceed the amounts
required to be paid, or which would be required to be paid if such
Employee Plan/Agreement were terminated, on account of rights vested or
accrued as of the Closing Date (using the actuarial methods and
assumptions then used by Company's actuaries in connection with the
funding of such Employee Plan/Agreement).

3.15.(e) Controlled Group; Affiliated Service Group; Leased
Employees. Company is not and never has been a member of a controlled
group of corporations as defined in Section 414(b) of the Code or in
common control with any unincorporated trade or business as determined
under Section 414(c) of the Code. Company is not and never has been a
member of an "affiliated service group" within the meaning of Section
414(m) of the Code. There are not and never have been any leased
employees within the meaning of Section 414(n) of the Code who perform
services for Company, and no individuals

<PAGE> 26

are expected to become leased employees with the passage of time.
Company has no liability, actual or contingent, under Title IX of ERISA.

3.15.(f) Payments and Compliance. With respect to each
Employee Plan/Agreement, (i) all payments due from Company to date have
been made and all amounts properly accrued to date as liabilities of
Company which have not been paid have been properly recorded on the
books of Company and are reflected in the Recent Balance Sheet; (ii)
Company has complied with, and each such Employee Plan/Agreement
conforms in form and operation to, all applicable laws and regulations,
including but not limited to ERISA and the Code, in all respects and all
reports and information relating to such Employee Plan/Agreement
required to be filed with any governmental entity have been timely
filed; (iii) all reports and information relating to each such Employee
Plan/Agreement required to be disclosed or provided to participants or
their beneficiaries have been timely disclosed or provided; (iv) each
such Employee Plan/Agreement which is intended to qualify under Section
401 of the Code has received a favorable determination letter from the
Internal Revenue Service with respect to such qualification, its related
trust has been determined to be exempt from taxation under Section
501(a) of the Code, and nothing has occurred since the date of such
letter that has or is likely to adversely affect such qualification or
exemption; (v) there are no actions, suits or claims pending (other than
routine claims for benefits) or threatened with respect to such Employee
Plan/Agreement or against the assets of such Employee Plan/Agreement;
and (vi) no Employee Plan/Agreement is a plan which is established and
maintained outside the United States primarily for the benefit of
individuals substantially all of whom are nonresident aliens.

3.15.(g) Post-Retirement Benefits. No Employee Plan/Agreement
provides benefits, including, without limitation, death or medical
benefits (whether or not insured) with respect to current or former
Company employees beyond their retirement or other termination of
service other than (i) coverage mandated by applicable law, (ii) death
or retirement benefits under any Employee Plan/Agreement that is an
employee pension benefit plan, (iii) deferred compensation benefits
accrued as liabilities on the books of Company (including the Recent
Balance Sheet), (iv) disability benefits under any Employee Plan/
Agreement that is an employee welfare benefit plan and which have been
fully provided for by insurance or otherwise or (v) benefits in the
nature of severance pay.

3.15.(h) No Triggering of Obligations. The consummation of the
transactions contemplated by this

<PAGE> 27

Agreement will not (i) entitle any current or former employee of Company
to severance pay, unemployment compensation or any other payment, except
as expressly provided in this Agreement, (ii) accelerate the time of
payment or vesting, or increase the amount of compensation due to any
such employee or former employee or (iii) result in any prohibited
transaction described in Section 406 of ERISA or Section 4975 of the
Code for which an exemption is not available.

3.15.(i) Delivery of Documents. There has been delivered to
Buyer, with respect to each Employee Plan/Agreement:

(i) a copy of the annual report, if required under
ERISA, with respect to each such Employee Plan/Agreement for
the last two years;

(ii) a copy of the summary plan description,
together with each summary of material modifications, required
under ERISA with respect to such Employee Plan/Agreement, all
material employee communications relating to such Employee
Plan/Agreement, and, unless the Employee Plan/Agreement is
embodied entirely in an insurance policy to which Company is a
party, a true and complete copy of such Employee
Plan/Agreement;

(iii) if the Employee Plan/Agreement is funded
through a trust or any third party funding vehicle (other than
an insurance policy), a copy of the trust or other funding
agreement and the latest financial statements thereof; and

(iv) the most recent determination letter received
from the Internal Revenue Service with respect to each
Employee Plan/Agreement that is intended to be a "qualified
plan" under Section 401 of the Code.

With respect to each Employee Plan/Agreement for which an annual report
has been filed and delivered to Buyer pursuant to clause (i) of this
Section 3.15.(i), no material adverse change has occurred with respect
to the matters covered by the latest such annual report since the date
thereof.

3.15(j) Future Commitments. Company has no announced plan or
legally binding commitment to create any additional Employee
Plans/Agreements or to amend or modify any existing Employee
Plan/Agreement.

3.16. Employment Compensation. Schedule 3.16 contains a true and
correct list of all employees to whom Company is paying compensation, including
bonuses and incentives, at an annual rate

<PAGE> 28

in excess of Ten Thousand Dollars ($10,000) for services rendered or otherwise;
and in the case of salaried employees such list identifies the current annual
rate of compensation for each employee and in the case of hourly or commission
employees identifies certain reasonable ranges of rates and the number of
employees falling within each such range.

3.17. Trade Rights. Schedule 3.17 lists all material Trade Rights (as
defined below), including (without limitation) all registered Trade Rights and
all Trade Rights for which federal, state or local applications have been
filed, in which Company now has any interest, specifying whether such Trade
Rights are owned, controlled, used or held (under license or otherwise) by
Company, and also indicating which of such Trade Rights are registered. All
Trade Rights shown as registered in Schedule 3.17 have been properly
registered, all pending registrations and applications have been properly made
and filed and all annuity, maintenance, renewal and other fees relating to
registrations or applications are current. In order to conduct the business of
Company, as such is currently being conducted or proposed to be conducted,
Company does not require any Trade Rights that it does not already have.
Company is not infringing and has not infringed any Trade Rights of another in
the operation of the business of Company, nor, to the best of Company's and
Shareholders' knowledge, is any other person infringing the Trade Rights of
Company. Company has not granted any license or made any assignment of any
Trade Right, nor does Company pay any royalties or other consideration for the
right to use any Trade Rights of others. There is no Litigation pending or, to
the best of Company's and Shareholders' knowledge, threatened to challenge
Company's right, title and interest with respect to its continued use and right
to preclude others from using any Trade Rights of Company. All Trade Rights of
Company are valid, enforceable and in good standing, and there are no equitable
defenses to enforcement based on any act or omission of Company. The
consummation of the transactions contemplated hereby will not alter or impair
any Trade Rights owned or used by Company. As used herein, the term "Trade
Rights" shall mean and include: (i) all trademark rights, business identifiers,
trade dress, service marks, trade names and brand names, all registrations
thereof and applications therefor and all goodwill associated with the
foregoing; (ii) all copyrights, copyright registrations and copyright
applications, and all other rights associated with the foregoing and the
underlying works of authorship; (iii) all patents and patent applications, and
all international proprietary rights associated therewith; (iv) all contracts
or agreements granting any right, title, license or privilege under the
intellectual property rights of any third party; (v) all inventions, mask works
and mask work registrations, know-how, discoveries, improvements, designs,
trade secrets, shop and royalty rights, employee covenants and agreements
respecting intellectual property and non-competition and all other types of
intellectual property; and (vi) all claims for infringement or breach of any of
the foregoing.

<PAGE> 29

3.18. Major Customers and Suppliers.

3.18.(a) Major Customers. Schedule 3.18.(a) contains a list of
the twenty (20) largest customers of Company for each of the two (2)
most recent fiscal years (determined on the basis of the total dollar
amount of net sales) showing the total dollar amount of net sales to
each such customer during each such year. Neither Company nor any
Shareholder has any knowledge or information of any facts indicating,
nor any other reason to believe, that any of the customers listed on
Schedule 3.18.(a) will not continue to be customers of the business of
Company after the Closing at substantially the same level of purchases
as heretofore.

3.18.(b) Major Suppliers. Schedule 3.18.(b) contains a list of
the ten (10) largest suppliers to Company for each of the two (2) most
recent fiscal years (determined on the basis of the total dollar amount
of purchases) showing the total dollar amount of purchases from each
such supplier during each such year. Neither Company nor any Shareholder
has any knowledge or information of any facts indicating, nor any other
reason to believe, that any of the suppliers listed on Schedule 3.18.(b)
will not continue to be suppliers to the business of Company after the
Closing and will not continue to supply the business with substantially
the same quantity and quality of goods at competitive prices.

3.18.(c) Sales Representatives. Schedule 3.18.(c) contains a
list of all sales representatives of Company, together with true,
correct and complete copies of all sales representative contracts and
policy statements, and a description of all substantial modifications or
exceptions.

3.19. Service Warranty and Liability. Schedule 3.19 contains a true,
correct and complete copy of Company's standard warranty or warranties for
sales of Services (as defined below) and, except as stated therein, there are
no warranties, commitments or obligations with respect to the provision of such
Services. Schedule 3.19 sets forth the estimated aggregate annual cost to
Company of meeting warranty or liability obligations or commitments for
customers for each of the five (5) preceding fiscal years. Schedule 3.19
contains a description of all liability claims and similar Litigation relating
to services rendered, which are presently pending or which to Company's or any
Shareholder's knowledge are threatened, or which have been asserted or
commenced against Company within the last five (5) years, in which a party
thereto either requests injunctive relief or alleges damages (whether or not
covered by insurance). The provision of such services by the Company meets and
complies with all governmental laws and regulations currently in effect. As
used in this Section 3.19, the term "Services" means any and all services
currently or at any time previously rendered, provided or sold by Company, or
by any

<PAGE> 30

predecessor of Company under any brand name or mark under which services are or
have been rendered, provided or sold by Company.

3.20. Bank Accounts. Schedule 3.20 sets forth the names and locations
of all banks, trust companies, savings and loan associations and other financial
institutions at which the Company maintains a safe deposit box, lock box or
checking, savings, custodial or other account of any nature, the type and
number of each such account and the signatories therefore, a description of any
compensating balance arrangements, and the names of all persons authorized to
draw thereon, make withdrawals therefrom or have access thereto.

3.21. Affiliates' Relationships to Company.

3.21.(a) Contracts With Affiliates. All leases, contracts,
agreements or other arrangements between Company and any Affiliate are
described on Schedule 3.21.(a).

3.21.(b) No Adverse Interests. No Affiliate has any direct or
indirect interest in (i) any entity which does business with Company or
is competitive with Company's business, or (ii) any property, asset or
right which is used by Company in the conduct of its business.

3.21.(c) Obligations. All obligations of any Affiliate to
Company, and all obligations of Company to any Affiliate, are listed on
Schedule 3.21.(c).

3.22. Assets Necessary to Business. Company presently has and at the
Closing will have good, valid and marketable title to all property and assets,
tangible and intangible, and all leases, licenses and other agreements,
necessary to permit Buyer to carry on the business of Company as presently
conducted.

3.23. No Brokers or Finders. Except for TMark Associates, Ltd. and
Crestar Securities Corporation, neither Company nor any of its directors,
officers, employees, Shareholders or agents have retained, employed or used any
broker or finder in connection with the transaction provided for herein or in
connection with the negotiation thereof.

3.24. Year 2000 Compliance. Except as set forth in Schedule 3.24: (a)
the computer source codes, programs and other software of the Company
(including machine readable code, printed listings of code, databases,
documentation and related property and information of Company used or under
development for use in the MidAtlantic Business) (collectively, "Software")
accurately determines chronological dates and accurately performs all
calculations, data manipulations, sorting and transmission of date data
regardless of whether the date represents or references different centuries
(For example, when the actual date changes from

<PAGE> 31

12/31/1999 to 1/1/2000, the Software will accurately determine that 1/1/2000 is
the new date and determine that an individual born in 1948 is 52 years old and
not -48 [i.e., 00-48 = -48], or otherwise incorrectly perform the age
calculation); (b) the Software provides that all date related user interface
functionalities and data fields permit the entry of a four digit year (i.e.,
the years 1965, 2065 and 3065 could all be entered by the user without the need
of a manual override) and such date data will result in accurate calculations,
data manipulations, sorting and transmission of all data, including the date
data; (c) the entry of a date equal to or greater than 01/01/2000 into the
Software will not affect any calculation that produces or uses time spans such
that the results of the calculation are incorrect (i.e., such as an interest
calculation); and (d) the integrity of calculations performed utilizing the
Software will not be affected by date data for dates on or after 01/02/2000,
and calculations using previously generated data (on or before 21/31/1999) will
also maintain calculation integrity.

3.25. Systems Performance. The Software and related systems owned or
used by Company perform in accordance with the written specifications
previously delivered to Buyer. The Software and related system components are
capable of interconnecting and/or interfacing with each other, and they deliver
the functionality needed to meet the information systems requirements of the
MidAtlantic Business as they are presently conducted. No Shareholder or
Affiliate will cause any unplanned interruption of the operations of, or
accessibility to, the Software or related systems (or any system component)
through any device, method or means including, without limitation, the use of
any "virus," "lockup," "time bomb" or "key lock" device or program, or
disabling code, which has the potential or capability of causing any unplanned
interruption of the operations of, or accessibility of, the Software or related
systems (or any system component) to Buyer, or any user authorized by Buyer, or
which could alter, destroy or inhibit the use of the Software or related
systems (or any system component), or the data contained therein (collectively,
"Disabling Devices"), which could block access to or prevent the use of the
Software or any system (or system component) by Buyer or any authorized user.
No Shareholder has placed, nor is any Shareholder aware of, any Disabling
Device on any Software or system component owned or used by Company. There is
no new version, update or release of any Software currently being developed.

3.26. Software Ownership; Non Infringement. Except as set forth in
Schedule 3.26 hereto:

(1) Company owns all right, title and interest in and to the
Software;

<PAGE> 32

(2) Company has developed the Software entirely through its
own efforts for its own account, and the Software is free and clear of
all Liens of any nature whatsoever;

(3) The Software does not infringe any patent, copyright or
trade secret of any third party;

(4) The Software is fully eligible for protection under the
applicable copyright law and has not been forfeited to the public
domain;

(5) The source code and system specification of the Software
have been maintained in confidence;

(6) All personnel, including employees, agents, consultants
and contractors, who have participated in the concept and the
development of the Software either (a) have been party to a fore-hire
relationship with Company that has accorded the Company full, effective
and exclusive ownership of all tangible and intangible property thereby
arising with respect to the Software, or (b) have executed appropriate
instruments and assigns in favor of the Company as assignees and have
conveyed to the Company full, effective and exclusive ownership of all
tangible and intangible property thereby arising with respect to the
Software;

(7) Company has duly obtained the right and license to use,
copy, modify and distribute the software components contained in the
Software, the Software contains no other software components in which
any third party may claim superior or joint ownership, and no Software
is a derivative work of any software programs not owned by their
entirety by Company;

(8) Company has not granted any rights in the Software to any
third party; and

(9) The Software contains certain software components duly
licensed to Company for inclusion in the Software, and the Software
contains no other software components in which any third party may claim
superior or joint ownership, nor is any Software a derivative work of
any other software programs not owned in their entirety by Company.

3.27. Disclosure. No representation or warranty by Company and/or the
Shareholders in this Agreement, nor any statement, certificate, schedule,
document or exhibit hereto furnished or to be furnished by or on behalf of
Company or Shareholders pursuant to this Agreement or in connection with
transactions contemplated hereby, contains or shall contain any untrue statement
of material fact or omits or shall omit a material fact necessary to make the
statements contained therein not misleading. All statements and

<PAGE> 33

information contained in any certificate, instrument, Disclosure Schedule or
document delivered by or on behalf of Company and/or Shareholders shall be
deemed representations and warranties by the Company and the Shareholders.

4. REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer makes the following representations and warranties to the
Shareholders, each of which was true and correct on the Effective Date (other
than Section 4.2), remains true as of the Closing Date, shall be unaffected by
any investigation hereafter made by Shareholders or any notice to Shareholders,
and shall survive the Closing of the transactions provided for herein.

4.1. Corporate.

4.1.(a) Organization. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Florida.

4.1.(b) Corporate Power. Buyer has all requisite corporate
power to enter into this Agreement and the other documents and
instruments to be executed and delivered by Buyer and to carry out the
transactions contemplated hereby and thereby.

4.2. Authority. The execution and delivery of this Agreement and the
other documents and instruments to be executed and delivered by Buyer pursuant
hereto and the consummation of the transactions contemplated hereby and thereby
have been duly authorized by the Board of Directors of Buyer. No other
corporate act or proceeding on the part of Buyer or its shareholders is
necessary to authorize this Agreement or the other documents and instruments to
be executed and delivered by Buyer pursuant hereto or the consummation of the
transactions contemplated hereby and thereby. This Agreement constitutes, and
when executed and delivered, the other documents and instruments to be executed
and delivered by Buyer pursuant hereto will constitute, valid and binding
agreements of Buyer, enforceable in accordance with their respective terms,
except as such may be limited by bankruptcy, insolvency, reorganization or
other laws affecting creditors' rights generally, and by general equitable
principles.

4.3. No Brokers or Finders. Except for Broadview Associates LLC,
neither Buyer nor any of its directors, officers, employees or agents has
retained, employed or used any broker or finder in connection with the
transaction provided for herein or in connection with the negotiation thereof.

4.4. Disclosure. No representation or warranty by Buyer in this
Agreement, nor any statement, certificate, schedule, document or exhibit hereto
furnished or to be furnished by or on behalf of

<PAGE> 34

Buyer pursuant to this Agreement or in connection with transactions
contemplated hereby, contains or shall contain any untrue statement of material
fact or omits or shall omit a material fact necessary to make the statements
contained therein not misleading.

4.5. Investment Intent. The Shares are being acquired by Buyer for
investment only and not with the view to resale or other distribution.

5. COVENANTS

5.1. Employment and Noncompetition Agreements. Contemporaneously
with the execution of this Agreement, Shareholders shall cause each of E.
Franklin DePew, John F. DePew and Thomas C. Tuch, Jr. to execute and deliver to
Company an Employment and Noncompetition Agreement, substantially in the form
of Exhibit A hereto.

5.2. Noncompetition; Confidentiality. As an inducement to Buyer to
execute this Agreement and complete the transactions contemplated hereby, and
in order to preserve the goodwill associated with the business of Company being
acquired pursuant to this Agreement, and in addition to and not in limitation
of any covenants contained in any agreement executed and delivered pursuant to
Section 5.1 hereof, each Shareholder hereby covenants and agrees as follows:

5.2.(a) Covenant Not to Compete. For a period of three (3)
years from the Closing Date, no Shareholder will directly or indirectly:

(i) engage in, continue in or carry on any business
which competes with Company or the MidAtlantic Business or is
substantially similar thereto, including owning or controlling
any financial interest in any corporation, partnership, firm
or other form of business organization which is so engaged;

(ii) consult with, advise or assist in any way,
whether or not for consideration, any corporation,
partnership, firm or other business organization which is now
or becomes a competitor of Company or Buyer (or any of its
subsidiaries) in any aspect with respect to the MidAtlantic
Business, including, but not limited to, advertising or
otherwise endorsing the products of any such competitor;
soliciting customers or otherwise serving as an intermediary
for any such competitor; loaning money or rendering any other
form of financial assistance to or engaging in any form of
business transaction on other than an arm's length basis with
any such competitor;

<PAGE> 35

(iii) offer employment to an employee of Company or
the MidAtlantic Business, without the prior written consent of
Buyer; or

(iv) engage in any practice the purpose of which is
to evade the provisions of this covenant not to compete or to
commit any act which adversely affects the Company or the
MidAtlantic Business;

provided, however, that the foregoing shall not prohibit the ownership of
securities of corporations which are listed on a national securities
exchange or traded in the national over-the-counter market in an amount
which shall not exceed 5% of the outstanding shares of any such
corporation. The parties agree that the geographic scope of this covenant
not to compete shall extend to and cover the following jurisdictions:
Alabama, the District of Columbia, Maryland, Mississippi, Missouri, North
Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington.
The parties agree that a Buyer may sell, assign or otherwise transfer
this covenant not to compete, in whole or in part, to any subsidiary of
Buyer or to any person, corporation, firm or entity that purchases all or
part of the business of the Company. In the event a court of competent
jurisdiction determines that the provisions of this covenant not to
compete are excessively broad as to duration, geographical scope or
activity, it is expressly agreed that this covenant not to compete shall
be construed so that the remaining provisions shall not be affected, but
shall remain in full force and effect, and any such over broad provisions
shall be deemed, without further action on the part of any person, to be
modified, amended and/or limited but only to the extent necessary to
render the same valid and enforceable in such jurisdiction.

5.2.(b) Covenant of Confidentiality. No Shareholder shall at
any time subsequent to the Closing, except as explicitly requested by
Buyer, (i) use for any purpose, (ii) disclose to any person, or (iii)
keep or make copies of documents, tapes, discs or programs containing,
any confidential information concerning Company. For purposes hereof,
"confidential information" shall mean and include, without limitation,
all Trade Rights in which Company has an interest, all customer lists
and customer information, and all other information concerning Company's
processes, apparatus, equipment, packaging, products, marketing and
distribution methods, not previously disclosed to the public directly by
Company.

5.2.(c) Equitable Relief for Violations. Each Shareholder
agrees that the provisions and restrictions contained in this Section
5.2 are necessary to protect the

<PAGE> 36

legitimate continuing interests of Buyer in acquiring the Shares, and
that any violation or breach of these provisions will result in
irreparable injury to Buyer for which a remedy at law would be
inadequate and that, in addition to any relief at law which may be
available to Buyer for such violation or breach and regardless of any
other provision contained in this Agreement, Buyer shall be entitled to
injunctive and other equitable relief as a court may grant after
considering the intent of this Section 5.2.

5.3. General Releases. Contemporaneously with the execution of this
Agreement, each of E. Franklin DePew, Carol Joy DePew and Robert L. Musick, Jr.
shall execute and deliver, and shall cause each of John F. DePew and Thomas C.
Tuch, Jr. to execute and deliver, a general release to Buyer, in substantially
the form attached hereto as Exhibit B.

5.4. Section 338(h)(10) Election. At the Buyer's option, Company and
Shareholders will join with the Buyer in making an election under Section
338(h)(10) of the Code (and any corresponding elections under state tax law)
(collectively, a "Section 338(h)(10) Election") with respect to the purchase
and sale of the stock of the Company hereunder. The Shareholders of the Company
will pay any tax attributable to the making of the Section 338(h)(10) Election
and will indemnify the Buyer, the Company and their subsidiaries against any
tax (including interest and penalties) arising out of any failure to pay such
tax. The Shareholders will also pay any state, local, or foreign tax (and
indemnify the Buyer, the Company and their subsidiaries against any tax
(including interest and penalties) arising out of any failure to pay such tax)
attributable to an election under state, local, or foreign law similar to the
election available under Section 338(g) of the Code (or which results from the
making of an election under Section 338(g) of the Code) with respect to the
purchase and sale of the stock of the Company hereunder. Buyer shall be
responsible for the preparation and filing of such election. The allocation of
purchase price among the assets of the Company shall be made in accordance with
Schedule 5.1 hereto. Shareholders and Buyer shall accept such purchase price
allocations and Buyer and each Shareholder shall report, act, file in all
respects and for purposes consistent with such allocations. Shareholders and
the Company (if required) shall execute and deliver to Buyer at Closing three
copies of such documents or forms (including Section 338 Forms, as defined
below) as Buyer shall request or as are required by applicable law for an
effective Section 338(h)(10) Election, including, without limitation, any
"Statement of Section 338(h)(10)" and IRS Form 8023 (together with any
schedules or attachments thereto, the "Section 338 Forms") that are required
pursuant to the Treasury Regulations.

5.5. Continuation of First American Agreement. Shareholders have
provided Buyer with a true and correct copy of that certain

<PAGE> 37

MidAtlantic Pension Group Institutional Plan Services Agreement, dated
September 21, 1995 (the "First American Agreement"), by and between the Company
and First American National Bank ("First American"). The parties acknowledge
and agree that the continuation of the First American Agreement is important to
the Company's business, and that the provisions of this Section 5.5 constitute
a material inducement to Buyer to enter into this Agreement. Notwithstanding
any other provision of this Agreement, and in addition to all of their other
obligations under this Agreement, the Shareholders, jointly and severally,
represent and warrant that First American will not terminate the First American
Agreement prior to the first anniversary of the Effective Date. In the event
that First American terminates the First American Agreement at any time on or
before the first anniversary of the Effective Date, the Shareholders, jointly
and severally, covenant and agree to pay to Buyer as damages for the breach of
the foregoing representation and warranty and the termination of the First
American Agreement, an amount equal to the total revenues that would have been
received by the Company under the First American Agreement during the remainder
of such twelve-month period had the First American Agreement remained in full
force and effect until the end of such period.

5.6. E&O Insurance Coverage. Buyer covenants and agrees to obtain,
promptly following Closing, additional errors & omission insurance for Company,
which policy shall be a "claims made" policy and shall have a retroactive date
of coverage of April 3, 1991, the date of incorporation of Company. E. Franklin
DePew and Carol Jay DePew, jointly and severally, covenant and agree to
promptly reimburse Buyer up to a maximum of $20,000 for the cost of obtaining
such additional coverage.

6. INDEMNIFICATION

6.1. By Shareholders. Subject to the terms and conditions of this
Article 6, each Shareholder, jointly and severally, hereby agrees to indemnify,
defend and hold harmless Buyer, its directors, officers, employees and
controlled and controlling persons (hereinafter "Buyer's Affiliates") and the
Company from and against all Claims asserted against, resulting to, imposed
upon, or incurred by Buyer, Buyer's Affiliates or the Company, directly or
indirectly, by reason of, arising out of or resulting from (a) the inaccuracy
or breach of any representation or warranty of any Shareholder or Company
contained in or made pursuant to this Agreement, (b) the breach of any covenant
of any Shareholder or the Company contained in this Agreement, (c) the
litigation matters referred to in Schedule 3.9, (d) any Claim against the
Company and/or any Buyer Affiliate(s) by Ann S. Jones, or her heirs or
successors or assigns, relating to or arising out of her sale of shares of
common stock of the Company to the Company, (e) any Claim against the Company
and/or any Buyer Affiliate(s) by any person or entity, including (without
limitation) Robert L. Musick, Jr., or

<PAGE> 38

his heirs or successors or assigns, relating to or arising out of the
transactions consummated pursuant to that certain Rescission Agreement,
effective as of May 30, 1998, by and between the Company and Robert L. Musick,
Jr., (f) any Claim against the Company and/or any Buyer Affiliate(s) relating
to or arising out of MidAtlantic Capital Management, Inc., MidAtlantic
Investment Advisers, Inc., or their respective businesses, or (g) the conduct
of the MidAtlantic Business or operations of the Company prior to the Closing
(other than Claims for liabilities to the extent the amounts thereof are
specifically reflected in the Recent Balance Sheet). Regardless of the
foregoing, however, breaches of representations and warranties contained in
Section 3.2 hereof shall be subject only to several indemnification by the
respective Shareholders who shall have made and breached such representations
and warranties. As used in this Article 6, the term "Claim" shall include (i)
all debts, liabilities and obligations; (ii) all losses, damages (including,
without limitation, consequential damages), judgments, awards, settlements,
costs and expenses (including, without limitation, interest (including
prejudgment interest in any litigated matter), penalties, court costs and
attorneys fees and expenses); and (iii) all demands, claims, suits, actions,
costs of investigation, causes of action, proceedings and assessments, whether
or not ultimately determined to be valid.

6.2. By Buyer. Subject to the terms and conditions of this
Article 6, Buyer hereby agrees to indemnify, defend and hold harmless each
Shareholder from and against all Claims asserted against, resulting to, imposed
upon or incurred by any such person, directly or indirectly, by reason of or
resulting from (a) the inaccuracy or breach of any representation or warranty
of Buyer contained in or made pursuant to this Agreement, or (b) the breach of
any covenant of Buyer contained in this Agreement.

6.3. Indemnification of Third-Party Claims. The obligations and
liabilities of any party to indemnify any other under this Article 6 with
respect to Claims relating to third parties shall be subject to the following
terms and conditions:

6.3.(a) Notice and Defense. The party or parties to be
indemnified (whether one or more, the "Indemnified Party") will give the
party from whom indemnification is sought (the "Indemnifying Party")
prompt written notice of any such Claim, and the Indemnifying Party will
undertake the defense thereof by representatives chosen by it. In all
matters concerning the Shareholders by virtue of joint and several
liability, the Shareholders' Agent shall give and receive notice and
otherwise act in all respects on their behalf. Failure to give such
notice shall not affect the Indemnifying Party's duty or obligations
under this Article 6, except to the extent the Indemnifying Party is
prejudiced thereby. So long as the Indemnifying Party is defending any
such Claim actively and in good faith, the Indemnified Party shall not
settle such Claim.

<PAGE> 39

The Indemnified Party shall make available to the Indemnifying Party or
its representatives all records and other materials required by them and
in the possession or under the control of the Indemnified Party, for the
use of the Indemnifying Party and its representatives in defending any
such Claim, and shall in other respects give reasonable cooperation in
such defense.

6.3.(b) Failure to Defend. If the Indemnifying Party, within
a reasonable time after notice of any such Claim, fails to defend such
Claim actively and in good faith, the Indemnified Party will (upon
further notice) have the right to undertake the defense, compromise or
settlement of such Claim or consent to the entry of a judgment with
respect to such Claim, on behalf of and for the account and risk of the
Indemnifying Party, and the Indemnifying Party shall thereafter have no
right to challenge the Indemnified Party's defense, compromise,
settlement or consent to judgment therein.

6.3.(c) Indemnified Party's Rights. Anything in this Section
6.3 to the contrary notwithstanding, (i) if there is a reasonable
probability that a Claim may materially and adversely affect the
Indemnified Party other than as a result of money damages or other money
payments, the Indemnified Party shall have the right to defend,
compromise or settle such Claim, and (ii) the Indemnifying Party shall
not, without the written consent of the Indemnified Party, settle or
compromise any Claim or consent to the entry of any judgment which does
not include as an unconditional term thereof the giving by the claimant
or the plaintiff to the Indemnified Party of a release from all
Liability in respect of such Claim.

<PAGE> 40

Party shall pay promptly on behalf of the Indemnified Party, and/or to the
Indemnified Party in reimbursement of any amount theretofore required to be
paid by it, the amount so determined by judgment, determination, settlement or
compromise and all other Claims of the Indemnified Party with respect thereto,
unless in the case of a judgment an appeal is made from the judgment. If the
Indemnifying Party desires to appeal from an adverse judgment, then the
Indemnifying Party shall post and pay the cost of the security or bond to stay
execution of the judgment pending appeal. Upon the payment in full by the
Indemnifying Party of such amounts, the Indemnifying Party shall succeed to the
rights of such Indemnified Party, to the extent not waived in settlement,
against the third party who made such third party Claim.

6.5. Indemnification for Environmental Matters. Without limiting the
generality of the foregoing, each Shareholder, jointly and severally, agrees to
indemnify, reimburse, hold harmless and defend Buyer, Buyer's affiliates and
Company for, from, and against all Claims asserted against, imposed on, or
incurred by any such person, directly or indirectly, in connection with any
pollution, threat to the environment, or exposure to, or manufacture,
processing, distribution, use, treatment, generation, transport or handling,
disposal, emission, discharge, storage or release of Waste that (A) is related
in any way to Company's or any previous owner's or operator's ownership,
operation or occupancy of the business, properties and assets owned or used by
Company, and (B) in whole or in part occurred, existed, arose out of conditions
or circumstances that existed, or was caused on or before the Closing Date.

6.6. Limitations on Indemnification. Except for any willful or
knowing breach or misrepresentation, as to which claims may be brought without
limitation as to time or amount:

6.6.(a) Time Limitation. No claim or action shall be brought
under this Article 6 for breach of a representation or warranty after
the lapse of two (2) years following the Closing. Regardless of the
foregoing, however, or any other provision of this Agreement:

(i) There shall be no time limitation on claims on
actions brought for breach of any representation or warranty
made by Shareholders or Company in or pursuant to Sections 3.1
and 3.2, and Shareholders hereby waive all applicable
statutory limitation periods with respect thereto.

(ii) Any claim or action brought for breach of any
representation or warranty made by Shareholders with respect
to tax or ERISA matters may be brought at any time until the
underlying tax or ERISA obligation is barred by the applicable
period of limitation under

<PAGE> 41

federal and state laws relating thereto (as such period may be
extended by waiver).

(iii) Any claim made by a party hereunder by
delivering written notice of the claim to the Indemnifying
Party or Parties, by filing a suit or action in a court of
competent jurisdiction or a court reasonably believed to be of
competent jurisdiction or by a demand for arbitration in
accordance with Article 9 hereof for breach of a
representation or warranty prior to the termination of the
survival period for such claim shall be preserved despite the
subsequent termination of such survival period.

(iv) If any act, omission, disclosure or failure to
disclosure shall form the basis for a claim for breach of more
than one representation or warranty, and such claims have
different periods of survival hereunder, the termination of
the survival period of one claim shall not affect a party's
right to make a claim based on the breach of representation or
warranty still surviving.

6.6.(b) Amount Limitation. The aggregate amount of the
indemnification obligations of Shareholders pursuant to this Article 6
shall not exceed Five Million Dollars ($5,000,000). Notwithstanding the
foregoing sentence, the aggregate amount of the indemnification
obligations of Shareholders pursuant to this Article 6 for any Claims
relating to the inaccuracy or breach of any representations or
warranties contained in Section 3.1 or 3.2 may exceed Five Million
Dollars ($5,000,000) but shall not exceed the aggregate Purchase Price
as set forth in Section 2.1.

6.6.(c) Independent Nature of First American Indemnity. The
representations, warranties and other obligations of the Shareholders
under Section 5.5 of this Agreement shall not be affected by the
provisions of this Section 6.6, and any amounts paid to or recovered by
Buyer pursuant to Section 5.5 shall not be included for purposes of
calculating the aggregate indemnification obligations of Shareholders as
set forth in Section 6.6(b) above.

6.7. No Waiver. The closing of the transactions contemplated by this
Agreement shall not constitute a waiver by any party of its rights to
indemnification hereunder, regardless of whether the party seeking
indemnification has knowledge of the breach, violation or failure of condition
constituting the basis of the Claim at or before the Closing, and regardless of
whether such breach, violation or failure is deemed to be "material" for
purposes of Section 9.2.

<PAGE> 42

7. CLOSING

The closing of this transaction ("the Closing") shall take place
contemporaneously with the execution and delivery of this agreement at the
offices of Christian & Barton, L.L.P., 909 East Main Street, Suite 1200,
Richmond, Virginia, at 10:00 A.M. on August 12, 1998, or at such other hour and
place as the parties hereto shall agree upon in writing. The date hereof is
referred to in this Agreement as the "Closing Date". Unless otherwise indicated,
the transactions contemplated hereby shall be deemed for all purposes to be
effective as of August 1, 1998, which date shall be referred to herein as the
"Effective Date."

7.1. Documents to be Delivered by Company and Shareholders. At the
Closing, Company and Shareholders shall deliver to Buyer the following
documents, in each case duly executed or otherwise in proper form:

7.1.(a) Stock Certificate(s). Stock certificates representing
the Shares, duly endorsed for transfer or with duly executed stock powers
attached, in either case as of the Effective Date.

7.1.(b) Opinion of Counsel. A written opinion of Christian &
Barton, LLP, counsel to Company and Shareholders, dated as of the
Closing Date, addressed to Buyer, substantially in the form of Exhibit C
hereto.

7.1.(c) Consents and Approvals. Executed originals of all
approvals, consents and waivers that are required to effect the
transactions contemplated hereby.

7.1.(d) Estoppel Certificates. An estoppel certificate or
status letter from the landlord under each lease of Real Property, which
estoppel certificate or status letter will certify: (i) the lease is
valid and in full force and effect; (ii) the amounts payable by Company
under the lease and the date to which the same have been paid; (iii)
whether there are, to the knowledge of said landlord, any defaults
thereunder, and, if so, specifying the nature thereof; and (iv) a
statement that the transactions contemplated by this Agreement will not
constitute a default under the lease.

7.1.(e) Employment and Noncompetition Agreements. The
Employment and Noncompetition Agreements referred to in Section 5.1,
duly executed by the persons referred to in such Section.

7.1.(f) Certified Resolutions. Certified copies of the
resolutions of the Board of Directors and the Shareholders of Company,
authorizing and approving this Agreement and the

<PAGE> 43

consummation of the transactions contemplated by this Agreement.

7.1.(g) Articles; By-Laws. A copy of the By-Laws of Company
certified by the secretary of Company, and a copy of the Articles of
Incorporation of Company certified by the Secretary of State of the
state of incorporation of Company.

7.1.(h) Incumbency Certificate. Incumbency certificates
relating to each person executing (as a corporate officer or otherwise
on behalf of another person) any document executed and delivered to
Buyer pursuant to the terms hereof.

7.1.(i) General Releases. The General Releases referred to in
Section 5.3, duly executed by the persons referred to in such Section.

7.1.(j) Resignations. The resignations of E. Franklin DePew
and Carol Joy DePew as officers of the Company, and E. Franklin DePew as
the sole director of the Company, effective as of the Closing and in
form satisfactory to Buyer's counsel.

7.1.(k) Affidavits. Affidavits from Shareholders in form and
substance satisfactory to Buyer, to the effect that Company is not a
"foreign person," "foreign corporation," "foreign partnership," "foreign
trust" or "foreign estate" under Section 1445 of the Code, and containing
all such other information as is required to comply with the requirements
of such Section.

7.1.(l) Ann S. Jones Share Repurchase Documentation. Executed
originals of all documentation relating to the repurchase of 28 shares
of Company's common stock by Company from Ann S. Jones, including (i)
Agreement, dated July 29, 1998, (ii) surrendered Company stock
certificate no. 10 representing 28 shares of Company common stock, duly
endorsed in blank or with a duly executed stock power attached, and
(iii) a general release executed by Ann S. Jones in favor of Company, in
form reasonably satisfactory to Buyer and its counsel.

