COMMAND SYSTEMS INC, S-1, 1998-11-05

COMMAND SYSTEMS INC
S-1, 1998-11-05
COMPUTER PROGRAMMING SERVICES

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 5, 1998

REGISTRATION NO.
REGISTRATION NO. 333-43877
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

AND

POST-EFFECTIVE

AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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

COMMAND SYSTEMS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

---------------
DELAWARE 7371 06-1135009
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INCORPORATION OR
ORGANIZATION)

76 BATTERSON PARK ROAD
FARMINGTON, CT 06032
(860) 409-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

---------------
EDWARD G. CAPUTO
PRESIDENT AND CHIEF EXECUTIVE OFFICER
COMMAND SYSTEMS, INC.
76 BATTERSON PARK ROAD
FARMINGTON, CT 06032
(860) 409-2000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

COPIES TO:

PAUL JACOBS, ESQ.

WARREN J. NIMETZ, ESQ.

FULBRIGHT & JAWORSKI L.L.P.

666 FIFTH AVENUE

NEW YORK, NY 10103

(212) 318-3000

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: MARCH 12,
1998

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]

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

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

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

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

CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT OFFERING PRICE REGISTRATION FEE(2)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock par value
$.01 per share........ 345,000 Shares $12.00 $4,140,000 $1,221.30
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

(1) Includes 45,000 Shares sold pursuant to the Underwriters' over-allotment
options. Excludes 2,760,000 shares of Common Stock registered for sale
under the Registration Statement on Form S-1, Registration No. 333-43877.

(2) A registration fee of $9,770.40 was previously paid with respect to
2,760,000 shares of Common Stock sold under the Registration Statement on
Form S-1, Registration No. 333-43877.

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

THIS REGISTRATION STATEMENT INCLUDES A COMBINED PROSPECTUS PURSUANT TO RULE
429, WHICH ALSO RELATES TO REGISTRATION STATEMENT ON FORM S-1, REGISTRATION
NO. 333-43877.

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

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

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

SUBJECT TO COMPLETION, DATED NOVEMBER 5, 1998

PROSPECTUS

3,105,000 SHARES

COMMON STOCK
COMMAND SYSTEMS, INC.

This Prospectus relates to an aggregate of 3,105,000 shares of Common Stock
of Command Systems, Inc. ("Command" or the "Company") which were sold pursuant
to the Company's initial public offering on March 12, 1998 (the "Initial Public
Offering") at the public offering price of $12 per share. Of such amount, an
aggregate of 2,200,000 shares were sold by the Company and an aggregate of
905,000 shares were sold by the selling stockholders (the "Selling
Stockholders"). The Company conducted the Initial Public Offering pursuant to
an effective registration statement covering 2,400,000 shares of Common Stock
plus an additional 360,000 shares of Common Stock subject to the underwriters'
overallotment option (collectively, the "Registered Shares"). Shortly before
the effective date, the size of the offering was increased by 300,000 shares,
plus an additional 45,000 shares to increase the overallotment option
(collectively, the "Additional Shares," and together with the Registered
Shares, the "Shares").

The increase in size of the offering was reflected in a final prospectus.
However, a registration statement pursuant to Rule 462(b) of the Securities Act
of 1933, as amended (the "Act"), covering the Additional Shares was not filed
with the Securities and Exchange Commission (the "Commission"). This Prospectus
forms a part of a registration statement filed with the Commission to register
the Additional Shares which have already been sold (the "Additional Shares
Registration Statement"). This Prospectus also forms a part of a post-effective
amendment to the registration statement relating to the Registered Shares (the
"Initial Registration Statement," and together with the Additional Shares
Registration Statement, the "Registration Statements"). As provided in the Act,
certain persons purchasing securities sold in violation of the registration
provisions of the Act may recover the consideration paid for such securities
with interest upon the tender of such securities, less the amount of any income
received, or damages if such person no longer owns the securities. See "Risk
Factors--Sale of Unregistered Shares; Violation of the Act."

The Common Stock is quoted on the Nasdaq National Market under the symbol
"CMND." The last reported sale price of the Common Stock on the Nasdaq National
Market on November 4, 1998 was $2.6875 per share.

The sale of the Shares was underwritten by the underwriters named under the
caption "Plan of Distribution."

Neither the Underwriters nor the Representatives have participated in the
preparation, review or dissemination of the Additional Shares Registration
Statement or the Prospectus forming a part of the Additional Shares
Registration Statement; and neither the Underwriters nor the Representatives
have passed upon, or performed any investigation regarding, any of the factual
or legal matters set forth in the Additional Shares Registration Statement or
the Prospectus forming a part of the Additional Shares Registration Statement,
except to the extent such investigation was performed in connection with the
Initial Public Offering and the Initial Registration Statement (and the
prospectus dated March 12, 1998 that formed a part of the Initial Registration
Statement) relating thereto.

AN INVESTMENT IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 6 OF THIS PROSPECTUS.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

The Company received net proceeds of $23,235,000 from the sale of an
aggregate of 2,200,000 Shares in the Initial Public Offering, after deducting
underwriters' discounts and commissions of $1,848,000 and other offering
expenses of $1,317,000. The Selling Stockholders received net proceeds of
$10,099,800 from the sale of an aggregate of 905,000 Shares in the Initial
Public Offering, after deducting underwriters' discounts and commissions of
$760,200. The Company did not receive any proceeds from the sale of Shares by
the Selling Stockholders. The Company and the Selling Stockholders agreed to
indemnify the underwriters against certain liabilities relating to the Initial
Public Offering, including liabilities under the Act. See "Plan of
Distribution."

The date of this Prospectus is November , 1998.
<PAGE>

PROSPECTUS SUMMARY

This Prospectus forms a part of the Additional Shares Registration Statement
being filed to register the sale of the Additional Shares which were sold in
the Initial Public Offering, which sale was not the subject of an effective
registration statement. This Prospectus also forms a part of the Initial
Registration Statement relating to the Registered Shares sold in the Initial
Public Offering. See "Risk Factors-Sale of Unregistered Shares; Violation of
the Act." The following summary is qualified in its entirety by, and should be
read in conjunction with, the more detailed information and the Consolidated
Financial Statements, including the Notes thereto, appearing elsewhere in this
Prospectus. Except as otherwise noted herein, all information in this
Prospectus (i) reflects the conversion of all outstanding shares of the
Company's Series A and Series B Convertible Preferred Stock into an aggregate
of 1,181,750 shares of Common Stock upon the consummation of the Initial Public
Offering (the "Preferred Stock Conversion") and (ii) reflects a 1-for-2 reverse
stock split of the Common Stock of the Company effected in February 1998. See
"Capitalization," "Description of Capital Stock," "Principal and Selling
Stockholders" and "Underwriting."

THE COMPANY

Command Systems, Inc. ("Command" or the "Company") provides a wide range of
information technology ("IT") solutions and services to financial services
organizations to support their evolving business processes. The Company
utilizes leading technologies to offer its customers a comprehensive range of
IT services, including technology, software and hardware solutions (including
product procurement), education and management consulting services. In 1996 the
Company established a software development facility in Bangalore, India (the
"Offshore Technology Resource Center") which today provides its customers with
increased access to skilled IT professionals on a cost-effective basis. As of
June 30, 1998, the Company employed 276 full-time consultants in its four U.S.
offices and the Offshore Technology Resource Center. The Company develops and
maintains long-term relationships with its customers. In 1997, the Company
provided services to over 100 customers and for each of 1996 and 1997 over 60%
of the Company's revenue was derived from existing customers from the previous
year. The Company's customers are typically large financial services
organizations, especially leading insurance companies, such as The Hartford,
MassMutual, Phoenix and Aetna, and MONY.

According to industry sources, the U.S. market for outsourced IT services is
expected to grow from over $13 billion in 1996 to approximately $24 billion in
2001. The Company believes that a number of factors will cause the demand for
IT services to continue to grow, particularly for organizations in such data
and technology intensive industries as the insurance, banking, brokerage and
other financial services industries (collectively, the "financial services
organizations"). These factors include intense competition, globalization,
rapid technological innovation and change, deregulation and the strategic
business decision of many financial services organizations to focus on core
competencies. It has become increasingly difficult and expensive for businesses
to maintain in-house the management capabilities and technical expertise
necessary to successfully integrate and deploy advanced IT systems and
applications in a timely and cost-effective manner. As a result, financial
services organizations are increasingly turning to third-party IT service
providers to help them evaluate, develop, implement and support new IT systems
and applications, and to help them maintain existing legacy systems and
applications.

The Company solves business problems for its customers by designing, building
and implementing IT solutions that combine the Company's technical expertise
with the industry specific expertise it has gained through focusing on the
financial services industry for over twelve years. The technology services
offered by the Company include IT staff augmentation, Year 2000 solutions
services, project-based applications development and implementation, network
design and deployment, Internet/intranet development, and systems maintenance.
The Company also provides software and hardware solutions, education and
training services to its customers' IT staffs, and management consulting
services for the development of customers' long-term technology strategy. These
services may be provided individually or as a combination of offerings to
provide comprehensive IT

2
<PAGE>

solutions. The Company believes that the key attributes of its IT solutions are
(i) the provision of a broad range of IT services, (ii) its strategic focus on
the financial services industry, (iii) its Offshore Technology Resource Center,
(iv) its complete range of Year 2000 solutions services and (v) its expertise
in key and emerging technologies.

The Company's objective is to become the preferred provider of IT services to
an expanding base of customers. The Company's strategies to achieve this
objective include (i) cross-selling its services to existing customers, (ii)
leveraging its expertise within the insurance market into a larger, more
diverse customer base within the broader financial services industries, (iii)
deriving a greater percentage of its revenue from higher margin services, (iv)
utilizing its Offshore Technology Resource Center, (v) strengthening preferred
provider relationships with existing customers and (vi) attracting, training
and retaining highly skilled IT professionals. For the year ended December 31,
1997, IT staff augmentation, Year 2000 solutions services, software and
hardware solutions (together with education and training, and management
consulting services) and other application development, maintenance and
networking services accounted for 59%, 21%, 12% and 8%, respectively, of the
Company's total revenue. IT staff augmentation, Year 2000 solutions services,
software and hardware solutions (together with education and training, and
management consulting services) and other application development, maintenance
and networking services accounted for 51%, 30%, 13% and 6%, respectively, of
the Company's total revenue for the six months ended June 30, 1998, and 52%,
28%, 14% and 6%, respectively, of the Company's total revenue for the three
months ended June 30, 1998. Revenue from Year 2000 projects and other higher
margin services decreased as a percentage of the Company's revenue in the three
month period ended June 30, 1998 compared to the three months ended March 31,
1998. For the three months ended March 31, 1998, IT staff augmentation, Year
2000 solutions services, software and hardware solutions (together with
education and training, and management consulting services) and other
application development, maintenance and networking services accounted for 51%,
31%, 12% and 6%, respectively, of the Company's total revenue. For the three
months ended September 30, 1998, revenue from Year 2000 engagements and other
application development services continued to decrease as a percentage of the
Company's total revenue. There can be no assurance that revenues from Year 2000
projects and other higher margin services will not continue to decrease as a
percentage of the Company's revenue for future periods.

The Company lost $573,000 from operations in the three months ended September
30, 1998 compared with earnings from operations of $402,000 in the third
quarter of 1997. The Company's gross margin was lower than expected for the
three months ended September 30, 1998, reflecting a less profitable mix of
business and reduced margins from Year 2000 and other project business.
Operating results were also lower than anticipated, primarily due to costs
associated with the Company's increase in sales and project management
personnel which were not accompanied by expected growth in project business.
The Company reported a net loss of $188,000 for the three months ended
September 30, 1998, compared to a net loss of $503,000 for the comparable 1997
period. The Company's results for the three months ended September 30, 1998
benefited from interest income of $ 319,000.

The Company was incorporated in Delaware on July 1, 1997. Prior to that time,
the Company conducted its business as Command Systems Incorporated, a
corporation organized under the laws of the State of Connecticut on April 2,
1985, which was merged into the Company in December 1997. The Company's
executive offices are located at 76 Batterson Park Road, Farmington,
Connecticut, 06032 and its telephone number is (860) 409-2000. The Company's
World Wide Web address is www.commandsys.com. The Company's website is not part
of this Prospectus.

Command Systems(TM), CommandMCS(TM), CommandNET(TM), CommandOO(TM),
CommandPRO(TM), CommandSOURCE(TM), CommandSTAFF(TM), CommandU(TM),
CommandWARE(TM), CommandWEB(TM), Command2000(TM), C-BOLT(TM), Command
International Software(TM) and the Company's logo are trademarks of the
Company. All other trade names, trademarks or service marks appearing in this
Prospectus are the property of their respective owners and are not the property
of the Company.

3
<PAGE>

THE OFFERING

<TABLE>
<C> <S>
Common Stock sold by the Company............................ 2,200,000 shares
Common Stock sold by the Selling Stockholders............... 905,000 shares
Common Stock outstanding after the Initial Public Offering.. 7,656,750 shares (1)
Use of proceeds............................................. For the repayment of
debt, the payment of
accumulated and unpaid
preferred stock
dividends, the expansion
of sales and marketing
capabilities and other
general corporate
purposes, including
working capital.
Nasdaq National Market Symbol CMND
</TABLE>
- --------

(1) Excludes 220,250 shares of Common Stock issuable upon the exercise of stock
options outstanding as of October 30, 1998 at a weighted average exercise
price of $7.15 per share, 56,500 of which were issued on March 5, 1997 in
exchange for units of shadow stock issued pursuant to the Company's Shadow
Stock Incentive Plan (the "Exchange Options"), 48,350 of which are
currently exercisable, and 163,750 of which were issued pursuant to the
Company's 1997 Employee, Director and Consultant Stock Plan (the "1997 Plan
Options"), 23,750 of which are currently exercisable. See "Management--
Employee Benefit Plans."

