Stock Purchase Agreement

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


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STOCK PURCHASE AGREEMENT
TABLE OF CONTENTS


Page
---- 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


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Page
----
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


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Disclosure Schedule


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


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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


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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.


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(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.


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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.


(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
Shareholders' Agent 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 Shareholders' Agent 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


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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.


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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 ...