7.1.(m) Crestar Bank Payoff Documentation. Executed originals
of the following documentation relating to the payoff by Buyer of two
Company promissory notes payable to Crestar Bank: (i) the two promissory
notes marked "cancelled" and "paid in full," and (ii) UCC-3 Termination
Statements in form and substance necessary to terminate any and all
security interests of Crestar Bank in and to the assets of Company.

7.1.(n) Hilb, Rogal and Hamilton Company Payoff
Documentation. Executed original of the promissory note of

<PAGE> 44

Company in favor of Hilb, Rogal and Hamilton Company in the principal
amount of $40,000, which note shall be marked "cancelled" and "paid in
full."

7.1.(o) Termination of Shareholders' Agreement. Executed
original of Termination of Shareholders' Agreement, in form and
substance reasonably acceptable to Buyer and its counsel.

7.1.(p) John F. DePew Employment Matters. Executed originals,
in form and substance reasonably acceptable to Buyer, of (i) Termination,
dated July 31, 1998, of Employment Agreement dated November 17, 1995,
between Company and John F. DePew, and (ii) Receipt, dated August 12,
1998, evidencing receipt by John F. DePew of any and all amounts due and
owing under the terms of such Employment Agreement, including Section 8
thereof.

7.1.(q) Automobile Title, Loan and Lease Transfer
Documentation. Executed originals (or true and correct copies thereof)
of all documentation relating to (i) the transfer of title to two
vehicles (1998 Mercedes Benz 230SLK (VIN# WDBKK47F2WF044009) and 1995
Range Rover Discovery (VIN# SALJY1247SA137168) from Company to E.
Franklin DePew, and E. Franklin DePew's assumption of all indebtedness
relating thereto, and (ii) the cancellation and termination of that
certain lease agreement commencing February 28, 1997, between Jaguar
Credit Corporation and the Company relating to a 1998 Jaguar XJGL Sedan.

7.1.(r) Assignment of Payments from ISC. An executed original
of an assignment agreement by and between Company and E. Franklin DePew
assigning to Company all right, title and interest to all payments to E.
Franklin DePew from Investors Security Company, Inc.

7.1.(s) Other Documents. All other documents, instruments or
writings required to be delivered to Buyer at the Closing pursuant to
this Agreement and such other certificates of authority and documents as
Buyer may reasonably request.

7.2. Documents to be Delivered by Buyer. At the Closing, Buyer shall
deliver to Shareholders the following documents, in each case duly executed or
otherwise in proper form:

7.2.(a) Cash Purchase Price. To Shareholders' Agent, a
certified or bank cashier's check (or wire transfer) as required by
Section 2.2(a) hereof.

7.2.(b) Opinion of Counsel. A written opinion of Foley &
Lardner, counsel to Buyer, dated as of the Closing

<PAGE> 45

Date, addressed to Company, in substantially the form of Exhibit D
hereto.

7.2.(c) Certified Resolutions. A certified copy of the
resolutions of the Board of Directors of Buyer authorizing and approving
this Agreement and the consummation of the transactions contemplated by
this Agreement.

7.2.(d) Incumbency Certificate. Incumbency certificates
relating to each person executing any document executed and delivered to
Company or Shareholders by Buyer pursuant to the terms hereof.

7.2.(e) Crestar Bank Loan Payoff. To Crestar Bank, one or
more wire transfers of immediately available funds in the aggregate
amount of $151,670.31 in full payment of all outstanding indebtedness
of Company to Crestar Bank.

7.2.(f) Other Documents. All other documents, instruments or
writings required to be delivered to Company at the Closing pursuant to
this Agreement and such other certificates of authority and documents as
Company may reasonably request.

8. TERMINATION

This Agreement may be terminated without further liability of any party
at any time prior to the Closing: (a) by mutual written agreement of Buyer and
Shareholders' Agent; or (b) by either Buyer or Shareholders' Agent (i) if the
Closing shall not have occurred by 11:59 p.m. Eastern time on the date hereof,
provided the terminating party has not, through breach of a representation,
warranty or covenant, prevented the Closing from occurring at or before such
time, or (ii) if any Government Entity shall have issued a final and
non-appealable Order enjoining or otherwise prohibiting the consummation of the
transactions contemplated by this Agreement.

9. RESOLUTION OF DISPUTES

9.1. Arbitration.

9.1.(a) Any dispute, controversy or claim arising out of or
relating to this Agreement or any contract or agreement entered into
pursuant hereto or the performance by the parties of its or their terms
shall be settled by binding arbitration held in Tampa, Florida in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect, except as specifically otherwise
provided in this Article 9. Notwithstanding the foregoing, Buyer may, in
its discretion, apply to a court of competent jurisdiction for equitable
relief from any violation or threatened violation of

<PAGE> 46

the covenants of any Shareholder under Section 5.2 of this Agreement, or
any covenants not to compete contained in any Employment and
Noncompetition Agreement delivered pursuant to Section 5.1 hereof.

9.1.(b) No party shall be required to submit to arbitration
hereunder unless all persons who are not parties to this Agreement, but
who are necessary parties to a complete resolution of the controversy,
submit to the arbitration process on the same terms as the parties
hereto. Without limiting the generality of the foregoing, no claim under
Article 6 for the indemnification of a third-party claim shall be
subject to arbitration under this Article 9 unless the third party
bringing such claim against the indemnitee shall agree in writing to the
application of this Article 9 to the resolution of such claim.

9.2. Arbitrators. If the matter in controversy (exclusive of
attorney fees and expenses) shall appear, as at the time of the demand for
arbitration, to exceed $250,000, then the panel to be appointed shall consist
of three neutral arbitrators; otherwise, one neutral arbitrator.

9.3. Procedures; No Appeal. The arbitrator(s) shall allow such
discovery as the arbitrator(s) determine appropriate under the circumstances
and shall resolve the dispute as expeditiously as practicable, and if
reasonably practicable, within 120 days after the selection of the
arbitrator(s). The arbitrator(s) shall give the parties written notice of the
decision, with the reasons therefor set out, and shall have 30 days thereafter
to reconsider and modify such decision if any party so requests within 10 days
after the decision. Thereafter, the decision of the arbitrator(s) shall be
final, binding, and nonappealable with respect to all persons, including
(without limitation) persons who have failed or refused to participate in the
arbitration process.

9.4. Authority. The arbitrator(s) shall have authority to award
relief under legal or equitable principles, including interim or preliminary
relief, and to allocate responsibility for the costs of the arbitration and to
award recovery of attorneys fees and expenses in such manner as is determined
to be appropriate by the arbitrator(s).

9.5. Entry of Judgment. Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having in personam and subject matter
jurisdiction. Buyer and each Shareholder hereby submit to the in personam
jurisdiction of the Federal and State courts in Florida, for the purpose of
confirming any such award and entering judgment thereon.

<PAGE> 47

9.6. Confidentiality. All proceedings under this Article 9 and all
evidence given or discovered pursuant hereto, shall be maintained in confidence
by all parties.

9.7. Continued Performance. The fact that the dispute resolution
procedures specified in this Article 9 shall have been or may be invoked shall
not excuse any party from performing its obligations under this Agreement and
during the pendency of any such procedure all parties shall continue to perform
their respective obligations in good faith, subject to any rights to terminate
this Agreement that may be available to any party and to the right of setoff
provided in Section 6.4 hereof.

9.8. Tolling. All applicable statutes of limitation shall be tolled
while the procedures specified in this Article 9 are pending. The parties will
take such action, if any, required to effectuate such tolling.

10. MISCELLANEOUS

10.1. Disclosure Schedule. The Schedules have been compiled in a
bound volume (the "Disclosure Schedule"), executed by Shareholders and dated
and delivered to Buyer on the date of this Agreement. Information set forth in
the Disclosure Schedule specifically refers to the article and section of this
Agreement to which such information is responsive and such information shall
not be deemed to have been disclosed with respect to any other article or
section of this Agreement or for any other purpose. The Disclosure Schedule
includes a table of contents and/or index to all of the information and
documents contained therein. The Disclosure Schedule shall not vary, change or
alter the language of the representations and warranties contained in this
Agreement and, to the extent the language in the Disclosure Schedule does not
conform in every respect to the language of such representations and
warranties, such language in the Disclosure Schedule shall be disregarded and
be of no force or effect.

10.2. Further Assurance. From time to time, at Buyer's request and
without further consideration, Company and Shareholders will execute and
deliver to Buyer such documents and take such other action as Buyer may
reasonably request in order to consummate more effectively the transactions
contemplated hereby.

10.3. Disclosures and Announcements. Shareholders shall not disclose
or make any announcements concerning the transactions provided for in this
Agreement prior to September 30, 1998. Thereafter, any announcements by
Shareholders concerning the transactions provided for in this Agreement shall be
subject to the approval of Buyer in all essential respects. Except as required
by law, the initial public announcement by Buyer concerning the transactions
provided for in this Agreement shall be subject to the

<PAGE> 48

prior review (but not approval) of Shareholders. Shareholders shall act
hereunder only through Shareholders' Agent.

10.4. Assignment; Parties in Interest.

10.4.(a) Assignment. Except as expressly provided herein, the
rights and obligations of a party hereunder may not be assigned,
transferred or encumbered without the prior written consent of the other
parties. Notwithstanding the foregoing, Buyer may, without consent of
any other party, (i) merge Company with and into Buyer and/or any
subsidiary of Buyer, or (ii) cause one or more subsidiaries of Buyer to
carry out all or part of the transactions contemplated hereby; provided,
however, that Buyer shall, nevertheless, remain liable for all of its
obligations, and those of any such subsidiary, to Shareholders
hereunder.

10.4.(b) Parties in Interest. This Agreement shall be binding
upon, inure to the benefit of, and be enforceable by the respective
successors and permitted assigns of the parties hereto. Nothing
contained herein shall be deemed to confer upon any other person any
right or remedy under or by reason of this Agreement.

10.5. Law Governing Agreement. This Agreement may not be modified or
terminated orally, and shall be construed and interpreted according to the
internal laws of the State of Florida, excluding any choice of law rules that
may direct the application of the laws of another jurisdiction.

10.6. Amendment and Modification. Buyer and Shareholders may amend,
modify and supplement this Agreement in such manner as may be agreed upon in
writing between Buyer and Shareholders' Agent; provided, however, that Buyer
may, in Buyer's discretion, require the execution of any amendment by all the
Shareholders personally.

10.7. Notice. All notices, requests, demands and other communications
hereunder shall be given in writing and shall be: (a) personally delivered; (b)
sent by telecopier, facsimile transmission or other electronic means of
transmitting written documents; or (c) sent to the parties at their respective
addresses indicated herein by registered or certified U.S. mail, return receipt
requested and postage prepaid, or by private overnight mail courier service.
The respective addresses to be used for all such notices, demands or requests
are as follows:

<PAGE> 49

(a) If to Buyer, to:

ABR Information Services, Inc.
34125 U.S. Highway 19 North
Palm Harbor, Florida 34684-2116
Attention: James E. MacDougald
Chairman of the Board,
President and
Chief Executive Officer
Facsimile: (813) 789-3854

(with a copy to)

Foley & Lardner
100 North Tampa Street, Suite 2700
Tampa, Florida 33602-5804
Attention: Todd B. Pfister
Facsimile: (813) 221-4210

or to such other person or address as Buyer shall furnish to Shareholders'
Agent in writing.

(b) If to Shareholders, to Shareholders' Agent:

c/o MidAtlantic 401(k) Services, Inc.
One Park West Circle
Suite 300
Midlothian, Virginia 23113
Attention: E. Franklin DePew
Facsimile: (804) 379-9397
(with a copy to)

Christian & Barton, LLP
909 East Main Street
Richmond, Virginia 23219
Attention: David I. Greenberg, Esq.
Facsimile: (804) 697-4112

or to such other person or address as Shareholders shall designate as a
successor Shareholders' Agent in accordance with this Agreement.

<PAGE> 50

MidAtlantic 401(k) Services, Inc.
c/o ABR Information Services, Inc.
34125 U.S. Highway 19 North
Palm Harbor, Florida 34684-2116
Attention: James E. MacDougald
Chairman of the Board,
President and
Chief Executive Officer
Facsimile: (813) 789-3854

(with a copy to)

Foley & Lardner
100 North Tampa Street, Suite 2700
Tampa, Florida 33602-5804
Attention: Todd B. Pfister
Facsimile: (813) 221-4210

Any notice to Company given after Closing shall also be given in the same
manner to Buyer.

If personally delivered, such communication shall be deemed delivered
upon actual receipt; if electronically transmitted pursuant to this paragraph,
such communication shall be deemed delivered the next business day after
transmission (and sender shall bear the burden of proof of delivery); if sent
by overnight courier pursuant to this paragraph, such communication shall be
deemed delivered upon receipt; and if sent by U.S. mail pursuant to this
paragraph, such communication shall be deemed delivered as of the date of
delivery indicated on the receipt issued by the relevant postal service, or, if
the addressee fails or refuses to accept delivery, as of the date of such
failure or refusal. Delivery to Shareholders' Agent shall constitute delivery
to all Shareholders. Any party to this Agreement may change its address for the
purposes of this Agreement by giving notice thereof in accordance with this
Section.

10.8. Expenses.

10.8.(a) Brokerage. Except as to (i) Broadview Associates LLC,
which shall be compensated by Buyer, and (ii) TMark Associates, Ltd. and
Crestar Securities Corporation, which shall be compensated by
Shareholders, Shareholders and Buyer each represent and warrant to each
other that there is no broker involved or in any way connected with the
transfer provided for herein on their behalf respectively (and
Shareholders represent and warrant that there is no broker involved on
behalf of Company) and each agrees to hold the other harmless from and
against all other claims for brokerage

<PAGE> 51

commissions or finder's fees in connection with the execution of this
Agreement or the transactions provided for herein.

10.8.(b) Expenses to be Paid by Shareholders. Shareholders
shall pay, and shall indemnify, defend and hold Buyer and Company
harmless from and against, each of the following:

(i) Transfer Taxes. Any sales, use, excise,
transfer or other similar tax imposed with respect to the
transactions provided for in this Agreement, and any interest
or penalties related thereto.

(ii) Professional Fees. All fees and expenses,
including accounting and other professional fees, incurred in
connection with or relating to the preparation and provision
of the financial statements of the Company as set forth in
Section 3.4 above.

10.8.(c) Other. Except as otherwise provided herein, each of
the parties shall bear its own expenses and the expenses of its counsel
and other agents in connection with the transactions contemplated
hereby.

10.8.(d) Costs of Litigation or Arbitration. The parties agree
that (subject to the discretion, in an arbitration proceeding, of the
arbitrator as set forth in Section 10.4) the prevailing party in any
action brought with respect to or to enforce any right or remedy under
this Agreement shall be entitled to recover from the other party or
parties all reasonable costs and expenses of any nature whatsoever
incurred by the prevailing party in connection with such action,
including without limitation attorneys' fees and prejudgment interest.

10.9. Shareholders' Agent; Power of Attorney.

10.9.(a) Shareholders' Agent. The Shareholders hereby appoint
and constitute E. Franklin DePew as Shareholders' Agent hereunder, to
exercise the powers on behalf of Shareholders set forth in this
Agreement; and E. Franklin DePew hereby accepts such appointment. In the
event of the death, resignation or inability to act of E. Franklin
DePew, and upon receipt by Buyer of evidence of the same which is
satisfactory to Buyer, Carol Joy DePew shall be successor Shareholders'
Agent with all powers of his predecessor.

10.9.(b) Power of Attorney. Each Shareholder, by his execution
of this Agreement, hereby constitutes and appoints the Shareholders'
Agent his true and lawful attorney in fact, with full power in his name
and on his behalf:

<PAGE> 52

(i) to receive on behalf of such Shareholder the
proceeds of sale of such Shareholder's Shares being sold
hereunder, to give Buyer a receipt therefor on behalf of such
Shareholder and to hold such proceeds subject to the terms
hereof and the instructions of such Shareholder with respect
to the ultimate disbursement thereof;

(ii) to act on such Shareholder's behalf according
to the terms of this Agreement, including, without limitation,
the power to contest or acquiesce in the determination of the
Contingent Payment in accordance with Section 2.1; to amend
this Agreement in accordance with Article 10.6 or terminate
this Agreement in accordance with Section 8; to consent to the
assignment of rights under this Agreement in accordance with
Section 10.4.(a); to give and receive notices on behalf of all
the Shareholders; and to act on their behalf in connection
with any matter as to which the Shareholders jointly and
severally are an "Indemnified Party" or "Indemnifying Party"
under Article 6 hereof; all in the absolute discretion of the
Shareholders' Agent;

(iii) in general, to do all things and to perform
all acts, including, without limitation, executing and
delivering all agreements, certificates, receipts,
instructions and other instruments contemplated by or deemed
advisable in connection with this Agreement.

This power of attorney, and all authority hereby conferred, is granted subject
to the interests of the other Shareholders and the Buyer hereunder and in
consideration of the mutual covenants and agreements made herein, and shall be
irrevocable and shall not be terminated by any act of any Shareholder or by
operation of law, whether by the death or incapacity of any Shareholder or by
the occurrence of any other event. Each Shareholder agrees, jointly and
severally, to hold the Shareholders' Agent free and harmless from any and all
loss, damage or liability which they, or any one of them, may sustain as a
result of any action taken in good faith hereunder.

10.10. Entire Agreement. This instrument embodies the entire agreement
between the parties hereto with respect to the transactions contemplated
herein, and there have been and are no agreements, representations or
warranties between the parties other than those set forth or provided for
herein.

10.11. Counterparts; Facsimile Signatures. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one

<PAGE> 53

and the same instrument. This Agreement and the Ancillary Instruments may be
effective upon the execution and delivery by any party of facsimile copies of
signature pages hereto and thereto duly executed by such party; provided,
however, that any party delivering a facsimile signature page covenants and
agrees to deliver promptly after the date hereto two (2) original copies to the
other parties hereto.

10.12. Headings. The headings in this Agreement are inserted for
convenience only and shall not constitute a part hereof.

10.13. Glossary of Terms. The following sets forth the location of
certain definitions of capitalized terms defined in the body of this Agreement:

"Act" - Section 3.26
"Affiliate" - Section 3.7.(k)
"Ancillary Instruments" - Section 3.2.(a)
"Buyer's Affiliates" - Section 6.1
"Buyer Loan" - Section 2.1(d)
"CERCLA" - Section 3.10.(c)
"Claim" - Section 6.1
"Closing" - Preamble to Article 9
"Closing Date" - Section 7
"Code" - Section 3.5.(e)
"Common Stock" - Section 2.2(b)
"Company Employees" - Section 3.15.(a)
"Contingent Payment" - Section 2.1
"Disclosure Schedule" - Article 10
"Effective Date" - Section 7
"Employee Plans/Agreement(s)" - Section 3.15.(a)
"Environmental Laws" - Section 3.10.(c)
"ERISA" - Section 3.15.(a)
"Facilities" - Second Recital
"Government Entities" - Section 3.3
"Indemnified Party" - Section 6.3.(a)
"Indemnifying Party" - Section 6.3.(a)
"Laws" - Section 3.3
"Lien" - Section 3.11.(a)
"Litigation" - Section 3.9
"Orders" - Section 3.3
"PBGC" - Section 3.15.(b)(ii)
"Purchase Price" - Section 2.1
"Real Property" - Section 3.11.(c)
"Recent Balance Sheet" - Section 3.4
"Services" - Section 3.19
"Settlement Date" - Section 2.2.(c)
"Shares" - First Recital
"Trade Rights" - Section 3.17
"Waste" - Section 3.10.(c)

Where any group or category of items or matters is defined collectively in the
plural number, any item or matter within such definition may be referred to
using such defined term in the singular number.

<PAGE> 54

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.

BUYER:

ABR INFORMATION SERVICES, INC.,
a Florida corporation

By: /s/ Dennis A. Sweeney
----------------------------------------
Dennis A. Sweeney
Senior Vice President -
Mergers and Acquisitions

COMPANY:

MIDATLANTIC 401(k) SERVICES, INC.,
a Virginia corporation

By: /s/ E. Franklin DePew
----------------------------------------
E. Franklin DePew
Title: President

SHAREHOLDERS:

/s/ E. Franklin DePew
----------------------------------------
E. Franklin DePew, Individually and
as Joint Tenant with Carol Joy DePew

/s/ Carol Joy DePew
----------------------------------------
Carol Joy DePew, Individually and
as Joint Tenant with E. Franklin DePew

/s/ Robert L. Musick, Jr.
----------------------------------------
Robert L. Musick, Jr., Individually

SHAREHOLDERS' AGENT:

/s/ E. Franklin DePew
----------------------------------------
E. Franklin DePew

<PAGE> 1

EXHIBIT 10.18

ABR INFORMATION SERVICES, INC.
1997 STOCK OPTION PLAN

1. PURPOSE OF PLAN

The purpose of this Plan is to enable ABR Information Services, Inc. (the
"Company") and its Subsidiaries to compete successfully in attracting,
motivating and retaining Employees with outstanding abilities by making it
possible for them to purchase Shares on terms that will give them a direct and
continuing interest in the future success of the businesses of the Company and
its Subsidiaries and encourage them to remain in the employ of the Company or
one or more of its Subsidiaries. Each Option is intended to be an Incentive
Stock Option, except to the extent that (a) any such Option would exceed the
limitations set forth in Section 3(c) hereof and (b) any Option is specifically
designated at the time of grant as not being an Incentive Stock Option.

2. DEFINITIONS

For purposes of the Plan, except where the context clearly indicates
otherwise, the following terms shall have the meanings set forth below:

(a) "Board" means the Board of Directors of the Company.

(b) "Code" means the United States Internal Revenue Code of 1986, as
amended.

(d) "Effective Date" means the date the Plan is adopted by the Board.

(e) "Employee" means a person who is regularly employed on a salary
basis by the Company or any Subsidiary, including an officer or director of
the Company or any Subsidiary who is also an employee of the Company or a
Subsidiary.

(f) "Fair Market Value" means, with respect to a Share, if the Shares
are then listed and traded on a registered national or regional securities
exchange, or quoted on The National Association of Securities Dealers'
Automated Quotation System (including The Nasdaq Stock Market's National
Market), the average closing price of a Share on such exchange or quotation
system for the ten trading days immediately preceding the date of grant of
an Option, or, if Fair Market Value is used herein in connection with any
event other than the grant of an Option, then such average closing price
for the ten trading days immediately preceding the date of such event. If
the Shares are not traded on a registered securities exchange or quoted in
such a quotation system, the Committee shall determine the Fair Market
Value of a Share.

(g) "Incentive Stock Option" means an option granted under this Plan
and which is an incentive stock option within the meaning of section 422 of
the Code, or the corresponding provision of any subsequently enacted tax
statute.

(h) "Option" means an option granted under this Plan, whether or not
such option is an Incentive Stock Option.

(i) "Optionee" means any person who has been granted an Option which
Option has not expired or been fully exercised or surrendered.

(j) "Plan" means the Company's 1997 Stock Option Plan.

(k) "Rule 16b-3" means Rule 16b-3 promulgated pursuant to Section
16(b) of the Securities Exchange Act of 1934, as amended.

(l) "Share" means one share of voting common stock, par value $.01 per
share, of the Company, and such other stock or securities that may be
substituted therefor pursuant to Section 6 hereof.

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<PAGE> 2

(m) "Subsidiary" means any "subsidiary corporation" within the meaning
of Section 424(f) of the Code.

3. LIMITS ON OPTIONS

(a) The total number of Shares with respect to which Options may be granted
under the Plan shall not exceed in the aggregate 1,400,000 Shares, subject to
adjustment as provided in Section 6 hereof. If any Option expires, terminates or
is terminated for any reason prior to its exercise in full, the Shares that were
subject to the unexercised portion of such Option shall be available for future
grants under the Plan.

(b) No Incentive Stock Option shall be granted to any Employee who at the
time such option is granted, owns capital stock of the Company possessing more
than 10% of the total combined voting power or value of all classes of capital
stock of the Company or any Subsidiary, determined in accordance with the
provisions of Section 422(b)(6) and 424(d) of the Code, unless the option price
at the time such Incentive Stock Option is granted is at least 110 percent
(110%) of the Fair Market Value of the Shares subject to the Incentive Stock
Option and such Incentive Stock Option is not exercisable by its terms after the
expiration of five (5) years from the date of grant.

(c) An Incentive Stock Option shall be granted hereunder only to the extent
that the aggregate Fair Market Value (determined at the time the Incentive Stock
Option is granted) of the Shares with respect to which such Incentive Stock
Option and any other "incentive stock option" (within the meaning of Section 422
of the Code) are exercisable for the first time by any Optionee during any
calendar year (under the Plan and all other plans of the Optionee's employer
corporation and its parent and subsidiary corporations within the meaning of
Section 422(d) of the Code) does not exceed $100,000. This limitation shall be
applied by taking Incentive Stock Options and any such other "incentive stock
options" into account in the order in which such Incentive Stock Options and any
such other "incentive stock Options" were granted.

(d) No Optionee shall, in any calendar year, be granted Options to purchase
more than 100,000 Shares (subject to adjustment pursuant to Section 6).

4. GRANTING OF OPTIONS

The Committee is authorized to grant Options to selected Employees pursuant
to the Plan beginning on the Effective Date. Subject to the provisions of the
Plan, the Committee shall have authority to select the Employees to whom Options
will be awarded under the Plan, to determine the number of Shares to be included
in such Options, and to determine the other terms and conditions of such
Options, including any which may be necessary to qualify Incentive Stock Options
as "incentive stock options" under Section 422 of the Code. The date on which
the Committee approves the grant of an Option shall be considered the date on
which such Option is granted.

5. TERMS OF STOCK OPTIONS

Subject to Section 3 hereof, the terms of Options granted under this Plan
shall be as follows:

(a) The exercise price of each Share subject to an Option shall be
fixed by the Committee. Notwithstanding the prior sentence, the option
exercise price of an Incentive Stock Option shall be fixed by the Committee
but shall in no event be less than 100% of the Fair Market Value of the
Shares subject to such Option.

(b) Except as otherwise provided by the Committee, Options shall not
be assignable or transferable by the Optionee other than by will or by the
laws of descent and distribution.

(c) Each Option shall expire and all rights thereunder shall end at
the expiration of such period (which shall not be more than ten (10) years)
after the date on which it was granted as shall be fixed by the Committee,
subject in all cases to earlier expiration as provided in subsections (d)
and (e) of this Section 5.

2
<PAGE> 3

(d) Except as otherwise provided by the Committee, during the life of
an Optionee, an Option shall be exercisable only by such Optionee and only
within one (1) month after the termination of the Optionee's employment
with the Company or a Subsidiary, other than by reason of the Optionee's
death, permanent disability or retirement with the consent of the Company
or a Subsidiary as provided in subsection (e) of this Section 5, but only
if and to the extent the Option was exercisable immediately prior to such
termination, and subject to the provisions of subsection (c) of this
Section 5.

(e) Except as otherwise provided by the Committee, if an Optionee: (i)
dies while employed by the Company or a Subsidiary or within the period
when an Option could have otherwise been exercised by the Optionee; (ii)
terminates employment with the Company or a Subsidiary by reason of the
"permanent and total disability" (within the meaning of Section 22(e)(3) of
the Code) of such Optionee; or (iii) terminates employment with the Company
or a Subsidiary as a result of such Optionee's retirement, provided that
the Company or such Subsidiary has consented in writing to such Optionee's
retirement, then, in each such case, such Optionee, or the dully authorized
representatives of such Optionee, shall have the right, at any time within
three months after the death, disability or retirement of the Optionee, as
the case may be, and prior to the termination of the Option pursuant to
subsection (c) of this Section 5, to exercise any Option to the extent such
Option was exercisable by the Optionee immediately prior to such Optionee's
death, disability or retirement. In the discretion of the Committee, the
three-month period referenced in the immediately preceding sentence may be
extended for a period of up to one year.

(f) Subject to the foregoing terms and to such additional terms
regarding the exercise of an Option as the Committee may fix at the time of
grant, an Option may be exercised in whole at one time or in part from time
to time.

(g) Options granted pursuant to the Plan shall be evidenced by an
agreement in writing setting forth the material terms and conditions of the
grant, including, but not limited to, the number of Shares subject to
Option. Option agreements covering Options need not contain similar
provisions; provided, however, that all such option agreements shall comply
with the terms of the Plan.

6. EFFECT OF CHANGES IN CAPITALIZATION

(a) If the number of outstanding Shares is increased or decreased or
changed into or exchanged for a different number or kind of shares or other
securities of the Company by reason of any recapitalization, reclassification,
stock split, combination of shares, exchange of shares, stock dividend or other
distribution payable in capital stock, or other increase or decrease in such
shares effected without receipt of consideration by the Company, a proportionate
and appropriate adjustment shall be made by the Company in the number and kind
of shares for which Options are outstanding, so that the proportionate interest
of the Optionee immediately following such event shall, to the extent
practicable, be the same as immediately prior to such event. Any such adjustment
in outstanding Options shall not change the aggregate option price payable with
respect to Shares subject to the unexercised portion of the Options outstanding
but shall include a corresponding proportionate adjustment in the option price
per Share.

(b) Subject to Section 6(c) hereof, if the Company shall be the surviving
corporation in any reorganization, merger, share exchange or consolidation of
the Company with one or more other corporations or other entities, any Option
theretofore granted shall pertain to and apply to the securities to which a
holder of the number of Shares subject to such Option would have been entitled
immediately following such reorganization, merger, share exchange or
consolidation, with a corresponding proportionate adjustment of the option price
per Share so that the aggregate option price thereafter shall be the same as the
aggregate option price of the Shares remaining subject to the Option immediately
prior to such reorganization, merger, share exchange or consolidation.

3
<PAGE> 4

approval of the dissolution of the Company; (iii) the approval by the Board of
an agreement providing for the sale or transfer (other than as a security for
obligations of the Company or any Subsidiary) of substantially all of the assets
of the Company; or (iv) the acquisition of more than fifty percent (50%) of the
outstanding Shares by any person within the meaning of Rule 13(d)(3) under the
Securities Exchange Act of 1934 if such acquisition is not preceded by a prior
expression of approval by the Board, then, in each such case, any Option granted
hereunder shall become immediately exercisable in full, subject to any
appropriate adjustments in the number of Shares subject to such Option and the
option price, regardless of any provision contained in the Plan or any stock
option agreement with respect thereto limiting the exercisability of the Option
for any length of time. Notwithstanding the foregoing, if a successor
corporation or other entity as contemplated in clause (i) or (iii) of the
preceding sentence agrees to assume the outstanding Options or to substitute
substantially equivalent options, then the outstanding Options issued hereunder
shall not be immediately exercisable, but shall remain exercisable in accordance
with the terms of the Plan and the applicable stock option agreements.

(d) Adjustments under this Section 6 relating to Shares or securities of
the Company shall be made by the Committee, whose determination in that respect
shall be final and conclusive. No fractional Shares or units of other securities
shall be issued pursuant to any such adjustment, and any fractions resulting
from any such adjustment shall be eliminated in each case by rounding upward to
the nearest whole Share or unit.

(e) The grant of an Option pursuant to the Plan shall not affect or limit
in any way the right or power of the Company to make adjustments,
reclassification, reorganizations or changes of its capital or business
structure or to merge, consolidate, dissolve or liquidate, or to sell or
transfer all or any part of its business or assets.

(f) The Board may, in its sole and absolute discretion, amend, modify or
rescind the provisions of this Section 6 if it determines that the operations of
this Section 6 may prevent a transaction in which the Company or any affiliated
entity is a party from being accounted for on a pooling-of-interests basis.

7. DELIVERY AND PAYMENT FOR SHARES; REPLACEMENT OPTIONS

(a) No Shares shall be delivered upon the exercise of an Option until the
option price for the Shares to be acquired has been paid in full. No Shares
shall be issued or transferred under the Plan unless and until all legal
requirements applicable to the issuance or transfer of such Shares have been
complied with to the satisfaction of the Committee. Any Shares issued by the
Company to an Optionee upon exercise of an Option may be made only in strict
compliance with and in accordance with applicable state and federal securities
laws.

(b) Payment of the option price for the Shares purchased pursuant to the
exercise of an Option shall be made, as determined by the Committee and set
forth in the option agreement pertaining to such Option: (i) in cash or by check
payable to the order of the Company; (ii) through the tender to the Company of
Shares, which Shares shall be valued, for purposes of determining the extent to
which the option price has been paid thereby, at their Fair Market Value on the
date of exercise; or (iii) by a combination of the methods described in (i) and
(ii) hereof, provided, however, that the Committee may in its discretion impose
and set forth in the option agreement pertaining to an Option such limitations
or prohibitions on the use of Shares to exercise Options as it deems
appropriate.

(c) To the extent that the payment of the exercise price for the Shares
purchased pursuant to the exercise of an Option is made with Shares as provided
in Section 7(b) hereof, then, at the discretion of the Committee, the Optionee
may be granted a replacement Option under the Plan to purchase a number of
Shares equal to the number of Shares tendered as permitted in Section 7(b)
hereof, with an exercise price per Share equal to the Fair Market Value on the
date of grant of such replacement Option and with a term extending to the
expiration date of the original Option.

8. NO CONTINUATION OF EMPLOYMENT AND DISCLAIMER OF RIGHTS

No provision in the Plan or in any Option granted or option agreement
entered into pursuant to the Plan shall be construed to confer upon any
individual the right to remain in the employ of the Company or any

4
<PAGE> 5

Subsidiary, or to interfere in any way with the right and authority of the
Company or any Subsidiary either to increase or decrease the compensation of any
individual at any time, or to terminate any employment or other relationship
between any individual and the Company or any Subsidiary. The Plan shall in no
way be interpreted to require the Company to transfer any amounts to a third
party trustee or otherwise hold any amounts in trust or escrow for payment to
any Optionee or beneficiary under the terms of the Plan. An Optionee shall have
none of the rights of a shareholder of the Company until all or some of the
Shares covered by an Option are fully paid and issued to such Optionee.

9. ADMINISTRATION

(a) The Plan shall be administered by a committee (the "Committee") of the
Board, consisting of not less than two directors, each of whom shall qualify as
a "non-employee director" within the meaning of Rule 16b-3 and as an "outside
director" under Section 162(m)(4)(C) of the Code or any successor provisions
thereto. If at any time the Committee shall not be in existence, the Board shall
administer the Plan, and all references to the Committee herein shall include
the Board. To the extent permitted by applicable law, the Board may delegate to
another committee of the Board or to one or more senior officers of the Company
any or all of the authority and responsibility of the Committee with respect to
the Plan, other than with respect to participants who are subject to Section 16
of the Securities Exchange Act of 1934, as amended ("Section 16 participants").
To the extent that the Board has delegated to such other committee or one or
more officers the authority and responsibility of the Committee, all references
to the Committee herein shall include such other committee or one or more
officers.

(b) Subject to the terms of the Plan and applicable law, the Committee
shall have full power and authority to interpret and administer the Plan and any
instrument or agreement relating to, or made under, the Plan, establish, amend,
suspend, or waive such rules and regulations and appoint such agents as it shall
deem appropriate for the proper administration of the Plan, and make any other
determination and take any other action that the Committee deems necessary or
desirable for the administration of the Plan. The Committee's decisions and
determinations under the Plan need not be uniform and may be made selectively
among participants, whether or not they are similarly situated. A majority of
the members of the Committee shall constitute a quorum and all determinations of
the Committee shall be made by a majority of its members. Any determination of
the Committee under the Plan may be made without notice or meeting of the
Committee by a writing signed by a majority of the Committee members.

(c) No member of the Committee or the Board shall be liable for any action
taken or decision made, or any failure to take any action, in good faith with
respect to the Plan or any Option granted or Option agreement entered into
hereunder.

10. NO RESERVATION OF SHARES

The Company shall be under no obligation to reserve or to retain in its
treasury any particular number of Shares in connection with its obligations
hereunder.

11. AMENDMENT OF PLAN

The Board, without further action by the shareholders may amend this Plan
from time to time as it deems desirable and shall make any amendments which may
be required so that Options intended to be Incentive Stock Options shall at all
times continue to be Incentive Stock Options for purposes of the Code.

12. TERMINATION OF PLAN

5
<PAGE> 6

13. EFFECTIVE DATE

The Plan shall become effective on the Effective Date and Options hereunder
may be granted at any time on or after that date, subject to approval of the
Plan by the Company's shareholders within one year after the Effective Date.
Upon approval of the Plan by the shareholders of the Company as set forth above,
all Options granted under the Plan on or after the Effective Date shall be fully
effective as if the shareholders of the Company had approved the Plan on the
Effective Date. If the shareholders of the Company fail to approve the Plan
within one year after the Effective Date, any Incentive Stock Option granted
hereunder shall be null, void and of no effect.