4
<PAGE>

SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
---------------------------------------- ----------------
1993 1994 1995 1996 1997 1997 1998
------ ------ ------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Revenue............... $6,127 $9,272 $12,436 $17,069 $25,057 $10,880 $16,631
Gross profit.......... 406 2,382 3,328 4,575 8,084 3,048 5,572
Income (loss) from
operations........... (202) 280 315 (597) 829 (158) 49
Net income (loss)(1).. (256) 193 221 (423) (497) (350) 479
Preferred stock
dividends and
accretion(2)......... -- -- -- -- (80) -- (260)
Income (loss)
applicable to common
stockholders......... (256) 193 221 (423) (577) (350) 219
Pro forma earnings
(loss) per common
share-diluted(3)..... $ 0.01 $ (0.08)
======= =======
Basic and diluted
earnings per share... $ 0.03
=======
Shares used in per
share calculation:
Basic............... 4,275 4,275 6,267
Diluted............. 4,275 4,275 6,308
<CAPTION>
JUNE
DEC. 31, 30,
1997 1998(4)
-------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash
equivalents.......... $ 392 $20,717
Working capital....... 78 23,178
Total assets.......... 14,425 36,206
Short-term debt....... 1,414 --
Series A Convertible
Preferred Stock...... 2,223 --
Series B Convertible
Preferred Stock...... 8,000 --
Stockholders' equity
(deficit)............ (722) 32,729
</TABLE>
- --------
(1) Net loss for the year ended December 31, 1997 includes a one-time charge to
earnings of $693,000 as a provision for current and deferred income taxes
resulting from the termination of the Company's S corporation status. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operation--Income Tax Matters."

(2) Reflects accrued dividends at a rate of 10% per annum on the Company's
Series A and Series B Convertible Preferred Stock and accretion relating to
unamortized expenses of the preferred stock offerings. Such dividends were
paid out of the proceeds of the Initial Public Offering and were
approximately $298,000 in the aggregate.

(3) Adjusted to reflect on a pro forma basis a federal income tax provision as
if the Company had historically been taxed as a C corporation.

(4) Reflects (i) the receipt by the Company of net proceeds of $23.2 million
from the sale of 2,200,000 shares of Common Stock in the Initial Public
Offering after deducting underwriting discounts and commissions and
offering expenses paid by the Company; (ii) the conversion of Series A and
B Convertible Preferred Stock into 1,181,750 shares of Common Stock; (iii)
the payment of $298,000 of preferred stock dividends; and (iv) the
repayment of the Company's then outstanding line of credit in the amount of
$2.4 million.

5
<PAGE>

RISK FACTORS

An investment in the Common Stock involves a high degree of risk. The
following factors, in addition to the other information contained in this
Prospectus, should be carefully considered in evaluating the Company and its
business before purchasing shares of Common Stock. Included in this Prospectus
are various forward-looking statements within the meaning of Section 27A of
the Act and Section 21E of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), including, among others, the expected growth related to
the Year 2000 problem, the Company's goals and strategies, the pace of change
in the IT marketplace, the demand for IT services, the ability of the Company
to capitalize on offshore investments and infrastructure, the Company's goal
to expand service offerings and to pursue acquisitions, and the ability to
leverage existing relationships and Year 2000 engagements into additional
contracts. These statements are forward-looking and reflect the Company's
current expectations. Such statements are subject to a number of risks and
uncertainties including, but not limited to, the risk factors discussed below,
changes in economic and political environments, changes in technology and
changes in the IT marketplace. In light of the many risks and uncertainties
surrounding the Company and the IT marketplace, a prospective purchaser should
keep in mind that there can be no assurance that the results or outcomes
indicated or suggested by the forward-looking statements described in this
Prospectus will actually occur or be achieved.

RISKS ASSOCIATED WITH FAILURE TO OBTAIN CONTRACTS TO PERFORM HIGHER MARGIN
SERVICES

A core element of the Company's growth strategy is to derive an increasing
percentage of its revenue from higher margin services, such as the delivery of
complete projects and solutions, as opposed to lower margin IT staff
augmentation projects and software and hardware solutions. The sales and
marketing methods for obtaining complete projects and solutions contracts is
different than those for the Company's historical businesses and involves
longer bidding processes. In addition, in performing complete projects and
solutions, the Company assumes greater responsibility in coordinating and
completing larger, more complex projects. There can be no assurance that the
Company will be successful in obtaining contracts for the delivery of complete
projects and solutions, or that the Company will successfully complete such
projects and solutions if obtained.

For the year ended December 31, 1997 and the three months ended March 31,
1998, complete projects and solutions accounted for 29% and 37%, respectively,
of the Company's total revenue. Following certain concerns expressed relating
to the Company's performance under a Year 2000 solutions services contract for
one of the Company's largest customers in early 1998, the customer terminated
the contract. In addition, in 1998 the Company performed an assessment phase
of a Year 2000 conversion project for one of the Company's other large
customers and, following completion of such assessment, failed to obtain a
contract for the complete Year 2000 conversion project. In the three months
ended June 30, 1998, complete projects and solutions accounted for 34% of the
Company's total revenue, and continued to decrease as a percentage of the
Company's total revenue in the three months ended September 30, 1998. There
can be no assurance that revenue from higher margin services will not continue
to decrease as a percentage of the Company's revenue for future periods. The
Company has increased its infrastructure of personnel, facilities and
equipment and other resources to meet anticipated growth in the demand for
Year 2000 conversions and other IT services. A significant portion of the
increased personnel has been added at the Company's Bangalore, India facility,
where it is difficult for the Company to effect reductions in staffing to
adjust to shortfalls in revenue. The Company experienced low rates of employee
utilization at its Bangalore, India facility during the three month periods
ended June 30, 1998 and September 30, 1998. The failure by the Company to
increase revenue from higher margin services would have a material adverse
effect on the Company's business, financial condition and results of
operations. See "--Variability of Quarterly Operations and Financial Results"
and "--Risks Associated with Year 2000 Service Offering; Finite Nature of
Demand for Year 2000 Solutions Services."

VARIABILITY OF QUARTERLY OPERATIONS AND FINANCIAL RESULTS

The Company's operations and related revenue and operating results
historically have varied substantially from quarter to quarter, and the
Company expects these variations to continue. Among the factors causing these
variations have been the number, timing and scope of IT projects in which the
Company is engaged, the contractual terms of such projects, delays incurred in
the performance of such projects, the accuracy of estimates of resources and
time frames required to complete ongoing projects, patterns of capital
spending by customers,

6
<PAGE>

IT outsourcing trends, pricing changes in response to various competitive
factors, new service introductions by the Company or its competitors, levels
of market acceptance of the Company's service and product offerings and the
Company's ability to staff its assignments with qualified personnel and
general economic conditions.

A high percentage of the Company's selling, general and administrative
expenses, particularly salary, are relatively fixed in advance of any
particular quarter. As a result, unanticipated variations in the number and
timing of the Company's projects during a particular quarter may cause
significant variations in operating results in that quarter. An unanticipated
termination of a major project, a customer's decision not to pursue a new
project or proceed to succeeding stages of a current project, or the
completion during a quarter of several major customer projects could require
the Company to continue to pay for underutilized personnel and, therefore,
have a material adverse effect on the Company's business, financial condition
and results of operations. Any unexpected shortfall in revenue without a
corresponding and timely reduction in staffing and other expenses, or a
staffing increase that is unaccompanied by a corresponding increase in
revenue, could also have a material adverse effect on the Company's business,
financial condition and results of operations. Specifically, hiring and
employment practices and applicable law in India make it difficult for the
Company to effect reductions in staffing at the Company's Bangalore, India
facility.

As a result of the factors described above, the Company's operating results
for a future quarter may differ from the expectations of public market
analysts and investors. In such event, the price of the Company's Common Stock
could be adversely affected. The Company believes, therefore, that past
operating results and period-to-period comparisons should not be relied upon
as an indication of future operating performance. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and "Business--
Recent Developments; Anticipated Second Quarter Results."

MANAGEMENT OF GROWTH

The Company's business has grown significantly in size and complexity over
the past several years. Revenue increased by approximately 311% to $25.1
million in 1997 from $6.1 million in 1993, and increased by approximately 47%
from 1996 to 1997. In addition, revenue for the nine months ended September
30, 1998 increased 44.0% to $25.6 million compared to $17.7 million for the
nine months ended September 30, 1997. In December 1996, the Company commenced
its Bangalore, India operations. This growth has placed and will continue to
place significant demands on the Company's management and administrative,
technical and other operational resources. In addition, the Company has
substantially increased the number of its skilled technical and management
personnel at its Bangalore, India facility, and will be required to increase
the number of its skilled technical, marketing and management personnel in the
United States, and to continue to develop and improve its operational,
financial, communications and other internal systems, in both the United
States and at its Bangalore, India facility. During the three month periods
ended June 30, 1998 and September 30, 1998, the Company experienced low rates
of employee utilization at its Bangalore, India facility. The Company's future
success will depend on the Company's ability to manage its projects and
personnel in a manner that achieves high rates of employee utilization at
profitable billing rates as well as quality performance. Certain members of
the Company's senior management team have been with the Company for less than
a year and the Company's senior management has little experience in managing
publicly traded companies. The Company's inability to manage its growth
effectively could have a material adverse effect on the quality of the
Company's services and projects, its ability to attract and retain key
personnel, its business, financial condition and results of operations. See
"--Variability of Quarterly Operations and Financial Results" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

SALE OF UNREGISTERED SHARES; VIOLATION OF THE ACT.

The Shares were sold pursuant to a registration statement which registered
the sale of the Registered Shares but not the sale of the Additional Shares.
As provided in the Act, certain persons purchasing securities sold in

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violation of the registration provisions of the Act may recover the
consideration paid for such securities with interest upon the tender of such
securities, less the amount of any income received, or damages if such person
no longer owns the securities. The maximum rescission liability with respect
to the 100,000 unregistered shares sold by the Company would be $1,200,000
(100,000 shares at $12 per share) plus interest. The Company has not
recognized a liability based on the rescission of the 100,000 unregistered
shares it sold because, as noted above, the right to rescind rests only with a
purchaser in the Initial Public Offering who still holds such shares. Given
the large trading volume in the Company's common stock subsequent to the
offering (indicating substantial turnover in share ownership) and the
inability to identify which securities were unregistered, the Company is of
the belief that it is not probable that it will be required to effect an
actual rescission, as opposed to paying rescissionary damages. As indicated
previously, shareholders who purchased unregistered shares in the offering may
recover damages if they sold such securities at a loss. Based upon the
preliminary status of the lawsuit described below under the caption "--
Shareholder Litigation," the range of such damages, if any, cannot reasonably
be estimated. The Company and the Selling Stockholders have entered into an
agreement (the "Indemnification Agreement") with the Company's former
securities counsel which served as the Company's counsel in the Initial Public
Offering, which would hold the Company and the Selling Stockholders harmless
for damages which might result from any claims as a consequence of the
aforementioned circumstances. In view of the Indemnification Agreement, and in
light of assurances the Company has received concerning the professional
indemnity insurance maintained by such counsel, the Company does not believe
that any claims relating to the foregoing will have a material adverse effect
on its financial condition. The Company is also the subject of shareholder
litigation relating to the Initial Public Offering. The plaintiffs in the
purported consolidated class action seek rescission of the sales of the shares
in the Initial Public Offering and unspecified damages, including
rescissionary damages, interest, costs and fees. See "--Shareholder
Litigation."

SHAREHOLDER LITIGATION

On or about May 6, 1998, a complaint was filed in the United States District
Court for the Southern District of New York by named plaintiffs Don M. Doney
Jr. and Madelyn J. McCabe against the Company, certain of the Company's
officers and directors (Edward G. Caputo, Stephen L. Willcox, Robert B. Dixon,
John J.C. Herndon, James M. Oates and Joseph D. Sargent) and the managing
underwriters of the Company's Initial Public Offering (Cowen & Company and
Volpe Brown Whelan & Company, LLC) (the "Doney Litigation"). On or about June
22, 1998, an amended complaint relating to the Doney Litigation was filed in
the United States District Court for the Southern District of New York. On or
about May 8, 1998, a second complaint was filed in the United States District
Court for the Southern District of New York by named plaintiff Chaile B.
Steinberg against the same defendants. On or about June 26, 1998, a third
complaint was filed in the United States District Court for the Southern
District of New York by named plaintiff Michael Makinen against the same
defendants (the "Makinen Litigation"). Each of the plaintiffs purports to
represent a class consisting of purchasers of common stock pursuant to the
initial public offering. These actions were consolidated by order of the
United States District Court for the Southern District of New York, and a
consolidated complaint styled In Re Command Systems, Inc. Securities
Litigation was filed on September 30, 1998. The consolidated complaint alleges
that defendants violated the Act and claims the sale of unregistered shares
breached the disclosure and filing requirements of the Act. The plaintiffs
seek rescission of the Initial Public Offering and unspecified damages,
including rescissionary damages, interest, costs and fees. Such litigation, if
concluded in favor of the plaintiffs, could have a material adverse effect on
the Company's business, financial condition and results of operations. Based
upon the status of the consolidated complaint the Company cannot currently
estimate a range of loss.

COMPETITIVE MARKET FOR TECHNICAL PERSONNEL

The Company's success depends to a significant extent on its ability to
attract, train, motivate and retain highly skilled IT professionals,
particularly project managers, software engineers and other senior technical
personnel. There is currently a shortage of, and significant competition for,
software development professionals with the advanced technological skills
necessary to perform the services offered by the Company. This has caused
wages for such professionals to increase, which increases costs to IT service
providers such as the Company. The Company has at times in the past
experienced, and may in the future experience, a turnover rate for its IT
professionals that is higher than the industry average. In addition, many of
the IT consulting contracts

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that the Company enters into contain provisions whereby, for a fee payable to
the Company, the customer has a right to hire the Company's IT professionals
who are providing consulting services to the customer. The Company's ability
to maintain existing engagements and obtain new business therefore depends, in
large part, on its ability to hire and retain additional technical personnel
with the IT skills to keep pace with continuing changes in information
processing technology, evolving industry standards and changing customer
preferences. An inability to hire such additional qualified personnel will
impair the Company's ability to manage and complete its existing projects and
to bid for or obtain new projects. There can be no assurance that the Company
will be successful in attracting and retaining future employees or retaining
current employees. An inability to hire a sufficient number of qualified
people or an inability to retain employees could have a material adverse
effect on the Company's business, financial condition and results of
operations. See "Business--Human Resources."

RELIANCE ON SIGNIFICANT CUSTOMERS; ABSENCE OF LONG-TERM CONTRACTS

The Company has derived and believes that it will continue to derive a
significant portion of its revenue from a limited number of large corporate
customers. For the six months ended June 30, 1998, Mutual Life Insurance
Company of New York ("MONY") and The Hartford Financial Services Group, Inc.
("The Hartford") accounted for 14.1% and 10.1% of the Company's total revenue,
respectively. For the year ended December 31, 1997 The Hartford, New York Life
Insurance Company ("New York Life") and Phoenix Home Life Mutual Insurance
Company ("Phoenix") accounted for 13.1%, 13.0% and 10.3% of the Company's
total revenue, respectively. For the year ended December 31, 1996, The
Hartford and New York Life accounted for 13.6% and 12.6%, of the Company's
total revenue, respectively. The volume of work performed for specific
customers is likely to vary from year to year, and a major customer in one
year may not provide the same level of revenue in any subsequent year. In
addition, the Company's contracts may generally be canceled by the customer at
any time and customers may unilaterally reduce their use of the Company's
services under such contracts without penalty. The termination or significant
reduction of its business relationship with any of its significant customers
would have a material adverse effect on the Company's business, financial
condition and results of operations. Moreover, in addition to being one of the
Company's largest customers, Phoenix owns 7.6% of the Company's outstanding
Common Stock. In addition, John J.C. Herndon, a director of the Company, is an
officer of Phoenix. The loss by the Company of its relationship with Phoenix
could adversely affect the Company's reputation and client relationships in
the financial services industry, which could, in turn, have a material adverse
effect on the Company's business, financial condition and results of
operations.