<PAGE> 1
EXHIBIT 10.19

STOCK PURCHASE AGREEMENT

dated October 30, 1998,
and effective as of October 1, 1998,

by and among

ABR INFORMATION SERVICES, INC.,
a Florida corporation,

WESTERN PENSION SERVICE CORPORATION,
a California corporation,
and
ROBERT A. JOCELYN,

as Shareholder

<PAGE> 2

STOCK PURCHASE AGREEMENT

TABLE OF CONTENTS

1. PURCHASE AND SALE OF SHARES........................................... 1

2. PURCHASE PRICE - PAYMENT.............................................. 1
2.1. Purchase Price............................................... 1
2.2. Payment of Purchase Price.................................... 3

3. JOINT AND SEVERAL REPRESENTATIONS AND WARRANTIES OF
COMPANY AND SHAREHOLDER............................................... 5
3.1. Corporate.................................................... 5
3.2. Shareholder.................................................. 6
3.3. No Violation................................................. 7
3.4. Financial Statements......................................... 7
3.5. Tax Matters.................................................. 7
3.6. Accounts Receivable.......................................... 9
3.7. Absence of Certain Changes................................... 9
3.8. Absence of Undisclosed Liabilities........................... 10
3.9. No Litigation................................................ 10
3.10. Compliance With Laws and Orders.............................. 11
3.11. Title to and Condition of Properties......................... 12
3.12. Insurance.................................................... 14
3.13. Contracts and Commitments.................................... 15
3.14. Labor Matters................................................ 16
3.15. Employee Benefit Plans....................................... 17
3.16. Employment Compensation...................................... 21
3.17. Trade Rights................................................. 21
3.18. Major Customers and Suppliers................................ 22
3.19. Service Warranty and Liability............................... 22
3.20. Bank Accounts................................................ 23
3.21. Affiliates' Relationships to Company......................... 23
3.22. Assets Necessary to Business................................. 23
3.23. No Brokers or Finders........................................ 23
3.24. Year 2000 Compliance......................................... 23
3.25. Systems Performance.......................................... 24
3.26. Software Ownership; Non Infringement......................... 24
3.27. Disclosure................................................... 25

4. REPRESENTATIONS AND WARRANTIES OF BUYER............................... 25
4.1. Corporate.................................................... 26
4.2. Authority.................................................... 26
4.3. No Brokers or Finders........................................ 26
4.4. Disclosure................................................... 26

i
<PAGE> 3

4.5. Investment Intent............................................. 26
4.6. 1934 Act Registration......................................... 26

5. COVENANTS............................................................. 27
5.1. Employment and Noncompetition Agreement....................... 27
5.2. Noncompetition; Confidentiality............................... 27
5.3. General Release............................................... 28

6. INDEMNIFICATION....................................................... 28
6.1. By Shareholder................................................ 28
6.2. By Buyer...................................................... 29
6.3. Indemnification of Third-Party Claims......................... 29
6.4. Payment....................................................... 30
6.5. Indemnification for Environmental Matters..................... 30
6.6. Limitations on Indemnification................................ 31
6.7. No Waiver..................................................... 32

7. CLOSING............................................................... 32
7.1. Documents to be Delivered by Company and Shareholder.......... 32
7.2. Documents to be Delivered by Buyer............................ 33

8. TERMINATION........................................................... 34

9. RESOLUTION OF DISPUTES................................................ 34
9.1. Arbitration................................................... 34
9.2. Arbitrators................................................... 35
9.3. Procedures; No Appeal......................................... 35
9.4. Authority..................................................... 35
9.5. Entry of Judgment............................................. 35
9.6. Confidentiality............................................... 35
9.7. Continued Performance......................................... 35
9.8. Tolling....................................................... 35

10. MISCELLANEOUS......................................................... 36
10.1. Disclosure Schedule........................................... 36
10.2. Further Assurance............................................. 36
10.3. Disclosures and Announcements................................. 36
10.4. Assignment; Parties in Interest............................... 36
10.5. Law Governing Agreement....................................... 37
10.6. Amendment and Modification.................................... 37
10.7. Notice........................................................ 37
10.8. Expenses...................................................... 38
10.9. Entire Agreement.............................................. 39
10.10. Counterparts; Facsimile Signatures............................ 39
10.11. Headings...................................................... 40
10.12. Glossary of Terms............................................. 40

ii
<PAGE> 4

Disclosure Schedule

<TABLE>
<S> <C>
Schedule 3.1.(e) Directors and Officers of the Company
Schedule 3.3 Violation, Conflict, Default
Schedule 3.4 Financial Statements
Schedule 3.5.(b) Tax Returns (Exceptions to Representations)
Schedule 3.5.(e) Tax, Other
Schedule 3.6 Accounts Receivable (Aged Schedule)
Schedule 3.7 Certain Changes
Schedule 3.8 Off-Balance Sheet Liabilities
Schedule 3.9 Litigation Matters
Schedule 3.10.(a) Non-Compliance with Laws
Schedule 3.10.(b) Licenses and Permits
Schedule 3.10.(c) Environmental Matters (Exceptions to Representations)
Schedule 3.11 Liens
Schedule 3.11.(c) Real Property
Schedule 3.12 Insurance
Schedule 3.13.(b) Personal Property Leases
Schedule 3.13.(d) Sales Commitments
Schedule 3.13.(f) Powers of Attorney
Schedule 3.13.(g) Collective Bargaining Agreements
Schedule 3.13.(h) Loan Agreements, etc.
Schedule 3.13.(i) Guarantees
Schedule 3.13.(l) Material Contracts
Schedule 3.14 Labor Matters
Schedule 3.15.(a) Employee Plans/Agreements
Schedule 3.16 Employment Compensation
Schedule 3.17 Trade Rights
Schedule 3.18.(a) Major Customers
Schedule 3.18.(b) Major Suppliers
Schedule 3.18.(c) Sales Representatives
Schedule 3.19 Service Warranty, Warranty Expense and Liability Claims
Schedule 3.20 Bank Accounts
Schedule 3.21.(a) Contracts with Affiliates
Schedule 3.21.(c) Obligations of and to Affiliates
Schedule 3.24 Year 2000 Noncompliance
Schedule 3.26 Software Ownership Exceptions
</TABLE>

iii
<PAGE> 5
STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT (this "Agreement"), dated October 30, 1998, and
effective as of October 1, 1998, by and among ABR Information Services, Inc., a
Florida corporation ("Buyer"), Western Pension Service Corporation, a
California corporation ("Company"), and Robert A. Jocelyn ("Shareholder").

RECITALS

1. Company is engaged in the business of providing retirement (including
401(k)) plan administration and consulting services to third parties (the
"Company Business"). Shareholder owns all of the issued and outstanding shares
(the "Shares") of capital stock of Company.

2. Company's facilities consist solely of leased offices at 1000 Fourth
Street, Suite 300, San Rafael, California (the "Facilities").

3. Buyer desires to purchase the Shares from Shareholder and Shareholder
desires to sell the Shares to Buyer, upon the terms and conditions herein set
forth.

1. PURCHASE AND SALE OF SHARES

Subject to the terms and conditions of this Agreement, effective as of the
Effective Date (as hereinafter defined) Shareholder shall sell to Buyer and
Buyer shall purchase from Shareholder all of the Shares.

2. PURCHASE PRICE - PAYMENT

2.1. Purchase Price.

2.1.(a) Amount. The aggregate purchase price (the "Purchase
Price") payable for the Shares shall be the sum of (a) SEVEN MILLION
DOLLARS ($7,000,000) and (b) a contingent payment (the "Contingent
Payment") based on the Company Business' net earnings before income
taxes ("Pre-Tax Earnings") for the twelve-month period commencing as
of October 1, 1998 (the "Contingent Payment Period").

2.1.(b) Calculation of Contingent Payment. The Contingent
Payment shall equal (i) ONE MILLION DOLLARS ($1,000,000), in the event
the Company Business' Pre-Tax Earnings for the Contingent Payment
Period equals or exceeds $1,200,000. No Contingent Payment shall be
due or payable

<PAGE> 6

in the event the Company Business' Pre-Tax Earnings for the Contingent
Payment Period is less than $1,200,000.

2.1.(c) Calculation of Pre-Tax Earnings. The calculation of the
Company Business' Pre-Tax Earnings for the Contingent Payment Period
shall include revenue received from retirement plan administration and
consulting services but shall not include revenue received from COBRA
administration services or other services not performed by Company as
of the date hereof but offered by Buyer or any of its subsidiaries or
affiliates. Except as expressly provided herein, the calculation of
Pre-Tax Earnings shall be made in accordance with generally accepted
accounting principles applied on a consistent basis, subject to the
following adjustments:

(i) Any depreciation or amortization adjustments resulting
solely from the transactions contemplated by this Agreement shall
not be included for purposes of calculating Pre-Tax Earnings for
the Contingent Payment Period.

(ii) Notwithstanding Company's actual expenses for the
Contingent Payment Period relating to items and functions (such
as property and casualty insurance, errors and omissions
insurance, health and welfare programs and human resource
functions) that Company and Buyer mutually agree shall be
provided by Buyer or another subsidiary thereof, Company shall
accrue as an expense for purposes of calculating Pre-Tax Earnings
for the Contingent Payment Period the same dollar amount as it
accrued in the twelve months preceding the Effective Date with
respect to such items and functions.

(iii) The calculation of Pre-Tax Earnings for the Contingent
Payment Period shall not exclude any expense item (or series of
related items) relating to personnel matters or, in the case of
non-personnel matters, exceeding $10,000 annually, unless such
exclusion has been preapproved in writing by an officer of Buyer.

(iv) Company shall review with Buyer on a monthly basis any
and all expense items Company intends to exclude for purposes of
calculating Pre-Tax Earnings for the Contingent Payment Period.

(v) In the event Buyer (or any subsidiary thereof) generates
new retirement plan administration or consulting services
business for Company during the Contingent Payment Period, and/or
Company generates new COBRA or pension administration services
business (or other new business for similar administrative
services not performed by Company as of the date hereof), Buyer
and Company agree to make a reasonable allocation of sales and
other reasonable costs associated with

<PAGE> 7

obtaining such new business for purposes of calculating Company's
Pre-Tax Earnings for the Contingent Payment Period.

(vi) The imputed interest expense on the Buyer Loan (as
hereinafter defined) shall be included in the calculation of
Pre-Tax Earnings for the Company Business for the Contingent
Payment Period.

2.1.(d) Buyer Loan. Buyer agrees to loan Company on the Closing
Date the sum of $68,906.21 (including the aggregate amount paid by
Buyer to Metro Commerce Bank), and thereafter prior to the end of the
Contingent Payment Period such additional amounts as may be reasonably
necessary to provide working capital for Company during the Contingent
Payment Period. The loan(s) described in this Section 2.1(d) are
referred to herein collectively as the "Buyer Loan." The proceeds of
the Buyer Loan (other than the aggregate amount paid by Buyer to Metro
Commerce Bank) shall be used solely as working capital for Company
during the Contingent Payment Period. The Buyer Loan shall be repaid
in full by Company to Buyer during the Contingent Payment Period. To
the extent that it is repaid after such time, the unpaid principal
balance in excess of $50,000 as of the end of the Contingent Payment
Period shall be charged in full against the Company Business' Pre-Tax
Earnings for the Contingent Payment Period.

2.1.(e) Interest on Buyer Loan. The calculation of the Company
Business' Pre-Tax Earnings for the Contingent Payment Period shall
include an imputed interest expense to Company equal to interest
calculated on the outstanding principal balance of the Buyer Loan
which remains unpaid from time to time, at the rate announced from
time to time by NationsBank N.A. (or its successor) as its prime rate.
Interest on the Buyer Loan calculated under this Section 2.1(e) shall
commence on the date the Buyer Loan is made to Company and continue
until the Buyer Loan is repaid in full.

2.2. Payment of Purchase Price. The Purchase Price shall be paid by Buyer
as follows:

2.2.(a) Cash to Shareholder. At the Closing, Buyer shall deliver
to the Shareholder the sum of Six Million Five Hundred Thousand
Dollars ($6,500,000).

2.2.(b) Contingent Payment. The initial calculation of the
Contingent Payment shall be made by Buyer, which shall deliver its
calculation on or before January 2, 2000 to Shareholder for his review
and comment. If Buyer and Shareholder are able to agree in writing
upon the amount of the Continent Payment within fifteen (15) days
following delivery of the initial calculation to Shareholder, then
Buyer shall pay such amount. Such payment of the Contingent Payment,
if any, shall be made to the Shareholder within fifteen (15) days
following the date of such written agreement; provided, however, that

<PAGE> 8

in no event shall payment of the Contingent Payment, if any, be made
to the Shareholder prior to January 4, 2000. In the event Buyer and
Shareholder cannot agree on the amount of the Contingent Payment by
February 1, 2000, then the determination of the Contingent Payment
shall be submitted to binding arbitration in accordance with Article 9
of this Agreement.

2.2.(c) Purchase Price Holdback.

(i) On the Closing Date, Buyer will transfer the sum of Five
Hundred Thousand Dollars ($500,000) to a segregated
interest-bearing account with a bank or other financial
institution with a combined capital and surplus in excess of
$50,000,000, which amount shall be held by Buyer in such account
for the purpose of securing the indemnification obligations of
Company and Shareholder under this Agreement. For purposes
hereof, "Holdback Period" shall mean the period commencing on the
date hereof and ending on April 1, 1999, subject to extension as
hereinafter provided.

(ii) If, prior to the expiration of the Holdback Period,
Buyer determines to assert a claim for indemnification under
Article 6 of this Agreement, then Buyer shall give the
Shareholder written notice of such claim (for purposes of this
Section 2.2(c), a "Claim Notice"), specifying in reasonable
detail the basis therefor and the amount and calculation thereof.
If the Shareholder does not deliver to Buyer written notice of
an objection to the claim for indemnification within twenty (20)
days after receipt of the Claim Notice relating thereto, Buyer
shall be entitled to withdraw the dollar amount of its claim (as
set forth in the Claim Notice) from the segregated account. If
the Shareholder shall timely deliver to Buyer such written notice
of objection, then Buyer shall not make a withdrawal from the
segregated account with respect to the claim set forth in the
Claim Notice until: (x) Buyer and Shareholder have executed
joint written instructions referring to such Claim Notice and
directing Buyer to withdraw, for Buyer's own account, funds from
the segregated account; or (y) Buyer has received a copy of a
judgment, decree or order of a court, or copy of an arbitration
award, adjudicating the dispute with respect to such claim for
indemnification; whereupon Buyer shall withdraw from the
segregated account, for Buyer's own account, such amount as
provided therein.

(iii) If Buyer has not delivered a Claim Notice to
Shareholder prior to the expiration of the Holdback Period, or if
any and all Claim Notices delivered to Shareholder during the
Holdback Period have been resolved pursuant to subsection (ii)
above, then Buyer shall deliver to Shareholder the portion of the
funds held in the segregated account equal to (x) $500,000, less
(y) any amounts withdrawn by Buyer as provided

<PAGE> 9
herein, plus (z) any interest earned with respect to such amount.
Buyer shall deliver such amount to the Shareholder promptly
after the expiration of the Holdback Period, unless one or more
Claim Notice(s) have not been finally resolved pursuant to
subsection (ii) above, in which case Buyer shall retain such
amount in the segregated account until: (a) Buyer and Shareholder
have executed joint written instructions referring to such Claim
Notice(s) and directing Buyer as to the disbursement of the funds
in the segregated account; or (b) Buyer has received a copy of a
judgment, decree or order of a court, or copy of an arbitration
award, adjudicating the dispute with respect to such Claim
Notice(s); whereupon Buyer shall disburse the funds in the
segregated account as provided therein.

2.2.(d) Method of Payment. All payments under this Section 2.2
shall be made in the form of certified or bank cashier's check payable
to the order of the recipient or, at the recipient's option, by wire
transfer of immediately available funds to an account previously
designated by the recipient in writing.

3. JOINT AND SEVERAL REPRESENTATIONS AND WARRANTIES OF COMPANY AND
SHAREHOLDER

Company and Shareholder, jointly and severally, make the following
representations and warranties to Buyer, each of which was true and correct on
the Effective Date (other than Section 3.2(b)), remains true as of the Closing
Date, shall be unaffected by any investigation heretofore or hereafter made by
or on behalf of Buyer, or any knowledge of Buyer other than as specifically
disclosed in the Disclosure Schedule delivered to Buyer at the time of the
execution of this Agreement, and shall survive the Closing of the transactions
provided for herein.

3.1. Corporate.

3.1.(a) Organization. Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of
California.

3.1.(b) Corporate Power. Company has all requisite corporate
power and authority to own, operate and lease its properties and to
carry on its business as and where such is now being conducted.

3.1.(c) Qualification. Company is not licensed or qualified to
do business as a foreign corporation in any jurisdiction. Neither the
character of the properties owned or leased by Company, nor the nature
of its business, makes such licensing or qualification necessary in
any jurisdiction.

3.1.(d) Subsidiaries. Company does not own any interest in any
corporation, partnership or other entity.

<PAGE> 10
3.1.(e) Corporate Documents, etc. The copies of the Articles of
Incorporation and By-Laws of the Company, including any amendments
thereto, which have been delivered by Shareholder to Buyer are true,
correct and complete copies of such instruments as presently in
effect. The corporate minute book and stock records of the Company
which have been furnished to Buyer for inspection are true, correct
and complete and accurately reflect all material corporate action
taken by the Company. The directors and officers of the Company are
listed in Schedule 3.1.(e).

3.1.(f) Capitalization of the Company. The authorized capital
stock of the Company consists entirely of One Thousand (1,000) shares
of common stock, no par value. No shares of such capital stock are
issued or outstanding except for Six Hundred (600) shares of common
stock of the Company which are owned of record and beneficially by
Shareholder. All such shares of capital stock
of the Company are validly issued, fully paid and nonassessable.
There are no (a) securities convertible into or exchangeable for any
of the Company's capital stock or other securities, (b) options,
warrants or other rights to purchase or subscribe to capital stock or
other securities of the Company or securities which are convertible
into or exchangeable for capital stock or other securities of the
Company, or (c) contracts, commitments, agreements, understandings or
arrangements of any kind relating to the issuance, sale or transfer of
any capital stock or other equity securities of the Company, any such
convertible or exchangeable securities or any such options, warrants
or other rights.

3.2. Shareholder.

3.2.(a) Power. Shareholder has full power, legal right and
authority to enter into, execute and deliver this Agreement and the
other agreements, instruments and documents contemplated hereby (such
other documents sometimes referred to herein as "Ancillary
Instruments"), and to carry out the transactions contemplated hereby.

3.2.(b) Validity. This Agreement has been duly and validly
executed and delivered by Shareholder and is, and when executed and
delivered each Ancillary Instrument will be, the legal, valid and
binding obligation of Shareholder, enforceable in accordance with its
terms, except as such may be limited by bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights generally,
and by general equitable principles.

3.2.(c) Title. Shareholder has, and Buyer is receiving, good and
marketable title to the Shares to be sold by Shareholder hereunder,
free and clear of all Liens (as defined in Section 3.11(a)) including,
without limitation, voting trusts or agreements, proxies, marital or
community property interests.

<PAGE> 11

3.3. No Violation. Except as set forth on Schedule 3.3, neither the
execution and delivery of this Agreement or the Ancillary Instruments nor the
consummation by Company and Shareholder of the transactions contemplated hereby
and thereby (a) will violate any statute, law, ordinance, rule or regulation
(collectively, "Laws") or any order, writ, injunction, judgment, plan or decree
(collectively, "Orders") of any court, arbitrator, department, commission,
board, bureau, agency, authority, instrumentality or other body, whether
federal, state, municipal, foreign or other (collectively, "Government
Entities"), (b) will require any authorization, consent, approval, exemption or
other action by or notice to any Government Entity (including, without
limitation, under any "plant-closing" or similar law), or (c) subject to
obtaining the consents referred to in Schedule 3.3, will violate or conflict
with, or constitute a default (or an event which, with notice or lapse of time,
or both, would constitute a default) under, or will result in the termination
of, or accelerate the performance required by, or result in the creation of any
Lien upon any of the assets of Company (or the Shares) under, any term or
provision of the Articles of Incorporation or By-Laws of Company or of any
contract, commitment, understanding, arrangement, agreement or restriction of
any kind or character to which Company or any Shareholder is a party or by
which Company or any Shareholder or any of its or their assets or properties
may be bound or affected.

3.4. Financial Statements. Included as Schedule 3.4 are true and complete
copies of the financial statements of Company consisting of (i) an audited
balance sheet of Company as of July 31, 1998, and the related audited
statements of income and cash flows for the year then ended (including the
notes contained therein or annexed thereto), and (ii) an audited balance sheet
of Company as of September 30, 1998 and the related audited statements of
income and cash flows for the eleven months then ended (including the notes
contained therein or annexed thereto), which financial statements have been
reported on, and are accompanied by, the signed, unqualified opinions of
Perotti and Carrade, independent auditors for Company for such periods. The
audited balance sheet of the Company as of September 30, 1998 is hereinafter
referred to as the "Recent Balance Sheet." All of such financial statements
(including all notes and schedules contained therein or annexed thereto) are
true, complete and accurate, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis, have been
prepared in accordance with the books and records of Company, and fairly
present, in accordance with generally accepted accounting principles, the
assets, liabilities and financial position, the results of operations and cash
flows of Company as of the dates and for the years and periods indicated. In
addition to the foregoing, Company has (i) a net worth (i.e., stockholders'
equity), after write-off of all outstanding advances to Shareholder), of a
minimum of $300,000, (ii) working capital (i.e., current assets less current
liabilities) of a minimum of $100,000, and (iii) long-term indebtedness
(excluding an $88,000 installment note payable to Metro Commerce Bank) of less
than $100,000.

3.5. Tax Matters.

3.5.(a) Provision For Taxes. The provision made for taxes on the
Recent Balance Sheet is sufficient for the payment, either currently
or on a deferred basis, of all federal, state, foreign, county, local
and other income, ad valorem, excise, profits, franchise, occupation,
property, payroll, sales, use,

<PAGE> 12

gross receipts and other taxes (and any interest and penalties) and
assessments, whether or not disputed, at the date of the Recent
Balance Sheet and for all years and periods prior thereto. Since the
date of the Recent Balance Sheet, Company has not incurred any taxes
other than taxes incurred in the ordinary course of business
consistent in type and amount with past practices of Company.

3.5.(b) Tax Returns Filed. Except as set forth on Schedule
3.5.(b), all federal, state, foreign, county, local and other tax
returns required to be filed by or on behalf of Company have been
timely filed and when filed were true and correct in all material
respects, and the taxes shown as due thereon were paid or adequately
accrued. True and complete copies of all tax returns or reports filed
by Company for each of its three most recent fiscal years have been
delivered to Buyer. Company has duly withheld and paid all taxes
which it is required to withhold and pay relating to salaries and
other compensation heretofore paid to the employees of Company.

3.5.(c) Tax Audits. The federal and state income tax returns of
Company have not been audited by the Internal Revenue Service or
appropriate state taxing authorities for any period. Company has not
received from the Internal Revenue Service or from the tax authorities
of any state, county, local or other jurisdiction any notice of
underpayment of taxes or other deficiency which has not been paid nor
any objection to any return or report filed by Company. There are
outstanding no agreements or waivers extending the statutory period of
limitations applicable to any tax return or report.

3.5.(d) No Consolidated Group. Company has never been a member
of an affiliated group of corporations that filed a consolidated tax
return. Company does not have any liability for the taxes of any
person or entity under Sections 1.1502-6 or 1.1502-78 of Title 26 of
the Code of Federal Regulations (or any similar provisions of state,
local or foreign income tax laws).

3.5.(e) Other. Except as set forth in Schedule 3.5.(e), since
December 31, 1979 Company has not (i) filed any consent or agreement
under Section 341(f) of the Internal Revenue Code of 1986, as amended
(the "Code"), (ii) applied for any tax ruling, (iii) entered into a
closing agreement with any taxing authority, (iv) filed an election
under Section 338(g) or Section 338(h)(10) of the Code (nor has a
deemed election under Section 338(e) of the Code occurred), except as
contemplated hereby, (v) made any payments, or been a party to an
agreement (including this Agreement) that under any circumstances
could obligate it to make payments that will not be deductible because
of Section 280G of the Code, or (vi) been a party to any tax
allocation or tax sharing agreement. The Company is not a "United
States real property holding company" within the meaning of Section
897 of the Code.

<PAGE> 13

3.6. Accounts Receivable. All accounts receivable and all benefit plan
service fees earned but unbilled of Company reflected on the Recent Balance
Sheet, and all accounts receivable and all benefit plan service fees earned but
unbilled incurred in the normal course of business since the date thereof,
represent arm's length sales actually made in the ordinary course of business;
are collectible (net of the reserve shown on the Recent Balance Sheet for
doubtful accounts) in the ordinary course of business without the necessity of
commencing legal proceedings; are subject to no counterclaim or setoff; and are
not in dispute. Schedule 3.6 contains an aged schedule of accounts receivable
and a detailed schedule of all benefit plan service fees earned but unbilled
included in the Recent Balance Sheet.

3.7. Absence of Certain Changes. Except as and to the extent set forth in
Schedule 3.7, since the date of the Recent Balance Sheet there has not been:

3.7.(a) No Adverse Change. Any adverse change in the financial
condition, assets, liabilities, business, prospects or operations of
Company;

3.7.(b) No Damage. Any loss, damage or destruction, whether covered
by insurance or not, affecting the Company, its properties or the Company
Business;

3.7.(c) No Increase in Compensation. Any increase in the
compensation, salaries or wages payable or to become payable to any
employee or agent of Company (including, without limitation, any increase
or change pursuant to any bonus, pension, profit sharing, retirement or
other plan or commitment), or any bonus or other employee benefit granted,
made or accrued;

3.7.(d) No Labor Disputes. Any labor dispute or disturbance, other
than routine individual grievances which are not material to the business,
financial condition or results of operations of Company.

3.7.(e) No Commitments. Any commitment or transaction by Company
(including, without limitation, any borrowing or capital expenditure) other
than in the ordinary course of business consistent with past practice;

3.7.(f) No Dividends. Any declaration, setting aside, or payment of
any dividend or any other distribution in respect of Company's capital
stock; any redemption, purchase or other acquisition by Company of any
capital stock of Company, or any security relating thereto; or any other
payment to any shareholder of Company as such a shareholder;

3.7.(g) No Disposition of Property. Any sale, lease or other transfer
or disposition of any properties or assets of Company;

3.7.(h) No Indebtedness. Any indebtedness for borrowed money
incurred, assumed or guaranteed by Company;

<PAGE> 14

3.7.(i) No Liens. Any mortgage, pledge, lien or encumbrance made on
any of the properties or assets of Company;

3.7.(j) No Amendment of Contracts. Any entering into, amendment or
termination by Company of any contract, or any waiver of material rights
thereunder, other than in the ordinary course of business;

3.7.(k) Loans and Advances. Any loan or advance (other than advances
to employees in the ordinary course of business for travel and
entertainment in accordance with past practice) to any person including,
but not limited to, any Affiliate (for purposes of this Agreement, the term
"Affiliate" shall mean and include: Shareholder, directors and officers of
Company; the spouse of any such person; any person who would be the heir or
descendant of any such person if he or she were not living; and any entity
in which any of the foregoing has a direct or indirect interest, except
through ownership of less than 5% of the outstanding shares of any entity
whose securities are listed on a national securities exchange or traded in
the national over-the-counter market);

3.7.(l) Credit. Any grant of credit to any customer or distributor on
terms or in amounts more favorable than those which have been extended to
such customer or distributor in the past, any other change in the terms of
any credit heretofore extended, or any other change of Company's policies
or practices with respect to the granting of credit; or

3.7.(m) No Unusual Events. Any other event or condition not in the
ordinary course of business of Company.

3.8. Absence of Undisclosed Liabilities. Except as and to the extent
specifically disclosed in the Recent Balance Sheet, or in Schedule 3.8, Company
does not have any liabilities, commitments or obligations (secured or
unsecured, and whether accrued, absolute, contingent, direct, indirect or
otherwise), other than commercial liabilities and obligations incurred since
the date of the Recent Balance Sheet in the ordinary course of business and
consistent with past practice and none of which has or will have a material
adverse effect on the business, financial condition or results of operations of
Company. Except as and to the extent described in the Recent Balance Sheet or
in Schedule 3.8, neither Company nor Shareholder has knowledge of any basis for
the assertion against Company of any liability and there are no circumstances,
conditions, happenings, events or arrangements, contractual or otherwise, which
may give rise to liabilities, except commercial liabilities and obligations
incurred in the ordinary course of Company's business and consistent with past
practice.

3.9. No Litigation. There is no action, suit, arbitration, proceeding,
investigation or inquiry, whether civil, criminal or administrative
("Litigation"), pending or, to Company's or Shareholder's knowledge, threatened
against Company, its directors (in such capacity), its business or any of its
assets, nor does Company or Shareholder know, or have grounds to know, of any
basis for any Litigation. Schedule 3.9 identifies all Litigation to which
Company or any of its directors (in such capacity) have been parties since
January 1,

<PAGE> 15

1997. Except as set forth in Schedule 3.9, neither Company nor its business or
assets is subject to any Order of any Government Entity.

3.10. Compliance With Laws and Orders.

3.10.(a) Compliance. Except as set forth in Schedule 3.10.(a),
Company (including each and all of its operations, practices, properties
and assets) is in compliance with all applicable Laws and Orders,
including, without limitation, those applicable to discrimination in
employment, occupational safety and health, trade practices, competition
and pricing, product warranties, zoning, building and sanitation,
employment, retirement and labor relations, product advertising and the
Environmental Laws as hereinafter defined. Except as set forth in Schedule
3.10.(a), Company has not received notice of any violation or alleged
violation of, and is subject to no Liability for past or continuing
violation of, any Laws or Orders. All reports and returns required to be
filed by Company with any Government Entity have been filed, and were
accurate and complete when filed. Without limiting the generality of the
foregoing:

(i) The operation of Company's business as it is now conducted
does not, nor does any condition existing at any of the Facilities,
in any manner constitute a nuisance or other tortious interference
with the rights of any person or persons in such a manner as to give
rise to or constitute the grounds for a suit, action, claim or demand
by any such person or persons seeking compensation or damages or
seeking to restrain, enjoin or otherwise prohibit any aspect of the
conduct of such business or the manner in which it is now conducted.

(ii) Company has made all required payments to its unemployment
compensation reserve accounts with the appropriate governmental
departments of the states where it is required to maintain such
accounts, and each of such accounts has a positive balance.

(iii) During the past five (5) years, Company has not been
required to make any reports or filings under, and has not received
any reports or other correspondence from any agency or other
governmental body under or relating to, the federal Occupational
Safety and Health Act of 1970, as amended, or any other applicable
health and safety laws and regulations.

<PAGE> 16

transactions contemplated hereby. Except as set forth in Schedule
3.10.(b), Company (including its operations, properties and assets) is
and has been in compliance with all such permits and licenses,
approvals, authorizations and consents.

3.10.(c) Environmental Matters. The applicable Laws relating to
pollution or protection of the environment, including Laws relating to
emissions, discharges, generation, storage, releases or threatened
releases of pollutants, contaminants, chemicals or industrial, toxic,
hazardous or petroleum or petroleum-based substances or wastes
("Waste") into the environment (including, without limitation, ambient
air, surface water, ground water, land surface or subsurface strata)
or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Waste
including, without limitation, the Clean Water Act, the Clean Air Act,
the Resource Conservation and Recovery Act, the Toxic Substances
Control Act and the Comprehensive Environmental Response Compensation
Liability Act ("CERCLA"), as amended, and their state and local
counterparts are herein collectively referred to as the "Environmental
Laws". Without limiting the generality of the foregoing provisions of
this Section 3.10, Company is in full compliance with all limitations,
restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in the Environmental
Laws or contained in any regulations, code, plan, order, decree,
judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder. Except as set forth in Schedule
3.10.(c), there is no Litigation nor any demand, claim, hearing or
notice of violation pending or threatened against Company relating in
any way to the Environmental Laws or any Order issued, entered,
promulgated or approved thereunder. Except as set forth in Schedule
3.10.(c), there are no past or present (or, to the best of Company's
and the Shareholder's knowledge, future) events, conditions,
circumstances, activities, practices, incidents, actions, omissions or
plans which may interfere with or prevent compliance or continued
compliance with the Environmental Laws or with any Order issued,
entered, promulgated or approved thereunder, or which may give rise to
any liability, including, without limitation, liability under CERCLA
or similar state or local Laws, or otherwise form the basis of any
Litigation, hearing, notice of violation, study or investigation,
based on or related to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling, or the emission,
discharge, release or threatened release into the environment, of any
Waste.

3.11. Title to and Condition of Properties.

<PAGE> 17

security interests, claims, pledges, licenses, equities, options,
conditional sales contracts, assessments, levies, easements,
covenants, reservations, restrictions, rights-of-way, exceptions,
limitations, charges or encumbrances of any nature whatsoever
(collectively, "Liens") except those described in Schedule 3.11 and,
in the case of real property, Liens for taxes not yet due or which are
being contested in good faith by appropriate proceedings (and which
have been sufficiently accrued or reserved against in the Recent
Balance Sheet), municipal and zoning ordinances and easements for
public utilities, none of which interfere with the use of the property
as currently utilized. Except as set forth in Schedule 3.11, none of
Company's assets, business or properties are subject to any
restrictions with respect to the transferability thereof; and the
Company's title thereto will not be affected in any way by the
transactions contemplated hereby.

3.11.(b) Condition. All property and assets owned or utilized by
Company are in good operating condition and repair, free from any
defects (except such minor defects as do not interfere with the use
thereof in the conduct of the normal operations of Company), have been
maintained consistent with the standards generally followed in the
industry and are sufficient to carry on the business of Company as
conducted during the preceding 12 months. All buildings, plants and
other structures owned or otherwise utilized by Company are in good
condition and repair and have no structural defects or defects
affecting the plumbing, electrical, sewerage, or heating, ventilating
or air conditioning systems.

<PAGE> 18

or improvements thereat (including, but not limited to, inadequacy for
normal use of mechanical systems or disposal or water systems at or
serving the Real Property), or (v) work that has been done or labor or
materials that has or have been furnished to any Real Property during
the period of six (6) months immediately preceding the date of this
Agreement for which liens could be filed against any of the Real
Property.

3.11.(d) No Condemnation or Expropriation. Neither the whole nor
any portion of the property or any other assets of Company is subject
to any Order to be sold or is being condemned, expropriated or
otherwise taken by any Government Entity with or without payment of
compensation therefor, nor to the best of Company's and Shareholder's
knowledge has any such condemnation, expropriation or taking been
proposed.

3.12. Insurance. Set forth in Schedule 3.12 is a complete and accurate
list and description of all policies of fire, liability, errors and omissions,
electronic data processing, workers compensation, health and other forms of
insurance presently in effect with respect to the business and properties of
Company, true and correct copies of which have heretofore been delivered to
Buyer. Schedule 3.12 includes, without limitation, the carrier, the
description of coverage, the limits of coverage, retention or deductible
amounts, amount of annual premiums, retroactive date of coverage, date of
expiration and the date through which premiums have been paid with respect to
each such policy, and any pending claims in excess of $5,000. All such
policies are valid, outstanding and enforceable policies and provide insurance
coverage for the properties, assets and operations of Company, of the kinds, in
the amounts and against the risks customarily maintained by organizations
similarly situated; and no such policy (nor any previous policy) provides for
or is subject to any currently enforceable retroactive rate or premium
adjustment, loss sharing arrangement or other actual or contingent liability
arising wholly or partially out of events arising prior to the date hereof.
Schedule 3.12 indicates each policy as to which (a) the coverage limit has been
reached or (b) the total incurred losses to date equal 75% or more of the
coverage limit. No notice of cancellation or termination has been received
with respect to any such policy, and neither Company nor any Shareholder has
knowledge of any act or omission of Company which could result in cancellation
of any such policy prior to its scheduled expiration date. Company has not
been refused any insurance with respect to any aspect of the operations of the
business nor has its coverage been limited by any insurance carrier to which it
has applied for insurance or with which it has carried insurance during the
last three years. Company has duly and timely made all claims it has been
entitled to make under each policy of insurance. There is no claim by Company
pending under any such policies as to which coverage has been questioned,
denied or disputed by the underwriters of such policies, and neither Company
nor Shareholder knows of any basis for denial of any claim under any such
policy. Company has not received any written notice from or on behalf of any
insurance carrier issuing any such policy that insurance rates therefor will
hereafter be substantially increased (except to the extent that insurance rates
may be increased for all similarly situated risks) or that there will hereafter
be a cancellation or an increase in a deductible (or an increase in premiums in
order to maintain an existing deductible) or nonrenewal of any such policy.
Such policies are sufficient in all material respects for

<PAGE> 19

compliance by Company with all requirements of law and with the requirements of
all material contracts to which Company is a party. All general liability
policies maintained by or for the benefit of Company since its inception have
been "occurrence" policies and not "claims made" policies (except for Company's
errors and omissions policies, which have been "claims made" and not
"occurrence" policies).

3.13. Contracts and Commitments.

3.13.(a) Real Property Leases. Except as set forth in Schedule
3.11.(c), Company has no leases of real property.

3.13.(b) Personal Property Leases. Except as set forth in
Schedule 3.13.(b), Company has no leases of personal property
involving consideration or other expenditure in excess of $5,000 or
involving performance over a period of more than three months.

3.13.(c) Purchase Commitments. Company has no purchase
commitments for inventory items or supplies that, together with
amounts on hand, constitute in excess of three months normal usage, or
which are at an excessive price.

3.13.(d) Sales Commitments. Except as set forth in Schedule
3.13.(d), Company has no sales or service contracts or commitments to
customers which aggregate in excess of $ 50,000 to any one customer
(or group of affiliated customers). Company has no sales contracts or
commitments except those made in the ordinary course of business, at
arm's length, and no such contracts or commitments are for a sales
price which would result in a loss to the Company.

3.13.(e) Contracts With Affiliates and Certain Others. Company
has no agreement, understanding, contract or commitment (written or
oral) with any Affiliate or any employee, agent, consultant,
distributor, dealer or franchisee that is not immediately cancelable
by Company without liability, penalty or premium of any nature or kind
whatsoever.

3.13.(f) Powers of Attorney. Except as set forth in Schedule
3.13(f), the Company has not given a power of attorney, which is
currently in effect, to any person, firm or corporation for any
purpose whatsoever.

3.13.(g) Collective Bargaining Agreements. Except as set forth
in Schedule 3.13.(g), Company is not a party to any collective
bargaining agreements with any unions, guilds, shop committees or
other collective bargaining groups. Copies of all such agreements
have heretofore been delivered to Buyer.

<PAGE> 20

3.13.(h) Loan Agreements. Except as set forth in Schedule
3.13.(h), Company is not obligated under any loan agreement,
promissory note, letter of credit, or other evidence of indebtedness
as a signatory, guarantor or otherwise.

3.13.(i) Guarantees. Except as disclosed on Schedule 3.13.(i),
Company has not guaranteed the payment or performance of any person,
firm or corporation, agreed to indemnify any person or act as a
surety, or otherwise agreed to be contingently or secondarily liable
for the obligations of any person.

3.13.(j) Contracts Subject to Renegotiation. Company is not a
party to any contract with any governmental body which is subject to
renegotiation.

3.13.(k) Burdensome or Restrictive Agreements. Company is not a
party to nor is it bound by any agreement, deed, lease or other
instrument which is so burdensome as to materially affect or impair
the operation of Company. Without limiting the generality of the
foregoing, Company is not a party to nor is it bound by any agreement
requiring Company to assign any interest in any trade secret or
proprietary information, or prohibiting or restricting Company from
competing in any business or geographical area or soliciting customers
or otherwise restricting it from carrying on its business anywhere in
the world.

3.13.(l) Other Material Contracts. Company has no lease,
contract or commitment of any nature involving consideration or other
expenditure in excess of $ 25,000, or involving performance over a
period of more than three months, or which is otherwise individually
material to the operations of Company, except as explicitly described
in Schedule 3.13.(l).

3.13.(m) No Default. Company is not in default under any lease,
contract or commitment, nor has any event or omission occurred which
through the passage of time or the giving of notice, or both, would
constitute a default thereunder or cause the acceleration of any of
Company's obligations or result in the creation of any Lien on any of
the assets owned, used or occupied by Company. No third party is in
default under any lease, contract or commitment to which Company is a
party, nor has any event or omission occurred which, through the
passage of time or the giving of notice, or both, would constitute a
default thereunder or give rise to an automatic termination, or the
right of discretionary termination, thereof.

<PAGE> 21

hours, and is not engaged in any unfair labor practice; (b) there is no unfair
labor practice charge or complaint against Company pending or threatened; (c)
there is no labor strike, dispute, request for representation, slowdown or
stoppage actually pending or threatened against or affecting Company nor any
secondary boycott with respect to products of Company; (d) no question
concerning representation has been raised or is threatened respecting the
employees of Company; (e) no grievance which might have a material adverse
effect on Company, nor any arbitration proceeding arising out of or under
collective bargaining agreements, is pending and no such claim therefor exists;
and (f) there are no administrative charges or court complaints against Company
concerning alleged employment discrimination or other employment related
matters pending or threatened before the U.S. Equal Employment Opportunity
Commission or any Government Entity.

3.15. Employee Benefit Plans.

3.15.(a) Disclosure. Schedule 3.15.(a) sets forth all pension,
thrift, savings, profit sharing, retirement, incentive bonus or other
bonus, medical, dental, life, accident insurance, benefit, employee
welfare, disability, group insurance, stock purchase, stock option,
stock appreciation, stock bonus, executive or deferred compensation,
hospitalization and other similar fringe or employee benefit plans,
programs and arrangements, and any employment or consulting contracts,
"golden parachutes," collective bargaining agreements, severance
agreements or plans, vacation and sick leave plans, programs,
arrangements and policies, including, without limitation, all
"employee benefit plans" (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")), all
employee manuals, and all written or binding oral statements of
policies, practices or understandings relating to employment, which
are provided to, for the benefit of, or relate to, any persons
("Company Employees") employed by Company. The items described in the
foregoing sentence are hereinafter sometimes referred to collectively
as "Employee Plans/Agreements," and each individually as an "Employee
Plan/Agreement." True and correct copies of all the Employee
Plans/Agreements, including all amendments thereto, have heretofore
been provided to Buyer. Each of the Employee Plans/Agreements is
identified on Schedule 3.15.(a), to the extent applicable, as one or
more of the following: an "employee pension benefit plan" (as defined
in Section 3(2) of ERISA), a "defined benefit plan" (as defined in
Section 414 of the Code), an "employee welfare benefit plan" (as
defined in Section 3(1) of ERISA), and/or as a plan intended to be
qualified under Section 401 of the Code. No Employee Plan/Agreement
is a "multiemployer plan" (as defined in Section 4001 of ERISA), and
Company has never contributed nor been obligated to contribute to any
such multiemployer plan.

<PAGE> 22

with respect to which the Company or any of its assets may, directly
or indirectly, be subject to any Liability, contingent or otherwise,
or the imposition of any Lien (whether by reason of the complete or
partial termination of any such plan, the funded status of any such
plan, any "complete withdrawal" (as defined in Section 4203 of ERISA)
or "partial withdrawal" (as defined in Section 4205 of ERISA) by any
person from any such plan, or otherwise):

(i) no such plan has been terminated so as to subject,
directly or indirectly, any assets of Company to any liability,
contingent or otherwise, or the imposition of any lien under
Title IV of ERISA;

(ii) no proceeding has been initiated or threatened by any
person (including the Pension Benefit Guaranty Corporation
("PBGC")) to terminate any such plan;

(iii) no condition or event currently exists or currently is
expected to occur that could subject, directly or indirectly, any
assets of Company to any liability, contingent or otherwise, or
the imposition of any lien under Title IV of ERISA, whether to
the PBGC or to any other person or otherwise on account of the
termination of any such plan;

(iv) if any such plan were to be terminated as of the
Closing Date, no assets of Company would be subject, directly or
indirectly, to any liability, contingent or otherwise, or the
imposition of any lien under Title IV of ERISA;

(v) no "reportable event" (as defined in Section 4043 of
ERISA) has occurred with respect to any such plan;

(vi) no such plan which is subject to Section 302 of ERISA
or Section 412 of the Code has incurred any "accumulated funding
deficiency" (as defined in Section 302 of ERISA and Section 412
of the Code, respectively), whether or not waived; and

(vii) no such plan is a multiemployer plan or a plan
described in Section 4064 of ERISA.

3.15.(c) Prohibited Transactions, etc. There have been no
"prohibited transactions" within the meaning of Section 406 or 407 of
ERISA or Section 4975 of the Code for which a statutory or
administrative exemption does not exist with respect to any Employee
Plan/Agreement, and no event or omission has occurred in connection
with which the Company or any of its assets or any Employee
Plan/Agreement, directly or indirectly, could be subject to any
liability under ERISA, the Code or any other Law or Order applicable
to any Employee Plan/Agreement, or under any agreement, instrument,
Law or Order pursuant to or under which Company has agreed to
indemnify or is

<PAGE> 23

required to indemnify any person against liability incurred under any
such Law or Order.

3.15.(d) Full Funding. The funds available under each Employee
Plan/Agreement which is intended to be a funded plan exceed the
amounts required to be paid, or which would be required to be paid if
such Employee Plan/Agreement were terminated, on account of rights
vested or accrued as of the Closing Date (using the actuarial methods
and assumptions then used by Company's actuaries in connection with
the funding of such Employee Plan/Agreement).

3.15.(f) Payments and Compliance. With respect to each Employee
Plan/Agreement, (i) all payments due from Company to date have been
made and all amounts properly accrued to date as liabilities of
Company which have not been paid have been properly recorded on the
books of Company and are reflected in the Recent Balance Sheet; (ii)
Company has complied with, and each such Employee Plan/Agreement
conforms in form and operation to, all applicable laws and
regulations, including but not limited to ERISA and the Code, in all
respects and all reports and information relating to such Employee
Plan/Agreement required to be filed with any governmental entity have
been timely filed; (iii) all reports and information relating to each
such Employee Plan/Agreement required to be disclosed or provided to
participants or their beneficiaries have been timely disclosed or
provided; (iv) each such Employee Plan/Agreement which is intended to
qualify under Section 401 of the Code has received a favorable
determination letter from the Internal Revenue Service with respect to
such qualification, its related trust has been determined to be exempt
from taxation under Section 501(a) of the Code, and nothing has
occurred since the date of such letter that has or is likely to
adversely affect such qualification or exemption; (v) there are no
actions, suits or claims pending (other than routine claims for
benefits) or threatened with respect to such Employee Plan/Agreement
or against the assets of such Employee Plan/Agreement; and (vi) no
Employee Plan/Agreement is a plan which is established and maintained
outside the United States primarily for the benefit of individuals
substantially all of whom are nonresident aliens.

<PAGE> 24

3.15.(h) No Triggering of Obligations. The consummation of the
transactions contemplated by this Agreement will not (i) entitle any
current or former employee of Company to severance pay, unemployment
compensation or any other payment, except as expressly provided in
this Agreement, (ii) accelerate the time of payment or vesting, or
increase the amount of compensation due to any such employee or former
employee or (iii) result in any prohibited transaction described in
Section 406 of ERISA or Section 4975 of the Code for which an
exemption is not available.

3.15.(i) Delivery of Documents. There has been delivered to
Buyer, with respect to each Employee Plan/Agreement:

(i) a copy of the annual report, if required under ERISA,
with respect to each such Employee Plan/Agreement for the last
two years;

(ii) a copy of the summary plan description, together with
each summary of material modifications, required under ERISA with
respect to such Employee Plan/Agreement, all material employee
communications relating to such Employee Plan/Agreement, and,
unless the Employee Plan/Agreement is embodied entirely in an
insurance policy to which Company is a party, a true and complete
copy of such Employee Plan/Agreement;

(iii) if the Employee Plan/Agreement is funded through a
trust or any third party funding vehicle (other than an insurance
policy), a copy of the trust or other funding agreement and the
latest financial statements thereof; and

(iv) the most recent determination letter received from the
Internal Revenue Service with respect to each Employee
Plan/Agreement that is intended to be a "qualified plan" under
Section 401 of the Code.

<PAGE> 25

With respect to each Employee Plan/Agreement for which an annual report
has been filed and delivered to Buyer pursuant to clause (i) of this Section
3.15.(i), no material adverse change has occurred with respect to the matters
covered by the latest such annual report since the date thereof.

3.15.(j) Future Commitments. Company has no announced plan or legally
binding commitment to create any additional Employee Plans/Agreements or to
amend or modify any existing Employee Plan/Agreement.

3.16. Employment Compensation. Schedule 3.16 contains a true and correct
list of all employees to whom Company is paying compensation, including bonuses
and incentives, at an annual rate in excess of Ten Thousand Dollars ($10,000)
for services rendered or otherwise; and in the case of salaried employees such
list identifies the current annual rate of compensation for each employee, the
date of their last salary adjustment, the previous annual rate of compensation
for each employee, and any bonuses paid to each employee during the preceding
twelve months; and in the case of hourly or commission employees identifies
certain reasonable ranges of rates and the number of employees falling within
each such range.

3.17. Trade Rights. Schedule 3.17 lists all material Trade Rights (as
defined below), including (without limitation) all registered Trade Rights and
all Trade Rights for which federal, state or local applications have been
filed, in which Company now has any interest, specifying whether such Trade
Rights are owned, controlled, used or held (under license or otherwise) by
Company, and also indicating which of such Trade Rights are registered. All
Trade Rights shown as registered in Schedule 3.17 have been properly
registered, all pending registrations and applications have been properly made
and filed and all annuity, maintenance, renewal and other fees relating to
registrations or applications are current. In order to conduct the business of
Company, as such is currently being conducted or proposed to be conducted,
Company does not require any Trade Rights that it does not already have.
Company is not infringing and has not infringed any Trade Rights of another in
the operation of the business of Company, nor, to the best of Company's and
Shareholder's knowledge, is any other person infringing the Trade Rights of
Company. Company has not granted any license or made any assignment of any
Trade Right listed on Schedule 3.17, nor does Company pay any royalties or
other consideration for the right to use any Trade Rights of others. There is
no Litigation pending or, to the best of Company's and Shareholder's knowledge,
threatened to challenge Company's right, title and interest with respect to its
continued use and right to preclude others from using any Trade Rights of
Company. All Trade Rights of Company are valid, enforceable and in good
standing, and there are no equitable defenses to enforcement based on any act
or omission of Company. The consummation of the transactions contemplated
hereby will not alter or impair any Trade Rights owned or used by Company. As
used herein, the term "Trade Rights" shall mean and include: (i) all trademark
rights, business identifiers, trade dress, service marks, trade names and brand
names, all registrations thereof and applications therefor and all goodwill
associated with the foregoing; (ii) all copyrights, copyright registrations and
copyright applications, and

<PAGE> 26

all other rights associated with the foregoing and the underlying works of
authorship; (iii) all patents and patent applications, and all international
proprietary rights associated therewith; (iv) all contracts or agreements
granting any right, title, license or privilege under the intellectual property
rights of any third party; (v) all inventions, mask works and mask work
registrations, know-how, discoveries, improvements, designs, trade secrets,
shop and royalty rights, employee covenants and agreements respecting
intellectual property and non-competition and all other types of intellectual
property; and (vi) all claims for infringement or breach of any of the
foregoing.

3.18. Major Customers and Suppliers.

3.18.(a) Major Customers. Schedule 3.18.(a) contains a list of the
twenty (20) largest customers of Company for each of the two (2) most
recent fiscal years (determined on the basis of the total dollar amount of
net sales) showing the total dollar amount of net sales to each such
customer during each such year. Neither Company nor Shareholder has any
knowledge or information of any facts indicating, nor any other reason to
believe, that any of the customers listed on Schedule 3.18.(a) will not
continue to be customers of the business of Company after the Closing at
substantially the same level of purchases as heretofore.

3.18.(b) Major Suppliers. Schedule 3.18.(b) contains a list of the
three (3) largest suppliers to Company for each of the two (2) most recent
fiscal years (determined on the basis of the total dollar amount of
purchases) showing the total dollar amount of purchases from each such
supplier during each such year. Neither Company nor Shareholder has any
knowledge or information of any facts indicating, nor any other reason to
believe, that any of the suppliers listed on Schedule 3.18.(b) will not
continue to be suppliers to the business of Company after the Closing and
will not continue to supply the business with substantially the same
quantity and quality of goods at competitive prices.

3.18.(c) Sales Representatives. Schedule 3.18.(c) contains a list of
all sales representatives of Company, together with true, correct and
complete copies of all sales representative contracts and policy
statements, and a description of all substantial modifications or
exceptions.

<PAGE> 27

(5) years, in which a party thereto either requests injunctive relief or
alleges damages (whether or not covered by insurance). The provision of such
services by the Company meets and complies with all governmental laws and
regulations currently in effect. As used in this Section 3.19, the term
"Services" means any and all services currently or at any time previously
rendered, provided or sold by Company, or by any predecessor of Company under
any brand name or mark under which services are or have been rendered, provided
or sold by Company.

3.20. Bank Accounts. Schedule 3.20 sets forth the names and locations of
all banks, trust companies, savings and loan associations and other financial
institutions at which the Company maintains a safe deposit box, lock box or
checking, savings, custodial or other account of any nature, the type and
number of each such account and the signatories therefore, a description of any
compensating balance arrangements, and the names of all persons authorized to
draw thereon, make withdrawals therefrom or have access thereto.

3.21. Affiliates' Relationships to Company.

3.21.(a) Contracts With Affiliates. All leases, contracts, agreements
or other arrangements between Company and any Affiliate are described on
Schedule 3.21.(a).

3.21.(b) No Adverse Interests. No Affiliate has any direct or
indirect interest in (i) any entity which does business with Company or is
competitive with Company's business, or (ii) any property, asset or right
which is used by Company in the conduct of its business.

3.21.(c) Obligations. All obligations of any Affiliate to Company,
and all obligations of Company to any Affiliate, are listed on Schedule
3.21.(c).

3.23. No Brokers or Finders. Except for Crestar Securities Corporation
and TMark Associates, Ltd., neither Shareholder nor Company or any of its
directors, officers, employees or agents have retained, employed or used any
broker or finder in connection with the transaction provided for herein or in
connection with the negotiation thereof.

3.24. Year 2000 Compliance. Except as set forth in Schedule 3.24, to the
best of Company's and Shareholder's knowledge: (a) the computer source codes,
programs and other software of the Company (including machine readable code,
printed listings of code, databases, documentation and related property and
information of Company used or under development for use in the Company
Business) (collectively, "Software") accurately determines chronological dates
and accurately performs all calculations, data manipulations, sorting and
transmission of date data regardless of whether the date represents or
references

<PAGE> 28

different centuries (For example, when the actual date changes from 12/31/1999
to 1/1/2000, the Software will accurately determine that 1/1/2000 is the new
date and determine that an individual born in 1948 is 52 years old and not -48
[i.e., 00-48 = -48], or otherwise incorrectly perform the age calculation); (b)
the Software provides that all date related user interface functionalities and
data fields permit the entry of a four digit year (i.e., the years 1965, 2065
and 3065 could all be entered by the user without the need of a manual
override) and such date data will result in accurate calculations, data
manipulations, sorting and transmission of all data, including the date data;
(c) the entry of a date equal to or greater than 01/01/2000 into the Software
will not affect any calculation that produces or uses time spans such that the
results of the calculation are incorrect (i.e., such as an interest
calculation); and (d) the integrity of calculations performed utilizing the
Software will not be affected by date data for dates on or after 01/02/2000,
and calculations using previously generated data (on or before 12/31/1999) will
also maintain calculation integrity.

3.25. Systems Performance. To the best of Company's and Shareholder's
knowledge, the Software and related systems owned or used by Company perform in
accordance with the written specifications previously delivered to Buyer and
the Software and related system components are capable of interconnecting
and/or interfacing with each other, and they deliver the functionality needed
to meet the information systems requirements of the Company Business as they
are presently conducted. Shareholder will not cause any unplanned interruption
of the operations of, or accessibility to, the Software or related systems (or
any system component) through any device, method or means including, without
limitation, the use of any "virus," "lockup," "time bomb" or "key lock" device
or program, or disabling code, which has the potential or capability of causing
any unplanned interruption of the operations of, or accessibility of, the
Software or related systems (or any system component) to Buyer, or any user
authorized by Buyer, or which could alter, destroy or inhibit the use of the
Software or related systems (or any system component), or the data contained
therein (collectively, "Disabling Devices"), which could block access to or
prevent the use of the Software or any system (or system component) by Buyer or
any authorized user. Shareholder has not placed, nor is Shareholder aware of,
any Disabling Device on any Software or system component owned or used by
Company. There is no new version, update or release of any Software currently
being developed.

3.26. Software Ownership; Non Infringement. Except as set forth in
Schedule 3.26 hereto:

(1) Company owns all right, title and interest in and to the
Software;

(2) Company has developed the Software entirely through its own
efforts for its own account, and the Software is free and clear of all
Liens of any nature whatsoever;

(3) The Software does not infringe any patent, copyright or trade
secret of any third party;

<PAGE> 29

(4) The Software is fully eligible for protection under the
applicable copyright law and has not been forfeited to the public domain;

(5) The source code and system specification of the Software have
been maintained in confidence;

(6) All personnel, including employees, agents, consultants and
contractors, who have participated in the concept and the development of
the Software either (a) have been party to a fore-hire relationship with
Company that has accorded the Company full, effective and exclusive
ownership of all tangible and intangible property thereby arising with
respect to the Software, or (b) have executed appropriate instruments and
assigns in favor of the Company as assignees and have conveyed to the
Company full, effective and exclusive ownership of all tangible and
intangible property thereby arising with respect to the Software;

(7) Company has duly obtained the right and license to use, copy,
modify and distribute the software components contained in the Software,
the Software contains no other software components in which any third
party may claim superior or joint ownership, and no Software is a
derivative work of any software programs not owned by their entirety by
Company;

(8) Company has not granted any rights in the Software to any third
party; and

(9) The Software contains certain software components duly licensed
to Company for inclusion in the Software, and the Software contains no
other software components in which any third party may claim superior or
joint ownership, nor is any Software a derivative work of any other
software programs not owned in their entirety by Company.

3.27. Disclosure. No representation or warranty by Company and/or the
Shareholder in this Agreement, nor any statement, certificate, schedule,
document or exhibit hereto furnished or to be furnished by or on behalf of
Company or Shareholder pursuant to this Agreement or in connection with
transactions contemplated hereby, contains or shall contain any untrue statement
of material fact or omits or shall omit a material fact necessary to make the
statements contained therein not misleading. All statements and information
contained in any certificate, instrument, Disclosure Schedule or document
delivered by or on behalf of Company and/or Shareholder shall be deemed
representations and warranties by the Company and the Shareholder.

4. REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer makes the following representations and warranties to the
Shareholder, each of which was true and correct on the Effective Date (other
than Section 4.2), remains true as of the Closing Date, shall be unaffected by
any investigation hereafter made by Shareholder or

25
<PAGE> 30

any notice to Shareholder, and shall survive the Closing of the transactions
provided for herein.

4.1. Corporate.

4.1.(a) Organization. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Florida.

4.3. No Brokers or Finders. Except for Broadview Associates LLC, neither
Buyer nor any of its directors, officers, employees or agents has retained,
employed or used any broker or finder in connection with the transaction
provided for herein or in connection with the negotiation thereof.

4.4. Disclosure. No representation or warranty by Buyer in this
Agreement, nor any statement, certificate, schedule, document or exhibit hereto
furnished or to be furnished by or on behalf of Buyer pursuant to this
Agreement or in connection with transactions contemplated hereby, contains or
shall contain any untrue statement of material fact or omits or shall omit a
material fact necessary to make the statements contained therein not
misleading.

4.5. Investment Intent. The Shares are being acquired by Buyer for
investment only and not with the view to resale or other distribution.

4.6. 1934 Act Registration. Buyer has a class of securities registered
pursuant to Section 12 of the Securities Exchange Act of 1934, as amended.

<PAGE> 31

5. COVENANTS

5.1. Employment and Noncompetition Agreement. Contemporaneously with the
execution of this Agreement, Shareholder shall execute and deliver to Company
an Employment and Noncompetition Agreement, substantially in the form of
Exhibit A hereto.

5.2. Noncompetition; Confidentiality. As an inducement to Buyer to
execute this Agreement and complete the transactions contemplated hereby, and
in order to preserve the goodwill associated with the business of Company being
acquired pursuant to this Agreement, and in addition to and not in limitation
of any covenants contained in any agreement executed and delivered pursuant to
Section 5.1 hereof, Shareholder hereby covenants and agrees as follows:

5.2.(a) Covenant Not to Compete. For a period of three (3)
years from the Closing Date, Shareholder will not directly or
indirectly:

(i) engage in, continue in or carry on any business
which competes with Company or the Company Business or is
substantially similar thereto, including owning or
controlling any financial interest in any corporation,
partnership, firm or other form of business organization
which is so engaged;

(ii) consult with, advise or assist in any way, whether
or not for consideration, any corporation, partnership, firm
or other business organization which is now or becomes a
competitor of Company or Buyer (or any of its subsidiaries)
in any aspect with respect to the Company Business,
including, but not limited to, advertising or otherwise
endorsing the products of any such competitor; soliciting
customers or otherwise serving as an intermediary for any
such competitor; loaning money or rendering any other form of
financial assistance to or engaging in any form of business
transaction on other than an arm's length basis with any such
competitor;

(iii) offer employment to an employee of Company or the
Company Business, without the prior written consent of Buyer;
or

(iv) engage in any practice the purpose of which is to
evade the provisions of this covenant not to compete or to
commit any act which adversely affects the Company or the
Company Business;

<PAGE> 32

Arizona. The parties agree that a Buyer may sell, assign or
otherwise transfer this covenant not to compete, in whole or in
part, to any subsidiary of Buyer or to any person, corporation,
firm or entity that purchases all or part of the business of the
Company. In the event a court of competent jurisdiction determines
that the provisions of this covenant not to compete are excessively
broad as to duration, geographical scope or activity, it is
expressly agreed that this covenant not to compete shall be
construed so that the remaining provisions shall not be affected,
but shall remain in full force and effect, and any such over broad
provisions shall be deemed, without further action on the part of
any person, to be modified, amended and/or limited but only to the
extent necessary to render the same valid and enforceable in such
jurisdiction.

5.2.(b) Covenant of Confidentiality. Shareholder shall not at
any time subsequent to the Closing, except as explicitly requested
by Buyer, (i) use for any purpose, (ii) disclose to any person, or
(iii) keep or make copies of documents, tapes, discs or programs
containing, any confidential information concerning Company. For
purposes hereof, "confidential information" shall mean and include,
without limitation, all Trade Rights in which Company has an
interest, all customer lists and customer information, and all
other information concerning Company's processes, apparatus,
equipment, packaging, products, marketing and distribution methods,
not previously disclosed to the public directly by Company.

5.2.(c) Equitable Relief for Violations. Shareholder agrees
that the provisions and restrictions contained in this Section 5.2
are necessary to protect the legitimate continuing interests of
Buyer in acquiring the Shares, and that any violation or breach of
these provisions will result in irreparable injury to Buyer for
which a remedy at law would be inadequate and that, in addition to
any relief at law which may be available to Buyer for such
violation or breach and regardless of any other provision contained
in this Agreement, Buyer shall be entitled to injunctive and other
equitable relief as a court may grant after considering the intent
of this Section 5.2.

5.3. General Release. Contemporaneously with the execution of this
Agreement, Shareholder shall deliver a general release to Buyer, in
substantially the form attached hereto as Exhibit B.

6. INDEMNIFICATION

6.1. By Shareholder. Subject to the terms and conditions of this Article
6, Shareholder hereby agrees to indemnify, defend and hold harmless Buyer, its
directors, officers, employees and controlled and controlling persons
(hereinafter "Buyer's Affiliates") and the Company from and against all Claims
asserted against, resulting to, imposed upon, or incurred by Buyer, Buyer's
Affiliates or the Company, directly or indirectly, by reason of, arising out of
or resulting from (a) the inaccuracy or breach of any representation or
warranty

<PAGE> 33

of the Shareholder or Company contained in or made pursuant to this Agreement,
(b) the breach of any covenant of any Shareholder or the Company contained in
this Agreement, (c) the litigation matters referred to in Schedule 3.9, or (d)
the conduct of the Company Business or operations of the Company prior to the
Closing (other than Claims for liabilities to the extent the amounts thereof
are specifically reflected in the Recent Balance Sheet). As used in this
Article 6, the term "Claim" shall include (i) all debts, liabilities and
obligations; (ii) all losses, damages (including, without limitation,
consequential damages), judgments, awards, settlements, costs and expenses
(including, without limitation, interest (including prejudgment interest in any
litigated matter), penalties, court costs and attorneys fees and expenses); and
(iii) all demands, claims, suits, actions, costs of investigation, causes of
action, proceedings and assessments, whether or not ultimately determined to be
valid.

6.2. By Buyer. Subject to the terms and conditions of this Article 6,
Buyer hereby agrees to indemnify, defend and hold harmless Shareholder from and
against all Claims asserted against, resulting to, imposed upon or incurred by
any such person, directly or indirectly, by reason of or resulting from (a) the
inaccuracy or breach of any representation or warranty of Buyer contained in or
made pursuant to this Agreement, or (b) the breach of any covenant of Buyer
contained in this Agreement.

6.3.(a) Notice and Defense. The party or parties to be
indemnified (whether one or more, the "Indemnified Party") will
give the party from whom indemnification is sought (the
"Indemnifying Party") prompt written notice of any such Claim, and
the Indemnifying Party will undertake the defense thereof by
representatives chosen by it. Failure to give such notice shall
not affect the Indemnifying Party's duty or obligations under this
Article 6, except to the extent the Indemnifying Party is
prejudiced thereby. So long as the Indemnifying Party is defending
any such Claim actively and in good faith, the Indemnified Party
shall not settle such Claim. The Indemnified Party shall make
available to the Indemnifying Party or its representatives all
records and other materials required by them and in the possession
or under the control of the Indemnified Party, for the use of the
Indemnifying Party and its representatives in defending any such
Claim, and shall in other respects give reasonable cooperation in
such defense.

6.3.(b) Failure to Defend. If the Indemnifying Party, within
a reasonable time after notice of any such Claim, fails to defend
such Claim actively and in good faith, the Indemnified Party will
(upon further notice) have the right to undertake the defense,
compromise or settlement of such Claim or consent to the entry of a
judgment with respect to such Claim, on behalf of and for the
account and risk of the Indemnifying Party, and the Indemnifying
Party

<PAGE> 34

shall thereafter have no right to challenge the Indemnified
Party's defense, compromise, settlement or consent to judgment
therein.

6.3.(c) Indemnified Party's Rights. Anything in this Section
6.3 to the contrary notwithstanding, (i) if there is a reasonable
probability that a Claim may materially and adversely affect the
Indemnified Party other than as a result of money damages or other
money payments, the Indemnified Party shall have the right to
defend, compromise or settle such Claim, and (ii) the Indemnifying
Party shall not, without the written consent of the Indemnified
Party, settle or compromise any Claim or consent to the entry of
any judgment which does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the
Indemnified Party of a release from all Liability in respect of
such Claim.

6.4. Payment. The Indemnifying Party shall promptly pay the Indemnified
Party any amount due under this Article 6, which payment may be accomplished in
whole or in part, at the option of the Indemnified Party, by the Indemnified
Party setting off any amount owed to the Indemnifying Party by the Indemnified
Party. To the extent set-off is made by an Indemnified Party in satisfaction
or partial satisfaction of an indemnity obligation under this Article 6 that is
disputed by the Indemnifying Party, upon a subsequent determination by final
judgment not subject to appeal that all or a portion of such indemnity
obligation was not owed to the Indemnified Party, the Indemnified Party shall
pay the Indemnifying Party the amount which was set-off and not owed together
with interest from the date of set-off until the date of such payment at an
annual rate equal to the average annual rate in effect as of the date of the
set-off, on those three maturities of United States Treasury obligations having
a remaining life, as of such date, closest to the period from the date of the
set-off to the date of such judgment. Upon judgment, determination, settlement
or compromise of any third party Claim, the Indemnifying Party shall pay
promptly on behalf of the Indemnified Party, and/or to the Indemnified Party in
reimbursement of any amount theretofore required to be paid by it, the amount
so determined by judgment, determination, settlement or compromise and all
other Claims of the Indemnified Party with respect thereto, unless in the case
of a judgment an appeal is made from the judgment. If the Indemnifying Party
desires to appeal from an adverse judgment, then the Indemnifying Party shall
post and pay the cost of the security or bond to stay execution of the judgment
pending appeal. Upon the payment in full by the Indemnifying Party of such
amounts, the Indemnifying Party shall succeed to the rights of such Indemnified
Party, to the extent not waived in settlement, against the third party who made
such third party Claim.

6.5. Indemnification for Environmental Matters. Without limiting the
generality of the foregoing, Shareholder agrees to indemnify, reimburse, hold
harmless and defend Buyer, Buyer's affiliates and Company for, from, and
against all Claims asserted against, imposed on, or incurred by any such
person, directly or indirectly, in connection with any pollution, threat to the
environment, or exposure to, or manufacture, processing, distribution, use,
treatment, generation, transport or handling, disposal, emission, discharge,
storage or release of Waste that (A) is related in any way to Company's or any
previous

<PAGE> 35

owner's or operator's ownership, operation or occupancy of the business,
properties and assets owned or used by Company, and (B) in whole or in part
occurred, existed, arose out of conditions or circumstances that existed, or
was caused on or before the Closing Date.

6.6. Limitations on Indemnification. Except for any willful or knowing
breach or misrepresentation, as to which claims may be brought without
limitation as to time or amount:

(i) There shall be no time limitation on claims on actions
brought for breach of any representation or warranty made by
Shareholder or Company in or pursuant to Sections 3.1 and 3.2,
and Shareholder hereby waives all applicable statutory limitation
periods with respect thereto.

(ii) Any claim or action brought for breach of any
representation or warranty made by Shareholder with respect to
tax or ERISA matters may be brought at any time until the
underlying tax or ERISA obligation is barred by the applicable
period of limitation under federal and state laws relating
thereto (as such period may be extended by waiver).

(iii) Any claim made by a party hereunder by delivering
written notice of the claim to the Indemnifying Party or Parties,
by filing a suit or action in a court of competent jurisdiction
or a court reasonably believed to be of competent jurisdiction or
by a demand for arbitration in accordance with Article 9 hereof
for breach of a representation or warranty prior to the
termination of the survival period for such claim shall be
preserved despite the subsequent termination of such survival
period.

(iv) If any act, omission, disclosure or failure to
disclosure shall form the basis for a claim for breach of more
than one representation or warranty, and such claims have
different periods of survival hereunder, the termination of the
survival period of one claim shall not affect a party's right to
make a claim based on the breach of representation or warranty
still surviving.

6.6.(b) Amount Limitation. The aggregate amount of the
indemnification obligations of Shareholder pursuant to this Article 6
shall not exceed Four Million Dollars ($4,000,000); provided, however,
that the aggregate indemnification obligation shall be the Purchase
Price on claims or

<PAGE> 36
actions brought for breach of any representation or warranty made by
the Shareholder in or pursuant to Sections 3.1, 3.2, 3.5 and 3.15.

7. CLOSING

The closing of this transaction ("the Closing") shall take place
contemporaneously with the execution and delivery of this agreement at the
offices of Foley & Lardner in San Francisco, located at One Maritime Plaza,
Suite 600, at 7:00 A.M. on October 30, 1998, or at such other hour and place as
the parties hereto shall agree upon in writing. The date hereof is referred to
in this Agreement as the "Closing Date". Unless otherwise indicated, the
transactions contemplated hereby shall be deemed for all purposes to be
effective as of October 1, 1998, which date shall be referred to herein as the
"Effective Date."

7.1. Documents to be Delivered by Company and Shareholder. At the
Closing, Company and Shareholder shall deliver to Buyer the following documents,
in each case duly executed or otherwise in proper form:

7.1.(a) Stock Certificate(s). Stock certificates representing
the Shares, duly endorsed for transfer or with duly executed stock
powers attached, in either case as of the Effective Date.

7.1.(b) Opinion of Counsel. A written opinion of, counsel to
Company and Shareholder, dated as of the Closing Date, addressed to
Buyer, substantially in the form of Exhibit C hereto.

7.1.(c) Consents and Approvals. Executed originals of all
approvals, consents and waivers that are required to effect the
transactions contemplated hereby.

7.1.(d) Estoppel Certificates. An estoppel certificate or status
letter from the landlord under each lease of Real Property, which
estoppel certificate or status letter will certify: (i) the lease is
valid and in full force and effect; (ii) the amounts payable by
Company under the lease and the date to which the same have been paid;
(iii) whether there are, to the knowledge of said landlord, any
defaults thereunder, and, if so, specifying the nature thereof; and
(iv) a statement that the transactions contemplated by this Agreement
will not constitute a default under the lease.

<PAGE> 37
7.1.(e) Employment and Noncompetition Agreement. The Employment
and Noncompetition Agreement referred to in Section 5.1, duly executed
by the persons referred to in such Section.

7.1.(f) Certified Resolutions. Certified copies of the
resolutions of the Board of Directors and the Shareholder of Company,
authorizing and approving this Agreement and the consummation of the
transactions contemplated by this Agreement.

7.1.(h) Incumbency Certificate. Incumbency certificates relating
to each person executing (as a corporate officer or otherwise on
behalf of another person) any document executed and delivered to Buyer
pursuant to the terms hereof.

7.1.(i) General Release. The General Release referred to in
Section 5.3, duly executed by the person referred to in such Section.

7.1.(j) Resignations. The resignation of Robert A. Jocelyn as
President, Chief Financial Officer/Treasurer and a Director, and the
resignation of Sharon E. Jocelyn as Secretary and a Director, of the
Company, effective as of the Closing and in form satisfactory to
Buyer's counsel.

7.1.(k) Affidavit. An affidavit from Company in form and
substance satisfactory to Buyer, to the effect that Company is not a
"foreign person," "foreign corporation," "foreign partnership,"
"foreign trust" or "foreign estate" under Section 1445 of the Code,
and containing all such other information as is required to comply
with the requirements of such Section.

7.1.(l) Other Documents. All other documents, instruments or
writings required to be delivered to Buyer at the Closing pursuant to
this Agreement and such other certificates of authority and documents
as Buyer may reasonably request.

7.2. Documents to be Delivered by Buyer. At the Closing, Buyer shall
deliver to Shareholder the following documents, in each case duly executed or
otherwise in proper form:

7.2.(a) Cash Purchase Price. To Shareholder, a certified or bank
cashier's check (or wire transfer) as required by Section 2.2(a)
hereof.

<PAGE> 38
7.2.(b) Opinion of Counsel. A written opinion of Foley &
Lardner, counsel to Buyer, dated as of the Closing Date, addressed to
Company, in substantially the form of Exhibit D hereto.

7.2.(c) Certified Resolutions. A certified copy of the
resolutions of the Board of Directors of Buyer authorizing and
approving this Agreement and the consummation of the transactions
contemplated by this Agreement.

7.2.(d) Incumbency Certificate. Incumbency certificates relating
to each person executing any document executed and delivered to
Company or Shareholder by Buyer pursuant to the terms hereof.

7.2.(e) Other Documents. All other documents, instruments or
writings required to be delivered to Company at the Closing pursuant
to this Agreement and such other certificates of authority and
documents as Company may reasonably request.

8. TERMINATION

This Agreement may be terminated without further liability of any party at
any time prior to the Closing: (a) by mutual written agreement of Buyer and
Shareholder; or (b) by either Buyer or Shareholder (i) if the Closing shall not
have occurred by 11:59 p.m. Eastern time on the date hereof, provided the
terminating party has not, through breach of a representation, warranty or
covenant, prevented the Closing from occurring at or before such time, or (ii)
if any Government Entity shall have issued an Order enjoining or otherwise
prohibiting the consummation of the transactions contemplated by this
Agreement.

9. RESOLUTION OF DISPUTES

9.1. Arbitration.

9.1.(a) Any dispute, controversy or claim arising out of or
relating to this Agreement or any contract or agreement entered into
pursuant hereto or the performance by the parties of its or their
terms shall be settled by binding arbitration held in Tampa, Florida
in accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect, except as specifically
otherwise provided in this Article 9. Notwithstanding the foregoing,
Buyer may, in its discretion, apply to a court of competent
jurisdiction for equitable relief from any violation or threatened
violation of the covenants of Shareholder under Section 5.2 of this
Agreement, or any covenants not to compete contained in any Employment
and Noncompetition Agreement delivered pursuant to Section 5.1 hereof.

<PAGE> 39

arbitration process on the same terms as the parties hereto. Without
limiting the generality of the foregoing, no claim under Article 6 for
the indemnification of a third-party claim shall be subject to
arbitration under this Article 9 unless the third party bringing such
claim against the indemnitee shall agree in writing to the application
of this Article 9 to the resolution of such claim.

9.2. Arbitrators. If the matter in controversy (exclusive of attorney
fees and expenses) shall appear, as at the time of the demand for arbitration,
to exceed $250,000, then the panel to be appointed shall consist of three
neutral arbitrators; otherwise, one neutral arbitrator.

9.3. Procedures; No Appeal. The arbitrator(s) shall allow such discovery
as the arbitrator(s) determine appropriate under the circumstances and shall
resolve the dispute as expeditiously as practicable, and if reasonably
practicable, within 120 days after the selection of the arbitrator(s). The
arbitrator(s) shall give the parties written notice of the decision, with the
reasons therefor set out, and shall have 30 days thereafter to reconsider and
modify such decision if any party so requests within 10 days after the
decision. Thereafter, the decision of the arbitrator(s) shall be final,
binding, and nonappealable with respect to all persons, including (without
limitation) persons who have failed or refused to participate in the
arbitration process.