Because many of its contracted engagements involve projects that are
critical to the operations of its customers' businesses, the Company's failure
to meet a customer's expectations could result in cancellation or nonrenewal
of a contract and could damage the Company's reputation and adversely affect
its ability to attract new business. Furthermore, the Company generally is not
the exclusive outside source for IT services to its customers. Accordingly, a
customer's dissatisfaction with the Company's performance could lead the
customer to purchase these services from a competitor. A significant aspect of
the Company's growth strategy is to leverage its expertise within the
insurance industry into a larger, more diverse customer base within the
broader financial services market. However, there can be no assurance that the
Company will be successful in expanding its customer base or that the
management skills and systems currently in place will be adequate to service
such additional customers. See "--Risks Associated with Year 2000 Service
Offering; Finite Nature of Demand for Year 2000 Services," "Business--Business
Strategy," "--Customers," and "--Representative Engagements."

RISKS ASSOCIATED WITH YEAR 2000 SERVICE OFFERING; FINITE NATURE OF DEMAND FOR
YEAR 2000 SOLUTIONS SERVICES

During 1996, in response to the needs and demands of its customers, the
Company began to offer Year 2000 solutions services. The Company realized no
revenue from Year 2000 solutions services in 1996, and 20% and 31% of its
revenue from Year 2000 solutions services during the year ended December 31,
1997 and the three months ended March 31, 1998, respectively. While the
Company has generated new contracts for and has commenced work on a number of
Year 2000 conversion projects, as of June 30, 1998, the Company had completed
only two Year 2000 projects and such services remain in an early stage of
marketing and customer

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<PAGE>

acceptance. Following certain concerns expressed relating to the Company's
performance under a Year 2000 solutions services contract for one of the
Company's largest customers in early 1998, the customer terminated the
contract. In addition, in 1998 the Company performed an assessment phase of a
Year 2000 conversion project for one of the Company's other large customers
and, following completion of such assessment, failed to obtain a contract for
the complete Year 2000 conversion project. In the three months ended June 30,
1998, revenue from Year 2000 engagements decreased as a percentage of the
Company's total revenue compared to the three months ended March 31, 1998 and
such engagements continued to decrease as a percentage of sales during the
three months ended September 30, 1998. No assurance can be made that the
Company's Year 2000 services will achieve further market acceptance.

Year 2000 projects currently constitute most of the Company's higher margin
services. A core element of the Company's growth strategy is to use the
business relationships and the knowledge of its customers' computer systems
obtained in providing its Year 2000 solutions services to generate additional
IT projects for these customers. The Company expects that Year 2000 solutions
services will diminish rapidly after the Year 2000 as companies complete
projects that address their needs. The Company's inability to effectively
market and deliver Year 2000 conversion services in the near future would
adversely impact the Company's ability to obtain other contracts to deliver
higher margin services, which would have a material adverse effect on the
Company's business, financial condition and results of operations. Moreover,
as a result of recently introduced automated software tools, Year 2000
conversions require fewer man-hours to complete. This introduction, together
with increased competition among IT service providers for Year 2000 conversion
projects, has reduced the amount of revenue which can be earned from each Year
2000 conversion project. As a result, the Company would need to obtain a
greater number of contracts for Year 2000 conversion services in order to
increase the share of the Company's revenue obtained from Year 2000 conversion
contracts. In addition, the failure to obtain such greater number of Year 2000
conversion contracts would adversely effect the Company's rate of employee
utilization.

When the demand for Year 2000 services decreases, there will likely be a
resulting decrease in the Company's revenue. The extent of such decrease will
depend on the amount of revenue attributable to Year 2000 solutions services
at the time of such decreased demand and the Company's ability to offset such
decrease by increasing revenue from other services. Such decrease in revenue
could have a material adverse impact on the Company's business, financial
condition and results of operations. In addition to the risks described above,
the Company faces additional risks that may cause the demand for its Year 2000
solutions services to decline, such as the risk that a competitor may
introduce automated software processes or tools that would enable companies to
perform their own Year 2000 solutions services more effectively. Moreover, by
utilizing significant resources during the next several years to solve its
customers' Year 2000 problems, the Company's ability to continue to deliver
other IT services could be adversely affected. See "--Risks Associated with
Failure to Obtain Contracts to Perform Higher Margin Services," "--Variability
of Quarterly Operations and Financial Results," "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Overview" and
"Business--Services."

COMPETITION

The IT services market is highly competitive and fragmented and served by
numerous international, national, regional and local firms. Primary
competitors include other IT service providers, along with participants from a
variety of market segments, including "Big Five" accounting firms,
implementation firms, applications software firms, service groups of computer
equipment companies, general management consulting firms, programming
companies and temporary staffing firms, as well as in-house IT departments. In
addition, a significant and increasing number of companies have recently
announced that they offer Year 2000 solutions services or automated Year 2000
solutions services software products. Many of the Company's competitors have
significantly greater financial, technical and marketing resources and
generate greater revenue than the Company, and there can be no assurance that
the Company will not lose existing customers to such competitors. The Company
believes that its ability to compete also depends in part on a number of
factors outside its control, including the ability of its competitors to hire
and retain professional and technical employees, the price at which others
offer comparable services and the extent of its competitors' responsiveness to
customer needs. See "Business--Competition."

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RAPID TECHNOLOGICAL CHANGE; DEPENDENCE ON NEW SOLUTIONS

The market for the services offered by the Company is characterized by
rapidly changing technology and frequent new service and product
introductions. The development of new technology, services and products can
render existing technology, services and products obsolete. The Company's
continued success will depend on its ability to attract and retain highly
capable technical personnel, to enhance its existing service and product
offerings, to develop new service and product offerings on a timely and cost-
effective basis and to keep pace with technological developments and changing
customer requirements. There can be no assurance that the Company will be
successful in developing and marketing such enhanced or new service or product
offerings or in acquiring resale rights to support product offerings from
vendors.

DEPENDENCE ON OFFSHORE SOFTWARE DEVELOPMENT FACILITY

In 1996, the Company established an Offshore Technology Resource Center in
Bangalore, India that is intended to provide the Company with improved access
to IT professionals, cost advantages and the ability to provide flexible
coverage for its outsourcing services customers. To provide its service
delivery model, the Company must maintain communications between its offices,
the offices of its customers in the United States and the Offshore Technology
Resource Center. Any loss of the Company's ability to transmit voice and data
through satellite communications to India could have a material adverse effect
on the Company's business, financial condition and results of operations.

In the past, India has experienced significant inflation, low growth in
gross domestic product and shortages of foreign exchange. India also has
experienced civil unrest and terrorism and, in the past, has been involved in
conflict with neighboring countries. No assurance can be given that the
Company will not be adversely affected by changes in inflation, interest
rates, taxation, social stability or other political, economic or diplomatic
developments in or affecting India in the future. The Company believes that as
a result of the detonation of nuclear devices in India, there may be some
adverse economic repercussions caused by the institution of sanctions or other
similar actions, the effects of which are unknown to management at this time.
No assurance can be given that such actions would not have a material adverse
effect on the Company's business, financial condition or results of
operations.

The Government of India has exercised and continues to exercise significant
influence over many aspects of the Indian economy, and the Government of India
actions concerning the economy could have a material adverse effect on private
sector entities, including the Company. During recent years, India's
government has provided significant tax incentives and relaxed certain
regulatory restrictions in order to encourage foreign investment in specified
sectors of the economy, including the software development industry. Certain
of those benefits that directly affect the Company include, among others, tax
holidays, liberalized import and export duties and preferential rules on
foreign investment and repatriation. Notwithstanding these benefits, however,
India's central and state governments remain significantly involved in the
Indian economy. The elimination of any of the benefits realized by the Company
from its Indian operations could have a material adverse effect on the
Company's business, financial condition and results of operations.

DEPENDENCE ON CONTINUED AUTHORIZATION TO RESELL

The Company's future success in both product sales and service and support
offerings depends largely on its continued status as an approved reseller of
products and its continued authorization as a service provider. Without such
sales and service authorizations, the Company would be unable to provide the
range of products and services it currently offers, including warranty
services. Consequently, the Company's future success depends in part on its
continued status as an authorized remarketer of computer products. There can
be no assurance, however, that the Company will maintain its status as an
approved reseller and service provider. The loss of one or more of such
authorizations could have a material adverse effect on the Company's business,
financial condition and results of operations.

IMMIGRATION ISSUES

As of June 30, 1998 the Company employed a number of foreign nationals in
the United States, each of whom obtained the required visas. During the
remainder of 1998, the Company intends to increase the number

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<PAGE>

of qualified foreign nationals which it employs in the United States. There is
a limit on the number of new petitions for certain visas that the Immigration
and Naturalization Service may approve in any government fiscal year, and in
years in which this limit is reached, the Company may be unable to obtain
certain visas necessary to bring critical foreign employees to the United
States. Compliance with existing United States immigration laws, or changes in
such laws making it more difficult to hire foreign nationals or limiting the
ability of the Company to attract and retain employees in the United States,
could require the Company to incur additional unexpected labor costs and
expenses. Any such restrictions or limitations on the Company's hiring
practices could have a material adverse effect on the Company's business,
financial condition and results of operations. The Company believes that its
success, in part, may result from its ability to attract and retain persons
with technical and project management skills from other countries due to the
general shortage of qualified technical professionals in the United States.

INTERNAL CONTROLS

The Company only recently implemented an accounting system capable of
generating information and reports necessary to appropriately manage a public
company, and currently is developing and implementing a system of internal
controls and otherwise developing an appropriate administrative
infrastructure. The failure to develop and maintain an effective internal
control structure could have a material adverse effect on the Company's
business, financial condition and results of operations.

RISKS OF DOING BUSINESS IN INTERNATIONAL MARKETS

For the year ended December 31, 1997 and the six months ended June 30, 1998
revenue derived from the Company's operations in India accounted for
approximately 10% and 13% respectively, of the Company's revenue, all of which
related to services performed for customers located in the United States.
Revenue from its operations in India, together with revenue, if any, generated
in the future from the provision of services outside the United States, may
account for an increasingly significant percentage of the Company's revenue.
As a result, the Company is subject to a number of risks, including, among
other things, difficulties relating to administering its business globally,
managing foreign operations, currency fluctuations, restrictions against the
repatriation of earnings, export requirements and restrictions, and multiple
and possibly overlapping tax structures. The realization of any of the
foregoing could have a material adverse effect on the Company's business,
financial condition and results of operations. Any earnings generated in
countries other than the United States may be permanently invested or may be
subject to considerable taxation if repatriated to the United States. The
Company presently incurs a significant amount of its costs in local currency
in India. In contrast, the Company presently generates most of its revenue in
U.S. dollars. Accordingly, the Company is subject to risks that, as a result
of currency fluctuations, the translation of foreign currencies into U.S.
dollars could adversely affect its business, financial condition and results
of operations. Historically, the Company has not hedged any meaningful portion
of its foreign exchange transactions.

POTENTIAL LIABILITY TO CUSTOMERS

Many of the Company's engagements involve projects that are critical to the
operations of its customers' businesses and provide benefits that may be
difficult to quantify. Any failure in a customer's system could result in a
claim for substantial damages against the Company, regardless of the Company's
responsibility for such failure. In addition, the Company's failure to
complete a project in the contractually prescribed time period, particularly a
Year 2000 solutions services contract, may result in a claim for substantial
damages against the Company. Although the Company generally attempts to limit
contractually its liability for damages arising from errors, mistakes or
omissions in rendering its IT services, there can be no assurance that the
limitations of liability set forth in its services contracts will be
enforceable in all instances or would otherwise protect the Company from
liability for damages. Although the Company maintains general liability
insurance coverage, including coverage for errors or omissions in the amount
of $5.0 million, there can be no assurance that such coverage will continue to
be available on reasonable terms or will be available in sufficient amounts to
cover one or more large claims, or that the insurer will not disclaim coverage
as to any future claim. The successful assertion of one or more large claims
against the Company that exceed available insurance coverage, or changes in
the Company's insurance policies, including premium increases or the
imposition of large deductible or co-insurance requirements, could adversely
affect the Company's business, financial condition and results of operations.

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RISKS RELATED TO POSSIBLE ACQUISITIONS AND INTERNAL EXPANSION

The Company may expand its operations through the acquisition of additional
businesses. To date, the Company has made no material acquisition of an
unaffiliated company. There can be no assurance that the Company will be able
to identify, acquire or profitably manage additional businesses or
successfully integrate any acquired businesses into the Company without
substantial expenses, delays or other operational or financial problems.
Further, acquisitions may involve a number of special risks, including
diversion of management's attention, failure to retain key acquired personnel,
unanticipated events or circumstances, legal liabilities and amortization of
acquired intangible assets, some or all of which could have a material adverse
effect on the Company's business, financial condition and results of
operations. Customer satisfaction or performance problems within an acquired
firm could have a material adverse impact on the reputation of the Company as
a whole. In addition, there can be no assurance that acquired businesses, if
any, will achieve anticipated revenue and earnings. The failure of the Company
to manage its acquisition strategy successfully could have a material adverse
effect on the Company's business, financial condition and results of
operations. In addition, the Company may issue additional shares of its Common
Stock to acquire such additional businesses, which may reduce the percentage
ownership of existing stockholders. See "Business--Business Strategy."

The Company may open new offices in attractive markets with its own
personnel. All of the Company's branch offices were originally start-up
operations. Not all branch offices have been successful. For example, the
Company closed its branch office in Minneapolis, Minnesota primarily as a
result of a shortage of qualified local IT professionals. There can be no
assurance that the Company will be able to establish, identify, acquire, or
integrate what will ultimately be successful branch operations. See
"Business--Business Strategy."