9.4. Authority. The arbitrator(s) shall have authority to award relief
under legal or equitable principles, including interim or preliminary relief,
and to allocate responsibility for the costs of the arbitration and to award
recovery of attorneys fees and expenses in such manner as is determined to be
appropriate by the arbitrator(s).

9.6. Confidentiality. All proceedings under this Article 9 and all
evidence given or discovered pursuant hereto, shall be maintained
in confidence by all parties.

9.8. Tolling. All applicable statutes of limitation shall be tolled while
the procedures specified in this Article 9 are pending. The parties will take
such action, if any, required to effectuate such tolling.

<PAGE> 40

10. MISCELLANEOUS

10.1. Disclosure Schedule. The Schedules have been compiled in a bound
volume (the "Disclosure Schedule"), executed by Shareholder and dated and
delivered to Buyer on the date of this Agreement. Information set forth in the
Disclosure Schedule specifically refers to the article and section of this
Agreement to which such information is responsive and such information shall
not be deemed to have been disclosed with respect to any other article or
section of this Agreement or for any other purpose. The Disclosure Schedule
includes a table of contents and/or index to all of the information and
documents contained therein. The Disclosure Schedule shall not vary, change or
alter the language of the representations and warranties contained in this
Agreement and, to the extent the language in the Disclosure Schedule does not
conform in every respect to the language of such representations and
warranties, such language in the Disclosure Schedule shall be disregarded and
be of no force or effect.

10.2. Further Assurance. From time to time, at Buyer's request and
without further consideration, Company and Shareholder will execute and deliver
to Buyer such documents and take such other action as Buyer may reasonably
request in order to consummate more effectively the transactions contemplated
hereby.

10.3. Disclosures and Announcements. Announcements concerning the
transactions provided for in this Agreement by Buyer, Company or Shareholder
shall be subject to the approval of the other parties in all essential
respects, except that approval of the Shareholder or Company shall not be
required as to any statements and other information which Buyer may submit to
the Securities and Exchange Commission, the Nasdaq Stock Market ("Nasdaq") or
Buyer's stockholders or be required to make pursuant to any rule or regulation
of the Securities and Exchange Commission or Nasdaq, or otherwise required by
law.

10.4. Assignment; Parties in Interest.

10.4.(a) Assignment. Except as expressly provided herein, the
rights and obligations of a party hereunder may not be assigned,
transferred or encumbered without the prior written consent of the
other parties. Notwithstanding the foregoing, Buyer may, without
consent of any other party, (i) merge Company with and into Buyer
and/or any subsidiary of Buyer, or (ii) cause one or more subsidiaries
of Buyer to carry out all or part of the transactions contemplated
hereby; provided, however, that Buyer shall, nevertheless, remain
liable for all of its obligations, and those of any such subsidiary,
to Shareholder hereunder.

<PAGE> 41

10.6. Amendment and Modification. Buyer and Shareholder may amend, modify
and supplement this Agreement in such manner as may be agreed upon in writing
between Buyer and Shareholder.

10.7. Notice. All notices, requests, demands and other communications
hereunder shall be given in writing and shall be: (a) personally delivered;
(b) sent by telecopier, facsimile transmission or other electronic means of
transmitting written documents; or (c) sent to the parties at their respective
addresses indicated herein by registered or certified U.S. mail, return receipt
requested and postage prepaid, or by private overnight mail courier service.
The respective addresses to be used for all such notices, demands or requests
are as follows:

(a) If to Buyer, to:

(with a copy to)

Foley & Lardner
100 North Tampa Street, Suite 2700
Tampa, Florida 33602-5804
Attention: Todd B. Pfister
Facsimile: (813) 221-4210

or to such other person or address as Buyer shall furnish to Shareholder in
writing.

(b) If to Shareholder, to:
Mr. Robert A. Jocelyn
c/o Western Pension Service Corporation
1000 Fourth Street, Suite 300
San Rafael, California 94901
Facsimile: (415) 459-5286

(with a copy to)

<PAGE> 42

Christian & Barton, L.L.P.
909 East Main Street, Suite 1200
Richmond, Virginia 23219
Attention: David I. Greenberg, Esq.
Facsimile: (804) 697-4112

or to such other person or address as Shareholder shall furnish to Buyer in
writing.

(c) If to Company, to:
Western Pension Service Corporation
c/o ABR Information Services, Inc.
34125 U.S. Highway 19 North
Palm Harbor, Florida 34684-2116
Attention: James E. MacDougald
Chairman of the Board, President and
Chief Executive Officer
Facsimile: (727) 789-3854

(with a copy to)

Foley & Lardner
100 North Tampa Street, Suite 2700
Tampa, Florida 33602-5804
Attention: Todd B. Pfister
Facsimile: (813) 221-4210

Any notice to Company given after Closing shall also be given in the same
manner to Buyer.

If personally delivered, such communication shall be deemed delivered upon
actual receipt; if electronically transmitted pursuant to this paragraph, such
communication shall be deemed delivered the next business day after
transmission (and sender shall bear the burden of proof of delivery); if sent
by overnight courier pursuant to this paragraph, such communication shall be
deemed delivered upon receipt; and if sent by U.S. mail pursuant to this
paragraph, such communication shall be deemed delivered as of the date of
delivery indicated on the receipt issued by the relevant postal service, or, if
the addressee fails or refuses to accept delivery, as of the date of such
failure or refusal. Any party to this Agreement may change its address for the
purposes of this Agreement by giving notice thereof in accordance with this
Section.

10.8. Expenses.

10.8.(a) Brokerage. Except as to (i) Broadview Associates LLC,
which shall be compensated by Buyer, and (ii) Crestar Securities
Corporation and TMark Associates, Ltd., which shall be compensated by
Shareholder, Shareholder and Buyer each represent and warrant to each
other that there is no

<PAGE> 43

broker involved or in any way connected with the transfer provided for
herein on their behalf respectively (and Shareholder represents and
warrants that there is no broker involved on behalf of Company) and
each agrees to hold the other harmless from and against all other
claims for brokerage commissions or finder's fees in connection with
the execution of this Agreement or the transactions provided for
herein.

10.8.(b) Expenses to be Paid by Shareholder. Shareholder
(individually, and not through the Company) shall pay, and shall
indemnify, defend and hold Buyer and Company harmless from and
against, each of the following:

(i) Transfer Taxes. Any sales, use, excise, transfer or
other similar tax imposed with respect to the transactions
provided for in this Agreement, and any interest or penalties
related thereto.

(ii) Professional Fees. All fees and expenses, including
accounting and other professional fees, incurred in connection
with or relating to the preparation and provision of the
financial statements of the Company as set forth in Section 3.4
above.

10.8.(c) Other. Except as otherwise provided herein, each of the
parties shall bear its own expenses and the expenses of its counsel
and other agents in connection with the transactions contemplated
hereby.

10.9. Entire Agreement. This instrument embodies the entire agreement
between the parties hereto with respect to the transactions contemplated
herein, and there have been and are no agreements, representations or
warranties between the parties other than those set forth or provided for
herein.

10.10. Counterparts; Facsimile Signatures. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. This Agreement
and the Ancillary Instruments may be effective upon the execution and delivery
by any party of facsimile copies of signature pages hereto and thereto duly
executed by such party; provided, however, that any party delivering a
facsimile signature page covenants and agrees to deliver promptly after the
date hereto two (2) original copies to the other parties hereto.

<PAGE> 44

10.11. Headings. The headings in this Agreement are inserted for
convenience only and shall not constitute a part hereof.

10.12. Glossary of Terms. The following sets forth the location of
certain definitions of capitalized terms defined in the body of this Agreement:

"Act" - Section 3.26
"Affiliate" - Section 3.7.(k)
"Ancillary Instruments" - Section 3.2.(a)
"Buyer's Affiliates" - Section 6.1
"CERCLA" - Section 3.10.(c)
"Claim" - Section 6.1
"Closing" - Preamble to Article 9
"Closing Date" - Section 7
"Code" - Section 3.5.(e)
"Company Employees" - Section 3.15.(a)
"Contingent Payment" - Section 2.1
"Disclosure Schedule" - Article 10
"Effective Date" - Section 7
"Employee Plans/Agreement(s)" - Section 3.15.(a)
"Environmental Laws" - Section 3.10.(c)
"ERISA" - Section 3.15.(a)
"Facilities" - Second Recital
"Government Entities" - Section 3.3
"Indemnified Party" - Section 6.3.(a)
"Indemnifying Party" - Section 6.3.(a)
"Laws" - Section 3.3
"Lien" - Section 3.11.(a)
"Litigation" - Section 3.9
"Orders" - Section 3.3
"PBGC" - Section 3.15.(b)(ii)
"Purchase Price" - Section 2.1
"Real Property" - Section 3.11.(c)
"Recent Balance Sheet" - Section 3.4
"Services" - Section 3.19
"Settlement Date" - Section 2.2.(c)
"Shares" - First Recital
"Trade Rights" - Section 3.17
"Waste" - Section 3.10.(c)

<PAGE> 45

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.

BUYER:
ABR INFORMATION SERVICES, INC.,
a Florida corporation

/S/ Dennis A. Sweeney
By:_______________________________

Senior Vice President
Title: _____________________________

COMPANY:

WESTERN PENSION SERVICE CORPORATION,
a California corporation

/s/ Robert A. Jocelyn
By:_______________________________
Robert A. Jocelyn
President

SHAREHOLDER:

/s/ Robert A. Jocelyn
__________________________________
Robert A. Jocelyn, Individually

<PAGE> 1
EXHIBIT 10.20

STOCK PURCHASE AGREEMENT

Dated November 10, 1998,
and effective as of November 1, 1998,

by and among

ABR INFORMATION SERVICES, INC.,
a Florida corporation,

BMC CONSULTANTS, INC.,
a Colorado corporation,

JEFFREY J. BERENDS,
D'NELLE L. MACALUSO,
FRANK J. DOBIS,
SCOTT A. HITTNER
CAROL L. CARLSON,
THOMAS W. NIELSEN, JR.,
WALTER L. MALLES, JR. and
GENE R. ETZIG,

as Shareholders,

and

JEFFREY J. BERENDS,
as Shareholders' Agent

<PAGE> 2

STOCK PURCHASE AGREEMENT
TABLE OF CONTENTS

<TABLE>
<S> <C> <C>
1. PURCHASE AND SALE OF SHARES..............................................................................1

2. PURCHASE PRICE -PAYMENT..................................................................................1
2.1. Purchase Price..................................................................................1
2.2. Payment of Purchase Price.......................................................................3

3. REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE PRINCIPAL SHAREHOLDER..................................6
3.1. Corporate.......................................................................................6
3.2. Shareholders....................................................................................7
3.3. No Violation....................................................................................8
3.4. Financial Statements............................................................................8
3.5. Tax Matters.....................................................................................9
3.6. Accounts Receivable............................................................................10
3.7. Absence of Certain Changes.....................................................................10
3.8. Absence of Undisclosed Liabilities.............................................................12
3.9. No Litigation..................................................................................12
3.10. Compliance With Laws and Orders................................................................12
3.11. Title to and Condition of Properties...........................................................14
3.12. Insurance......................................................................................16
3.13. Contracts and Commitments......................................................................17
3.14. Labor Matters..................................................................................18
3.15. Employee Benefit Plans.........................................................................19
3.16. Employment Compensation........................................................................23
3.17. Trade Rights...................................................................................23
3.18. Major Customers and Suppliers..................................................................24
3.19. Service Warranty and Liability.................................................................24
3.20. Bank Accounts..................................................................................25
3.21. Affiliates' Relationships to Company...........................................................25
3.22. Assets Necessary to Business...................................................................25
3.23. No Brokers or Finders..........................................................................25
3.24. Year 2000 Compliance...........................................................................25
3.25. Systems Performance............................................................................26
3.26. Software Ownership; Non Infringement...........................................................26
3.27. Disclosure.....................................................................................26

4. REPRESENTATIONS AND WARRANTIES OF BUYER.................................................................27
4.1. Corporate......................................................................................27
4.2. Authority......................................................................................27
4.3. No Brokers or Finders..........................................................................27
</TABLE>

<PAGE> 3

<TABLE>
<S> <C> <C>
4.4. Disclosure.....................................................................................27
4.5. Investment Intent..............................................................................28

5. COVENANTS...............................................................................................28
5.1. Employment and Noncompetition Agreements.......................................................28
5.2. Noncompetition; Confidentiality................................................................28
5.3. General Releases...............................................................................29
5.4. Section 338(h)(10) Election....................................................................29
5.5. Employees of Company...........................................................................30

6. INDEMNIFICATION.........................................................................................30
6.1. By Principal Shareholder.......................................................................30
6.2. By Buyer.......................................................................................31
6.3. Indemnification of Third-Party Claims..........................................................31
6.4. Payment........................................................................................32
6.5. Indemnification for Environmental Matters......................................................32
6.6. Limitations on Indemnification.................................................................32
6.7. No Waiver......................................................................................34

7. CLOSING.................................................................................................34
7.1. Documents to be Delivered by Company and Shareholders..........................................34
7.2. Documents to be Delivered by Buyer.............................................................35

8. TERMINATION.............................................................................................36

9. RESOLUTION OF DISPUTES..................................................................................36
9.1. Arbitration....................................................................................36
9.2. Arbitrators....................................................................................36
9.3. Procedures; No Appeal..........................................................................37
9.4. Authority......................................................................................37
9.5. Entry of Judgment..............................................................................37
9.6. Confidentiality................................................................................37
9.7. Continued Performance..........................................................................37
9.8. Tolling........................................................................................37

10. MISCELLANEOUS...........................................................................................37
10.1. Disclosure Schedule............................................................................37
10.2. Further Assurance..............................................................................38
10.3. Disclosures and Announcements..................................................................38
10.4. Assignment; Parties in Interest................................................................38
10.5. Law Governing Agreement........................................................................38
10.6. Amendment and Modification.....................................................................38
10.7. Notice.........................................................................................39
10.8. Expenses.......................................................................................40
10.9. Shareholders' Agent; Power of Attorney.........................................................41
10.10. Entire Agreement...............................................................................42
</TABLE>

<PAGE> 4

<TABLE>
<S> <C> <C>
10.11. Counterparts; Facsimile Signatures..................................42
10.12. Headings............................................................42
10.13. Glossary of Terms...................................................43

</TABLE>

iii
<PAGE> 5

Disclosure Schedule

Schedule 3.1.(c) Foreign Corporation Qualification
Schedule 3.1.(e) Directors and Officers of the Company
Schedule 3.1.(f) Shareholder List
Schedule 3.3 Violation, Conflict, Default
Schedule 3.4 Financial Statements
Schedule 3.5.(b) Tax Returns (Exceptions to Representations)
Schedule 3.5.(c) Tax Audits
Schedule 3.5.(e) Tax, Other
Schedule 3.6 Accounts Receivable (Aged Schedule)
Schedule 3.7 Certain Changes
Schedule 3.8 Off-Balance Sheet Liabilities
Schedule 3.9 Litigation Matters
Schedule 3.10.(a) Non-Compliance with Laws
Schedule 3.10.(b) Licenses and Permits
Schedule 3.10.(c) Environmental Matters (Exceptions to Representations)
Schedule 3.11 Liens
Schedule 3.11.(c) Real Property
Schedule 3.12 Insurance
Schedule 3.13.(b) Personal Property Leases
Schedule 3.13.(g) Collective Bargaining Agreements
Schedule 3.13.(h) Loan Agreements, etc.
Schedule 3.13.(i) Guarantees
Schedule 3.13.(l) Material Contracts
Schedule 3.14 Labor Matters
Schedule 3.15.(a) Employee Plans/Agreements
Schedule 3.16 Employment Compensation
Schedule 3.17 Trade Rights
Schedule 3.18.(a) Major Customers
Schedule 3.18.(b) Major Suppliers
Schedule 3.18.(c) Sales Representatives
Schedule 3.19 Service Warranty, Warranty Expense and Liability Claims
Schedule 3.20 Bank Accounts
Schedule 3.21.(a) Contracts with Affiliates
Schedule 3.21.(c) Obligations of and to Affiliates
Schedule 3.24 Year 2000 Noncompliance
Schedule 3.26 Software Ownership Exceptions

<PAGE> 6

STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT (this "Agreement"), dated November 10, 1998, and
effective as of November 1, 1998, by and among ABR Information Services, Inc., a
Florida corporation ("Buyer"), BMC Consultants, Inc., a Colorado corporation
("Company"), Jeffrey J. Berends, D'Nelle L. Macaluso, Frank J. Dobis, Scott A.
Hittner, Carol L. Carlson, Thomas W. Nielsen, Jr., Walter L. Malles, Jr. and
Gene R. Etzig (individually "Shareholder" and together the "Shareholders"), and
Jeffrey J. Berends (the "Shareholders' Agent").

RECITALS

1. Company is engaged in the business of providing retirement plan
administration and consulting services to third parties (the "BMC Business").
Shareholders own all of the issued and outstanding shares (the "Shares") of
capital stock of Company.

2. Company's facilities consist solely of leased offices at 1st Bank
Building, Suite 219, 5105 DTC Parkway, Englewood, Colorado 80111 (the
"Facilities").

3. Buyer desires to purchase the Shares from Shareholders and Shareholders
desire to sell the Shares to Buyer, upon the terms and conditions herein set
forth.

4. Shareholders wish to designate Jeffrey J. Berends their agent and
attorney-in-fact, with the authority to act on their behalf in connection with
the sale of the Shares to Buyer.

1. PURCHASE AND SALE OF SHARES

Subject to the terms and conditions of this Agreement, effective as of the
Effective Date (as hereinafter defined) Shareholders shall sell to Buyer and
Buyer shall purchase from Shareholders all of the Shares.

2. PURCHASE PRICE - PAYMENT

2.1. Purchase Price.

2.1.(a) Amount. The aggregate purchase price (the "Purchase
Price") payable for the Shares shall be the sum of (a) THREE MILLION
DOLLARS ($3,000,000) and (b) a contingent payment (the "Contingent
Payment") based on the BMC Business' net earnings before income taxes
("Pre-Tax Earnings") for the twelve-month period commencing as of
November 1,

<PAGE> 7

1998 (the "Contingent Payment Period"). All payments of Purchase Price
are to be made for pro rata distribution among the Shareholders in
accordance with their respective shareholdings in the Company as set
forth in Schedule 3.1(f)hereto (except that (i) an aggregate of Eight
Hundred Eighty Thousand Dollars ($880,000) otherwise allocable and
distributable to Jeffrey J. Berends (the "Principal Shareholder") shall
be subject to the holdback provisions of Sections 2.2(c) and 2.2(d)
below and (ii) Three Hundred Seventy-Five Thousand Dollars ($375,000)
otherwise allocable and distributable to the Principal Shareholder shall
be paid directly to the Company as provided in Section 2.2 (a) below).

2.1.(b) Calculation of Contingent Payment. The Contingent
Payment shall equal (i) THREE HUNDRED THOUSAND DOLLARS ($300,000), in
the event the BMC Business' Pre-Tax Earnings for the Contingent Payment
Period equals or exceeds $600,000, or (ii) EIGHT HUNDRED THOUSAND
DOLLARS ($800,000), in the event the BMC Business' Pre-Tax Earnings for
the Contingent Payment Period equals or exceeds $800,000. No Contingent
Payment shall be due or payable in the event the BMC Business' Pre-Tax
Earnings for the Contingent Payment Period is less than $600,000.

2.1.(c) Calculation of Pre-Tax Earnings. The calculation of the
BMC Business' Pre-Tax Earnings for the Contingent Payment Period shall
include revenue received from retirement plan administration and
consulting services but shall not include revenue received from COBRA
administration services or other services not performed by Company as of
the date hereof but offered by Buyer or any of its subsidiaries or
affiliates. Except as expressly provided herein, the calculation of
Pre-Tax Earnings shall be made in accordance with generally accepted
accounting principles applied on a consistent basis, subject to the
following adjustments:

(i) Any depreciation or amortization adjustments resulting
solely from the transactions contemplated by this Agreement
shall not be included for purposes of calculating Pre-Tax
Earnings for the Contingent Payment Period.

(ii) Notwithstanding Company's actual expenses for the
Contingent Payment Period relating to items and functions (such
as property and casualty insurance, errors and omissions
insurance, health and welfare programs and human resource
functions) that Company and Buyer mutually agree shall be
provided by Buyer or another subsidiary thereof, Company shall
accrue as an expense for purposes of calculating Pre-Tax
Earnings for the Contingent Payment Period the same dollar
amount as it accrued in the twelve months preceding the
Effective Date with respect to such items and functions.

2
<PAGE> 8

(iii) The calculation of Pre-Tax Earnings for the
Contingent Payment Period shall not exclude any expense item (or
series of related items) relating to personnel matters or
exceeding $10,000 annually, unless such exclusion has been
preapproved in writing by Buyer. The parties hereby agree that
the calculation of Pre-Tax Earnings shall exclude legal and
accounting fees associated with the transaction contemplated
hereby because the Closing Balance Sheet (as defined in Section
3.4) reflects all such accrued costs or such costs will be paid
by the Principal Shareholder in accordance with the Section 10.8
hereof. Additionally, such costs (other than those paid directly
by the Principal Shareholder), excluding the first $25,000
(which Buyer has agreed to pay), will be included in the minimum
net worth and minimum working capital calculations contemplated
in Section 3.4 hereof.

(iv) Company shall review with Buyer on a monthly basis any
and all expense items Company intends to exclude for purposes of
calculating Pre-Tax Earnings for the Contingent Payment Period.

(v) In the event Buyer (or any subsidiary thereof)
generates new retirement plan administration or consulting
services business for Company during the Contingent Payment
Period, and/or Company generates new COBRA or pension
administration services business (or other new business for
similar administrative services not performed by Company as of
the date hereof), Buyer and Company agree to make a reasonable
allocation of sales and other reasonable costs associated with
obtaining such new business for purposes of calculating
Company's Pre-Tax Earnings for the Contingent Payment Period.

2.1.(d) Conduct of Business During the Contingent Payment
Period. During the Contingent Payment Period, Buyer covenants and agrees
that Buyer will, and if appropriate will cause its Affiliates to, (i)
not move the business location of Company more than 30 miles from the
business premises of the BMC Business as of the date hereof, and (ii)
permit the Principal Shareholder (subject to his employment agreement
with Company) to manage and control the day-to-day affairs of the BMC
Business.

2.2. Payment of Purchase Price. The Purchase Price shall be paid by
Buyer as follows:

2.2.(a) Cash to Shareholders' Agent. At the Closing, Buyer shall
deliver to the Shareholders' Agent the sum of One Million Seven Hundred
Forty-Five Thousand Dollars ($1,745,000). Additionally, Buyer shall
deliver to the Company the sum of Three Hundred Seventy-Five Thousand
Dollars ($375,000), which amount shall constitute payment in full of
that certain

3
<PAGE> 9

Promissory Note, dated October 29, 1998, of the Principal Shareholder in
favor of the Company in the principal amount of $375,000.

2.2.(b) Contingent Payment. The initial calculation of the
Contingent Payment shall be made by Buyer, which shall deliver its
calculation (setting forth in reasonable detail Buyer's calculation of
the BMC Business' Pre-Tax Earnings and the various elements thereof) on
or before January 31, 2000 to Shareholders' Agent for his review and
comment. If Buyer and Shareholder's Agent are able to agree in writing
upon the amount of the Contingent Payment within fifteen (15) days
following delivery of the initial calculation to Shareholders' Agent,
then Buyer shall pay such amount. Such payment of the Contingent
Payment, if any, shall be made to the Shareholders' Agent within fifteen
(15) days following the date of such written agreement but in no event
earlier than January 1, 2000. In the event Buyer and Shareholders' Agent
cannot agree on the amount of the Contingent Payment by March 1, 2000,
then the determination of the Contingent Payment shall be submitted to
binding arbitration in accordance with Article 9 of this Agreement and
shall be paid on the later of (i) January 2, 2000, or (ii) 5 days after
a determination pursuant to such arbitration procedures.

2.2.(c) Purchase Price Holdback for Securing Minimum Net Worth
and Minimum Working Capital Requirements in the Closing Balance Sheet.
On the Closing Date, Buyer will transfer the sum of Three Hundred Eighty
Thousand Dollars ($380,000) to a segregated interest-bearing account
with a bank or other financial institution with a combined capital and
surplus in excess of $50,000,000, which amount shall be held by Buyer in
such account for the purpose of securing the representation contained in
Section 3.4 hereof that the Closing Balance Sheet (as defined in Section
3.4) will, upon finalization following receipt of the Recent Balance
Sheet, reflect that the Company had a net worth (i.e., stockholders'
equity) of at least $380,000 and working capital (i.e., current assets
less current liabilities) of at least $130,000 as of October 31, 1998.
If the Closing Balance Sheet, upon finalization, does not reflect that
the Company had a net worth of at least $380,000 or working capital of
at least $130,000 as of October 31, 1998, then Buyer shall deliver to
Principal Shareholder that portion of the funds held in the segregated
account equal to (x) $380,000, less the greater of (y) the amount by
which the net worth as reflected on the Closing Balance Sheet falls
below $380,000, or (z) the amount by which the working capital as
reflected on the Closing Balance Sheet falls below $130,000. If the
Closing Balance Sheet, upon finalization, reflects that the Company had
a net worth of at least $380,000 and working capital of at least
$130,000 as of October 31, 1998, then Buyer shall deliver to Principal
Shareholder the entire $380,000 held in the segregated account. Buyer
shall deliver the requisite amount to the Principal Shareholder promptly
after receipt of the Recent Balance Sheet and finalization of the
Closing Balance Sheet.

<PAGE> 10

2.2.(d) Purchase Price Holdback for Securing the General
Indemnification Obligations of Company and the Principal Shareholder.

(i) On the Closing Date, Buyer will transfer the sum of
Five Hundred Thousand Dollars ($500,000) to a segregated
interest-bearing account with a bank or other financial
institution with a combined capital and surplus in excess of
$50,000,000, which amount shall be held by Buyer in such account
for the purpose of securing the indemnification obligations of
Company and the Principal Shareholder under this Agreement. For
purposes hereof, "Holdback Period" shall mean the period
commencing on the date hereof and ending five (5) months from
the Closing Date, subject to extension as hereinafter provided.

(ii) If, prior to the expiration of the Holdback Period,
Buyer determines to assert a claim for indemnification under
Article 6 of this Agreement, then Buyer shall give the Principal
Shareholder written notice of such claim (for purposes of this
Section 2.2(c), a "Claim Notice"), specifying in reasonable
detail the basis therefor and the amount and calculation
thereof. If the Principal Shareholder does not deliver to Buyer
written notice of an objection to the claim for indemnification
within twenty (20) days after receipt of the Claim Notice
relating thereto, Buyer shall be entitled to withdraw the dollar
amount of its claim (as set forth in the Claim Notice) from the
segregated account. If the Principal Shareholder shall timely
deliver to Buyer such written notice of objection, then Buyer
shall not make a withdrawal from the segregated account with
respect to the claim set forth in the Claim Notice until: (x)
Buyer and Principal Shareholder have executed joint written
instructions referring to such Claim Notice and directing Buyer
to withdraw, for Buyer's own account, funds from the segregated
account; or (y) Buyer has received a copy of a judgment, decree
or order of a court, or copy of an arbitration award,
adjudicating the dispute and determining an amount with respect
to such claim for indemnification; whereupon Buyer shall
withdraw from the segregated account, for Buyer's own account,
such amount as provided therein.

(iii) If Buyer has not delivered a Claim Notice to
Principal Shareholder prior to the expiration of the Holdback
Period, or if any and all Claim Notices delivered to Principal
Shareholder during the Holdback Period have been resolved
pursuant to subsection (ii) above, then Buyer shall deliver to
Principal Shareholder the portion of the funds held in the
segregated account equal to (x) $500,000, less (y) any amounts
withdrawn by Buyer as provided herein, plus (z) any interest
earned with respect to such balance. Buyer shall deliver such
amount to the Principal Shareholder promptly after the
expiration of the Holdback Period, unless one or more Claim
Notice(s) have not been finally resolved pursuant to

<PAGE> 11

subsection (ii) above, in which case Buyer shall retain such
amount in the segregated account until: (a) Buyer and Principal
Shareholder have executed joint written instructions referring
to such Claim Notice(s) and directing Buyer as to the
disbursement of the funds in the segregated account; or (b)
Buyer has received a copy of a judgment, decree or order of a
court, or copy of an arbitration award, adjudicating the dispute
and determining an amount with respect to such Claim Notice(s);
whereupon Buyer shall disburse the funds in the segregated
account as provided therein.

2.2.(e) Method of Payment. All payments under this Section 2.2
shall be made in the form of certified or bank cashier's check payable
to the order of the recipient or, at the recipient's option, by wire
transfer of immediately available funds to an account designated by the
recipient not less than 48 hours prior to the time for payment specified
herein.

3. REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE
PRINCIPAL SHAREHOLDER

The Company and the Principal Shareholder, jointly and severally, make
the following representations and warranties to Buyer, each of which was true
and correct on the Effective Date (other than Section 3.2(b)), remains true as
of the Closing Date, shall be unaffected by any investigation heretofore or
hereafter made by or on behalf of Buyer, or any knowledge of Buyer other than as
specifically disclosed in the Disclosure Schedule delivered to Buyer at the time
of the execution of this Agreement, and shall survive the Closing of the
transactions provided for herein.

3.1. Corporate.

3.1.(a) Organization. Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Colorado.

3.1.(b) Corporate Power. Company has all requisite corporate
power and authority to own, operate and lease its properties and to
carry on its business as and where such is now being conducted.

3.1.(c) Qualification. Company is duly licensed or qualified to
do business as a foreign corporation, and is in good standing, in each
jurisdiction wherein the character of the properties owned or leased by
it, or the nature of its business, makes such licensing or qualification
necessary. The states in which Company is licensed or qualified to do
business are listed in Schedule 3.1(c).

3.1.(d) Subsidiaries. Company does not own any interest in any
corporation, partnership or other entity.

<PAGE> 12
3.1.(e) Corporate Documents, etc. The copies of the Articles of
Incorporation and By-Laws of the Company, including any amendments thereto,
which have been delivered by Company to Buyer are true, correct and
complete copies of such instruments as presently in effect. The corporate
minute book and stock records of the Company which have been furnished to
Buyer for inspection are true, correct and complete and accurately reflect
all material corporate action taken by the Company. The directors and
officers of the Company are listed in Schedule 3.1.(e).

3.1.(f) Capitalization of the Company. The authorized capital stock of
the Company consists entirely of 10,000 shares of common stock, no par
value per share. No shares of such capital stock are issued or outstanding
except for 2,406 shares of common stock of the Company which are owned of
record and beneficially by Shareholders in the respective numbers set forth
in Schedule 3.1.(f). All such shares of capital stock of the Company are
validly issued, fully paid and nonassessable. There are no (a) securities
convertible into or exchangeable for any of the Company's capital stock or
other securities, (b) options, warrants or other rights to purchase or
subscribe to capital stock or other securities of the Company or securities
which are convertible into or exchangeable for capital stock or other
securities of the Company, or (c) contracts, commitments, agreements,
understandings or arrangements of any kind relating to the issuance, sale
or transfer of any capital stock or other equity securities of the Company,
any such convertible or exchangeable securities or any such options,
warrants or other rights.

3.2. Shareholders.

3.2.(a) Power. Each Shareholder has full power, legal right and
authority to enter into, execute and deliver this Agreement and the other
agreements, instruments and documents contemplated hereby and to which such
shareholder is a party (such other documents sometimes referred to herein
as "Ancillary Instruments"), and to carry out the transactions contemplated
hereby.

3.2.(b) Validity. This Agreement has been duly and validly executed
and delivered by each Shareholder and is, and when executed and delivered
each Ancillary Instrument to which such shareholder is a party will be, the
legal, valid and binding obligation of such Shareholder, enforceable in
accordance with its terms, except as such may be limited by bankruptcy,
insolvency, reorganization or other laws affecting creditors' rights
generally, and by general equitable principles.

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<PAGE> 13
without limitation, voting trusts or agreements, proxies, marital or
community property interests.

3.3. No Violation. Except as set forth on Schedule 3.3, neither the
execution and delivery of this Agreement or the Ancillary Instruments nor the
consummation by Company and Shareholders of the transactions contemplated hereby
and thereby (a) will violate any statute, law, ordinance, rule or regulation
(collectively, "Laws") or any order, writ, injunction, judgment, plan or decree
(collectively, "Orders") of any court, arbitrator, department, commission,
board, bureau, agency, authority, instrumentality or other body, whether
federal, state, municipal, foreign or other (collectively, "Government
Entities"), (b) will require any authorization, consent, approval, exemption or
other action by or notice to any Government Entity (including, without
limitation, under any "plant-closing" or similar law), or (c) subject to
obtaining the consents referred to in Schedule 3.3, will violate or conflict
with, or constitute a default (or an event which, with notice or lapse of time,
or both, would constitute a default) under, or will result in the termination
of, or accelerate the performance required by, or result in the creation of any
Lien upon any of the assets of Company (or the Shares) under, any term or
provision of the Articles of Incorporation or By-Laws of Company or of any
contract, commitment, understanding, arrangement, agreement or restriction of
any kind or character to which Company or, to the knowledge of the Principal
Shareholder (with respect to the other Shareholders only), any Shareholder is a
party or by which Company or any Shareholder or any of its or their assets or
properties may be bound or affected.

3.4. Financial Statements. Included as Schedule 3.4 are true and
complete copies of (i) the current draft of the preliminary audit report and
financial statements of Company consisting of (a) a balance sheet of Company as
of December 31, 1997, and the related statements of income and cash flows for
the year then ended (including the notes contained therein or annexed thereto)
and (b) a balance sheet of Company as of September 30, 1998 and the related
statements of income and cash flows for the nine months then ended (including
the notes contained therein or annexed thereto), and (ii) the current draft of
the balance sheet of the Company as of October 31, 1998, and the related
statements of income and cash flows for the ten months then ended (including the
notes contained therein or annexed thereto). The Principal Shareholder hereby
covenants, agrees, represents and warrants that (a) the final audited financial
statements will be delivered to Buyer on or before November 20, 1998, and will
be reported on, and accompanied by, the signed, unqualified opinions of Grant
Thornton, LLP, independent auditors for Company for such periods and (b) the
final Closing Balance Sheet (as defined below) will be delivered simultaneously
therewith. The parties hereto covenant and agree that upon receipt, such audited
and unaudited financial statements shall be deemed for all purposes to
constitute a part of Schedule 3.4 to the Disclosure Schedules as if they had
been part of such schedule as of the delivery thereof on November 10, 1998. The
final audited balance sheet of the Company as of September 30, 1998 is herein
referred to as the "Recent Balance Sheet" and the final unaudited balance sheet
of the Company as of October 31, 1998 is herein referred to as the "Closing
Balance Sheet." All of such financial statements (including all notes and
schedules contained therein or annexed thereto) are and will be true, complete
and accurate, have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis, prepared in accordance with
the

8
<PAGE> 14

books and records of Company, and fairly present, in accordance with
generally accepted accounting principles, the assets, liabilities and financial
position, the results of operations and cash flows of Company as of the dates
and for the years and periods indicated. In addition to the foregoing, the
Principal Shareholder hereby represents and warrants that the Closing Balance
Sheet will, upon receipt, reflect that the Company had a net worth (i.e.,
stockholders' equity) of at least $380,000 and working capital (i.e., current
assets less current liabilities) of at least $130,000 as of October 31, 1998.

3.5. Tax Matters.

3.5.(a) Provision For Taxes. The provision made for taxes on the
Closing Balance Sheet is sufficient for the payment, either currently or on
a deferred basis, of all federal, state, foreign, county, local and other
income, ad valorem, excise, profits, franchise, occupation, property,
payroll, sales, use, gross receipts and other taxes (and any interest and
penalties) and assessments, whether or not disputed, at the date of the
Closing Balance Sheet and for all years and periods prior thereto. Since
the date of the Recent Balance Sheet, Company has not incurred any taxes
other than taxes incurred in the ordinary course of business consistent in
type and amount with past practices of Company.

3.5.(b) Tax Returns Filed. Except as set forth on Schedule 3.5.(b),
all federal, state, foreign, county, local and other tax returns required
to be filed by or on behalf of Company have been timely filed and when
filed were true and correct in all material respects, and the taxes shown
as due thereon were paid or adequately accrued. True and complete copies of
all tax returns or reports filed by Company for each of its three most
recent fiscal years have been delivered to Buyer. Company has duly withheld
and paid all taxes which it is required to withhold and pay relating to
salaries and other compensation heretofore paid to the employees of
Company.

3.5.(c) Tax Audits. The federal and state income tax returns of
Company have not been audited by the Internal Revenue Service or any state
taxing authorities for any period, and Company has not received from the
Internal Revenue Service or from the tax authorities of any state, county,
local or other jurisdiction any notice of underpayment of taxes or other
deficiency which has not been paid nor any objection to any return or
report filed by Company. There are outstanding no agreements or waivers
extending the statutory period of limitations applicable to any tax return
or report.

3.5.(d) No Consolidated Group. Company has never been a member of an
affiliated group of corporations that filed a consolidated tax return.
Company does not have any liability for the taxes of any person or entity
under Sections 1.1502-6 or 1.1502-78 of Title 26 of the Code of Federal

9
<PAGE> 15
Regulations (or any similar provisions of state, local or foreign income
tax laws).

3.5.(e) S Corporation. Company properly and timely filed a valid
election under Section 1362 of the Internal Revenue Code of 1986, as
amended (the "Code"), to be treated as an S corporation ("S Corp") as
defined under Section 1361 of the Code for federal income tax purposes
effective from January 1, 1991 and has corresponding elections in effect
under the laws of Colorado. Such elections have remained in effect since
January 1, 1991. Except for transactions contemplated by this Agreement,
neither Company nor any of the Shareholders has taken any action, nor has
any event occurred, that would result in the revocation or termination of
any of such elections. Company is not subject to the tax imposed by Section
1374 of the Code (or any equivalent state statute) and Company does not
have a "net unrealized built-in gain" as such phrase is defined in Section
1374(d) of the Code (or any equivalent state statute).

3.5.(f) Other. Except as set forth in Schedule 3.5.(f), Company has
not (i) filed any consent or agreement under Section 341(f) of the Internal
Revenue Code of 1986, as amended (the "Code"), (ii) applied for any tax
ruling, (iii) entered into a closing agreement with any taxing authority,
(iv) filed an election under Section 338(g) or Section 338(h)(10) of the
Code (nor has a deemed election under Section 338(e) of the Code occurred),
except as contemplated hereby, (v) made any payments, or been a party to an
agreement (including this Agreement) that under any circumstances could
obligate it to make payments that will not be deductible because of Section
280G of the Code, or (vi) been a party to any tax allocation or tax sharing
agreement. The Company is not a "United States real property holding
company" within the meaning of Section 897 of the Code.

3.6. Accounts Receivable. All accounts receivable of Company reflected on
the Closing Balance Sheet, and all accounts receivable incurred in the normal
course of business since the date thereof, represent arm's length sales actually
made in the ordinary course of business; are collectible (net of the reserve
shown on the Closing Balance Sheet for doubtful accounts) in the ordinary course
of business without the necessity of commencing legal proceedings; are subject
to no counterclaim or setoff; and are not in dispute. Schedule 3.6 contains an
aged schedule of accounts receivable included in the Closing Balance Sheet.

3.7. Absence of Certain Changes. Except as and to the extent set forth in
Schedule 3.7, since the date of the Recent Balance Sheet there has not been:

3.7.(a) No Adverse Change. Any adverse change in the financial
condition, assets, liabilities, business, prospects or operations of
Company;

10
<PAGE> 16
3.7.(b) No Damage. Any loss, damage or destruction, whether covered
by insurance or not, affecting the Company, its properties or the BMC
Business;

3.7.(d) No Labor Disputes. Any labor dispute or disturbance, other
than routine individual grievances which are not material to the business,
financial condition or results of operations of Company.

3.7.(e) No Commitments. Any commitment or transaction by Company
(including, without limitation, any borrowing or capital expenditure) other
than in the ordinary course of business consistent with past practice;

3.7.(f) No Dividends. Any declaration, setting aside, or payment of
any dividend or any other distribution in respect of Company's capital
stock; any redemption, purchase or other acquisition by Company of any
capital stock of Company, or any security relating thereto; or any other
payment to any shareholder of Company as such a shareholder;

3.7.(g) No Disposition of Property. Any sale, lease or other transfer
or disposition of any properties or assets of Company;

3.7.(h) No Indebtedness. Any indebtedness for borrowed money
incurred, assumed or guaranteed by Company;

3.7.(i) No Liens. Any mortgage, pledge, lien or encumbrance made on
any of the properties or assets of Company;

3.7.(j) No Amendment of Contracts. Any entering into, amendment or
termination by Company of any contract, or any waiver of material rights
thereunder, other than in the ordinary course of business;

3.7.(k) Loans and Advances. Any loan or advance (other than advances
to employees in the ordinary course of business for travel and
entertainment in accordance with past practice) to any person including,
but not limited to, any Affiliate (for purposes of this Agreement, the term
"Affiliate" shall mean and include: all Shareholders, directors and
officers of Company; the spouse of any such person; any person who would be
the heir or descendant of any such person if he or she were not living; and
any entity in which any of the foregoing has a direct or indirect interest,
except through ownership of less

11
<PAGE> 17
than 5% of the outstanding shares of any entity whose securities are listed
on a national securities exchange or traded in the national
over-the-counter market);

3.7.(l) Credit. Any grant of credit by Company to any customer or
distributor on terms or in amounts more favorable than those which have
been extended to such customer or distributor in the past, any other change
in the terms of any credit heretofore extended, or any other change of
Company's policies or practices with respect to the granting of credit; or

3.7.(m) No Unusual Events. Any other event or condition not in the
ordinary course of business of Company, other than the transactions
specifically contemplated by this Agreement.

3.8. Absence of Undisclosed Liabilities. Except as and to the extent
specifically disclosed in the Recent Balance Sheet, or in Schedule 3.8, Company
does not have any liabilities, commitments or obligations (secured or unsecured,
and whether accrued, absolute, contingent, direct, indirect or otherwise), other
than commercial liabilities and obligations incurred since the date of the
Recent Balance Sheet in the ordinary course of business and consistent with past
practice and none of which has or will have a material adverse effect on the
business, financial condition or results of operations of Company. Except as and
to the extent described in the Recent Balance Sheet or in Schedule 3.8, neither
Company nor any Shareholder has knowledge of any basis for the assertion against
Company of any liability and there are no circumstances, conditions, happenings,
events or arrangements, contractual or otherwise, which may give rise to
liabilities, except commercial liabilities and obligations incurred in the
ordinary course of Company's business and consistent with past practice.

3.9. No Litigation. Except as set forth in Schedule 3.9 there is no
action, suit, arbitration, proceeding, investigation or inquiry, whether civil,
criminal or administrative ("Litigation"), pending or, to the knowledge of the
Shareholders, threatened against Company, its directors (in such capacity), its
business or any of its assets, nor does Company or any Shareholder know, or have
grounds to know, of any basis for any Litigation. Schedule 3.9 also identifies
all Litigation to which Company or any of its directors (in such capacity) have
been parties since January 1, 1997. Except as set forth in Schedule 3.9, neither
Company nor its business or assets is subject to any Order of any Government
Entity.

3.10. Compliance With Laws and Orders.

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<PAGE> 18
alleged violation of, and is subject to no Liability for past or continuing
violation of, any Laws or Orders. All reports and returns required to be
filed by Company with any Government Entity have been filed, and were
accurate and complete when filed. Without limiting the generality of the
foregoing:

(i) To the knowledge of the Shareholders, the operation of
Company's business as it is now conducted does not, nor does any
condition existing at any of the Facilities, in any manner constitute
a nuisance or other tortious interference with the rights of any
person or persons in such a manner as to give rise to or constitute
the grounds for a suit, action, claim or demand by any such person or
persons seeking compensation or damages or seeking to restrain, enjoin
or otherwise prohibit any aspect of the conduct of such business or
the manner in which it is now conducted.

(ii) Company has made all required payments to its unemployment
compensation reserve accounts with the appropriate governmental
departments of the states where it is required to maintain such
accounts, and each of such accounts has a positive balance.

(iii) Company has delivered to Buyer copies of all reports of
Company for the past five (5) years required under the federal
Occupational Safety and Health Act of 1970, as amended, and under all
other applicable health and safety laws and regulations. The
deficiencies, if any, noted on such reports have been corrected.

3.10.(b) Licenses and Permits. Company has all licenses, permits,
approvals, authorizations and consents of all Government Entities and all
certification organizations required for the conduct of the business (as
presently conducted and as proposed to be conducted) and operation of the
Facilities. All such licenses, permits, approvals, authorizations and
consents are described in Schedule 3.10.(b), are in full force and effect
and will not be affected or made subject to loss, limitation or any
obligation to reapply as a result of the transactions contemplated hereby.
Except as set forth in Schedule 3.10.(b), Company (including its
operations, properties and assets) is and has been in compliance with all
such permits and licenses, approvals, authorizations and consents.

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<PAGE> 19
processing, distribution, use, treatment, storage, disposal, transport or
handling of Waste including, without limitation, the Clean Water Act, the
Clean Air Act, the Resource Conservation and Recovery Act, the Toxic
Substances Control Act and the Comprehensive Environmental Response
Compensation Liability Act ("CERCLA"), as amended, and their state and
local counterparts are herein collectively referred to as the
"Environmental Laws". Without limiting the generality of the foregoing
provisions of this Section 3.10, Company is in full compliance with all
material limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in the
Environmental Laws or contained in any regulations, code, plan, order,
decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder. Except as set forth in Schedule
3.10.(c), there is no Litigation nor any demand, claim, hearing or notice
of violation pending or, to the knowledge of the Shareholders, threatened
against Company relating in any way to the Environmental Laws or any Order
issued, entered, promulgated or approved thereunder. Except as set forth in
Schedule 3.10.(c), there are no past or present (or, to the best of
Company's and the Shareholders' knowledge, future) events, conditions,
circumstances, activities, practices, incidents, actions, omissions or
plans which may interfere with or prevent compliance or continued
compliance with the Environmental Laws or with any Order issued, entered,
promulgated or approved thereunder, or which may give rise to any
liability, including, without limitation, liability under CERCLA or similar
state or local Laws, or otherwise form the basis of any Litigation,
hearing, notice of violation, study or investigation, based on or related
to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling, or the emission, discharge, release or
threatened release into the environment, of any Waste.

3.11. Title to and Condition of Properties.

3.11.(a) Marketable Title. Company has good and marketable title to
all of Company's assets, business and properties, including, without
limitation, all such properties (tangible and intangible) reflected in the
Recent Balance Sheet, free and clear of all mortgages, liens, (statutory or
otherwise) security interests, claims, pledges, licenses, equities,
options, conditional sales contracts, assessments, levies, easements,
covenants, reservations, restrictions, rights-of-way, exceptions,
limitations, charges or encumbrances of any nature whatsoever
(collectively, "Liens") except those described in Schedule 3.11(a) and, in
the case of real property, Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings (and which have been
sufficiently accrued or reserved against in the Recent Balance Sheet),
municipal and zoning ordinances and easements for public utilities, none of
which interfere with the use of the property as currently utilized. None of
Company's assets, business or properties are subject to any restrictions
with respect to the

14
<PAGE> 20
transferability thereof; and the Company's title thereto will not be
affected in any way by the transactions contemplated hereby.

3.11.(b) Condition. All property and assets owned or utilized by
Company are in good operating condition and repair, free from any defects
(except such minor defects as do not interfere with the use thereof in the
conduct of the normal operations of Company), have been maintained
consistent with the standards generally followed in the industry and are
sufficient to carry on the business of Company as conducted during the
preceding 12 months. To the knowledge of the Shareholders, all buildings,
plants and other structures owned or otherwise utilized by Company are in
good condition and repair and have no material structural defects or
defects affecting the plumbing, electrical, sewerage, or heating,
ventilating or air conditioning systems.

3.11.(c) Real Property. Company does not own any real property. The
only real property used or occupied by Company (the "Real Property") is
leased from an unaffiliated third-party lessor, and Schedule 3.11.(c) sets
forth, the material terms of such lease. To the knowledge of the Principal
Shareholder, there are now in full force and effect duly issued
certificates of occupancy permitting the Real Property and improvements
located thereon to be legally used and occupied as the same are now
constituted. To the knowledge of the Principal Shareholder, all of the Real
Property has permanent rights of access to dedicated public roads. To the
knowledge of the Principal Shareholder, no fact or condition exists which
would prohibit or adversely affect the ordinary rights of access to and
from the Real Property from and to the existing roads and there is no
pending or threatened restriction or denial, governmental or otherwise,
upon such ingress and egress. To the knowledge of the Principal Shareholder
there is not (i) any claim of adverse possession or prescriptive rights
involving any of the Real Property, (ii) any structure located on any Real
Property which encroaches on or over the boundaries of neighboring or
adjacent properties or (iii) any structure of any other party which
encroaches on or over the boundaries of any of such Real Property. To the
knowledge of the Principal Shareholder, none of the Real Property is
located in a flood plain, flood hazard area, wetland or lakeshore erosion
area within the meaning of any Law, regulation or ordinance. To the
knowledge of the Principal Shareholder, no public improvements have been
commenced and to Company's and Shareholders' knowledge none are planned
which in either case may result in special assessments against or otherwise
materially adversely affect any Real Property. To the knowledge of the
Principal Shareholder, no portion of any of the Real Property has been used
as a landfill or for storage or landfill of hazardous or toxic materials.
The Principal Shareholder has no knowledge of any (i) planned or proposed
increase in assessed valuations of any Real Property, (ii) Order requiring
repair, alteration, or correction of any existing condition affecting any
Real Property or the systems or improvements thereat, (iii) condition or
defect which could give rise to an order of the sort

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<PAGE> 21
referred to in "(ii)" above, (iv) underground storage tanks, or any
structural, mechanical, or other defects of material significance affecting
any Real Property or the systems or improvements thereat (including, but
not limited to, inadequacy for normal use of mechanical systems or disposal
or water systems at or serving the Real Property), or (v) work that has
been done or labor or materials that has or have been furnished to any Real
Property during the period of six (6) months immediately preceding the date
of this Agreement for which liens could be filed against any of the Real
Property.

3.11.(d) No Condemnation or Expropriation. To the knowledge of the
Shareholders, neither the whole nor any portion of the property or any
other assets of Company is subject to any Order to be sold or is being
condemned, expropriated or otherwise taken by any Government Entity with or
without payment of compensation therefor, nor has any such condemnation,
expropriation or taking been proposed.

3.12. Insurance. Set forth in Schedule 3.12 is a complete and accurate
list and description of all policies of fire, liability, errors and omissions,
electronic data processing, workers compensation, health and other forms of
insurance presently in effect with respect to the business and properties of
Company, true and correct copies of which have heretofore been delivered to
Buyer. Schedule 3.12 includes, without limitation, the carrier, the description
of coverage, the limits of coverage, retention or deductible amounts, amount of
annual premiums, retroactive date of coverage, date of expiration and the date
through which premiums have been paid with respect to each such policy, and any
pending claims in excess of $5,000. All such policies are valid, outstanding and
enforceable policies and provide insurance coverage for the properties, assets
and operations of Company, of the kinds, in the amounts and against the risks
customarily maintained by organizations similarly situated; and no such policy
(nor any previous policy) provides for or is subject to any currently
enforceable retroactive rate or premium adjustment, loss sharing arrangement or
other actual or contingent liability arising wholly or partially out of events
arising prior to the date hereof. Schedule 3.12 indicates each policy as to
which (a) the coverage limit has been reached or (b) the total incurred losses
to date equal 75% or more of the coverage limit. No notice of cancellation or
termination has been received with respect to any such policy, and neither
Company nor any Shareholder has knowledge of any act or omission of Company
which could result in cancellation of any such policy prior to its scheduled
expiration date. Company has not been refused any insurance with respect to any
aspect of the operations of the business nor has its coverage been limited by
any insurance carrier to which it has applied for insurance or with which it has
carried insurance during the last three years. Company has duly and timely made
all claims it has been entitled to make under each policy of insurance. There is
no claim by Company pending under any such policies as to which coverage has
been questioned, denied or disputed by the underwriters of such policies, and
neither Company nor any of the Shareholders knows of any basis for denial of any
claim under any such policy. Company has not received any written notice from or
on behalf of any insurance carrier issuing any such policy that insurance rates
therefor will hereafter be substantially increased (except to the extent that
insurance rates may be increased for all similarly situated risks) or that there
will hereafter be a cancellation or an

<PAGE> 22

increase in a deductible (or an increase in premiums in order to maintain an
existing deductible) or nonrenewal of any such policy. Such policies are
sufficient in all material respects for compliance by Company with all
requirements of law and with the requirements of all material contracts to
which Company is a party. Except as set forth on Schedule 3.12, all
general liability policies maintained by or for the benefit of Company since
its inception have been "occurrence" policies and not "claims made" policies.

3.13. Contracts and Commitments.

3.13.(a) Real Property Leases. Except as set forth in
Schedule 3.11.(c), Company has no leases of real property.

3.13.(b) Personal Property Leases. Except as set forth in
Schedule 3.13.(b), Company has no leases of personal property
involving consideration or other expenditure in excess of $10,000
over a period of twelve months.

3.13.(c) Purchase Commitments. Company has no purchase
commitments for inventory items or supplies that, together with
amounts on hand, constitute in excess of three months normal usage,
or which are at an excessive price.

3.13.(d) Sales Commitments. Company has no sales contracts or
commitments to customers which aggregate in excess of $ 25,000 to
any one customer (or group of affiliated customers). Company has
no sales contracts or commitments except those made in the ordinary
course of business, at arm's length, and no such contracts or
commitments are for a sales price which would result in a loss to
the Company.

3.13.(e) Contracts With Affiliates and Certain Others.
Company has no agreement, understanding, contract or commitment
(written or oral) with any Affiliate or any employee, agent,
consultant, distributor, dealer or franchisee of the Company, that
is not immediately cancelable by Company without liability, penalty
or premium of any nature or kind whatsoever.

3.13.(f) Powers of Attorney. The Company has not given a
power of attorney, which is currently in effect, to any person,
firm or corporation for any purpose whatsoever.

3.13.(g) Collective Bargaining Agreements. Except as set
forth in Schedule 3.13.(g), Company is not a party to any
collective bargaining agreements with any unions, guilds, shop
committees or other collective bargaining groups. Copies of all
such agreements have heretofore been delivered to Buyer.

3.13.(h) Loan Agreements. Except as set forth in Schedule
3.13.(h), Company is not obligated under any loan agreement,
promissory note,

<PAGE> 23

letter of credit, or other evidence of indebtedness as a signatory,
guarantor or otherwise.

3.13.(i) Guarantees. Except as disclosed on Schedule
3.13.(i), Company has not guaranteed the payment or performance of
any person, firm or corporation, agreed to indemnify any person or
act as a surety, or otherwise agreed to be contingently or
secondarily liable for the obligations of any person.

3.13.(j) Contracts Subject to Renegotiation. Company is not a
party to any contract with any governmental body which is subject
to renegotiation.

3.13.(k) Burdensome or Restrictive Agreements. Company is not
a party to nor is it bound by any agreement, deed, lease or other
instrument which is so burdensome as to materially affect or impair
the operation of Company. Without limiting the generality of the
foregoing, Company is not a party to nor is it bound by any
agreement requiring Company to assign any interest in any trade
secret or proprietary information, or prohibiting or restricting
Company from competing in any business or geographical area or
soliciting customers or otherwise restricting it from carrying on
its business anywhere in the world.

3.13.(l) Other Material Contracts. Company has no lease,
contract or commitment of any nature involving consideration or
other expenditure in excess of $ 10,000 over a twelve month period,
or involving performance over a period of more than three months,
or which is otherwise individually material to the operations of
Company, except as explicitly described in Schedule 3.13.(l).

3.13.(m) No Default. Company is not in default under any
lease, contract or commitment, nor has any event or omission
occurred which through the passage of time or the giving of notice,
or both, would constitute a default thereunder or cause the
acceleration of any of Company's obligations or result in the
creation of any Lien on any of the assets owned, used or occupied
by Company. To the knowledge of the Shareholders, no third party
is in default under any lease, contract or commitment to which
Company is a party, nor has any event or omission occurred which,
through the passage of time or the giving of notice, or both, would
constitute a default thereunder or give rise to an automatic
termination, or the right of discretionary termination, thereof.

<PAGE> 24

charge or complaint against Company pending or, to the knowledge of the
Shareholders, threatened; (c) there is no labor strike, dispute, request for
representation, slowdown or stoppage actually pending or, to the knowledge of
the Shareholders, threatened against or affecting Company nor any secondary
boycott with respect to products of Company; (d) no question concerning
representation has been raised or, to the knowledge of the Shareholders, is
threatened respecting the employees of Company; (e) no grievance which might
have a material adverse effect on Company, nor any arbitration proceeding
arising out of or under collective bargaining agreements, is pending and, to
the knowledge of the Shareholders, no such claim therefor exists; and (f) there
are no administrative charges or court complaints against Company concerning
alleged employment discrimination or other employment related matters pending
or, to the knowledge of the Shareholders, threatened before the U.S. Equal
Employment Opportunity Commission or any Government Entity.

3.15. Employee Benefit Plans.

3.15.(a) Disclosure. Schedule 3.15.(a) sets forth all
pension, thrift, savings, profit sharing, retirement, incentive
bonus or other bonus, medical, dental, life, accident insurance,
benefit, employee welfare, disability, group insurance, stock
purchase, stock option, stock appreciation, stock bonus, executive
or deferred compensation, hospitalization and other similar fringe
or employee benefit plans, programs and arrangements, and any
employment or consulting contracts, "golden parachutes," collective
bargaining agreements, severance agreements or plans, vacation and
sick leave plans, programs, arrangements and policies, including,
without limitation, all "employee benefit plans" (as defined in
Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")), all employee manuals, and all written
or binding oral statements of policies, practices or understandings
relating to employment, which are provided to, for the benefit of,
or relate to, any persons ("Company Employees") employed by
Company. The items described in the foregoing sentence are
hereinafter sometimes referred to collectively as "Employee
Plans/Agreements," and each individually as an "Employee
Plan/Agreement." True and correct copies of all the Employee
Plans/Agreements, including all amendments thereto, have heretofore
been provided to Buyer. Each of the Employee Plans/Agreements is
identified on Schedule 3.15.(a), to the extent applicable, as one
or more of the following: an "employee pension benefit plan" (as
defined in Section 3(2) of ERISA), a "defined benefit plan" (as
defined in Section 414 of the Code), an "employee welfare benefit
plan" (as defined in Section 3(1) of ERISA), and/or as a plan
intended to be qualified under Section 401 of the Code. No
Employee Plan/Agreement is a "multiemployer plan" (as defined in
Section 4001 of ERISA), and Company has never contributed nor been
obligated to contribute to any such multiemployer plan.

3.15.(b) Terminations, Proceedings, Penalties, etc. With
respect to each employee benefit plan (including, without
limitation, the Employee

<PAGE> 25

Plans/Agreements) that is subject to the provisions of Title IV of
ERISA and with respect to which the Company or any of its assets
may, directly or indirectly, be subject to any Liability,
contingent or otherwise, or the imposition of any Lien (whether by
reason of the complete or partial termination of any such plan, the
funded status of any such plan, any "complete withdrawal" (as
defined in Section 4203 of ERISA) or "partial withdrawal" (as
defined in Section 4205 of ERISA) by any person from any such plan,
or otherwise):

(i) no such plan has been terminated so as to subject,
directly or indirectly, any assets of Company to any
liability, contingent or otherwise, or the imposition of any
lien under Title IV of ERISA;

(ii) no proceeding has been initiated or, to the
knowledge of the Shareholders, threatened by any person
(including the Pension Benefit Guaranty Corporation ("PBGC"))
to terminate any such plan;

(iii) no condition or event currently exists or
currently is expected to occur that could subject, directly
or indirectly, any assets of Company to any liability,
contingent or otherwise, or the imposition of any lien under
Title IV of ERISA, whether to the PBGC or to any other person
or otherwise on account of the termination of any such plan;

(iv) if any such plan were to be terminated as of the
Closing Date, no assets of Company would be subject, directly
or indirectly, to any liability, contingent or otherwise, or
the imposition of any lien under Title IV of ERISA;

(v) no "reportable event" (as defined in Section 4043 of
ERISA) has occurred with respect to any such plan;

(vi) no such plan which is subject to Section 302 of
ERISA or Section 412 of the Code has incurred any
"accumulated funding deficiency" (as defined in Section 302
of ERISA and Section 412 of the Code, respectively), whether
or not waived; and

(vii) no such plan is a multiemployer plan or a plan
described in Section 4064 of ERISA.

3.15.(c) Prohibited Transactions, etc. There have been no
"prohibited transactions" within the meaning of Section 406 or 407
of ERISA or Section 4975 of the Code for which a statutory or
administrative exemption does not exist with respect to any
Employee Plan/Agreement, and no event or omission has occurred in
connection with which the Company or any of its assets or any
Employee Plan/Agreement, directly or indirectly, could be subject
to any liability under ERISA, the Code or any other Law or
Order applicable to any Employee Plan/Agreement, or under any
agreement, instrument, Law or

<PAGE> 26

Order pursuant to or under which Company has agreed to indemnify
or is required to indemnify any person against liability incurred
under any such Law or Order.

3.15.(d) Full Funding. The funds available under each
Employee Plan/Agreement which is intended to be a funded plan equal
or exceed the amounts required to be paid, or which would be
required to be paid if such Employee Plan/Agreement were
terminated, on account of rights vested or accrued as of the
Closing Date (using the actuarial methods and assumptions then used
by Company's actuaries in connection with the funding of such
Employee Plan/Agreement).

3.15.(e) Controlled Group; Affiliated Service Group; Leased
Employees. Company is not and never has been a member of a
controlled group of corporations as defined in Section 414(b) of
the Code or in common control with any unincorporated trade or
business as determined under Section 414(c) of the Code. Company
is not and never has been a member of an "affiliated service group"
within the meaning of Section 414(m) of the Code. There are not
and never have been any leased employees within the meaning of
Section 414(n) of the Code who perform services for Company, and no
individuals are expected to become leased employees with the
passage of time. Company has no liability, actual or contingent,
under Title IX of ERISA.

3.15.(f) Payments and Compliance. With respect to each
Employee Plan/Agreement, (i) all payments due from Company to date
have been made and all amounts properly accrued to date as
liabilities of Company which have not been paid have been properly
recorded on the books of Company and are reflected in the Recent
Balance Sheet; (ii) Company has complied with, and each such
Employee Plan/Agreement conforms in form and operation to, all
applicable laws and regulations, including but not limited to ERISA
and the Code, in all respects and all reports and information
relating to such Employee Plan/Agreement required to be filed with
any governmental entity have been timely filed; (iii) all reports
and information relating to each such Employee Plan/Agreement
required to be disclosed or provided to participants or their
beneficiaries have been timely disclosed or provided; (iv) each
such Employee Plan/Agreement which is intended to qualify under
Section 401 of the Code has received a favorable determination
letter from the Internal Revenue Service with respect to such
qualification, its related trust has been determined to be exempt
from taxation under Section 501(a) of the Code, and nothing has
occurred since the date of such letter that has or is likely to
adversely affect such qualification or exemption; (v) there are no
actions, suits or claims pending (other than routine claims for
benefits) or, to the knowledge of the Shareholders, threatened with
respect to such Employee Plan/Agreement or against the assets of
such Employee Plan/Agreement; and (vi) no Employee Plan/Agreement
is a plan which is established and maintained outside the United

21
<PAGE> 27

States primarily for the benefit of individuals substantially all
of whom are nonresident aliens.

3.15.(g) Post-Retirement Benefits. No Employee Plan/Agreement
provides benefits, including, without limitation, death or medical
benefits (whether or not insured) with respect to current or former
Company employees beyond their retirement or other termination of
service other than (i) coverage mandated by applicable law, (ii)
death or retirement benefits under any Employee Plan/Agreement that
is an employee pension benefit plan, (iii) deferred compensation
benefits accrued as liabilities on the books of Company (including
the Recent Balance Sheet), (iv) disability benefits under any
Employee Plan/ Agreement that is an employee welfare benefit plan
and which have been fully provided for by insurance or otherwise or
(v) benefits in the nature of severance pay.

3.15.(h) No Triggering of Obligations. The consummation of
the transactions contemplated by this Agreement will not (i)
entitle any current or former employee of Company to severance pay,
unemployment compensation or any other payment, except as expressly
provided in this Agreement, (ii) accelerate the time of payment or
vesting, or increase the amount of compensation due to any such
employee or former employee or (iii) result in any prohibited
transaction described in Section 406 of ERISA or Section 4975 of
the Code for which an exemption is not available.

3.15.(i) Delivery of Documents. There has been delivered to
Buyer, with respect to each Employee Plan/Agreement:

(i) a copy of the annual report, if required under
ERISA, with respect to each such Employee Plan/Agreement for
the last two years;

(ii) a copy of the summary plan description, together
with each summary of material modifications, required under
ERISA with respect to such Employee Plan/Agreement, all
material employee communications relating to such Employee
Plan/Agreement, and, unless the Employee Plan/Agreement is
embodied entirely in an insurance policy to which Company is
a party, a true and complete copy of such Employee
Plan/Agreement;

(iii) if the Employee Plan/Agreement is funded through a
trust or any third party funding vehicle (other than an
insurance policy), a copy of the trust or other funding
agreement and the latest financial statements thereof; and

<PAGE> 28
(iv) the most recent determination letter received from
the Internal Revenue Service with respect to each Employee
Plan/Agreement that is intended to be a "qualified plan"
under Section 401 of the Code.

With respect to each Employee Plan/Agreement for which an annual report
has been filed and delivered to Buyer pursuant to clause (i) of this Section
3.15.(i), no material adverse change has occurred with respect to the matters
covered by the latest such annual report since the date thereof.

3.15.(j) Future Commitments. Company has no announced plan or
legally binding commitment to create any additional Employee
Plans/Agreements or to amend or modify any existing Employee
Plan/Agreement.

3.17. Trade Rights. Schedule 3.17 lists all Trade Rights (as defined
below) in which Company now has any interest, specifying whether such Trade
Rights are owned, controlled, used or held (under license or otherwise) by
Company, and also indicating which of such Trade Rights are registered. All
Trade Rights shown as registered in Schedule 3.17 have been properly
registered, all pending registrations and applications have been properly made
and filed and all annuity, maintenance, renewal and other fees relating to
registrations or applications are current. In order to conduct the business of
Company, as such is currently being conducted or proposed to be conducted,
Company does not require any Trade Rights that it does not already have.
Company is not infringing and has not infringed any Trade Rights of another in
the operation of the business of Company, nor is any other person infringing
the Trade Rights of Company. Company has not granted any license or made any
assignment of any Trade Right listed on Schedule 3.17, nor does Company pay any
royalties or other consideration for the right to use any Trade Rights of
others. There is no Litigation pending or threatened to challenge Company's
right, title and interest with respect to its continued use and right to
preclude others from using any Trade Rights of Company. All Trade Rights of
Company are valid, enforceable and in good standing, and there are no equitable
defenses to enforcement based on any act or omission of Company. The
consummation of the transactions contemplated hereby will not alter or impair
any Trade Rights owned or used by Company. As used herein, the term "Trade
Rights" shall mean and include: (i) all trademark rights, business
identifiers, trade dress, service marks, trade names and brand names, all
registrations thereof and applications therefor and all goodwill associated
with the foregoing; (ii) all

<PAGE> 29
copyrights, copyright registrations and copyright applications, and all other
rights associated with the foregoing and the underlying works of authorship;
(iii) all patents and patent applications, and all international proprietary
rights associated therewith; (iv) all contracts or agreements granting any
right, title, license or privilege under the intellectual property rights of any
third party; (v) all inventions, mask works and mask work registrations,
know-how, discoveries, improvements, designs, trade secrets, shop and royalty
rights, employee covenants and agreements respecting intellectual property and
non-competition and all other types of intellectual property; and (vi) all
claims for infringement or breach of any of the foregoing.

3.18. Major Customers and Suppliers.

3.18.(a) Major Customers. Schedule 3.18.(a) contains a list
of the twenty (20) largest customers of Company for the twelve
month period ending December 31, 1997 and the ten month period
ending October 31, 1998 (determined on the basis of the total
dollar amount of net sales) showing the total dollar amount of net
sales to each such customer during each such year. Neither Company
nor any Shareholder has any knowledge or information of any facts
indicating, nor any other reason to believe, that any of the
customers listed on Schedule 3.18.(a) (except as indicated thereon)
will not continue to be customers of the business of Company after
the Closing at substantially the same level of purchases as
heretofore.

3.18.(b) Major Suppliers. Schedule 3.18.(b) contains a list
of the five (5) largest suppliers to Company for the twelve month
period ending December 31, 1997 and the ten month period ending
October 31, 1998 (determined on the basis of the total dollar
amount of purchases) showing the total dollar amount of purchases
from each such supplier during each such year. Neither Company nor
any Shareholder has any knowledge or information of any facts
indicating, nor any other reason to believe, that any of the
suppliers listed on Schedule 3.18.(b) will not continue to be
suppliers to the business of Company after the Closing and will not
continue to supply the business with substantially the same
quantity and quality of goods at competitive prices.

3.18.(c) Sales Representatives. Schedule 3.18.(c) contains a
list of all sales representatives of Company, together with true,
correct and complete copies of all sales representative contracts
and policy statements, and a description of all substantial
modifications or exceptions.

3.19. Service Warranty and Liability. Schedule 3.19 contains a true,
correct and complete copy of Company's standard written warranty or warranties
for sales of Services (as defined below) and, except as stated therein, there
are no warranties, commitments or obligations with respect to the provision of
such Services. Schedule 3.19 sets forth the estimated aggregate annual cost to
Company of meeting warranty or liability obligations or commitments for
customers for each of the five (5) preceding fiscal years. Schedule 3.19
contains a description of all liability claims and similar Litigation relating
to services rendered,
24

<PAGE> 30
which are presently pending or which to Company's or any Shareholder's
knowledge are threatened, or which have been asserted or commenced against
Company within the last five (5) years, in which a party thereto either requests
injunctive relief or alleges damages (whether or not covered by insurance). The
provision of such services by the Company meets and complies with all
governmental laws and regulations currently in effect. As used in this Section
3.19, the term "Services" means any and all services currently or at any time
previously rendered, provided or sold by Company, or by any predecessor of
Company under any brand name or mark under which services are or have been
rendered, provided or sold by Company.

3.20. Bank Accounts. Schedule 3.20 sets forth the names and locations of
all banks, trust companies, savings and loan associations and other financial
institutions at which the Company maintains a safe deposit box, lock box or
checking, savings, custodial or other account of any nature, the type and
number of each such account and the signatories therefore, a description of any
compensating balance arrangements, and the names of all persons authorized to
draw thereon, make withdrawals therefrom or have access thereto.

3.21. Affiliates' Relationships to Company.

3.21.(a) Contracts With Affiliates. All leases, contracts,
agreements or other arrangements between Company and any Affiliate
are described on Schedule 3.21.(a).

3.21.(b) No Adverse Interests. No Affiliate has any direct or
indirect interest in (i) any entity which does business with
Company or is competitive with Company's business, or (ii) any
property, asset or right which is used by Company in the conduct of
its business.

3.21.(c) Obligations. All obligations of any Affiliate to
Company, and all obligations of Company to any Affiliate, are
listed on Schedule 3.21.(c).

3.22. Assets Necessary to Business. Company presently has and at the
Closing will have good, valid and marketable title to all property and assets,
tangible and intangible; and all leases, licenses and other agreements,
necessary to permit Buyer to carry on the business of Company as presently
conducted.

3.23. No Brokers or Finders. Neither Company nor any of its directors,
officers, employees, Shareholders or agents have retained, employed or used any
broker or finder in connection with the transaction provided for herein or in
connection with the negotiation thereof.

3.24. Year 2000 Compliance. Except as disclosed on Schedule 3.24, to the
knowledge of the Shareholders: (a) the computer source codes, programs and
other software of the Company (including machine readable code, printed
listings of code, databases, documentation and related property and information
of Company used or under development for use in the BMC Business)
(collectively, "Software") accurately determines chronological

<PAGE> 31

dates and accurately performs all calculations, data manipulations, sorting and
transmission of date data regardless of whether the date represents or
references different centuries (For example, when the actual date changes from
12/31/1999 to 1/1/2000, the Software will accurately determine that 1/1/2000 is
the new date and determine that an individual born in 1948 is 52 years old and
not -48 [i.e., 00-48 = -48], or otherwise incorrectly perform the age
calculation); (b) the Software provides that all date related user interface
functionalities and data fields permit the entry of a four digit year (i.e.,
the years 1965, 2065 and 3065 could all be entered by the user without the need
of a manual override) and such date data will result in accurate calculations,
data manipulations, sorting and transmission of all data, including the date
data; (c) the entry of a date equal to or greater than 01/01/2000 into the
Software will not affect any calculation that produces or uses time spans such
that the results of the calculation are incorrect (i.e., such as an interest
calculation); and (d) the integrity of calculations performed utilizing the
Software will not be affected by date data for dates on or after 01/02/2000,
and calculations using previously generated data (on or before 12/31/1999) will
also maintain calculation integrity.

3.25. Systems Performance. To the knowledge of the Shareholders, the
Software and related system components are capable of interconnecting and/or
interfacing with each other, and they deliver the functionality needed to meet
the information systems requirements of the BMC Business as they are presently
conducted. No Shareholder will cause any unplanned interruption of the
operations of, or accessibility to, the Software or related systems (or any
system component) through any device, method or means including, without
limitation, the use of any "virus," "lockup," "time bomb" or "key lock" device
or program, or disabling code, which has the potential or capability of causing
any unplanned interruption of the operations of, or accessibility of, the
Software or related systems (or any system component) to Buyer, or any user
authorized by Buyer, or which could alter, destroy or inhibit the use of the
Software or related systems (or any system component), or the data contained
therein (collectively, "Disabling Devices"), which could block access to or
prevent the use of the Software or any system (or system component) by Buyer or
any authorized user. No Shareholder has placed, nor is any Shareholder aware
of, any Disabling Device on any Software or system component owned or used by
Company. To the knowledge of the Principal Shareholder, there is no new
version, update or release of any Software currently being developed, other
than standard updates the release of which will not render the existing version
obsolete.

3.26. Software Ownership; Non Infringement. The Company only utilizes
software purchased ("Purchased Software") or licensed ("Licensed Software") from
unaffiliated third party software vendors. The Company owns all right, title
and interest in and to the Purchased Software. With respect to Licensed
Software, Company has duly obtained the right and license to use the software as
currently utilized by the Company.

<PAGE> 32

this Agreement or in connection with transactions contemplated hereby, contains
or shall contain any untrue statement of material fact or omits or shall omit a
material fact necessary to make the statements contained therein not misleading.
All statements and information contained in any certificate, instrument,
Disclosure Schedule or document delivered by or on behalf of Company and/or
Shareholders shall be deemed representations and warranties by the Company and
the Shareholders.

4. REPRESENTATIONS AND WARRANTIES OF BUYER

4.1. Corporate.

4.1.(a) Organization. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Florida.

4.1.(b) Corporate Power. Buyer has all requisite corporate
power and authority to enter into this Agreement and the other
documents and instruments to be executed and delivered by Buyer and
to carry out the transactions contemplated hereby and thereby.

4.3. No Brokers or Finders. Neither Buyer nor any of its directors,
officers, employees or agents has retained, employed or used any broker or
finder in connection with the transaction provided for herein or in connection
with the negotiation thereof.

<PAGE> 33
fact or omits or shall omit a material fact necessary to make the statements
contained therein not misleading.