DEPENDENCE ON KEY EXECUTIVES

The Company's success will depend in large part upon the continued
availability of its key executive officers. In particular, the Company is
dependent upon the continued services of Edward G. Caputo, the Company's
President and Chief Executive Officer. In addition, Mr. Caputo is instrumental
to most of the Company's customer relationships relating to the delivery of
higher margin, complete project and solution services, and the loss of the
services of Mr. Caputo could have an adverse effect on the Company's customer
relationships in this area. Accordingly, the loss of the services of Mr.
Caputo or other key executives would have a material adverse effect on the
Company. The Company presently maintains key person life insurance on Mr.
Caputo in the amount of $5.0 million. This amount of insurance, however, may
not be sufficient to offset the Company's loss if Mr. Caputo's services were
unavailable. See "Management--Key Person Life Insurance."

CONTROL BY PRINCIPAL STOCKHOLDER

Mr. Caputo beneficially owns approximately 51.9% of the outstanding shares
of Common Stock. Accordingly, Mr. Caputo has the voting power to exercise
control over the election of members of the Board of Directors as well as any
decision whether to merge or sell the assets of the Company, adopt, amend or
repeal the Company's Amended and Restated Certificate of Incorporation, as
amended (the "Certificate of Incorporation") and By-Laws, or take other
actions requiring the vote or consent of the Company's stockholders. In
addition, such a concentration of ownership may have the effect of delaying or
preventing a change in control of the Company, and may also impede or preclude
transactions in which stockholders might otherwise receive a premium for their
shares over current market prices. See "Management--Directors and Executive
Officers" and "Principal and Selling Stockholders."

BROAD DISCRETION OF MANAGEMENT AS TO USE OF PROCEEDS

A substantial portion of the net proceeds received by the Company in
connection with the Initial Public Offering was not allocated for any specific
purpose, but will be allocated to working capital and general corporate
purposes. A portion or all of the remaining net proceeds of the Initial Public
Offering may also be used for strategic acquisitions of businesses, products
or technologies complementary to those of the Company; however, the Company is
not currently a party to any commitments or agreements and is not currently
involved in any negotiations with respect to any material acquisitions.
Accordingly, management will have broad discretion with respect to the
expenditure of such proceeds. Investors in the Company rely on the Company's
management, with limited information concerning the specific working capital
requirements and general corporate purposes to which the funds obtained in the
Initial Public Offering will ultimately be applied. See "Use of Proceeds."

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INTELLECTUAL PROPERTY RIGHTS

In order to protect its proprietary rights in its various intellectual
properties, the Company relies upon a combination of copyright and trade
secret laws, nondisclosure and other contractual arrangements. India is a
member of the Berne Convention, an international treaty. As a member of the
Berne Convention, the government of India has agreed to extend copyright
protection under its domestic laws to foreign works, including works created
or produced in the United States. The Company believes that laws, rules,
regulations and treaties in effect in the United States and India are adequate
to protect it from misappropriation or unauthorized use of its intellectual
property. However, there can be no assurance that such laws will not change
and, in particular, that the laws of India will not change in ways that may
prevent or restrict the transfer of software components, libraries and
toolsets from India to the United States. The Company enters into
confidentiality agreements with its employees and limits distribution of
proprietary information. There can be no assurance, however, that the steps
taken by the Company to protect its proprietary rights will be adequate to
deter misappropriation of its intellectual property, or that the Company will
be able to detect unauthorized use and take appropriate steps to enforce its
rights. The Company presently holds no patents or registered copyrights.
Although the Company believes that its intellectual property rights do not
infringe on the intellectual property rights of others, there can be no
assurance that such a claim will not be asserted against the Company in the
future, that assertion of such claims will not result in litigation or that
the Company would prevail in such litigation or be able to obtain a license
for the use of any infringed intellectual property from a third party on
commercially reasonable terms. Additionally, the Company may in the future
license certain technologies to its customers. There can be no assurance that
the Company will be able to successfully license these technologies, protect
them from infringement or misuse, or prevent infringement claims against the
Company in connection with its licensing efforts. The Company expects that the
risk of infringement claims against the Company will increase if more of the
Company's competitors are able to successfully obtain patents for software
products and processes. Any such claims, regardless of their outcome, could
result in substantial cost to the Company and divert management's attention
from the Company's operations. Any infringement claim or litigation against
the Company could, therefore, have a material adverse effect on the Company's
business, financial condition and results of operations. See "Business--
Intellectual Property Rights."

BENEFITS OF THE INITIAL PUBLIC OFFERING TO THEN EXISTING STOCKHOLDERS

The completion of the Initial Public Offering provided significant benefits
to the then existing stockholders of the Company, including certain of its
directors and officers. The Company did not receive any of the net proceeds
from the sale of shares by the Selling Stockholders, which was approximately
$10.1 million in the aggregate. The Company used $298,000 of the net proceeds
of the Initial Public Offering to pay accumulated and unpaid dividends on its
Series A and Series B Convertible Preferred Stock upon the Preferred Stock
Conversion, which Preferred Stock was held by Phoenix and its wholly-owned
subsidiary PHL Global Holding Co. ("PHL"). In addition, the Company used $2.4
million of the net proceeds for the repayment of the outstanding balance of
its credit facility with People's Bank. This credit facility, which expired on
August 15, 1998, was guaranteed by Edward G. Caputo, a current stockholder,
director and the President and Chief Executive Officer of the Company. Mr.
Caputo thus benefitted personally from the repayment of this guaranteed debt.
See "Use of Proceeds," "Dilution," "Management" and "Principal and Selling
Stockholders."

PUBLIC MARKET FOR THE COMMON STOCK; PRICE AND MARKET VOLATILITY

Prior to the Initial Public Offering there was no public market for the
Common Stock, and there can be no assurance that an active trading market will
be sustained. Market prices for securities of IT services companies such as
the Company are highly volatile. The market price of the Common Stock has been
adversely affected in response to variations in quarterly operating results,
and the failure by the Company to achieve earnings estimates of securities
analysts. The market price of the Common Stock may experience further
volatility in the future.

IMMEDIATE AND SUBSTANTIAL DILUTION

Purchasers of shares of Common Stock in the Initial Public Offering suffered
an immediate and substantial dilution in the net tangible book value of the
Common Stock from the initial public offering price. See "Dilution."

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ABSENCE OF DIVIDENDS

No dividends have been paid on the Common Stock to date and the Company does
not anticipate paying dividends on the Common Stock in the foreseeable future.
See "Dividend Policy."

CERTAIN ANTI-TAKEOVER PROVISIONS

The Company's Certificate of Incorporation authorizes the Board of Directors
to issue, without stockholder approval, 4,999,800 shares of undesignated
preferred stock with voting, conversion and other rights and preferences that
could adversely affect the voting power or other rights of the holders of
Common Stock. The issuance of preferred stock or of rights to purchase
preferred stock could be used to discourage an unsolicited acquisition
proposal. In addition, the possible issuance of preferred stock could
discourage a proxy contest, make more difficult the acquisition of a
substantial block of the Company's Common Stock or limit the price that
investors might be willing to pay in the future for shares of the Company's
Common Stock. The Certificate of Incorporation also provides that: (i) the
affirmative vote of the holders of at least 70% of the voting power of all of
the then outstanding shares of the capital stock of the Company shall be
required to adopt, amend or repeal any provision of the By-Laws of the
Company, (ii) stockholders of the Company may not take any action by written
consent, (iii) on or prior to the date on which the Company first provides
notice of an annual meeting of the stockholders (or a special meeting in lieu
thereof) following the Initial Public Offering, the Board of Directors will be
classified into three classes with staggered terms of three years each and
(iv) members of the Board of Directors may be removed only for cause and after
reasonable notice and an opportunity to be heard before the body proposing to
remove such director. The foregoing provisions of the Certificate of
Incorporation could have the effect of delaying, deterring or preventing a
change in control of the Company. Delaware law also contains provisions that
may have the effect of delaying, deferring or preventing a non-negotiated
merger or other business combination involving the Company. These provisions
are intended to encourage any person interested in acquiring the Company to
negotiate with and obtain the approval of its Board of Directors in connection
with the transaction. Certain of these provisions may, however, discourage a
future acquisition of the Company not approved by the Board of Directors in
which stockholders might receive an attractive value for their shares or that
a substantial number or even a majority of the Company's stockholders might
believe to be in their best interest. As a result, stockholders who desire to
participate in such a transaction may not have the opportunity to do so. See
"Description of Capital Stock--Delaware Law and Certain Charter and By-Law
Provisions."

SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS

Sales of substantial amounts of Common Stock in the public market could
adversely affect the market price of the Common Stock. The 3,105,000 shares
registered pursuant to the Registration Statements will be freely tradable by
persons other than "affiliates" of the Company without restriction. The
remaining 4,551,750 shares held by current stockholders of the Company were
subject to lock-up agreements (the "Lock-Up Agreements") under which the
holders of such shares have agreed not to sell or otherwise dispose of such
shares without the prior written consent of Cowen & Company, one of the
Representatives of the Underwriters, until September 9, 1998. Upon expiration
of the Lock-Up Agreements on September 9, 1998 (and assuming no exercise of
outstanding options), approximately 3,972,500 additional shares of Common
Stock became available for sale in the public market, subject to the
provisions of Rule 144 under the Securities Act. The remaining 579,250 shares
of Common Stock will become eligible for sale in the public market, subject to
the provisions of Rule 144, over a period of less than one year and could be
sold earlier if the holders thereof exercise their registration rights. The
Company intends to register an aggregate of 427,500 shares of Common Stock
issuable under the 1997 Employee, Director and Consultant Stock Plan.

The holder of 579,250 shares of Common Stock is entitled to certain
piggyback and S-3 registration rights with respect to such shares. By
exercising its registration rights, such holder could cause a large number of
shares to be registered and sold in the public market. Sales pursuant to Rule
144 or other exemptions from registration, or pursuant to registration rights,
may have an adverse effect on the market price for the Common Stock and could
impair the Company's ability to raise capital through an offering of its
equity securities. See "Description of Capital Stock," "Shares Eligible for
Future Sale" and "Underwriting."

15
<PAGE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 2,200,000 shares of
Common Stock offered by the Company in the Initial Public Offering was $23.2
million after deducting the underwriting discounts and commissions and
offering expenses paid by the Company. The principal purposes of the Initial
Public Offering were to increase the Company's equity capital, to create a
public market for the Common Stock, to facilitate future access by the Company
to public equity markets and to provide liquidity for the Company's existing
stockholders.

The Company used $2.4 million of the net proceeds for the repayment of the
outstanding balance under its secured credit facility with People's Bank. The
facility bears interest at the bank's prime rate plus 0.5% per annum (9.0% as
of March 31, 1998). Amounts outstanding under such credit facility were used
by the Company for working capital purposes. The credit facility expired on
August 15, 1998. The Company also used $298,000 of the net proceeds to pay
accumulated and unpaid dividends on its Series A convertible preferred stock,
par value $.01 per share (the "Series A Convertible Preferred Stock"), and
Series B convertible preferred stock, par value $.01 per share (the "Series B
Convertible Preferred Stock"), upon the Preferred Stock Conversion. The
Company has begun to use, and intends to continue to use, the balance of the
net proceeds from the Initial Public Offering (i) to expand its sales and
marketing capabilities by increasing the size of its sales force and
recruiting staff and expanding its marketing and promotional programs and (ii)
for general corporate purposes, including working capital. The Company may
also use a portion of such net proceeds for acquisitions of businesses that
are complementary to those of the Company. While the Company from time to time
evaluates such potential acquisitions, the Company currently has no
understandings, commitments or agreements with respect to any acquisitions.
The Company has not determined the amounts it plans to expend with respect to
each of the expected uses or the timing of such expenditures. As a
consequence, management will have the discretion to allocate the remaining net
proceeds from the Initial Public Offering. The amounts actually expended for
each use may vary significantly depending on a number of factors, including
the amount of future revenue, the amount of cash generated or used by the
Company's operations, the progress of the Company's sales and marketing
efforts, the success of the Company's recruiting efforts, the status of
competitive services and acquisition opportunities presented to the Company.
Pending such uses, the net proceeds to the Company from the Initial Public
Offering have been invested in short-term, investment-grade, interest-bearing
instruments.

The Company did not receive any proceeds from the sale of shares by the
Selling Stockholders. See "Principal and Selling Stockholders" and "Certain
Transactions--Transactions with Phoenix."

DIVIDEND POLICY

The Company has never declared or paid any dividends on its Common Stock.
The Company was, however, obligated to pay a 10% dividend on its Series A and
Series B Convertible Preferred Stock, and paid such accrued and unpaid
dividends with a portion of the net proceeds of the Initial Public Offering
upon the Preferred Stock Conversion. The Company does not anticipate paying
any other cash dividends in the foreseeable future and intends to retain any
earnings to fund future growth and the operation of its business. See "Risk
Factors--Absence of Dividends," "Use of Proceeds" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources."

16
<PAGE>

PRICE RANGE OF COMMON STOCK

The Common Stock has been traded on the Nasdaq National Market under the
symbol CMND since the Initial Public Offering on March 12, 1998.

The following table sets forth the intra-day high and low sale prices for
the Common Stock as reported on the Nasdaq National Market since March 12,
1998.

<TABLE>
<CAPTION>
HIGH LOW
--------- --------
<S> <C> <C>
First quarter ended March 31, 1998 (from March 12, 1998).... $14 3/4 $13
Second quarter.............................................. $18 3/4 $ 4
Third quarter............................................... $ 5 11/16 $ 2 5/8
Fourth quarter (through November 4, 1998)................... $ 3 7/16 $ 2 7/16
</TABLE>

The last reported sale price of the Common Stock on the Nasdaq National
Market on November 4, 1998 was $2 11/16 per share. As of October 30, 1998,
there were 14 record holders of Common Stock.

17
<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of the Company as of June
30, 1998, reflecting the issuance and sale by the Company of 2,200,000 shares
of Common Stock sold in the Initial Public Offering at the initial public
offering price of $12.00 per share, after giving effect to the deduction of
the underwriting discounts and commissions and offering expenses paid by the
Company, the application of the net proceeds thereof and the Preferred Stock
Conversion. The Shares were sold pursuant to a registration statement which
registered the sale of the Registered Shares but not the sale of the
Additional Shares. As provided in the Act, certain persons purchasing
securities sold in violation of the registration provisions of the Act may
recover the consideration paid for such securities with interest upon the
tender of such securities, less the amount of any income received, or damages
if such person no longer owns the securities. See "Risk Factors--Sale of
Unregistered Shares; Violation of the Act." The following table should be read
in conjunction with the Consolidated Financial Statements, including the Notes
thereto, appearing elsewhere in this Prospectus.