4.5. Investment Intent. The Shares are being acquired by Buyer for its
own account, for investment and not with the view to distribution, assignment
(excluding any assignment to Affiliates of Buyer), resale or other transfer.

5. COVENANTS

5.1. Employment and Noncompetition Agreements. Contemporaneously with the
execution of this Agreement, Principal Shareholder shall execute and deliver to
Company an Employment and Noncompetition Agreement, substantially in the form
of exhibit A hereto.

5.2. Noncompetition; Confidentiality. As an inducement to Buyer to
execute this Agreement and complete the transactions contemplated hereby, and
in order to preserve the goodwill associated with the business of Company being
acquired pursuant to this Agreement, and in addition to and not in limitation
of any covenants contained in any agreement executed and delivered pursuant to
Section 5.1 hereof, Principal Shareholder hereby covenants and agrees as
follows:

5.2.(a) Covenant Not to Compete. For a period of three (3)
years from the Closing Date, Principal Shareholder will not
directly or indirectly:

(i) engage in, continue in or carry on any business
which competes with Company or the BMC Business or is
substantially similar thereto, including owning or
controlling any financial interest in any corporation,
partnership, firm or other form of business organization
which is so engaged;

(ii) consult with, advise or assist in any way, whether
or not for consideration, any corporation, partnership, firm
or other business organization which is now or becomes a
competitor of Company or Buyer (or any of its subsidiaries)
in any aspect with respect to the BMC
Business, including, but not limited to, advertising or
otherwise endorsing the products of any such competitor;
soliciting customers or otherwise serving as an intermediary
for any such competitor; loaning money or rendering any other
form of financial assistance to or engaging in any form of
business transaction on other than an arm's length basis with
any such competitor;

(iii) offer employment to an employee of Company or the
BMC Business, without the prior written consent of Buyer; or

(iv) engage in any practice the purpose of which is to
evade the provisions of this covenant not to compete or to
commit any act which adversely affects the Company or the BMC
Business;

28
<PAGE> 34

provided, however, that the foregoing shall not prohibit the ownership of
securities of corporations which are listed on a national securities exchange
or traded in the national over-the-counter market in an amount which shall not
exceed 5% of the outstanding shares of any such corporation. The parties agree
that the geographic scope of this covenant not to compete shall extend to and
cover the entire state of Colorado. The parties agree that a Buyer may sell,
assign or otherwise transfer this covenant not to compete, in whole or in part,
to any subsidiary of Buyer or to any person, corporation, firm or entity that
purchases all or part of the business of the Company. In the event a court of
competent jurisdiction determines that the provisions of this covenant not to
compete are excessively broad as to duration, geographical scope or activity,
it is expressly agreed that this covenant not to compete shall be construed so
that the remaining provisions shall not be affected, but shall remain in full
force and effect, and any such over broad provisions shall be deemed, without
further action on the part of any person, to be modified, amended and/or
limited but only to the extent necessary to render the same valid and
enforceable in such jurisdiction.

5.2.(b) Covenant of Confidentiality. No Shareholder shall at
any time subsequent to the Closing, except as explicitly requested
by Buyer, (i) use for any purpose, (ii) disclose to any person, or
(iii) keep or make copies of documents, tapes, discs or programs
containing, any confidential information concerning Company. For
purposes hereof, "confidential information" shall mean and include,
without limitation, all Trade Rights in which Company has an
interest, all customer lists and customer information, and all
other information concerning Company's processes, apparatus,
equipment, packaging, products, marketing and distribution methods,
not previously disclosed to the public directly by Company.

5.2.(c) Equitable Relief for Violations. Each Shareholder
agrees that the provisions and restrictions contained in this
Section 5.2 are necessary to protect the legitimate continuing
interests of Buyer in acquiring the Shares, and that any violation
or breach of these provisions will result in irreparable injury to
Buyer for which a remedy at law would be inadequate and that, in
addition to any relief at law which may be available to Buyer for
such violation or breach and regardless of any other provision
contained in this Agreement, Buyer shall be entitled to injunctive
and other equitable relief as a court may grant after considering
the intent of this Section 5.2.

5.3. General Releases. Contemporaneously with the execution of this
Agreement, each Shareholder shall deliver a general release to Buyer, in
substantially the form attached hereto as Exhibit B.

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<PAGE> 35
338(h)(10) Election and will indemnify the Buyer, the Company and their
subsidiaries against any tax (including interest and penalties) arising out of
any failure to pay such tax. The Shareholders will also pay any state, local,
or foreign tax (and indemnify the Buyer, the Company and their subsidiaries
against any tax (including interest and penalties) arising out of any failure to
pay such tax) attributable to an election under state, local, or foreign law
similar to the election available under Section 338(g) of the Code (or which
results from the making of an election under Section 338(g) of the Code) with
respect to the purchase and sale of the stock of the Company hereunder. Buyer
shall be responsible for the preparation and filing of such election. The
allocation of purchase price among the assets of the Company shall be made in
accordance with book values reflected in the Recent Balance Sheet, an amount not
to exceed $80,000 for noncompete assets, and the remainder to goodwill.
Shareholders and Buyer shall accept such purchase price allocations and Buyer
and each Shareholder shall report, act, file in all respects and for purposes
consistent with such allocations. Shareholders and the Company (if required)
shall execute and deliver to Buyer at Closing three copies of such documents or
forms (including Section 338 Forms, as defined below) as Buyer shall request or
as are required by applicable law for an effective Section 338(h)(10) Election,
including, without limitation, any "Statement of Section 338(h)(10)" and IRS
Form 8023 (together with any schedules or attachments thereto, the "Section 338
Forms") that are required pursuant to the Treasury Regulations.

5.5. Employees of Company. To the extent permitted under the terms and
provisions of any benefit plans of Company (or its parent corporation) which
are made available to the employees of Company generally, the employees of
Company shall receive credit for years of service to Company for the purpose of
determining benefits for which such employees are eligible.

6. INDEMNIFICATION

6.1. By Principal Shareholder. Subject to the terms and conditions of
this Article 6, Principal Shareholder, hereby agrees to indemnify, defend and
hold harmless Buyer, its directors, officers, employees and controlled and
controlling persons (hereinafter "Buyer's Affiliates") and the Company from and
against all Claims asserted against, resulting to, imposed upon, or incurred by
Buyer, Buyer's Affiliates or the Company, directly or indirectly, by reason of,
arising out of or resulting from (a) the inaccuracy or breach of any
representation or warranty of any Shareholder (including Principal Shareholder)
or Company contained in or made pursuant to this Agreement, (b) the breach of
any covenant of any Shareholder (including Principal Shareholder) or the
Company contained in this Agreement, (c) the litigation matters referred to in
Schedule 3.9, or (d) the conduct of the BMC Business or operations of the
Company prior to the Closing (other than Claims for liabilities to the extent
the amounts thereof are specifically reflected in the Recent Balance Sheet).
As used in this Article 6, the term "Claim" shall include (i) all debts,
liabilities and obligations; (ii) all losses, damages (including, without
limitation, consequential damages), judgments, awards, settlements, costs and
expenses (including, without limitation, interest (including prejudgment
interest in any litigated matter), penalties, court costs and attorneys fees
and expenses); and (iii) all demands,

30
<PAGE> 36

claims, suits, actions, costs of investigation, causes of action, proceedings
and assessments, whether or not ultimately determined to be valid.

6.2. By Buyer. Subject to the terms and conditions of this Article 6,
Buyer hereby agrees to indemnify, defend and hold harmless each Shareholder
from and against all Claims asserted against, resulting to, imposed upon or
incurred by any such person, directly or indirectly, by reason of or resulting
from (a) the inaccuracy or breach of any representation or warranty of Buyer
contained in or made pursuant to this Agreement, or (b) the breach of any
covenant of Buyer contained in this Agreement.

6.3.(a) Notice and Defense. The party or parties to be
indemnified (whether one or more, the "Indemnified Party") will
give the party from whom indemnification is sought (the
"Indemnifying Party") prompt written notice of any such Claim, and
the Indemnifying Party will undertake the defense thereof by
representatives chosen by it. In all matters concerning the
Shareholders, the Shareholders' Agent shall give and receive notice
and otherwise act in all respects on their behalf. Failure to give
such notice shall not affect the Indemnifying Party's duty or
obligations under this Article 6, except to the extent the
Indemnifying Party is prejudiced thereby. So long as the
Indemnifying Party is defending any such Claim actively and in good
faith, the Indemnified Party shall not settle such Claim. The
Indemnified Party shall make available to the Indemnifying Party or
its representatives all records and other materials required by
them and in the possession or under the control of the Indemnified
Party, for the use of the Indemnifying Party and its
representatives in defending any such Claim, and shall in other
respects give reasonable cooperation in such defense.

6.3.(b) Failure to Defend. If the Indemnifying Party, within
a reasonable time after notice of any such Claim, fails to defend
such Claim actively and in good faith, the Indemnified Party will
(upon further notice) have the right to undertake the defense,
compromise or settlement of such Claim or consent to the entry of a
judgment with respect to such Claim, on behalf of and for the
account and risk of the Indemnifying Party, and the Indemnifying
Party shall thereafter have no right to challenge the Indemnified
Party's defense, compromise, settlement or consent to judgment
therein.

<PAGE> 37

Indemnifying Party shall not, without the written consent of the
Indemnified Party, settle or compromise any Claim or consent to the
entry of any judgment which does not include as an unconditional
term thereof the giving by the claimant or the plaintiff to the
Indemnified Party of a release from all Liability in respect of such
Claim.

6.4. Payment. The Indemnifying Party shall promptly pay the Indemnified
Party any amount due under this Article 6, which payment may be accomplished in
whole or in part, at the option of the Indemnified Party, by the Indemnified
Party setting off any amount owed to the Indemnifying Party by the Indemnified
Party. To the extent set-off is made by an Indemnified Party in satisfaction
or partial satisfaction of an indemnity obligation under this Article 6 that is
disputed by the Indemnifying Party, upon a subsequent determination by final
judgment not subject to appeal that all or a portion of such indemnity
obligation was not owed to the Indemnified Party, the Indemnified Party shall
pay the Indemnifying Party the amount which was set-off and not owed together
with interest from the date of set-off until the date of such payment at an
annual rate equal to the prime rate (as announced by the Wall Street Journal)
in effect as of the date of the set-off. Upon judgment, determination,
settlement or compromise of any third party Claim, the Indemnifying Party shall
pay promptly on behalf of the Indemnified Party, and/or to the Indemnified
Party in reimbursement of any amount theretofore required to be paid by it, the
amount so determined by judgment, determination, settlement or compromise and
all other Claims of the Indemnified Party with respect thereto, unless in the
case of a judgment an appeal is made from the judgment. If the Indemnifying
Party desires to appeal from an adverse judgment, then the Indemnifying Party
shall post and pay the cost of the security or bond to stay execution of the
judgment pending appeal. Upon the payment in full by the Indemnifying Party of
such amounts, the Indemnifying Party shall succeed to the rights of such
Indemnified Party, to the extent not waived in settlement, against the third
party who made such third party Claim.

6.5. Indemnification for Environmental Matters. Without limiting the
generality of the foregoing, Principal Shareholder agrees to indemnify,
reimburse, hold harmless and defend Buyer, Buyer's affiliates and Company for,
from, and against all Claims asserted against, imposed on, or incurred by any
such person, directly or indirectly, in connection with any pollution, threat
to the environment, or exposure to, or manufacture, processing, distribution,
use, treatment, generation, transport or handling, disposal, emission,
discharge, storage or release of Waste that (A) is related in any way to
Company's or any previous owner's or operator's ownership, operation or
occupancy of the business, properties and assets owned or used by Company, and
(B) in whole or in part occurred, existed, arose out of conditions or
circumstances that existed, or was caused on or before the Closing Date.

6.6. Limitations on Indemnification. Except for any willful or knowing
breach or misrepresentation, as to which claims may be brought without
limitation as to time or amount:

6.6.(a) Time Limitation. No claim or action shall be brought
under this Article 6 for breach of a representation or warranty
after the lapse of

<PAGE> 38
two (2) years following the Closing. Regardless of the foregoing,
however, or any other provision of this Agreement:

(i) There shall be no time limitation on claims on
actions brought for breach of any representation or warranty
made by Shareholders or Company in or pursuant to Sections
3.1, 3.2, 3.9 and 3.10, and as between Buyer and the
Principal Shareholder, the Principal Shareholder hereby
waives all applicable statutory limitation periods with
respect thereto.

(ii) Any claim or action brought for breach of any
representation or warranty made by the Principal Shareholder
with respect to tax or ERISA matters may be brought at any
time until the underlying tax or ERISA obligation is barred
by the applicable period of limitation under federal and
state laws relating thereto (as such period may be extended
by waiver).

(iii) Any claim made by a party hereunder by delivering
written notice of the claim to the Indemnifying Party or
Parties, by filing a suit or action in a court of competent
jurisdiction or a court reasonably believed to be of
competent jurisdiction or by a demand for arbitration in
accordance with Article 9 hereof for breach of a
representation or warranty prior to the termination of the
survival period for such claim shall be preserved despite the
subsequent termination of such survival period.

(iv) If any act, omission, disclosure or failure to
disclosure shall form the basis for a claim for breach of
more than one representation or warranty, and such claims
have different periods of survival hereunder, the termination
of the survival period of one claim shall not affect a
party's right to make a claim based on the breach of
representation or warranty still surviving.

6.6.(b) Amount Limitation. The Principal Shareholder shall
have no liability under this Article 6 to indemnify Buyer or
Buyer's Affiliates from any loss, damage or cost associated with or
relating to a claim unless and until the aggregate amount of
losses, damages and costs exceeds $50,000; but in such event,
Buyer, Buyer's Affiliates and Company shall be entitled to
indemnification in full except as otherwise limited herein. The
aggregate amount of the indemnification obligations of the
Principal Shareholder pursuant to this Article 6 shall not exceed
92% of the aggregate Purchase Price as set forth in Section 2.1;
provided, however, that there shall be no amount limitation on
claims or actions brought for breach of any representation or
warranty made by the Principal Shareholder in or pursuant to
Sections 3.1, 3.2, 3.5 and 3.15.

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<PAGE> 39

7. CLOSING

The closing of this transaction ("the Closing") shall take place
contemporaneously with the execution and delivery of this agreement at the
offices of Davis, Graham & Stubbs LLP, Denver, Colorado, at 10:00 A.M. on
November 10, 1998, or at such other hour and place as the parties hereto shall
agree upon in writing. The date hereof is referred to in this Agreement as the
"Closing Date". Unless otherwise indicated, the transactions contemplated
hereby shall be deemed for all purposes to be effective as of November 1, 1998,
which date shall be referred to herein as the "Effective Date."

7.1.(a) Stock Certificate(s). Stock certificates representing
the Shares, duly endorsed for transfer or with duly executed stock
powers attached, in either case as of the Effective Date.

7.1.(b) Opinion of Counsel. A written opinion of, counsel
to Company and Shareholders, dated as of the Closing Date,
addressed to Buyer, substantially in the form of Exhibit C hereto.

7.1.(c) Consents and Approvals. Executed originals of all
approvals, consents and waivers that are required to effect the
transactions contemplated hereby.

7.1.(d) Estoppel Certificates. An estoppel certificate or
status letter from the landlord under each lease of Real Property,
which estoppel certificate or status letter will certify: (i) the
lease is valid and in full force and effect; (ii) the amounts
payable by Company under the lease and the date to which the same
have been paid; (iii) whether there are, to the knowledge of said
landlord, any defaults thereunder, and, if so, specifying the
nature thereof; and (iv) a statement that the transactions
contemplated by this Agreement will not constitute a default under
the lease.

7.1.(e) Employment and Noncompetition Agreement. The
Employment and Noncompetition Agreement referred to in Section 5.1,
duly executed by the persons referred to in such Section.

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<PAGE> 40

7.1.(f) Certified Resolutions. Certified copies of the
resolutions of the Board of Directors and the Shareholders of
Company, authorizing and approving this Agreement and the
consummation of the transactions contemplated by this Agreement.

7.1.(g) Articles; By-Laws. A copy of the By-Laws of Company
certified by the secretary of Company, and a copy of the Articles
of Incorporation of Company certified by the Secretary of State of
the state of incorporation of Company.

7.1.(h) Incumbency Certificate. Incumbency certificates
relating to each person executing (as a corporate officer or
otherwise on behalf of another person) any document executed and
delivered to Buyer pursuant to the terms hereof.

7.1.(i) General Releases. The General Releases referred to in
Section 5.3, duly executed by the persons referred to in such
Section.

7.1.(j) Resignations. The resignations of Jeffrey J. Berends
as President, Treasurer and a Director of the Company, and Margaret
R. Berends as Secretary and a Director of the Company, effective as
of the Closing and in form satisfactory to Buyer's counsel.

7.1.(k) Affidavit. An affidavit from Company in form and
substance satisfactory to Buyer, to the effect that Company is not
a "foreign person," "foreign corporation," "foreign partnership,"
"foreign trust" or "foreign estate" under Section 1445 of the Code,
and containing all such other information as is required to comply
with the requirements of such Section.

7.1.(l) Other Documents. All other documents, instruments or
writings required to be delivered to Buyer at the Closing pursuant
to this Agreement and such other certificates of authority and
documents as Buyer may reasonably request.

7.2. Documents to be Delivered by Buyer. At the Closing, Buyer shall
deliver to Shareholders the following documents, in each case duly executed or
otherwise in proper form:

7.2.(a) Cash Purchase Price. To Shareholders' Agent and the
Company, the wire transfers as required by Section 2.2(a) hereof.

7.2.(b) Opinion of Counsel. A written opinion of Foley &
Lardner, counsel to Buyer, dated as of the Closing Date, addressed
to Company, in substantially the form of Exhibit D hereto.

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<PAGE> 41

7.2.(c) Certified Resolutions. A certified copy of the
resolutions of the Board of Directors of Buyer authorizing and
approving this Agreement and the consummation of the transactions
contemplated by this Agreement.

7.2.(d) Incumbency Certificate. Incumbency certificates
relating to each person executing any document executed and
delivered to Company or Shareholders by Buyer pursuant to the terms
hereof.

7.2.(e) Other Documents. All other documents, instruments or
writings required to be delivered to Company at the Closing
pursuant to this Agreement and such other certificates of authority
and documents as Company may reasonably request.

8. TERMINATION

[INTENTIONALLY OMITTED]

9. RESOLUTION OF DISPUTES

9.1. Arbitration.

9.1.(a) Any dispute, controversy or claim arising out of or
relating to this Agreement or any contract or agreement entered
into pursuant hereto or the performance by the parties of its or
their terms shall be settled by binding arbitration held in Tampa,
Florida in accordance with the Commercial Arbitration Rules of the
American Arbitration Association then in effect, except as
specifically otherwise provided in this Article 9. Notwithstanding
the foregoing, Buyer may, in its discretion, apply to a court of
competent jurisdiction for equitable relief from any violation or
threatened violation of the covenants of Principal Shareholder
under Section 5.2 of this Agreement, or any covenants not to
compete contained in any Employment and Noncompetition Agreement
delivered pursuant to Section 5.1 hereof.

9.1.(b) No party shall be required to submit to arbitration
hereunder unless all persons who are not parties to this Agreement,
but who are necessary parties to a complete resolution of the
controversy, submit to the arbitration process on the same terms as
the parties hereto. Without limiting the generality of the
foregoing, no claim under Article 6 for the indemnification of a
third-party claim shall be subject to arbitration under this
Article 9 unless the third party bringing such claim against the
indemnitee shall agree in writing to the application of this
Article 9 to the resolution of such claim.

9.2. Arbitrators. If the matter in controversy (exclusive of attorney
fees and expenses) shall appear, as at the time of the demand for arbitration,
to exceed $250,000, then the panel to be appointed shall consist of three
neutral arbitrators; otherwise, one neutral arbitrator.

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<PAGE> 42

9.3. Procedures; No Appeal. The arbitrator(s) shall allow such discovery
as the arbitrator(s) determine appropriate under the circumstances and shall
resolve the dispute as expeditiously as practicable, and if reasonably
practicable, within 120 days after the selection of the arbitrator(s). The
arbitrator(s) shall give the parties written notice of the decision, with the
reasons therefor set out, and shall have 30 days thereafter to reconsider and
modify such decision if any party so requests within 10 days after the
decision. Thereafter, the decision of the arbitrator(s) shall be final,
binding, and nonappealable with respect to all persons, including (without
limitation) persons who have failed or refused to participate in the
arbitration process.

9.4. Authority. The arbitrator(s) shall have authority to award relief
under legal or equitable principles, including interim or preliminary relief,
and to allocate responsibility for the costs of the arbitration and to award
recovery of attorneys fees and expenses in such manner as is determined to be
appropriate by the arbitrator(s).

9.6. Confidentiality. All proceedings under this Article 9 and all
evidence given or discovered pursuant hereto, shall be maintained in confidence
by all parties.

9.8. Tolling. All applicable statutes of limitation shall be tolled while
the procedures specified in this Article 9 are pending. The parties will take
such action, if any, required to effectuate such tolling.

10. MISCELLANEOUS

10.1. Disclosure Schedule. The Schedules have been compiled in a bound
volume (the "Disclosure Schedule"), executed by Shareholders and dated and
delivered to Buyer on the date of this Agreement. Information set forth in the
Disclosure Schedule specifically refers to the article and section of this
Agreement to which such information is responsive and such information shall
not be deemed to have been disclosed with respect to any other article or
section of this Agreement or for any other purpose. The Disclosure Schedule
shall not vary, change or alter the language of the representations and
warranties contained in this Agreement and, to the extent the language in the
Disclosure Schedule does not conform in

37
<PAGE> 43

every respect to the language of such representations and warranties, such
language in the Disclosure Schedule shall be disregarded and be of no force or
effect.

10.3. Disclosures and Announcements. Announcements concerning the
transactions provided for in this Agreement by Buyer, Company or Shareholders
shall be subject to the approval of the other parties in all essential
respects, except that approval of the Shareholders or Company shall not be
required as to any statements and other information which Buyer is required to
submit (upon advice of counsel) to the Securities and Exchange Commission, the
Nasdaq Stock Market ("Nasdaq") or Buyer's stockholders or to make pursuant to
any rule or regulation of the Securities and Exchange Commission or Nasdaq, or
otherwise required by law. Shareholders shall act hereunder only through
Shareholders' Agent.

10.4. Assignment; Parties in Interest.

10.4.(a) Assignment. Except as expressly provided herein, the
rights and obligations of a party hereunder may not be assigned,
transferred or encumbered without the prior written consent of the
other parties. Notwithstanding the foregoing, Buyer may, without
consent of any other party, (i) merge Company with and into Buyer
and/or any subsidiary of Buyer, or (ii) cause one or more
subsidiaries of Buyer to carry out all or part of the transactions
contemplated hereby; provided, however, that Buyer shall,
nevertheless, remain liable for all of its obligations, and those
of any such subsidiary, to Shareholders hereunder.

10.4.(b) Parties in Interest. This Agreement shall be binding
upon, inure to the benefit of, and be enforceable by the respective
successors and permitted assigns of the parties hereto. Nothing
contained herein shall be deemed to confer upon any other person
any right or remedy under or by reason of this Agreement.

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<PAGE> 44

10.7. Notice. All notices, requests, demands and other communications
hereunder shall be given in writing and shall be: (a) personally delivered;
(b) sent by telecopier, facsimile transmission or other electronic means of
transmitting written documents; or (c) sent to the parties at their respective
addresses indicated herein by registered or certified U.S. mail, return receipt
requested and postage prepaid, or by private overnight mail courier service.
The respective addresses to be used for all such notices, demands or requests
are as follows:

(a) If to Buyer, to:

(with a copy to)

Foley & Lardner
100 North Tampa Street, Suite 2700
Tampa, Florida 33602-5804
Attention: Todd B. Pfister
Facsimile: (813) 221-4210

or to such other person or address as Buyer shall furnish to Shareholders'
Agent in writing.

(b) If to Shareholders, to Shareholders' Agent:

Mr. Jeffrey J. Berends
c/o BMC Consultants, Inc.
Suite 219
5105 DTC Parkway
Englewood, Colorado 80111
Facsimile: (303) 770-7490

(with a copy to)

Davis, Graham & Stubbs LLP
370 Seventeenth Street, Suite 4700
Denver, Colorado 80202
Attention: Sheldon Smith, Esq.
Facsimile: (303) 893-1379

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<PAGE> 45

or to such other person or address as Shareholders shall designate as a
successor Shareholders' Agent in accordance with this Agreement.

BMC Consultants, Inc.
1st Bank Building
Suite 219
5105 DTC Parkway
Englewood, Colorado 80111
Attention: President
Facsimile: (303) 770 -7490

(with a copy to)

Foley & Lardner
100 North Tampa Street, Suite 2700
Tampa, Florida 33602-5804
Attention: Todd B. Pfister
Facsimile: (813) 221-4210

Any notice to Company given after Closing shall also be given in the same
manner to Buyer.

If personally delivered, such communication shall be deemed delivered upon
actual receipt; if electronically transmitted pursuant to this paragraph, such
communication shall be deemed delivered the next business day after
transmission (and sender shall bear the burden of proof of delivery); if sent
by overnight courier pursuant to this paragraph, such communication shall be
deemed delivered upon receipt; and if sent by U.S. mail pursuant to this
paragraph, such communication shall be deemed delivered as of the date of
delivery indicated on the receipt issued by the relevant postal service, or, if
the addressee fails or refuses to accept delivery, as of the date of such
failure or refusal. Delivery to Shareholders' Agent shall constitute delivery
to all Shareholders. Any party to this Agreement may change its address for
the purposes of this Agreement by giving notice thereof in accordance with this
Section.

10.8. Expenses.

10.8.(a) Brokerage. Shareholders and Buyer each represent and
warrant to each other that there is no broker involved or in any
way connected with the transfer provided for herein on their behalf
respectively (and Shareholders represent and warrant that there is
no broker involved on behalf of Company) and each agrees to hold
the other harmless from and against all other claims for brokerage
commissions or finder's fees in connection with the execution of
this Agreement or the transactions provided for herein.

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<PAGE> 46

10.8.(b) Expenses to be Paid by the Principal Shareholder.
The Principal Shareholder (personally, and not through the Company)
shall pay, and shall indemnify, defend and hold Buyer and Company
harmless from and against, each of the following:

(i) Transfer Taxes. Any sales, use, excise, transfer or
other similar tax imposed with respect to the transactions
provided for in this Agreement, and any interest or penalties
related thereto.

(ii) Professional Fees. All fees and expenses,
including legal, accounting and other professional fees,
incurred by the Shareholders in connection with the
consummation of the transactions contemplated by this
Agreement and the preparation of the financial statements of
the Company as set forth in Section 3.4 of this Agreement,
but only to the extent such fees and expenses exceed $25,000.

10.8.(c) Other. Except as otherwise provided herein, each of
the parties shall bear its own expenses and the expenses of its
counsel and other agents in connection with the transactions
contemplated hereby.

10.8.(d) Costs of Litigation or Arbitration. The parties
agree that (subject to the discretion, in an arbitration
proceeding, of the arbitrator as set forth in Section 10.4) the
prevailing party in any action brought with respect to or to
enforce any right or remedy under this Agreement shall be entitled
to recover from the other party or parties all reasonable costs and
expenses of any nature whatsoever incurred by the prevailing party
in connection with such action, including without limitation
attorneys' fees and prejudgment interest.

10.9. Shareholders' Agent; Power of Attorney.

10.9.(a) Shareholders' Agent. The Shareholders hereby appoint
and constitute Jeffrey J. Berends as Shareholders' Agent hereunder,
to exercise the powers on behalf of Shareholders set forth in this
Agreement; and Jeffrey J. Berends hereby accepts such appointment.
In the event of the death, resignation or inability to act of
Jeffrey J. Berends, and upon receipt by Buyer of evidence of the
same which is satisfactory to Buyer, Margaret R. Berends shall be
successor Shareholders' Agent with all powers of his predecessor.

10.9.(b) Power of Attorney. Each Shareholder, by his
execution of this Agreement, hereby constitutes and appoints the
Shareholders' Agent his true and lawful attorney in fact, with full
power in his name and on his behalf:

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<PAGE> 47

subject to the terms hereof and the instructions of such
Shareholder with respect to the ultimate disbursement thereof;

(ii) to act on such Shareholder's behalf according to
the terms of this Agreement, including, without limitation,
the power to contest or acquiesce in the determination of the
Contingent Payment in accordance with Section 2.1; to amend
this Agreement in accordance with Article 10.6 or terminate
this Agreement in accordance with Section 8; to consent to
the assignment of rights under this Agreement in accordance
with Section 10.4.(a); to give and receive notices on behalf
of all the Shareholders; and to act on their behalf in
connection with any matter as to which the Shareholders are
an "Indemnified Party" or "Indemnifying Party" under Article
6 hereof; all in the absolute discretion of the Shareholders'
Agent;

(iii) in general, to do all things and to perform all
acts, including, without limitation, executing and delivering
all agreements, certificates, receipts, instructions and
other instruments contemplated by or deemed advisable in
connection with this Agreement.

This power of attorney, and all authority hereby conferred, is granted
subject to the interests of the other Shareholders and the Buyer hereunder and
in consideration of the mutual covenants and agreements made herein, and shall
be irrevocable and shall not be terminated by any act of any Shareholder or by
operation of law, whether by the death or incapacity of any Shareholder or by
the occurrence of any other event. Each Shareholder agrees, jointly and
severally, to hold the Shareholders' Agent free and harmless from any and all
loss, damage or liability which they, or any one of them, may sustain as a
result of any action taken in good faith hereunder.

10.11. Counterparts; Facsimile Signatures. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. This Agreement
and the Ancillary Instruments may be effective upon the execution and delivery
by any party of facsimile copies of signature pages hereto and thereto duly
executed by such party; provided, however, that any party delivering a
facsimile signature page covenants and agrees to deliver promptly after the
date hereto two (2) original copies to the other parties hereto.

10.12. Headings. The headings in this Agreement are inserted for
convenience only and shall not constitute a part hereof.

42
<PAGE> 48

10.13. Glossary of Terms.

The following sets forth the location of certain definitions of
capitalized terms defined in the body of this Agreement:

"Act" - Section 3.26
"Affiliate" - Section 3.7.(k)
"Ancillary Instruments" - Section 3.2.(a)
"Buyer's Affiliates" - Section 6.1
"CERCLA" - Section 3.10.(c)
"Claim" - Section 6.1
"Closing" - Preamble to Article 9
"Closing Date" - Section 7
"Code" - Section 3.5.(e)
"Company Employees" - Section 3.15.(a)
"Contingent Payment" - Section 2.1
"Disclosure Schedule" - Article 10
"Employee Plans/Agreement(s)" - Section 3.15.(a)
"Environmental Laws" - Section 3.10.(c)
"ERISA" - Section 3.15.(a)
"Facilities" - Second Recital
"Government Entities" - Section 3.3
"Indemnified Party" - Section 6.3.(a)
"Indemnifying Party" - Section 6.3.(a)
"Laws" - Section 3.3
"Lien" - Section 3.11.(a)
"Litigation" - Section 3.9
"Orders" - Section 3.3
"PBGC" - Section 3.15.(b)(ii)
"Purchase Price" - Section 2.1
"Real Property" - Section 3.11.(c)
"Recent Balance Sheet" - Section 3.4
"Services" - Section 3.19
"Settlement Date" - Section 2.2.(c)
"Shares" - First Recital
"Trade Rights" - Section 3.17
"Waste" - Section 3.10.(c)

43
<PAGE> 49

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.

BUYER:
ABR INFORMATION SERVICES, INC.,
a Florida corporation

By: /s/ Dennis A. Sweeney
_______________________________

Title: Senior Vice President
___________________________

COMPANY:

BMC CONSULTANTS, INC.,
a Colorado corporation

By: /s/ Jeffrey J. Berends
_______________________________
Jeffrey J. Berends
President

SHAREHOLDERS:

/s/ Jeffrey J. Berends
__________________________________
Jeffrey J. Berends, Individually

/s/ D'Nelle L. Macaluso
___________________________________
D'Nelle L. Macaluso, Individually

/s/ Frank J. Dobis
___________________________________
Frank J. Dobis, Individually

/s/ Scott A. Hittner
___________________________________
Scott A. Hittner, Individually

44
<PAGE> 50
/s/ Carol L. Carlson
___________________________________
Carol L. Carlson, Individually

/s/ Thomas W. Nielsen, Jr.
___________________________________
Thomas W. Nielsen, Jr., Individually

/s/ Walter L. Malles, Jr.
___________________________________
Walter L. Malles, Jr., Individually

/s/ Gene R. Etzig
___________________________________
Gene R. Etzig, Individually

SHAREHOLDERS' AGENT:

/s/ Jeffrey J. Berends
___________________________________
Jeffrey J. Berends

<PAGE> 1
EXHIBIT 10.21

KEY EXECUTIVE EMPLOYMENT AND SEVERANCE AGREEMENT

THIS AGREEMENT is made and entered into as of the ____ day of __________,
1998 by and between ABR INFORMATION SERVICES, INC., a Florida corporation (the
"Company"), and _____________________________ (the "Executive").

W I T N E S S E T H:

WHEREAS, the Executive is employed by the Company and/or a subsidiary of
the Company (the "Employer") in a key executive capacity and the Executive's
services are valuable to the conduct of the business of the Company;

WHEREAS, the Executive possesses intimate knowledge of the business and
affairs of the Company and has acquired certain confidential information and
data with respect to the Company;

WHEREAS, the Company desires to ensure, insofar as possible, that it will
continue to have the benefit of the Executive's services and to protect its
confidential information and goodwill;

WHEREAS, the Company recognizes that circumstances may arise in which a
change in control of the Company occurs, through acquisition or otherwise,
thereby causing uncertainty about the Executive's future employment with the
Employer without regard to the Executive's competence or past contributions,
which uncertainty may result in the loss of valuable services of the Executive
to the detriment of the Company and its shareholders, and the Company and the
Executive wish to provide reasonable security to the Executive against changes
in the Executive's relationship with the Company in the event of any such
change in control;

WHEREAS, the Company and the Executive are desirous that any proposal for
a change in control or acquisition of the Company will be considered by the
Executive objectively and with reference only to the best interests of the
Company and its shareholders; and

WHEREAS, the Executive will be in a better position to consider the
Company's best interests if the Executive is afforded reasonable security, as
provided in this Agreement, against altered conditions of employment which
could result from any such change in control or acquisition.

NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto mutually
covenant and agree as follows:

<PAGE> 2

1. DEFINITIONS.

(a) Act. For purposes of this Agreement, the term "ACT" means the
Securities Exchange Act of 1934, as amended.

(b) Affiliate and Associate. For purposes of this Agreement, the
terms "AFFILIATE" and "ASSOCIATE" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations of the Act.

(c) Beneficial Owner. For purposes of this Agreement, a Person shall
be deemed to be the "BENEFICIAL OWNER" of any securities:

(i) which such Person or any of such Person's Affiliates or
Associates has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding, or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, (A) securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for purchase, or (B) securities issuable upon exercise of any
rights issued pursuant to the terms of a shareholder rights agreement at
any time before the issuance of such securities;

(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of
or has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of
the General Rules and Regulations under the Act), including pursuant to
any agreement, arrangement or understanding; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially
own, any security under this subparagraph (ii) as a result of an
agreement, arrangement or understanding to vote such security if the
agreement, arrangement or understanding: (A) arises solely from a
revocable proxy or consent given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations under the Act, and (B) is not also
then reportable on a Schedule 13D or Schedule 13G under the Act (or any
comparable or successor report); or

(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in Section 1(c) (ii) above) or disposing of
any voting securities of the Company.

(d) Cause. For purposes of this Agreement, "CAUSE" for termination by
the Company of the Executive's employment in connection with a Change of
Control of the Company shall, for purposes of this Agreement, be limited to (i)
the engaging by the Executive

<PAGE> 3

in intentional conduct not taken in good faith which has caused demonstrable
and serious financial injury to the Company; (ii) conviction of a felony (as
evidenced by binding and final judgment, order or decree of a court of
competent jurisdiction, in effect after exhaustion of all rights of appeal);
and (iii) continuing willful and unreasonable refusal by the Executive to
perform the Executive's duties or responsibilities (unless such duties or
responsibilities are significantly changed without the Executive's consent).

(e) Change in Control of the Company. For purposes of this Agreement,
a "CHANGE IN CONTROL OF THE COMPANY" shall mean a change in control of a nature
that would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Act. Without limiting the inclusiveness
of the definition in the preceding sentence, a Change in Control of the Company
shall be deemed to have occurred if:

(i) any Person (other than any employee benefit plan of the
Company or of any subsidiary of the Company, any Person organized,
appointed or established pursuant to the terms of any such benefit plan
or any trustee, administrator or fiduciary of such a plan) is or becomes
the Beneficial Owner of securities of the Company representing at least
50% of the combined voting power of the Company's then outstanding
securities;

(ii) one-half or more of the members of the Board are not
Continuing Directors;

(iii) there shall be consummated (A) any merger of the Company or
share exchange involving the Company whether or not the Company is the
surviving corporation and or pursuant to which shares of the Company's
Common Stock would be converted into cash, securities or other property,
other than a merger or share exchange of the Company in which the holders
of the Company's Common Stock immediately prior to the merger would
receive at least 50% of the voting power of the common stock of the
surviving corporation immediately after the merger or share exchange, or
(B) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all, or substantially all, of the
assets of the Company; or

(iv) the shareholders of the Company approve any plan or proposal
for the liquidation or dissolution of the Company.

(f) Code. For purposes of this Agreement, the term "CODE" means the
Internal Revenue Code of 1986, including any amendments thereto or successor
tax codes thereof.

(g) Contining Director. For purposes of this Agreement, the term
"CONTINUING DIRECTOR" means any member of the Board of Directors of the Company
(the "BOARD") who was a member of the Board on the date hereof, and any
successor of a Continuing Director who is recommended to succeed a Continuing
Director by a majority of the Continuing Directors then on the Board.

<PAGE> 4

(h) Covered Termination. Subject to Section 2(b) hereof, for purposes
of this Agreement, the term "COVERED TERMINATION" means any termination of the
Executive's employment where the Termination Date is any date prior to the end
of the Employment Period.