<TABLE>
<CAPTION>
JUNE 30, 1998
--------------
(IN THOUSANDS)
<S> <C>
Stockholders' equity:
Common stock, $.01 par value; 25,000,000 shares authorized;
7,656,750 issued and outstanding(1).......................... $ 34,818
Additional paid-in capital.................................... 33,425,140
Accumulated deficit........................................... (417,629)
Cumulative translation adjustment............................. (313,740)
-----------
Total stockholders' equity.................................. $32,728,589
===========
</TABLE>
- --------

(1) Excludes 220,250 shares of Common Stock issuable upon exercise of stock
options outstanding as of October 30, 1998, consisting of 56,500 Exchange
Options, 48,350 of which are currently exercisable, and 163,750 1997 Plan
Options, 23,750 of which are currently exercisable, at a weighted average
exercise price of $7.15 per share.

18
<PAGE>

DILUTION

The pro forma net tangible book value of the Company as of December 31,
1997, assuming the Preferred Stock Conversion, was approximately $2.6 million
or $0.47 per share of Common Stock. Pro forma net tangible book value per
share is determined by dividing the net tangible book value of the Company
(pro forma tangible assets less total liabilities) by the number of shares of
Common Stock outstanding. Dilution per share represents the difference between
the amount per share paid by purchasers of shares of Common Stock in the
Initial Public Offering and the pro forma net tangible book value per share of
Common Stock immediately after completion of the Initial Public Offering.
Without taking into account any changes in such pro forma net tangible book
value after December 31, 1997, other than to give effect to (i) the sale of
2,200,000 shares of Common Stock by the Company in the Initial Public Offering
at the initial public offering price of $12.00 per share and after deducting
the underwriting discounts and commissions and offering expenses and (ii) the
application of the estimated net proceeds therefrom, the pro forma net
tangible book value of the Company as of December 31, 1997 would have been
approximately $25.8 million or $3.37 per share. This represents an immediate
increase in pro forma net tangible book value of $2.90 per share to the then
existing stockholders and an immediate dilution in pro forma net tangible book
value of $8.63 per share to new investors. The following table illustrates
this dilution on a per share basis.

<TABLE>
<S> <C> <C>
Initial Public Offering price per share(1)........................ $12.00
Net tangible book value per share before Initial Public
Offering....................................................... $0.47
Increase per share attributable to new investors................ 2.90
-----
Pro forma net tangible book value per share after Initial Public
Offering......................................................... 3.37
------
Dilution per share to new investors............................... $ 8.63
======
</TABLE>
- --------
(1) Before deducting underwriting discounts and commissions and estimated
offering expenses.

The following table summarizes on a pro forma basis, as of December 31,
1997, the number of shares of Common Stock purchased from the Company, the
total consideration paid to the Company and the average price per share of
Common Stock paid by the then existing stockholders and new investors in the
Initial Public Offering at $12.00 per share:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
----------------- ------------------- PRICE
NUMBER(1) PERCENT AMOUNT PERCENT PER SHARE
--------- ------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C>
Then existing
stockholders(2).......... 5,456,750 71.3% $10,187,000 27.8% $1.87
New investors............. 2,200,000 28.7 26,400,000 72.2 12.00
--------- ----- ----------- -----
Total................... 7,656,750 100.0% $36,587,000 100.0%
========= ===== =========== =====
</TABLE>
- --------

(1) Sales by the Selling Stockholders in the Initial Public Offering reduced
the number of shares held by then existing stockholders to 4,551,750
shares or approximately 59.4% and increased the number of shares held by
new investors to 3,105,000 shares or approximately 40.6% of the total
number of shares of Common Stock outstanding after the Initial Public
Offering. See "Principal and Selling Stockholders."

(2) Number of shares held by then existing stockholders consisted of 4,275,000
shares of Common Stock issued and outstanding, 522,500 shares of Common
Stock as of December 31, 1997 which was then issuable upon conversion of
the Series A Convertible Preferred Stock and 659,250 shares of Common
Stock which was then issuable upon conversion of the Series B Convertible
Preferred Stock. See "Principal and Selling Stockholders."

The foregoing table excludes 220,250 shares of Common Stock issuable upon
exercise of stock options outstanding as of October 30, 1998, consisting of
56,500 Exchange Options, 48,350 of which are currently exercisable, and
163,750 1997 Plan Options, 23,750 of which are currently exercisable, at a
weighted average exercise price of $7.15 per share. To the extent that such
options are exercised in the future, there will be further dilution to new
investors. See "Capitalization," "Management--Employee Benefit Plans" and
"Description of Capital Stock."

19
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data as of December 31, 1995,
1996 and 1997 and for the years then ended are derived from and are qualified
by reference to the audited Consolidated Financial Statements of the Company
and the Notes thereto. The selected consolidated financial data as of December
31, 1994 is derived from audited consolidated financial statements not
included in this Prospectus. The selected consolidated financial data as of
December 31, 1993 and for the six months ended June 30, 1997 and 1998 are
derived from unaudited consolidated financial statements. The unaudited
consolidated financial statements include all adjustments, consisting only of
normal recurring accruals, which the Company considers necessary for a fair
presentation of the financial position and the results of operations.
Historical results are not necessarily indicative of results to be expected in
the future. The operating results for the six months ended June 30, 1998 are
not indicative of the operating results for the full year. The data should be
read in conjunction with the Consolidated Financial Statements, including the
Notes thereto, "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and other financial information included herein.

<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
----------------------------------------- ----------------
1993 1994 1995 1996 1997 1997 1998
------ ------ ------- ------- ------- ------- -------
(IN THOUSAND, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Revenue................. $6,127 $9,272 $12,436 $17,069 $25,057 $10,880 $16,631
Cost of revenue......... 5,721 6,890 9,108 12,494 16,973 7,833 11,059
------ ------ ------- ------- ------- ------- -------
Gross profit........... 406 2,382 3,328 4,575 8,084 3,047 5,572
Selling, general and
administrative
expenses............... 608 2,102 3,013 5,172 7,255 3,205 5,523
------ ------ ------- ------- ------- ------- -------
Income (loss) from
operations............ (202) 280 315 (597) 829 (158) 49
Other income (expense),
net.................... (38) (55) (50) (75) (277) (168) 381
------ ------ ------- ------- ------- ------- -------
Income (loss) before
income taxes and
minority interest...... (240) 225 265 (672) 552 (326) 430
Income tax (provision)
benefit................ (16) (32) (44) 8 95 -- (49)
Income tax (provision)
for change in corporate
status................. -- -- -- -- (693) -- --
------ ------ ------- ------- ------- ------- -------
Income (loss) before
minority interest...... (256) 193 221 (664) (46) (326) 479
Minority interest in net
(income) loss.......... -- -- -- 241 (451) (24) --
------ ------ ------- ------- ------- ------- -------
Net income (loss)....... (256) 193 221 (423) (497) (350) 479
Preferred stock
dividends and
accretion.............. -- -- -- -- (80) -- (260)
------ ------ ------- ------- ------- ------- -------
Income (loss) applicable
to common
stockholders........... $ (256) $ 193 $ 221 $ (423) $ (577) $ (350) $ 219
====== ====== ======= ======= ======= ======= =======
Basic and diluted
earnings per common
share.................. $ 0.03
=======
Pro forma results of
operations:
Adjustments to U.S.
federal income tax
provision assuming C
corporation status and
the realization of net
operating losses for
all periods........... $ 633 $ --
------- -------
Net income (loss), as
adjusted.............. 136 (350)
Preferred stock
dividends and
accretion............. (80) --
------- -------
Income applicable to
common stockholders... $ 56 $ (350)
======= =======
Pro forma earnings per
common share.......... $ 0.01 $ (0.08)
======= =======
Shares used in per share
calculation:
Basic.................. 4,275 4,275 6,267
Diluted................ 4,275 4,275 6,308
</TABLE>

20
<PAGE>

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------- JUNE 30,
1993 1994 1995 1996 1997 1998
------ ------ ------ ------ ------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents..... $ 43 $ 83 $ 223 $ 444 $ 392 $20,717
Working capital (deficit)..... 265 86 85 (99) 78 23,178
Total assets.................. 1,112 1,188 2,294 4,816 14,425 36,206
Short-term debt............... 187 436 949 1,452 1,414
Long-term debt................ 418 -- -- 1,145 --
Series A convertible preferred
stock........................ -- -- -- -- 2,223 --
Series B convertible preferred
stock........................ -- -- -- -- 8,000 --
Stockholders' equity
(deficit).................... (50) 142 365 (58) (722) 32,729
</TABLE>

21
<PAGE>

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

The following discussion and analysis should be read in conjunction with
"Selected Financial Data" and the Company's Consolidated Financial Statements,
including the Notes thereto, appearing elsewhere in this Prospectus.

OVERVIEW

The Company is a solutions provider offering IT services based on leading
technologies, including a wide variety of technology, software and hardware
solutions (including procurement), education and management consulting
services. Historically, the Company has derived the majority of its revenue
from the Company's traditional IT staff augmentation services and software and
hardware solutions. However, as a result of the introduction of Year 2000
solutions services in December 1996 and the significant demand for such
services, a growing percentage of the Company's revenue during the year ended
December 31, 1997 and the six months ended June 30, 1998 was derived from Year
2000 solutions services. Year 2000 solutions services, as well as other
complete project and solution services, typically provide higher margins than
the Company's IT staff augmentation and software and hardware solutions. For
the year ended December 31, 1997, IT staff augmentation, Year 2000 solutions
services, software and hardware solutions (together with education and
training, and management consulting services) and other application
development, maintenance and networking services accounted for 59%, 21%, 12%
and 8%, respectively, of the Company's total revenue. IT staff augmentation,
Year 2000 solutions services, software and hardware solutions (together with
education and training, and management consulting services) and other
application development, maintenance and networking services accounted for
51%, 30%, 13% and 6%, respectively, of the Company's total revenue for the six
months ended June 30, 1998 and 52%, 28%, 14% and 6%, respectively, of the
Company's total revenue in the three months ended June 30, 1998. Revenue from
Year 2000 projects and other higher margin services decreased as a percentage
of the Company's revenue in the three months ended June 30, 1998 compared to
the three months ended March 31, 1998. For the three months ended March 31,
1998, IT staff augmentation, Year 2000 solutions services, software and
hardware solutions (together with education and training, and management
consulting services) and other application development, maintenance and
networking services accounted for 51%, 31%, 12% and 6%, respectively, of the
Company's total revenue. For the three months ended September 30, 1998,
revenue from Year 2000 engagements and other application development services
continued to decrease as a percentage of the Company's total revenue. There
can be no assurance that revenue from Year 2000 projects and other higher
margin services will not continue to decrease as a percentage of the Company's
revenue for future periods.

The results of operations in the second and third quarter were adversely
affected primarily due to costs associated with the Company's increase in
sales and project management personnel which were not accompanied by expected
growth in complete projects and solutions business. In addition, the Company
experienced a lower than expected gross margin reflecting low rates of
employee utilization in the Offshore Technology Resource Center, a less
profitable mix of business and reduced margins from Year 2000 and other
project business. As the Company previously announced, gross profit as a
percentage of revenue may be affected as the Company continues to strive to
shift an increasing percentage of its business from IT staff augmentation to a
project orientation. Following certain concerns expressed relating to the
Company's performance under a Year 2000 solutions services contract for one of
the Company's largest customers in early 1998, the customer terminated the
contract. The loss of revenues from the customer contract termination will not
have a material adverse effect on the Company's results of operations and
financial condition.

Over 90% of the Company's service revenue is billed on a time and materials
basis. Revenue from services provided on a time and materials basis is
recognized in the period that services are provided. The balance of the
Company's service revenue is derived from services provided on a fixed-price
basis. Such revenue is recognized

22
<PAGE>

using the percentage-of-completion method. The Company bears the risk of cost
overruns and inflation with respect to its fixed-price projects. When entering
into such contracts, the Company strives to mitigate the attendant risks by
subdividing such projects into smaller, more manageable phases with fixed
price and time frames. See "Risk Factors--Variability of Quarterly Operations
and Financial Results."

In the mid-1990s, several conferences and market pronouncements increased
worldwide awareness of the Year 2000 problem (which prevents existing
applications from properly interpreting dates after 1999). The Company began
providing Year 2000 solutions services in December 1996 through its workforce
both in the U.S. and at the Offshore Technology Resource Center in response to
the needs and demands of its customers. During 1998, the Company expended
approximately $350,000 for the lease of additional office space in its
existing facility in downtown Bangalore, and the purchase of equipment and
leasehold improvements. See "Risk Factors--Finite Nature of Demand for Year
2000 Solutions Services; Other Risks of Decreased Demand," "--Dependence on
Offshore Software Development Facility" and "Business--Industry Overview."

Personnel and rent expenses represent a significant percentage of the
Company's operating expenses and are relatively fixed in advance of any
particular quarter. In particular, due to hiring and employment practices and
applicable law in India, the Company is unable to effect appropriate
reductions of staff at its Bangalore, India facility in response to revenue
shortfalls. Senior management seeks to manage the Company's personnel
utilization rates by carefully monitoring its needs and basing most personnel
increases on specific project requirements. To the extent revenue does not
increase at a rate commensurate with these additional expenses, the Company's
results of operations could be materially and adversely affected.

During 1996, the Company entered into an agreement with Phoenix to organize
Command International Software Pvt. in Bangalore, India, to establish the
Offshore Technology Resource Center. Initially, the Company and Phoenix
maintained a 51% and 49% interest, respectively, in Command International
Software Pvt. On December 31, 1997, Phoenix, acting through a wholly-owned
subsidiary, exchanged its 49% interest for shares of the Company's Series B
Convertible Preferred Stock which was converted into 659,250 shares of Common
Stock upon consummation of the Initial Public Offering. Accordingly, the
Company currently owns 100% of the Offshore Technology Resource Center. See
"Certain Transactions."

As a result of the acquisition of the minority interest in the Offshore
Technology Resource Center, the Company recorded goodwill of approximately
$6.8 million which will be amortized over a period of 15 years commencing
January 1, 1998.

The Company believes that as a result of the detonation of nuclear devices
in India, there may be some adverse economic repercussions caused by the
institution of sanctions or other similar actions, the effects of which are
unknown to management at this time. No assurance can be given that such
actions would not have a material adverse effect on the Company's business,
financial condition or results of operations.

INCOME TAX MATTERS

From its inception through August 23, 1997, the Company elected to be taxed
under the S corporation provisions of the Internal Revenue Code of 1986, as
amended (the "Code"). An S corporation generally is not subject to income tax
at the corporate level (with certain exceptions under state income tax laws).
This election was terminated in conjunction with the formation of the Company
as a Delaware holding corporation and the issuance of its Series A Convertible
Preferred Stock.

In connection with the termination of its S corporation status, the Company
was required by the Code to change its method of accounting for tax reporting
purposes from the cash method to the accrual method. This change resulted in a
one-time charge to earnings in the three months ended September 30, 1997 of
$693,000 resulting from differences (of approximately $2.0 million) in the tax
treatment of certain of the Company's assets and liabilities under the cash
and accrual methods of accounting and is reflected through an increase in
current and deferred income tax liabilities. Under current statutes, this
liability will be payable over a period of four years.

23
<PAGE>

The Offshore Technology Resource Center is eligible for certain favorable
tax treatment provided under India law including: (i) an exemption from
payment of corporate income taxes for a period of five consecutive years in
the first eight years of operation (the "Tax Holiday") or (ii) an exemption
from income taxes on the profits derived from India (the "Export Exemption").
The Export Exemption remains available after expiration of the Tax Holiday. As
a result of the availability of these exemptions, the Company has not recorded
deferred income taxes applicable to the undistributed earnings of the Offshore
Technology Resource Center, which aggregated approximately $429,000 and
$1,349,000, respectively, as of December 31, 1997 and June 30, 1998. The
Company considers these earnings to be permanently invested in India and does
not anticipate repatriating any of these earnings to the U.S. If any earnings
of Command Software are repatriated to the U.S. in the future, the Company
will be required to record a provision for income taxes on such amounts and,
upon repatriation of the funds, pay U.S. taxes thereon. See Note 4 of the
Notes to Consolidated Financial Statements.

RESULTS OF OPERATIONS

The following table sets forth certain operating data as a percentage of
revenue for the periods indicated:

<TABLE>
<CAPTION>
PERCENTAGE OF REVENUE
---------------------------------------
YEAR ENDED SIX MONTHS
DECEMBER 31, ENDED JUNE 30,
------------------- -----------------
1995 1996 1997 1997 1998
----- ----- ----- ------- -------
<S> <C> <C> <C> <C> <C>
Revenue.............................. 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of revenue...................... 73.2 73.2 67.7 72.0 66.5
----- ----- ----- ------- -------
Gross profit......................... 26.8 26.8 32.3 28.0 33.5
Selling, general and administrative
expenses............................ 24.2 30.3 29.0 29.5 33.2
----- ----- ----- ------- -------
Income (loss) from operations........ 2.6 (3.5) 3.3 (1.5) 0.3
Other income (expense), net.......... (0.4) (0.5) (1.1) (1.5) 2.3
----- ----- ----- ------- -------
Income (loss) before income taxes and
minority interest................... 2.2 (4.0) 2.2 (3.0) 2.6
Income tax (provision) benefit....... (0.4) -- 0.4 -- 0.3
Income tax (provision) for change in
corporate status.................... -- -- (2.8) -- --
----- ----- ----- ------- -------
Income (loss) before minority
interest............................ 1.8 (4.0) (0.2) (3.0) 2.9
Minority interest in net (income)
loss................................ -- 1.4 (1.8) (0.2) --
----- ----- ----- ------- -------
Net income (loss).................... 1.8 (2.6) (2.0) (3.2) 2.9
Preferred stock dividends and
accretion........................... -- -- (0.3) -- (1.6)
----- ----- ----- ------- -------
Income (loss) applicable to common
stockholders........................ 1.8% (2.6)% (2.3)% (3.2)% 1.3%
===== ===== ===== ======= =======
</TABLE>

Six Months Ended June 30, 1998 Compared With Six Months Ended June 30, 1997.

Revenue. Revenue for the six month period ended June 30, 1998 increased by
52.9% to $16.6 million from $10.9 million for the six months ended June 30,
1997. This resulted primarily from an increase in revenue generated from Year
2000 solutions services. As compared to the year ended December 31, 1997,
revenue from Year 2000 projects and other higher margin services for the six
months ended June 30, 1998 increased as a percentage of the Company's total
revenue. However, as discussed above, revenue from Year 2000 projects and
other higher margin services for the three months ended June 30, 1998,
decreased as a percentage of the Company's total revenue as compared to the
three months ended March 31, 1998. There can be no assurance that revenue from
Year 2000 and other higher margin services will not continue to decrease as a
percentage of the Company's total revenue for future periods.

Gross Profit. Cost of revenue consists primarily of salaries and employee
benefits for personnel as well as the cost of hardware and software purchased
for resale to customers. Gross profit for the six month period ended June 30,
1998 increased by 82.8% to $5.6 million from $3.0 million for the six month
period ended June 30,

24
<PAGE>

1997. Gross profit as a percentage of revenue increased to 33.5% for the six
month period ended June 30, 1998 from 28.0% for the six month period ended
June 30, 1997. This increase resulted primarily from a larger amount of the
Company's revenue being derived from Year 2000 solutions services which
typically carry higher margins than the Company's traditional IT services.
However, the Company's gross margin for the three months ended June 30, 1998
decreased as compared to the three months ended March 31, 1998 reflecting low
rates of employee utilization in the Offshore Technology Resource Center, a
less profitable mix of business and reduced margins from Year 2000 and other
project business.

Selling, general and administrative expenses. Selling, general and
administrative expense consists primarily of salaries and employee benefits
for selling and administrative personnel as well as travel, telecommunications
and occupancy costs for the Company's U.S. and India operations. These
expenses are relatively fixed in advance of any particular quarter. To the
extent revenue does not increase at a rate commensurate with these expenses,
the Company's results of operations could be materially and adversely
affected. Selling, general and administrative expense, net of amortization for
goodwill, for the six month period ended June 30, 1998 increased by 65.2% to
$5.3 million from $3.2 million for the six month period ended June 30, 1997.
The increase is primarily attributable to additional sales and project
management personnel, which were added in anticipation of growth in complete
projects and solutions business. Also, a non-recurring charge of approximately
$100,000 was recorded to recognize certain use taxes and the Company accrued
costs of approximately $90,000 as a result of certain shareholder litigation.

Amortization of goodwill for the six month period ended June 30, 1998 was
$228,000, relating to the Company's purchase of the 49% minority interest in
its Offshore Technology Resource Center from PHL Global Holding Co. ("PHL"),
an indirect wholly owned subsidiary of Phoenix. The Company accounted for this
transaction as a purchase and recognized the $6.8 million excess of the
purchase price over the fair value of the assets acquired and liabilities
assumed as goodwill.

Income (Loss) From Operations. Income from operations for the six month
period ended June 30, 1998 was $49,000 compared to a loss of $(158,000) for
the six month period ended June 30, 1997. Income from operations as a
percentage of revenue was 0.3% for the six month period ended June 30, 1998 as
compared to a loss of (1.5)% for the six month period ended June 30, 1997.

Other Income (Expense), Net. Net interest income was $291,000 for the six
month period ended June 30, 1998 compared to net interest expense of $168,000
for the six month period ended June 30, 1997. The interest income was
attributable to interest earned from investment of the net proceeds of the
Company's initial public offering in commercial paper and other cash
equivalent instruments during the six month period ended June 30, 1998.
Interest expense in 1997 was a result of bank borrowings required to provide
working capital to the Company and accrued interest expense associated with
the subordinated notes issued to Phoenix. In addition, the Company recorded a
$91,000 foreign currency exchange gain in connection with its U.S. dollar
denominated cash and receivable balances of the Offshore Technology Resource
Center in Bangalore, India.

Income Tax (Provision) Benefit. The income tax benefit for the six month
period ended June 30, 1998 was $49,000, as a result of reversing the first
quarter's income tax provision and the utilization of deferred tax credits.
The Company computes its income tax provision on a quarterly basis and
provides for deferred income taxes based upon the difference between the
financial statement and tax basis of assets and liabilities. A valuation
allowance is provided when necessary to reduce the deferred tax assets to the
amount expected to be realized.

Minority Interest in Net (Income) Loss. Minority interest in net (income)
loss for the six months ended June 30, 1997 was ($24,000), representing the
minority interest in the income generated in the Bangalore, India facility.
There was no minority interest during 1998.

Net Income (Loss). As a result of the foregoing, net income was $479,000 for
the six month period ended June 30, 1998 as compared to a net loss of
$(350,000) for the six month period ended June 30, 1997. Basic and

25
<PAGE>

diluted earnings per share were $0.03 for the six month period ended June 30,
1998 as compared to a loss per share of $(0.08) for the six month period ended
June 30, 1997. Basic and diluted earnings per share were affected by preferred
stock dividends and accretion in 1998 of $260,000. In addition, the weighted
average number of shares outstanding used in the calculation of basic and
fully diluted earnings per share increased over the comparable period as a
result of shares issued in conjunction with the Company's March 12, 1998
initial public offering.

Preferred Stock Dividends and Accretions. Preferred Stock dividends and
accretions for the six months ended June 30, 1998 and June 30, 1997 were
$260,000 and $0, respectively.

Year Ended December 31, 1997 Compared to Year Ended December 31, 1996

Revenue. Revenue during the year ended December 31, 1997 increased by 46.8%
to $25.1 million from $17.1 million during the year ended December 31, 1996.
This increase resulted primarily from an increase in demand for the Company's
traditional IT consulting services and the introduction of Year 2000 solutions
services in December 1996.

Gross Profit. Gross profit during the year ended December 31, 1997 increased
by 76.1% to $8.1 million from $4.6 million during the year ended December 31,
1996. Gross profit as a percentage of revenue increased to 32.3% during the
year ended December 31, 1997 from 26.8% during the year ended December 31,
1996. This increase resulted primarily from the introduction of the Company's
Year 2000 solutions services which were performed primarily from the Company's
Offshore Technology Resource Center and which carried higher margins than the
Company's IT services performed in the United States.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses during the year ended December 31, 1997 increased by
40.4% to $7.3 million from $5.2 million during the year ended December 31,
1996. Selling, general and administrative expenses as a percentage of revenue
decreased to 29.0% during the year ended December 31, 1997 from 30.3% during
the year ended December 31, 1996. The decrease resulted primarily from
increased revenue from the Company's offshore facilities.

Income (Loss) from Operations. Income from operations during the year ended
December 31, 1997 was $829,000 compared to a loss of $(597,000) during the
year ended December 31, 1996. Income from operations as a percentage of
revenue was 3.3% during the year ended December 31, 1997 as compared to a loss
of (3.5)% during the year ended December 31, 1996.

Other Income (Expense), net. Other expense during the year ended December
31, 1997 increased to $277,000 from $75,000 during the year ended December 31,
1996. The increase resulted primarily from an increase in borrowing by the
Company to support the expansion of its Offshore Technology Resource Center.

Income Tax (Provision) Benefit. Income tax provision during the year ended
December 31, 1997 increased to $(598,000) from a benefit of $8,000 during the
year ended December 31, 1996. This increase was a result of the Company's
change from S corporation status to a C corporation, pursuant to which the
Company incurred a one-time charge in the amount of $693,000 because of the
related requirement to change from the cash method of accounting to the
accrual method of accounting.

Minority Interest in Net (Income) Loss. Minority interest in net (income)
loss was ($451,000) during the year ended December 31, 1997.

Preferred stock dividends and accretion. Preferred stock dividends and
accretion for the year ended December 31, 1997 was $80,000.

26
<PAGE>

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

Revenue. Revenue during the year ended December 31, 1996 increased by 37.9%
to $17.1 million from $12.4 million during the year ended December 31, 1995.
The increase resulted primarily from an increase in demand for the Company's
traditional IT consulting services.

Gross Profit. Gross profit during the year ended December 31, 1996 increased
by 39.4% to $4.6 million from $3.3 million during the year ended December 31,
1995. Gross profit as a percentage of revenue remained constant at 26.8%.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses during the year ended December 31, 1996 increased by
73.3% to $5.2 million from $3.0 million during the year ended December 31,
1995. Selling, general and administrative expenses as a percentage of revenue
increased to 30.3% during the year ended December 31, 1996 from 24.2% during
the year ended December 31, 1995. The increase resulted primarily from
expansion of the Company's sales, marketing and recruiting capabilities to
support a higher level of revenue.

Income (Loss) from Operations. Loss from operations during the year ended
December 31, 1996 was $(597,000) compared to income of $315,000 during the
year ended December 31, 1995.

Other Income (Expense), net. Other expense during the year ended December
31, 1996 increased to $75,000 from $50,000 during the year ended December 31,
1995. The increase resulted primarily from an increase in borrowing by the
Company to support the creation of the Offshore Technology Resource Center.

Minority Interest in Net (Income) Loss. Minority interest in net (income)
loss was $241,000 during the year ended December 31, 1996.

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<PAGE>

QUARTERLY RESULTS OF OPERATIONS

The following tables set forth certain quarterly operating information for
each of the eight quarters ending June 30, 1998, both in dollars and as a
percentage of revenue. This information was derived from the unaudited
consolidated financial statements of the Company, which, in the opinion of
management, were prepared on the same basis as the Consolidated Financial
Statements, including the Notes thereto, appearing elsewhere in this
Prospectus and include all adjustments, consisting of normal recurring
accruals, which management considers necessary for the fair presentation of
the information for the periods presented. The financial data given below
should be read in conjunction with the Consolidated Financial Statements,
including the Notes thereto, appearing elsewhere in this Prospectus. Results
for any previous fiscal quarter are not necessarily indicative of results for
the full year or for any future quarter.