(i) Employment Period. For purposes of this Agreement, the term
"EMPLOYMENT PERIOD" means a period commencing on the date of a Change in
Control of the Company, and ending at 11:59 p.m. Eastern Time on the earlier of
the third anniversary of such date or the Executive's Normal Retirement Date.

(j) Good Reason. For purposes of this Agreement, the Executive shall
have a "GOOD REASON" for termination of employment with the Company or any
subsidiary of the Company in connection with a Change in Control of the Company
in the event of:

(i) any material breach of this Agreement by the Company,
including specifically any breach by the Company of its agreements
contained in Sections 4, 5 or 6 hereof;

(ii) the removal of the Executive from, or any failure to reelect
or reappoint the Executive to, any of the positions held with the Company
or the Employer on the date of the Change in Control of the Company or
any other positions with the Company or the Employer to which the
Executive shall thereafter be elected, appointed or assigned, except in
the event that such removal or failure to reelect or reappoint relates to
the termination by the Company of the Executive's employment for Cause or
by reason of disability pursuant to Section 12 hereof;

(iii) a significant adverse change, without the Executive's
written consent, in the Executive's working conditions or status with the
Company or the Employer from such working conditions or status in effect
immediately prior to the Change in Control of the Company, including but
not limited to (A) a significant change in the nature or scope of the
Executive's authority, powers, functions, duties or responsibilities, or
(B) a significant reduction in the level of support services, staff,
secretarial and other assistance, office space and accoutrements; or

(iv) failure by the Company to enter into the Successor Agreement
referred to in Section 17(a) hereof and as provided therein.

(k) Normal Retirement Date. For purposes of this Agreement, the term
"NORMAL RETIREMENT DATE" means the last day in the Company's fiscal year in
which the Executive attains the age of 65.

(l) Person. For purposes of this Agreement, the term "PERSON" shall
mean any individual, firm, partnership, corporation, limited liability company,
or other entity, including any successor (by merger or otherwise) of such
entity, or a group of any of the foregoing acting in concert.

<PAGE> 5

(m) Termination Date. For purposes of this Agreement, except as
otherwise provided in Section 10(b) and Section 17(a) hereof, the term
"TERMINATION DATE" means: (i) if the Executive's employment is terminated by
the Executive's death, the date of death; (ii) if the Executive's employment is
terminated by reason of voluntary early retirement, as agreed in writing by the
Company and the Executive, the date of such early retirement which is set forth
in such written agreement; (iii) if the Executive's employment is terminated
for purposes of this Agreement by reason of disability pursuant to Section 12
hereof, the earlier of thirty (30) days after the Notice of Termination (as
provided in Section 13 hereof) is given or one day prior to the end of the
Employment Period; (iv) if the Executive's employment is terminated by the
Executive voluntarily (other than for Good Reason), the date the Notice of
Termination is given; and (v) if the Executive's employment is terminated by
the Company (other than by reason of disability pursuant to Section 12 hereof)
or by the Executive for Good Reason, the earlier of thirty (30) days after the
Notice of Termination is given or one day prior to the end of the Employment
Period. Notwithstanding the foregoing:

(i) if the Executive's employment is terminated by the Company
for Cause pursuant to Section 1(d)(iii) of this Agreement, and if the
Executive has cured the conduct constituting such Cause as described by
the Company in its Notice of Termination within thirty (30) days after
the Notice of Termination, then the Executive's employment hereunder
shall continue as if the Company had not delivered its Notice of
Termination;

(ii) if the Executive shall give the Company a Notice of
Termination for Good Reason and the Company notifies the Executive that a
dispute exists concerning the termination within the fifteen (15) day
period following the date of the Notice of Termination is given, then the
Executive may elect to continue the Executive's employment pending the
resolution of such dispute, and the Termination Date shall be determined
under this Section 1(m)(vii). If the Executive so elects and it is
thereafter determined that Good Reason did exist, the Termination Date
shall be the earliest of (A) the date on which the dispute is finally
determined, either (1) by mutual written agreement of the Executive and
the Company or (2) in accordance with Section 22 hereof, (B) the date of
the Executive's death, or (C) one day prior to the end of the Employment
Period. If the Executive so elects and it is thereafter determined that
Good Reason did not exist, then the employment of the Executive hereunder
shall continue after such determination as if the Executive had not
delivered the Notice of Termination asserting Good Reason and there shall
be no Termination Date arising out of such Notice of Termination. In
either case, this Agreement shall continue, until the Termination Date,
if any, as if the Executive had not delivered the Notice of Termination
except that, if it is finally determined that Good Reason did exist, the
Executive shall in no case be denied the benefits described in Sections
8(b) and 9 hereof (including a Termination Payment as defined in Section
9(b)) based on events occurring after the Executive delivered the Notice
of Termination;

(iii) if an opinion is required to be delivered pursuant to
Section 9(b)(ii) hereof and such opinion shall not have been delivered,
the Termination Date

<PAGE> 6

shall be the earlier of the date on which such opinion is delivered or
one day prior to the end of the Employment Period; or

(iv) except as provided in Section 1(m)(vii) above, if the party
receiving the Notice of Termination notifies the other party that a
dispute exists concerning the termination within the appropriate period
following receipt thereof and it is finally determined that the reason
asserted in such Notice of Termination did not exist or did not support
the basis asserted for the giving of such Notice of Termination, then (A)
if such Notice of Termination was delivered by the Executive, the
Executive will be deemed to have voluntarily terminated the Executive's
employment and the Termination Date shall be the earlier of the date
fifteen (15) days after the Notice of Termination is given or one day
prior to the end of the Employment Period, and (B) if such Notice of
Termination was delivered by the Company, the Company will be deemed to
have terminated the Executive other than by reason of death, disability
or Cause.

2. TERMINATION OR CANCELLATION PRIOR TO CHANGE IN CONTROL.

(a) Subject to Section 2(b) hereof and the terms of any written
agreement between either the Company or the Employer and the Executive with
respect to the employment of the Executive now or hereafter in effect, the
Company (and the Employer) and the Executive shall each retain the right to
terminate the employment of the Executive at any time prior to a Change in
Control of the Company. Subject to Section 2(b) hereof, in the event the
Executive's employment is terminated prior to a Change in Control of the
Company, this Agreement shall be terminated and cancelled and of no further
force and effect, and any and all rights and obligations of the parties
hereunder shall cease.

(b) Anything in this Agreement to the contrary notwithstanding, if a
Change in Control of the Company occurs and if the Executive's employment with
the Employer is terminated (other than a termination due to the Executive's
death or as a result of the Executive's disability) during the period of 180
days prior to the date on which the Change in Control of the Company occurs,
and if it is reasonably demonstrated by the Executive that such termination of
employment (i) was at the request of any Person who has taken steps reasonably
calculated to effect a Change in Control of the Company, or (ii) otherwise
arose in connection with or in anticipation of a Change in Control of the
Company, then for all purposes of this Agreement such termination of employment
shall be deemed a "COVERED TERMINATION."

3. EMPLOYMENT PERIOD. If a Change in Control of the Company occurs when
the Executive is employed by the Employer, the Company will, or will cause the
Employer to, continue thereafter to employ the Executive during the Employment
Period, and the Executive will remain in the employ of the Employer in
accordance with and subject to the terms and provisions of this Agreement. Any
termination of the Executive's employment during the Employment Period, whether
by the Company or the Employer, shall be deemed a termination by the Company
for purposes of this Agreement.

6
<PAGE> 7

4. DUTIES. During the Employment Period, the Executive shall, in the same
capacities and positions held by the Executive at the time of the Change in
Control of the Company or in such other capacities and positions as may be
agreed to by the Company and the Executive in writing, devote the Executive's
best efforts and all of the Executive's business time, attention and skill to
the business and affairs of the Employer, as such business and affairs now
exist and as they may hereafter be conducted. The services which are to be
performed by the Executive hereunder are to be rendered in the same
metropolitan area in which the Executive was employed at the time of such
Change in Control of the Company, or in such other place or places as shall be
mutually agreed upon in writing by the Executive and the Company from time to
time. Without the Executive's consent, the Executive shall not be required to
be absent from such metropolitan area more than 30 days in any fiscal year of
the Company.

5. COMPENSATION. During the Employment Period, the Executive shall be
compensated as follows:

(a) The Executive shall receive, at reasonable intervals (but not
less often than monthly) and in accordance with such standard policies as may
be in effect immediately prior to the Change in Control of the Company, an
annual base salary in cash equivalent of not less than the aggregate of the
Executive's annual base salary as in effect immediately prior to the Change in
Control of the Company (which base salary shall, unless otherwise agreed in
writing by the Executive, include the current receipt by the Executive of any
amounts which, prior to the Change in Control of the Company, the Executive had
elected to defer, whether such compensation is deferred under Section 401(k) of
the Code or otherwise), plus the dollar amount of any cash bonuses paid by the
Company to the Executive during the preceding fiscal year, subject to
adjustment as hereinafter provided.

(b) The Executive shall receive fringe benefits at least equal in
value to those provided for the Executive immediately prior to the Change in
Control of the Company, and shall be reimbursed, at such intervals and in
accordance with such standard policies as may be in effect immediately prior to
the Change in Control of the Company, for any and all monies advanced in
connection with the Executive's employment for reasonable and necessary
expenses incurred by the Executive on behalf of the Company, including travel
expenses.

(c) The Executive shall be included, to the extent eligible
thereunder (which eligibility shall not be conditioned on the Executive's
salary grade or on any other requirement which excludes persons of comparable
status to the Executive unless such exclusion was in effect for such plan or an
equivalent plan immediately prior to the Change in Control of the Company), in
any and all plans providing benefits for the Employer's salaried employees in
general, including but not limited to group life insurance, hospitalization,
medical, dental, profit sharing, stock option and stock bonus plans; provided,
that, in no event shall the aggregate level of benefits under such plans in
which the Executive is included be less than the aggregate level of benefits
under plans of the Company of the type referred to in this Section 5(c) in
which the Executive was participating immediately prior to the Change in
Control of the Company.

<PAGE> 8

(d) The Executive shall annually be entitled to not less than the
amount of paid vacation and not fewer than the number of paid holidays to which
the Executive was entitled annually immediately prior to the Change in Control
of the Company or such greater amount of paid vacation and number of paid
holidays as may be made available annually to other executives of the Company
of comparable status and position to the Executive.

(e) The Executive shall be included in all plans providing additional
benefits to executives of the Company of comparable status and position to the
Executive, including but not limited to deferred compensation, split-dollar
life insurance, supplemental retirement, stock option, stock appreciation,
stock bonus and similar or comparable plans; provided, that, in no event shall
the aggregate level of benefits under such plans be less than the aggregate
level of benefits under plans of the Company of the type referred to in this
Section 5(e) in which the Executive was participating immediately prior to the
Change in Control of the Company; and provided, further, that the Company's
obligation to include the Executive in bonus or incentive compensation plans
shall be determined by Section 5(f) hereof.

(f) To assure that the Executive will have an opportunity to earn
incentive compensation after a Change in Control of the Company, the Executive
shall be included in a bonus plan of the Company which shall satisfy the
standards described below (such plan, the "BONUS PLAN"). Bonuses under the
Bonus Plan shall be payable with respect to achieving such financial or other
goals reasonably related to the business of the Company and the Employer as the
Company shall establish (the "GOALS"), all of which Goals shall be attainable,
prior to the end of the Employment Period, with approximately the same degree
of probability as the goals under the Company's bonus plan or plans as in
effect immediately prior to the Change in Control of the Company (whether one
or more, the "COMPANY BONUS PLAN") and in view of the Company's existing and
projected financial and business circumstances applicable at the time. The
amount of the bonus (the "BONUS AMOUNT") that the Executive is eligible to earn
under the Bonus Plan shall be no less than the amount of the Executive's
maximum award provided in such Bonus Plan (such bonus amount herein referred to
as the "Targeted Bonus"), and in the event the Goals are not achieved such that
the entire Targeted Bonus is not payable, the Bonus Plan shall provide for a
payment of a Bonus Amount equal to a portion of the Targeted Bonus reasonably
related to that portion of the Goals which were achieved. Payment of the Bonus
Amount shall not be affected by any circumstance occurring subsequent to the
end of the Employment Period, including termination of the Executive's
employment.

6. ANNUAL COMPENSATION ADJUSTMENTS. During the Employment Period, the
Board (or an appropriate committee thereof) will consider and appraise, at
least annually, the contributions of the Executive to the Company, and in
accordance with the Company's practice prior to the Change in Control of the
Company, due consideration shall be given to the upward adjustment of the
Executive's base compensation rate, at least annually, (i) commensurate with
increases generally given to other executives of the Company of comparable
status and position to the Executive, and (ii) as the scope of the Company's
operations or the Executive's duties expand.

<PAGE> 9

7. TERMINATION FOR CAUSE OR WITHOUT GOOD REASON. If there is a Covered
Termination for Cause or due to the Executive's termination of the Executive's
employment other than for Good Reason (any such terminations to be subject to
the procedures set forth in Section 13 hereof), then the Executive shall be
entitled to receive only Accrued Benefits pursuant to Section 9(a) hereof.

8. TERMINATION GIVING RISE TO A TERMINATION PAYMENT.

(a) If there is a Covered Termination by the Executive for Good
Reason, or by the Company other than by reason of (i) death, (ii) disability
pursuant to Section 12 hereof, or (iii) Cause (any such terminations to be
subject to the procedures set forth in Section 13 hereof), then the Executive
shall be entitled to receive, and the Company shall promptly pay, Accrued
Benefits and, in lieu of further base salary for periods following the
Termination Date, as liquidated damages and additional severance pay and in
consideration of the covenant of the Executive set forth in Section 14(a)
hereof, the Termination Payment pursuant to Section 9(b) hereof.

(b) If there is a Covered Termination and the Executive is entitled
to Accrued Benefits and the Termination Payment, then the Executive shall be
entitled to the following additional benefits:

(i) The Executive shall receive, at the expense of the Company,
outplacement services, on an individualized basis at a level of service
commensurate with the Executive's status with the Company immediately
prior to the Change in Control of the Company (or, if higher, immediately
prior to the termination of the Executive's employment), provided by a
nationally recognized executive placement firm selected by the Company;
provided that the cost to the Company of such services shall not exceed
30% of the Executive's annual base salary in effect immediately prior to
the Change in Control of the Company.

(ii) Until the earlier of the end of the Employment Period or
such time as the Executive has obtained new employment and is covered by
the same or equivalent life insurance, hospitalization, medical and
dental coverage as was required hereunder with respect to the Executive
immediately prior to the date the Notice of Termination is given, the
Executive shall continue to be covered, at the expense of the Company, in
the same manner that the Executive was covered immediately prior to the
date the Notice of Termination is given.

9. PAYMENTS UPON TERMINATION.

(a) Accrued Benefits. For purposes of this Agreement, the Executive's
"ACCRUED BENEFITS" shall include the following amounts, payable as described
herein: (i) all base salary for the time period ending with the Termination
Date; (ii) reimbursement for any and all reasonable and necessary expenses
incurred by the Executive on behalf of the Company for the time period ending
with the Termination Date; (iii) any and all compensation or other cash earned
through the Termination Date and deferred at the election of the Executive or

<PAGE> 10

pursuant to any deferred compensation plan then in effect; (iv) a lump sum
payment of the bonus or incentive compensation otherwise payable to the
Executive with respect to the year in which termination occurs under any bonus
or incentive compensation plan in which the Executive is a participant; and (v)
all other payments and benefits to which the Executive (or in the event of the
Executive's death, the Executive's surviving spouse or other beneficiary) may
be entitled as compensatory fringe benefits or under the terms of any benefit
plan of the Company, excluding severance payments under any Company severance
policy, practice or agreement in effect immediately prior to the Change in
Control of the Company. Payment of Accrued Benefits shall be made promptly in
accordance with the Company's prevailing practice with respect to Subsections
(i) and (ii) above or, with respect to Subsections (iii), (iv) and (v) above,
pursuant to the terms of the benefit plan or practice establishing such
benefits.

(b) Termination Payment.

(i) Subject to the limits set forth in Subsection 9(b)(ii)
hereof, for purposes of this Agreement, the "TERMINATION PAYMENT" shall
be an amount equal to (A) the Executive's annual base salary, as in
effect immediately prior to the Change in Control of the Company, as
adjusted upward, from time to time, pursuant to Section 6 hereof, plus
(B) the amount of the average annual bonus award (determined on an
annualized basis for any bonus award paid for a period of less than one
year and excluding any year for which the Executive did not participate
in any bonus plan) paid to the Executive with respect to the three
complete fiscal years preceding the Termination Date (the sum of the
amounts set forth in (A) and (B) hereof shall hereafter be referred to as
"ANNUAL CASH COMPENSATION"), multiplied by (C) the number of years or
fractional portion thereof remaining in the Employment Period determined
as of the Termination Date; provided, however, that such amount shall not
be less than the greater of (i) the amount of the Executive's Annual Cash
Compensation or (ii) the severance benefits to which the Executive would
have been entitled under the Company's severance policies and practices
in effect immediately prior to the Change in Control of the Company. The
Termination Payment shall be paid to the Executive in cash equivalent ten
business days after the Termination Date. Such lump sum payment shall not
be reduced by any present value or similar factor, and the Executive
shall not be required to mitigate the amount of the Termination Payment
by securing other employment or otherwise, nor will such Termination
Payment be reduced by reason of the Executive securing other employment
or for any other reason. The Termination Payment shall be in lieu of, and
acceptance by the Executive of the Termination Payment shall constitute
the Executive's release of any rights of the Executive to, any other
severance payments under any Company severance policy, practice or
agreement. The Company shall bear the cost of up to $25,000 in the
aggregate of fees and expenses of consultants and/or legal, tax or
accounting advisors engaged by the Executive to advise the Executive as
to matters relating to the computation of benefits due and payable under
this Section 9(b).

(ii) Notwithstanding any other provision of this Agreement, if
any portion of the Termination Payment or any other payment under this
Agreement, or

<PAGE> 11

under any other agreement with or plan of the Company (in the aggregate,
"TOTAL PAYMENTS"), would constitute an "excess parachute payment," then
the Total Payments to be made to the Executive shall be reduced such that
the value of the aggregate Total Payments that the Executive is entitled
to receive shall be One Dollar ($1) less than the maximum amount which
the Executive may receive without becoming subject to the tax imposed by
Section 4999 of the Code (or any successor provision) or which the
Company may pay without loss of deduction under Section 280G(a) of the
Code (or any successor provision). For purposes of this Agreement, the
terms "excess parachute payment" and "parachute payments" shall have the
meanings assigned to them in Section 280G of the Code (or any successor
provision), and such "parachute payments" shall be valued as provided
therein. Present value for purposes of this Agreement shall be calculated
in accordance with Section 280G(d)(4) of the Code (or any successor
provision). Within forty (40) days following delivery of the Notice of
Termination or notice by the Company to the Executive of its belief that
there is a payment or benefit due the Executive which will result in an
excess parachute payment as defined in Section 280G of the Code (or any
successor provision), the Executive and the Company, at the Company's
expense, shall obtain the opinion (which need not be unqualified) of
nationally recognized tax counsel selected by the Executive in the
Executive's sole discretion (which may be general outside counsel to the
Company), which opinion sets forth (A) the amount of the Base Period
Income, (B) the amount and present value of Total Payments, and (C) the
amount and present value of any excess parachute payments determined
without regard to the limitations of this Section 9(b)(ii). As used in
this Section 9(b)(ii), the term "BASE PERIOD INCOME" means an amount
equal to the Executive's "annualized includible compensation for the base
period" as defined in Section 280G(d)(l) of the Code (or any successor
provision). For purposes of such opinion, the value of any noncash
benefits or any deferred payment or benefit shall be determined in
accordance with the principles of Sections 280G(d)(3) and (4) of the Code
(or any successor provisions). Such opinion shall be dated as of the
Termination Date and addressed to the Company and the Executive and shall
be binding upon the Company and the Executive. If such opinion determines
that there would be an excess parachute payment, the Termination Payment
hereunder or any other payment or benefit determined by such counsel to
be includible in Total Payments shall be reduced or eliminated as
specified by the Executive in writing delivered to the Company within
thirty (30) days of the Executive's receipt of such opinion or, if the
Executive fails to so notify the Company, then as the Company shall
reasonably determine, so that under the bases of calculations set forth
in such opinion there will be no excess parachute payment. If such legal
counsel so requests in connection with the opinion required by this
Section, the Executive and the Company shall obtain, at the Company's
expense, and the legal counsel may rely on in providing the opinion, the
advice of a firm of recognized executive compensation consultants as to
the reasonableness of any item of compensation to be received by the
Executive. If the provisions of Sections 280G and 4999 of the Code (or
any successor provisions) are repealed without succession, then this
Section 9(b) (ii) shall be of no further force or effect.

<PAGE> 12

(iii) (A) If, notwithstanding the provisions of Section 9(b)(ii)
above, but subject to paragraph (B) immediately following, it is
ultimately determined by a court or pursuant to a final determination by
the Internal Revenue Service that any portion of Total Payments is
subject to the tax (the "EXCISE TAX") imposed by Section 4999 of the Code
(or any successor provision), the Company shall pay to the Executive an
additional amount (the "GROSS-UP PAYMENT") such that the net amount
retained by the Executive after deduction of any Excise Tax and any
interest charges or penalties in respect of the imposition of such Excise
Tax (but not any federal, state or local income tax) on the Total
Payments, and any federal, state and local income tax and Excise Tax upon
the payment provided for by this Section 9(b)(iii), shall be equal to the
Total Payments. For purposes of determining the amount of the Gross-Up
Payment, the Executive shall be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation in the calendar year in
which the Gross-Up Payment is to be made and state and local income taxes
at the highest marginal rates of taxation in the state and locality of
the Executive's domicile for income tax purposes on the date the Gross-Up
Payment is made, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local taxes.

(iii) (B) If legislation is enacted that would require the
Company's shareholders to approve this Agreement, prior to a Change in
Control of the Company, due solely to the provision contained in
paragraph (A) of this Section 9(b)(iii), then

(1) from and after such time as shareholder approval would
be required, until shareholder approval is obtained as required
by such legislation, paragraph (A) shall be of no force and
effect;

(2) the Company and the Executive shall use their best
efforts to consider and agree in writing upon an amendment to
this Section 9(b)(iii) such that, as amended, this Section
9(b)(iii) would provide the Executive with the benefits intended
to be afforded to the Executive by paragraph (A) without
requiring shareholder approval; and

(3) at the reasonable request of the Executive, the Company
shall seek shareholder approval of this Agreement at the next
annual meeting of shareholders of the Company.

10. DEATH.

(a) Except as provided in Section 10(b) hereof, in the event of a Covered
Termination due to the Executive's death, the Executive's estate, heirs and
beneficiaries shall receive all the Executive's Accrued Benefits through the
Termination Date.

(b) In the event the Executive dies after a Notice of Termination is
given (i) by the Company or (ii) by the Executive for Good Reason, the
Executive's estate, heirs and beneficiaries shall be entitled to the benefits
described in Section 10(a) hereof and, subject to the provisions of this
Agreement, to such Termination Payment as the Executive would have

<PAGE> 13

been entitled to had the Executive lived. For purposes of this Section 10(b),
the Termination Date shall be the earlier of thirty (30) days following the
giving of the Notice of Termination, subject to extension pursuant to Section
1(m) hereof, or one day prior to the end of the Employment Period.

11. RETIREMENT. If, during the Employment Period, the Executive and the
Company shall execute an agreement providing for the early retirement of the
Executive from the Company, or the Executive shall otherwise give notice that
he is voluntarily choosing to retire early from the Company, the Executive
shall receive Accrued Benefits through the Termination Date; provided, that if
the Executive's employment is terminated by the Executive for Good Reason or by
the Company other than by reason of death, disability or Cause and the
Executive also, in connection with such termination, elects voluntary early
retirement, the Executive shall also be entitled to receive a Termination
Payment pursuant to Section 8(a) hereof.

12. TERMINATION FOR DISABILITY. If, during the Employment Period, as a
result of the Executive's disability due to physical or mental illness or
injury (regardless of whether such illness or injury is job-related), the
Executive shall have been absent from the Executive's duties hereunder on a
full-time basis for a period of six consecutive months and, within thirty (30)
days after the Company notifies the Executive in writing that it intends to
terminate the Executive's employment (which notice shall not constitute the
Notice of Termination contemplated below), the Executive shall not have
returned to the performance of the Executive's duties hereunder on a full-time
basis, the Company may terminate the Executive's employment for purposes of
this Agreement pursuant to a Notice of Termination given in accordance with
Section 13 hereof. If the Executive's employment is terminated on account of
the Executive's disability in accordance with this Section, the Executive shall
receive Accrued Benefits in accordance with Section 9(a) hereof and shall
remain eligible for all benefits provided by any long term disability programs
of the Company in effect at the time of such termination.

13. TERMINATION NOTICE AND PROCEDURE. Any Covered Termination by the
Company or the Executive (other than a termination of the Executive's
employment that is a Covered Termination by virtue of Section 2(b) hereof)
shall be communicated by written Notice of Termination to the Executive, if
such Notice of Termination is given by the Company, and to the Company, if such
Notice of Termination is given by the Executive, all in accordance with the
following procedures and those set forth in Section 23 hereof:

(a) If such termination is for disability, Cause or Good Reason, the
Notice of Termination shall indicate in reasonable detail the facts and
circumstances alleged to provide a basis for such termination.

(b) Any Notice of Termination by the Company shall have been
approved, prior to the giving thereof to the Executive, by a resolution duly
adopted by a majority of the members of the Company's Board of Directors then
in office.

<PAGE> 14

(c) If the Notice is given by the Executive for Good Reason, the
Executive may cease performing the Executive's duties hereunder on or after the
date fifteen (15) days after the delivery of Notice of Termination and shall in
any event cease employment on the Termination Date. If the Notice of
Termination is given by the Company, then the Executive may cease performing
the Executive's duties hereunder on the date of receipt of the Notice of
Termination, subject to the Executive's rights hereunder.

(d) The Executive shall have thirty (30) days, or such longer period
as the Company may determine to be appropriate, to cure any conduct or act, if
curable, alleged to provide grounds for termination of the Executive's
employment for Cause under this Agreement pursuant to Subsection 1(d) (iii)
hereof.

(e) The recipient of any Notice of Termination shall personally
deliver or mail in accordance with Section 23 hereof written notice of any
dispute relating to such Notice of Termination to the party giving such Notice
of Termination within fifteen (15) days after receipt thereof; provided,
however, that if the Executive's conduct or act alleged to provide grounds for
termination by the Company for Cause is curable, then such period shall be
thirty (30) days. After the expiration of such period, the contents of the
Notice of Termination shall become final and not subject to dispute.

14. FURTHER OBLIGATIONS OF THE EXECUTIVE.

(a) Competition. The Executive agrees that, in the event of any
Covered Termination where the Executive is entitled to Accrued Benefits and the
Termination Payment, the Executive shall not, for a period expiring one year
after the Termination Date, without the prior written approval of the Company's
Board of Directors, participate in the management of, be employed by or own any
business enterprise which the principal office of which is located within the
Southeastern United States that engages in substantial competition with the
Company or any of its subsidiaries, where such enterprise's revenues from such
competitive activities amounted to 50% or more of such enterprise's net
revenues and sales for its most recently completed fiscal year; provided,
however, that nothing in this Section 14(a) shall prohibit the Executive from
owning stock or other securities of a competitor of the Company or any of its
subsidiaries amounting to less than five (5) percent of the outstanding capital
stock of such competitor; and provided, further if for any reason the Company
does not pay the Executive the amounts and make available to the Executive the
benefits provided in and required by this Agreement, then the Executive will
have no further obligation to the Company under this Section 14(a).

(b) Confidentiality. During and following the Executive's employment
by the Company, the Executive shall hold in confidence and not directly or
indirectly disclose or use or copy or make lists of any confidential
information or proprietary data of the Company (including that of the
Employer), except to the extent authorized in writing by the Board or required
by any court or administrative agency, other than to an employee of the Company
or a person to whom disclosure is reasonably necessary or appropriate in
connection with the performance by the Executive of duties as an executive of
the Company. Confidential

<PAGE> 15

information shall not include any information known generally to the public or
any information of a type not otherwise considered confidential by persons
engaged in the same business or a business similar to that of the Company. All
records, files, documents and materials, or copies thereof, relating to the
business of the Company which the Executive shall prepare, or use, or come into
contact with, shall be and remain the sole property of the Company and shall be
promptly returned to the Company upon termination of employment with the
Company.

15. Expenses and Interest. If, after a Change in Control of the Company,
(i) a dispute arises with respect to the enforcement of the Executive's rights
under this Agreement, or (ii) any legal or arbitration proceeding shall be
brought to enforce or interpret any provision contained herein or to recover
damages for breach hereof, in either case so long as the Executive is not
acting in bad faith, the Executive shall recover from the Company any
reasonable attorneys' fees and necessary costs and disbursements incurred as a
result of such dispute, legal or arbitration proceeding ("Expenses"), and
prejudgment interest on any money judgment or arbitration award obtained by the
Executive calculated at the prime rate of interest as reported by The Wall
Street Journal from the date that payments to the Executive should have been
made under this Agreement. Within ten (10) days after the Executive's written
request therefor, the Company shall pay to the Executive, or such other person
or entity as the Executive may designate in writing to the Company, the
Executive's Expenses in advance of the final disposition or conclusion of any
such dispute, legal or arbitration proceeding.

16. PAYMENT OBLIGATIONS ABSOLUTE. The Company's obligation during and
after the Employment Period to pay the Executive the amounts and to makes the
benefits and other arrangements provided herein shall be absolute and
unconditional and shall not be affected by any circumstances, including,
without limitation, any setoff, counterclaim, recoupment, defense or other
right which the Company may have against the Executive or any other Person.
Except as provided in Section 15 of this Agreement, all amounts payable by the
Company hereunder shall be paid without notice or demand. The Company will not
seek to recover all or any part of any payment made by the Company hereunder
from the Executive, or from whomsoever may be entitled thereto, for any reason
whatsoever.

17. SUCCESSORS.

(a) If the Company sells, assigns or transfers all or substantially
all of its business and assets to any Person or if the Company merges into or
consolidates or otherwise combines (where the Company is not the surviving
entity in such combination) with any Person (any such event, a "SALE OF
BUSINESS"), then the Company shall assign all of its right, title and interest
in this Agreement as of the date of such event to such Person, and the Company
shall cause such Person, by written agreement in form and substance reasonably
satisfactory to the Executive (the "Successor Agreement"), to expressly assume
and agree to perform from and after the date of such assignment all of the
terms, conditions and provisions imposed by this Agreement upon the Company.
Failure of the Company to enter into the Successor Agreement at or prior to the
effective date of such Sale of Business shall be a breach of this Agreement
constituting "Good Reason" hereunder, except that for purposes of implementing
the foregoing, the date upon which such Sale of Business becomes effective
shall be deemed the

<PAGE> 16

Termination Date. In case of such assignment by the Company and of assumption
and agreement by such Person pursuant to the Successor Agreement, as used in
this Agreement, "COMPANY" shall thereafter mean such Person which executes and
delivers the Successor Agreement provided for in this Section 17(a) or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law, and this Agreement shall inure to the benefit of, and be
enforceable by, such Person. The Executive shall, in the Executive's
discretion, be entitled to proceed against any or all of such Persons, any
Person which theretofore was such a successor to the Company (as defined in the
first paragraph of this Agreement) and the Company (as so defined) in any
action to enforce any rights of the Executive hereunder. Except as provided in
this Section 17(a), this Agreement shall not be assignable by the Company. This
Agreement shall not be terminated by the voluntary or involuntary dissolution
of the Company.

(b) This Agreement and all rights of the Executive shall inure to the
benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, heirs and beneficiaries. Any amount
payable to the Executive under this Agreement if the Executive had lived shall
be paid, in the event of the Executive's death, to the Executive's estate,
heirs and representatives; provided, however, that the foregoing shall not be
construed to modify any terms of any benefit plan of the Company or agreement
to which the Executive is a party, as such terms are in effect on the date of
the Change in Control of the Company, that expressly govern benefits under such
plan or agreement in the event of the Executive's death.

18. SEVERABILITY. The provisions of this Agreement shall be regarded as
divisible, and if any of said provisions or any part hereof are declared
invalid or unenforceable by a court of competent jurisdiction, the validity and
enforceability of the remainder of such provisions or parts hereof and the
applicability thereof shall not be affected thereby.

19. AMENDMENT. This Agreement may not be amended or modified at any time
except by written instrument executed by the Company and the Executive.

20. WITHHOLDING. The Company shall be entitled to withhold from amounts
to be paid to the Executive hereunder any federal, state or local withholding
or other taxes or charges which it is from time to time required to withhold;
provided, that the amount so withheld shall not exceed the minimum amount
required to be withheld by law. The Company shall be entitled to rely on an
opinion of nationally recognized tax counsel if any question as to the amount
or requirement of any such withholding shall arise.

21. CERTAIN RULES OF CONSTRUCTION. No party shall be considered as being
responsible for the drafting of this Agreement for the purpose of applying any
rule construing ambiguities against the drafter or otherwise. No draft of this
Agreement shall be taken into account in construing this Agreement. Any
provision of this Agreement which requires an agreement in writing shall be
deemed to require that the writing in question be signed by the Executive and
an authorized representative of the Company.

<PAGE> 17

22. GOVERNING LAW; RESOLUTION OF DISPUTES. This Agreement and the rights
and obligations hereunder shall be governed by and construed in accordance with
the internal laws of the State of Florida, without reference to conflict or
choice of law principles thereunder. Any dispute arising out of this Agreement
shall, at the Executive's election, be determined by arbitration under the
rules of the American Arbitration Association then in effect (in which case the
Executive and the Company shall be bound by the arbitration award) or by
litigation. Whether the dispute is to be settled by arbitration or litigation,
the venue for the arbitration or litigation shall be Pinellas County, Florida
or, at the Executive's election, if the Executive is no longer residing or
working in the Tampa/St. Petersburg, Florida metropolitan area, in the judicial
district encompassing the city in which the Executive resides; provided, that,
if the Executive is not then residing in the United States, the election of the
Executive with respect to such venue shall be either Pinellas County, Florida
or in the judicial district encompassing that city in the United States among
the thirty cities having the largest population (as determined by the most
recent United States Census data available at the Termination Date) which is
closest to the Executive's residence. The parties consent to personal
jurisdiction in each trial court in the selected venue having subject matter
jurisdiction notwithstanding their residence or situs, and each party
irrevocably consents to service of process in the manner provided hereunder for
the giving of notices.

23. NOTICE. Notices given pursuant to this Agreement shall be in writing
and, except as otherwise provided in this Agreement, shall be deemed given when
actually received by the Executive or actually received by the Company's
Secretary or any officer of the Company other than the Executive. If mailed,
such notices shall be mailed by United States registered or certified mail,
return receipt requested, addressee only, postage prepaid, if to the Company,
to ABR Information Services, Inc., Attention: Secretary (or President, if the
Executive is then Secretary), 34125 U.S. Highway 19 North, Palm Harbor, Florida
34684, or if to the Executive, at the address set forth below the Executive's
signature to this Agreement, or to such other address as the party to be
notified shall have theretofore given to the other party in writing.

24. NO WAIVER. No waiver by either party at any time of any breach by the
other party of, or compliance with, any condition or provision of this
Agreement to be performed by the other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same time or any prior or
subsequent time.

25. HEADINGS. The headings herein contained are for reference only and
shall not affect the meaning or interpretation of any provision of this
Agreement.

<PAGE> 18

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

ABR INFORMATION SERVICES, INC.

By:
----------------------------------
James E. MacDougald
Chairman of the Board, President
and Chief Executive Officer

THE EXECUTIVE

-------------------------------------
Name:
--------------------------------

Address:
-----------------------------

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

<PAGE> 1

EXHIBIT 21.1

LIST OF SUBSIDIARIES OF ABR INFORMATION SERVICES, INC.

1. ABR Properties, Inc. (a Florida Corporation)

2. ABR Benefits Services, Inc. (a Florida Corporation)

3. Charing Company, Inc. (a Wisconsin Corporation)

4. Matthews, Malone & Associates, Ltd. (an Arizona Corporation)

5. Business Computer Services, Inc. (dba PayAmerica) (a Virginia Corporation)

6. MidAtlantic 401(K) Services, Inc. (a Virginia Corporation)

7. Chowning, Ltd. (a Wisconsin Corporation)

8. The Barrington Group, Ltd. (a Wisconsin Corporation) (wholly owned by
Chowning, Ltd.)

9. Western Pension Service Corporation (a California Corporation)

10. BMC Consultants, Inc. (a Colorado Corporation)

<PAGE> 1
Exhibit 23.1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We have issued our reports dated November 11, 1998, accompanying the
consolidated financial statements and schedule of ABR Information Services,
Inc. that are included in the Company's Form 10-K for the year ended July 31,
1998. We hereby consent to the incorporation by reference of said reports in
the Registration Statements of ABR Information Services, Inc. on Form S-3 (File
No. 333-2706, effective March 21, 1996), Form S-8 (File No. 33-86520, as
amended, effective December 3, 1996) and Form S-8 (File No. 333-17195, effective
December 3, 1996).

GRANT THORNTON LLP

Tampa, Florida
November 11, 1998

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ABR
INFORMATION SERVICES, INC. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
1998 FORM 10-K.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<EXCHANGE-RATE> 1
<CASH> 54,427,446
<SECURITIES> 85,912,690
<RECEIVABLES> 13,102,473
<ALLOWANCES> 2,582,277
<INVENTORY> 0
<CURRENT-ASSETS> 156,024,886
<PP&E> 47,713,155
<DEPRECIATION> 0
<TOTAL-ASSETS> 273,130,547
<CURRENT-LIABILITIES> 33,854,880
<BONDS> 0
0
0
<COMMON> 286,956
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 273,130,547
<SALES> 74,592,273
<TOTAL-REVENUES> 0
<CGS> 42,386,859
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 13,909,617
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 15,466,758
<INCOME-TAX> 8,800,000
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</TABLE>