<TABLE>
<CAPTION>
SEPT. 30, DEC. 31, MAR. 31, JUNE 30, SEPT. 30, DEC. 31, MAR. 31, JUNE 30,
1996 1996 1997 1997 1997 1997 1998 1998
--------- -------- -------- -------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS:
Revenue................. $4,295 $4,507 $5,144 $5,736 $6,861 $7,316 $7,934 $8,697
Cost of revenue......... 3,048 3,653 3,846 3,987 4,380 4,760 5,110 5,949
------ ------ ------ ------ ------ ------ ------ ------
Gross profit............ 1,247 854 1,298 1,749 2,481 2,556 2,824 2,748
Selling, general and
administrative
expenses............... 1,187 1,711 1,474 1,731 2,079 1,971 2,272 3,251
------ ------ ------ ------ ------ ------ ------ ------
Income (loss) from
operations............. 60 (857) (176) 18 402 585 552 (503)
Other income (expense),
net.................... (24) (48) (38) (130) (73) (36) 6 375
------ ------ ------ ------ ------ ------ ------ ------
Income (loss) before
income taxes and
minority interest...... 36 (905) (214) (112) 329 549 558 (128)
Income tax (provision)
benefit................ (7) 15 -- -- 21 74 104 (153)
Income tax (provision)
for change in corporate
status................. -- -- -- -- (693) -- -- --
------ ------ ------ ------ ------ ------ ------ ------
Income (loss) before
minority interest...... 29 (890) (214) (112) (343) 623 454 25
Minority interest in net
(income) loss.......... -- 241 (57) 33 (160) (267) -- --
------ ------ ------ ------ ------ ------ ------ ------
Net income (loss)....... 29 (649) (271) (79) (503) 356 454 25
Preferred stock
dividends and
accretion.............. -- -- -- -- (23) (57) (260) --
------ ------ ------ ------ ------ ------ ------ ------
Income (loss) applicable
to common
stockholders........... $ 29 $ (649) $ (271) $ (79) $ (526) $ 299 $ 194 $ 25
====== ====== ====== ====== ====== ====== ====== ======
AS A PERCENTAGE OF TOTAL
REVENUE:
Revenue................. 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of revenue......... 71.0 81.1 74.8 69.5 63.8 65.1 64.4 68.4
------ ------ ------ ------ ------ ------ ------ ------
Gross profit............ 29.0 18.9 25.2 30.5 36.2 34.9 35.6 31.6
Selling, general and
administrative
expenses............... 27.6 38.0 28.6 30.2 30.3 26.9 28.6 37.4
------ ------ ------ ------ ------ ------ ------ ------
Income (loss) from
operations............. 1.4 (19.1) (3.4) 0.3 5.9 8.0 7.0 (5.8)
Other income (expense),
net.................... (0.6) (1.1) (0.7) (2.3) (1.1) (0.5) 0.1 4.3
------ ------ ------ ------ ------ ------ ------ ------
Income (loss) before
income taxes and
minority interest...... 0.8 (20.2) (4.1) (2.0) 4.8 7.5 7.1 (1.5)
Income tax (provision)
benefit................ (0.1) 0.4 -- -- 0.3 1.0 (1.3) 1.8
Income tax (provision)
for change in corporate
status................. -- -- -- -- (10.1) -- -- --
------ ------ ------ ------ ------ ------ ------ ------
Income (loss) before
minority interest...... 0.7 (19.8) (4.1) (2.0) (5.0) 8.5 5.8 0.3
Minority interest in net
(income) loss.......... -- 5.4 (1.1) 0.6 (2.3) (3.6) -- --
------ ------ ------ ------ ------ ------ ------ ------
Net income (loss)....... 0.7 (14.4) (5.2) (1.4) (7.3) 4.9 5.8 0.3
Preferred stock
dividends and
accretion.............. -- -- -- -- (0.3) (0.8) (3.3) --
------ ------ ------ ------ ------ ------ ------ ------
Income (loss) applicable
to common
stockholders........... 0.7% (14.4)% (5.2)% (1.4)% (7.6)% 4.1% 2.5% 0.3%
====== ====== ====== ====== ====== ====== ====== ======
</TABLE>

28
<PAGE>

The Company's operations and related revenue and operating results
historically have varied substantially from quarter to quarter and the Company
expects these variations to continue. Among the factors causing these
variations have been the number, timing and scope of IT projects in which the
Company is engaged, the accuracy of estimates of resources and time frames
required to complete ongoing projects, and general economic conditions. A high
percentage of the Company's selling, general and administrative expenses,
particularly salary, are relatively fixed in advance of any particular
quarter. As a result, unanticipated variations in the number and timing of the
Company's projects during a particular quarter may cause significant
variations in operating results in that quarter. An unanticipated termination
of a major project, a customer's decision not to pursue a new project or
proceed to succeeding stages of a current project, or the completion during a
quarter of several major customer projects could require the Company to
continue to pay for underutilized personnel and, therefore, have a material
adverse effect on the Company's business, financial condition and results of
operations. Specifically, hiring and employment practices and applicable law
in India make it difficult for the Company to effect reductions in staffing at
the Company's Bangalore, India facility. The results of operations in the
second and third quarter were adversely affected primarily due to costs
associated with the Company's increase in sales and project management
personnel which were not accompanied by expected growth in complete projects
and solutions business. In addition, the Company experienced a lower than
expected gross margin reflecting low rates of employee utilization in the
Offshore Technology Resource Center, a less profitable mix of business and
reduced margins from Year 2000 and other project business. Demand for the
Company's services generally is lower in the fourth quarter due to reduced
activity during the holiday season and fewer working days for those customers
which curtail operations during such period. The Company anticipates that its
business will continue to be subject to such seasonal variations. See "Risk
Factors--Variability of Quarterly Operations and Financial Results."

LIQUIDITY AND CAPITAL RESOURCES

Since inception, the Company has financed its operations and capital
expenditures primarily with internally generated cash flows, borrowings under
its line of credit facilities, proceeds from the issuance of subordinated
notes to Phoenix and proceeds from the issuance of Common Stock in the Initial
Public Offering.

The Company's operating activities used $237,000 for the six month period
ended June 30, 1998 compared to $996,000 for the six months ended June 30,
1997. The use of cash was primarily due to an increase in accounts receivable.

The Company's operating activities generated cash of $290,000 in 1997 and
used cash of $1.1 million in 1996 and $108,000 in 1995. In 1996 and 1995 the
use of cash was due primarily to increases in accounts receivable. In
addition, in 1996 the Company incurred an operating loss associated with start
up expenses for its Offshore Technology Resource Center.

The Company used cash of $735,000 for capital expenditures during the six
months ended June 30, 1998 to support planned sales growth. The Company spent
$869,000 during the six months ended June 30, 1997 which was primarily related
to the Offshore Technology Resource Center.

The Company's capital expenditures used cash of $1.5 million during the year
ended December 31, 1997 and $955,000 for the year ended 1996, which were
primarily related to the operations of the Company's Offshore Technology
Resource Center. The Company's investing activities used cash of $264,000 in
1995 to finance additions to equipment and improvements.

The Company's financing activities provided $21.5 million for the six months
ended June 30, 1998 and $1.9 million for the same period in 1997. In March
1998, the Company issued and sold the Shares in the Initial Public Offering.
The Shares were sold pursuant to a registration statement which registered the
sale of the Registered Shares but not the sale of the Additional Shares. As
provided in the Act, certain persons purchasing securities sold in violation
of the registration provisions of the Act may recover the consideration paid
for such securities with interest upon the tender of such securities, less the
amount of any income received, or damages if such person no longer owns the
securities. The maximum rescission liability with respect to the 100,000
unregistered shares sold by the Company would be $1,200,000 (100,000 shares at
$12 per share) plus interest.

29
<PAGE>

The Company has not recognized a liability based on the rescission of the
100,000 unregistered shares it sold because, as noted above, the right to
rescind rests only with a purchaser in the Initial Public Offering who still
holds such shares. Given the large trading volume in the Company's common
stock subsequent to the offering (indicating substantial turnover in share
ownership) and the inability to identify which securities were unregistered,
the Company is of the belief that it is not probable that it will be required
to effect an actual rescission, as opposed to paying rescissionary damages. As
indicated previously, shareholders who purchased unregistered shares in the
offering may recover damages if they sold such securities at a loss. Based
upon the preliminary status of the lawsuit described below under the caption
"--Shareholder Litigation," the range of such damages, if any, cannot
reasonably be estimated. The Company and the Selling Stockholders have entered
into the Indemnification Agreement with the Company's former securities
counsel which served as the Company's counsel in the Initial Public Offering,
which would hold the Company and the Selling Stockholders harmless for damages
which might result from any claims as a consequence of the aforementioned
circumstances. In view of the Indemnification Agreement, and in light of
assurances the Company has received concerning the professional indemnity
insurance maintained by such counsel, the Company does not believe that any
claims relating to the foregoing will have a material adverse effect on its
financial condition. The Company is also the subject of shareholder litigation
relating to the Initial Public Offering. The plaintiffs in the purported
consolidated class action seek rescission of the sales of the shares in the
Initial Public Offering and unspecified damages, including rescissionary
damages, interest, costs and fees. See "--Shareholder Litigation."

The Company received net proceeds of $23.2 million after underwriters'
discounts and other offering expenses from the sale of 2,200,000 shares in the
Initial Public Offering. Simultaneously, with the Initial Public Offering, the
holders of 100 shares of Series A convertible preferred stock and the holders
of 100 shares of Series B convertible preferred stock exchanged their shares
for 1,181,750 shares of common stock. Dividends accrued during the period and
previously unamortized offering expenses have been recognized as a reduction
to net income. The Company has paid dividends of $298,000 from the proceeds.
For the six month period ended June 30, 1997 the cash was generated under the
Company's bank credit facilities and from subordinated notes issued to
Phoenix.

The Company's financing activities provided cash of $1.2 million for the
year ended December 31, 1997, $2.2 million in 1996 and $512,000 in 1995.
During the year ended December 31, 1997, cash was generated primarily through
the Company's issuance of subordinated notes to Phoenix, investments by
Phoenix in the Offshore Technology Resource Center and bank borrowings. The
Company generated cash in 1996 primarily through the issuance of subordinated
notes to Phoenix in order to finance the establishment of its Offshore
Technology Resource Center. In 1995 financing activities generated cash
primarily as a result of borrowings under the Company's bank credit
facilities.

As of June 30, 1998, the Company had $20.7 million in cash and had working
capital of $23.2 million.

Effective October 29, 1998, the Company entered into a Loan and Security
Agreement with People's Bank (the "Credit Facility"), which provides for a
revolving line of credit of up to $4.0 million for its U.S. operations.
Borrowings under the line of credit are secured by a valid first priority
perfected security interest in all business assets of Command Systems, Inc.
Such security interest excludes the assets of Command International Software
Pvt. The Credit Facility will be primarily used to fund the Company's working
capital requirements. The Credit Facility will bear interest at a floating
rate based upon prime plus 0% or at the Company's option LIBOR plus 175 basis
points for 30, 60 or 90 periods. LIBOR borrowings will be limited to a maximum
of seven LIBOR maturities at one time, with LIBOR borrowings in increments of
$500,000. The Company was required to pay a commitment fee of $22,000 at the
time of closing. The Company is required to maintain a minimum of the
following: total net worth of five times credit facility, debt service
coverage ratio of 3:1, interest coverage of 3:1 and a current ratio of 2:1.

The Company believes that the net proceeds from the Initial Public Offering,
together with other available funds, including the Credit Facility, and the
cash flow expected to be generated from operations, will be adequate to at
least satisfy its current and planned operations over the next 12 months.

The Company's Offshore Technology Resource Center invoices its U.S.
customers in U.S. dollars to mitigate exchange risk; however, local expenses
are denominated in local currency. The Company presently incurs a significant
amount of its costs in local currency in India. In contrast, the Company
presently generates

30
<PAGE>

most of its revenue in U.S. dollars. Accordingly, the Company is subject to
risks that, as a result of currency fluctuations, the translation of foreign
currencies into U.S. dollars could adversely affect its business, financial
condition and results of operations. Historically, the Company has not hedged
any meaningful portion of its foreign exchange transactions. See "Risk
Factors--Risks of Doing Business in International Markets."

SHAREHOLDER LITIGATION

INFLATION

The Company's most significant costs are the salaries and related benefits
for its consultants and other professionals. Competition in India and the U.S.
for IT professionals with the advanced technological skills necessary to
perform the services offered by the Company have caused wages to increase at a
rate greater than the general rate of inflation. As with other IT service
providers, the Company must adequately anticipate wage increases. Further,
India has in the past experienced significant inflation. Historically, the
Company's wage costs in India have been significantly lower than its wage
costs in the U.S. for comparably skilled employees, although wage costs in
India are presently increasing at a faster rate than in the U.S. There can be
no assurance that the Company will be able to recover cost increases through
increases in the prices that it charges for its services in the U.S. See "Risk
Factors--Competitive Market for Technical Personnel."

THE YEAR 2000 ISSUE

The Company has completed an assessment of its information systems to
determine the extent to which its existing systems correctly define the Year
2000. Those systems found not to be compliant have been upgraded by the
vendors of those systems except for certain purchased software packages which
are expected to be upgraded and brought into compliance by their vendors
before the year 2000. The majority of the upgrades were implemented via
standard maintenance contracts, without costs. Only a nominal amount has been
expended, to date, and the remaining upgrades are expected to be implemented
for minimal cost. With respect to the information systems of third parties who
are major vendors of the Company, the Company will be seeking to obtain Year
2000 compliance certifications for those systems that relate to the Company's
business. These third parties include major hardware and software vendors, as
well as financial services providers. Most of the Company's major vendors have
made public statements indicating that they intend to cause their products and
services to be Year 2000 compliant on a timely basis. Based on the foregoing,
the Company has not to date developed contingency plans for the failure by its
major vendors to provide Year 2000 compliant products and services. There can
be no assurance, however, that the Year 2000 issue will not affect the
information systems of the Company's major vendors as they relate to the
Company's business, or that any such impact of a major vendor's information
system would not have a material adverse effect on the Company.

31
<PAGE>

BUSINESS

SUMMARY

The Company provides a wide range of IT solutions and services to financial
services organizations to support their evolving business processes. The
Company utilizes leading technologies to offer its customers a comprehensive
range of IT services, including technology, software and hardware solutions
(including product procurement), education and management consulting services.
In 1996 the Company established its Offshore Technology Resource Center in
Bangalore, India, which today provides its customers with increased access to
skilled IT professionals. As of June 30, 1998, the Company employed 276 full-
time consultants in its four U.S. offices and the Offshore Technology Resource
Center. The Company develops and maintains long-term relationships with its
customers. In 1997, the Company provided services to over 100 customers and
for each of 1996 and 1997 over 60% of the Company's revenue was derived from
existing customers from the previous year. The Company's customers are
typically large financial services organizations, especially leading insurance
companies, such as The Hartford, MassMutual, Phoenix and Aetna, and G.E.
Capital. For the year ended December 31, 1997, IT staff augmentation, Year
2000 solutions services, software and hardware solutions (together with
education and training, and management consulting services) and other
application development, maintenance and networking services accounted for
59%, 21%, 12% and 8%, respectively, of the Company's total revenue. IT staff
augmentation, Year 2000 solutions services, software and hardware solutions
(together with education and training, and management consulting services) and
other application development, maintenance and networking services accounted
for 51%, 30%, 13% and 6%, respectively, of the Company's total revenue for the
six months ended June 30, 1998, and 52%, 28%, 14% and 6%, respectively, of the
Company's total revenue for the three months ended June 30, 1998. Revenue from
Year 2000 projects and other higher margin services decreased as a percentage
of the Company's revenue in the three month period ended June 30, 1998
compared to the three months ended March 31, 1998. For the three months ended
March 31, 1998, IT staff augmentation, Year 2000 solutions services, software
and hardware solutions (together with education and training, and management
consulting services) and other application development, maintenance and
networking services accounted for 51%, 31%, 12% and 6%, respectively, of the
Company's total revenue. For the three months ended September 30, 1998,
revenue from Year 2000 engagements and other application development services
continued to decrease as a percentage of the Company's total revenue. There
can be no assurance that revenues from Year 2000 projects and other higher
margin services will not continue to decrease as a percentage of the Company's
revenue for future periods.

INDUSTRY OVERVIEW

Intense competition, globalization, rapid technological innovation and
deregulation are accelerating the rate of change in business today,
particularly for organizations in such data and technology intensive
industries as the insurance, banking, brokerage and other financial services
industries. Financial services organizations face increasing pressures to
improve product and service quality, reduce costs, improve operating
efficiencies and strengthen customer relationships. These organizations are
changing and adapting their business processes in order to achieve these
objectives and therefore require systems and personnel that are flexible and
capable of rapid change. Accordingly, a financial services organization's
ability to successfully integrate and deploy advanced IT systems and
applications in a timely and cost-effective manner has become critical to its
success in today's rapidly changing business environment. In addition, many
financial services organizations have begun to view IT solutions as strategic
tools that can be used to gain competitive advantages such as reducing the
time to market of products, providing an expanded mix of value--added client
services, reducing the cost of development and maintenance of systems and
providing timely access to information.

At the same time, rapid technological advances have accelerated the pace of
transition from mainframe to client/server architectures and from the
utilization of many interdepartmental systems to enterprise-wide integrated
systems. These technological advances have also increased the use of network
and Internet/intranet communications systems. In addition, such technological
advances have accelerated the convergence of the foregoing technologies.
Although these rapid technological advances and other emerging and converging
technologies offer the promise of faster, more functional and more flexible IT
systems and applications, the implementation of business solutions utilizing
these new technologies presents organizations and IT departments

32
<PAGE>

with major challenges. Evaluating, developing and integrating these solutions
requires a large number of highly skilled individuals trained in many diverse
technologies and architectures. However, there is a shortage of these
individuals, and consequently many organizations either will not have
sufficient staffing to satisfy their needs or will not have personnel with
adequate expertise. Moreover, many companies have made a strategic decision to
focus on their core competencies, minimize their fixed costs and reduce their
work forces, thereby preventing them from investing in large IT staffs.

As a result, many organizations are increasingly turning to third-party IT
service providers to help them evaluate, develop, implement and support new IT
systems and applications, and to help them maintain existing legacy systems
and applications. Consequently, demand for IT services has grown
significantly. According to industry sources, the U.S. market for outsourced
IT services is expected to grow from over $13 billion in 1996 to approximately
$24 billion in the year 2001. IT services are particularly essential to the
financial services industry, whose business is highly dependent on effective
data processing management and analysis. Third-party implementation of such
services in a timely and cost-effective manner requires not only technical
expertise, but also highly developed project management skills and prior
experience with the customers' systems. Also, because of needs specific to
their industry, financial services organizations frequently seek IT service
providers with financial industry experience.

Financial services organizations are particularly sensitive to, and need to
address, the Year 2000 problem (which prevents existing applications from
properly interpreting dates after 1999), because it would prevent or inhibit
the proper calculation of critical data and ultimately, if not corrected, may
lead to an interruption or discontinuation of service. Solving a Year 2000
problem is a highly time and labor intensive project, typically requiring (i)
identification and analysis of programs that are or may be affected, (ii)
analysis of up to millions of lines of code and millions of items of data,
(iii) renovation of affected code and (iv) testing. Many providers of IT
services expect to have an opportunity to leverage services rendered in
connection with solving Year 2000 problems into other projects that require
experience with these same customer systems, including (i) maintaining and
reengineering legacy systems, which many financial services organizations
choose to maintain in order to maximize their investments in these systems and
because of the high degree of customized functionality they provide and (ii)
addressing the growing backlog of applications development projects that are
accumulating while IT departments devote greater portions of their limited
budgets and deploy more of their personnel on the Year 2000 problem.

As organizations continue to maintain legacy systems, migrate from mainframe
to client/server architectures, implement other emerging IT technologies and
address the Year 2000 problem, the demand for IT professionals will continue
to rise and the shortage of IT professionals is expected to become more
severe. Meanwhile, financial services organizations continue to be challenged
by the rising costs of applications development and maintenance and the large
and growing backlog of applications development projects. For these reasons,
financial services organizations are increasingly turning to outside IT
service providers. By outsourcing IT services, companies are able to (i) focus
on their core business, (ii) access specialized technical skills, (iii)
implement IT solutions more rapidly, (iv) benefit from flexible staffing and
(v) reduce the cost of recruiting and training.

RECENT DEVELOPMENTS; THIRD QUARTER RESULTS

Following certain concerns expressed relating to the Company's performance
under a Year 2000 solutions services contract for one of the Company's largest
customers in early 1998, the customer terminated the contract. In addition, in
1998 the Company performed an assessment phase of a Year 2000 conversion
project for one of the Company's other large customers and, following
completion of such assessment, failed to obtain a contract for the complete
Year 2000 conversion project. In the three months ended June 30, 1998,
complete projects and solutions accounted for a decreasing percentage of the
Company's total revenue compared to the three months ended March 31, 1998, and
continued to decrease as a percentage of the Company's total revenue for the
three months ended September 30, 1998. The Company intends to continue to
pursue the strategies described below under the caption "--Business Strategy."
There can be no assurance, however, that revenues obtained from higher margin
services will not continue to decrease as a percentage of the Company's total
revenue, or that the Company will otherwise succeed in pursuing its
strategies.

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The Company lost $573,000 from operations in the three months ended
September 30, 1998 compared with earnings from operations of $402,000 in the
third quarter of 1997. The Company's gross margin was lower than expected for
the three months ended September 30, 1998, reflecting a less profitable mix of
business and reduced margins from Year 2000 and other project business.
Operating results were also lower than anticipated, primarily due to costs
associated with the Company's increase in sales and project management
personnel which were not accompanied by expected growth in project business.
The Company reported a net loss of $188,000 for the three months ended
September 30, 1998, compared to a net loss of $503,000 for the comparable 1997
period. The Company's results for the three months ended September 30, 1998
benefited from interest income of $319,000.

THE COMMAND SYSTEMS SOLUTION

Command Systems provides IT services and solutions to financial services
organizations by integrating and deploying new IT technologies to support
evolving business processes in an efficient and cost-effective manner. The
following are key attributes of the Command Systems solution:

Broad Range of IT Services. The Company provides its customers with a single
source for a broad range of IT services including (i) IT staff augmentation,
(ii) Year 2000 solutions services, (iii) software and hardware solutions, (iv)
project-based applications development and implementation, (v) network design
and deployment, (vi) Internet/intranet application development and (vii)
systems maintenance. The Company provides its services in a wide variety of
computing environments (including client/server and legacy-based platforms)
and utilizes leading technologies such as object-oriented development,
database management systems and various Internet/intranet networking
technologies. In addition, the Company provides education and training
services to its IT customers' staffs and has recently introduced management
consulting services to meet the strategic IT needs of its customers.

Strategic Focus on Financial Services Industry. By focusing on the financial
services industry since 1985, and particularly on the needs of large insurance
companies, the Company has developed expertise in a large vertical market
dominated by large organizations with extensive IT needs. The Company seeks to
leverage its expertise in the financial services industry to increase its
customer base and to increase its business from existing customers. By hiring
personnel with experience in the financial services industry, the Company has
been able to establish new relationships with customers in this industry as
well as maintain or strengthen existing relationships.

Offshore Technology Resource Center. In anticipation of the growing demand
for IT services and the shortage of skilled IT professionals in the United
States, the Company in 1996 established the Offshore Technology Resource
Center in Bangalore, India. The Company believes that its Offshore Technology
Resource Center offers customers certain advantages, including access to a
large pool of IT professionals and lower development costs.

Complete Range of Year 2000 Solutions Services. The Company's services
include a comprehensive approach to the Year 2000 problem that (i) identifies
and analyzes programs that are or may be affected, (ii) analyzes up to
millions of lines of code and millions of items of data, (iii) renovates
affected code to make it Year 2000 compliant and (iv) conducts multi-level
testing. The Company believes that its Command2000 conversion methodology
results in cost-effective and timely conversion solutions for its customers.

Expertise in Key and Emerging Technologies. The Company hires highly skilled
personnel who are experienced with key technologies (such as client/server
development and design and network integration) and emerging technologies
(such as data warehousing and object-oriented analysis and design).
Additionally, the Company's IT professionals receive initial and ongoing
training in a variety of technology platforms. The Company assists customers
in understanding the latest IT developments and guides them through the
implementation of the IT solutions best suited to their needs.

BUSINESS STRATEGY

The Company's objective is to become the preferred provider of IT services
to an expanding base of customers. The Company's strategies to achieve this
objective include the following:

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Cross-Sell Services to Existing Customers. The Company's relationships with
its customers provide it with an opportunity to market additional services and
solutions to such customers. The Company seeks to maximize its customer
retention rate and secure additional engagements by providing high-quality,
responsive services. In addition, the Company believes that the detailed
knowledge of customers' organizations, systems and needs that it gains, as
well as the customer relationships that are created during the performance of
its Year 2000 conversion projects and other projects, will serve as a
competitive advantage in securing additional projects from these customers.

Leverage Expertise in Insurance Market. The Company will seek to leverage
its expertise within the insurance industry into a larger, more diverse
customer base within the broader financial services market, especially as
deregulation encourages the creation of full service financial services
organizations. The insurance, banking and other financial services industries
are generally dominated by large companies with extensive IT needs. The
Company will seek to leverage its industry-specific expertise and its existing
accounts into a larger number of customers in these IT intensive markets. As
the Company expands its customer base, it intends to open additional regional
sales offices in the U.S. to enable the Company to sell to and support
existing and new customers in expanded geographic areas and industries. To
achieve these goals, the Company may seek strategic acquisitions of
organizations that complement or enhance the Company's core skills.

Migration to Higher Margin Services. The Company seeks to derive a greater
percentage of its revenue from higher margin services. To support this goal,
in December 1996 the Company introduced Year 2000 solutions services for its
customers and in July 1997 the Company began offering management consulting
services. The Company has also reorganized and increased its sales force to
focus on the delivery of complete projects and solutions to its clients. The
Company believes that projects managed by the Company, if obtained, will carry
higher margins and will better enable it to become a full service technology
solutions provider to its customers.

Utilize Offshore Technology Resource Center. The Company believes that its
offshore infrastructure improves the Company's access to IT professionals,
reduces the costs to the Company's clients associated with IT services and
enables it to provide better support to its customers. This facility, which
has been operational since December 1996, utilizes state-of-the-art technology
and is connected via secure, high-speed satellite links to the Company's
headquarters, branch offices and customer sites. The staff at the Offshore
Technology Resource Center had grown to 151 employees as of June 30, 1998.

Continued Development of Long-Term Relationships with Customers. The Company
continues to develop preferred provider relationships with its customers. The
Company's on-site personnel are integrated into the operations of its
customers' IT departments. In addition, the Company makes significant
investments in technology enhancements to support the strategic technical
direction of its customers. The Company also uses several methods to obtain
continuous customer feedback, including customer satisfaction surveys,
consultant performance surveys and regularly scheduled meetings with senior
management of each customer. A significant portion of the compensation of the
Company's senior executives, sales executives and senior project managers is
directly linked to customer satisfaction and the delivery of high quality,
timely IT services at or below budget. The Company believes that these
initiatives foster long-term customer satisfaction as evidenced by the fact
that for each of the fiscal years ended December 31, 1996 and 1997 existing
customers from the previous fiscal year generated over 60% of the Company's
revenue.

Attract, Train and Retain Highly Skilled IT Professionals. The Company's
future success depends to a significant extent on its ability to attract,
train, motivate and retain highly skilled IT professionals, particularly
project managers, software engineers and other technology leaders. To achieve
this objective, the Company maintains programs and personnel to identify and
hire the best available IT professionals. The Company conducts training of its
IT professionals in both legacy systems and emerging technologies to maintain
its position as a technological leader and to enhance its methodologies. In
addition, the Company utilizes its IT educational courses as an additional
method of recruiting IT professionals. In order to attract, motivate and
retain its employees in the face of existing shortages of IT professionals,
the Company focuses on its corporate culture,

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incentive programs, compensation and benefits and provides a career and
education management program to create an individualized structured career
growth plan for its employees. The Company also has access to a large pool of
IT professionals through its state-of-the-art Offshore Technology Resource
Center.

SERVICES

The Company is a solutions provider, using leading technologies to offer its
customers a comprehensive range of IT services, including technology, software
and hardware solutions (including procurement), education and management
consulting services. These services may be provided individually or as a
combination of services offerings to provide complete solutions. The Company
has adopted an integrated approach to providing solutions to its customers.
Each of the Company's service offerings is led by a technology leader,
supported by a team of dedicated IT consultants with focused expertise in the
technologies specific to such service offering. The Company's dedicated teams
of service providers work closely with each other, with the Company's
customers and with a wide variety of technology vendors to ensure the
availability of leading-edge technologies and capabilities, cost efficient and
timely delivery of services and the development of solutions for specific
business needs and objectives. The Company believes that its integrated
approach to designing, developing and implementing its services offerings
promotes long-term customer satisfaction, active customer involvement and a
more complete understanding of customer requirements. The Company offers IT
services primarily in the following areas: (i) IT staff augmentation, (ii)
Year 2000 solutions services, (iii) software and hardware solutions and (iv)
application development, maintenance and networking services. Following is a
more detailed description of these and other services provided by the Company:

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TECHNOLOGY SERVICES

The Company solves business problems by building technical solutions for
customers utilizing the Company's business and technology expertise. The
Company's organization enables focused attention to customer requirements and
is based on the following services:

COMMAND SYSTEMS SOLUTIONS

DESCRIPTION

COMMANDSTAFF--IT staff augmentation .Design
services to provide customers with
highly skilled IT professionals, .Data modeling
over a wide range of technologies
from client server and/or .Analysis
traditional technology developers to
help desk support to supplement IT .Programming
requirements on demand and as
needed. IT professionals are .Development
carefully selected and technically
qualified to match areas of .Testing
expertise with specific customer
requirements. .Networking

.Implementation

.Help Desk

.Maintenance

COMMAND2000--Year 2000 solutions The Company provides the following
services. Provides expertise to six step methodology to analyze,
cost-effectively assess business renovate and test millions of lines
requirements and develop quality of code and millions of items of
solutions utilizing a combination of data:
on-site project management staff and
programming support from the
Company's Offshore Technology
Resource Center in Bangalore, India.

. Management Awareness--Advise
corporate executives of the nature
and scope of the Year 2000
problem.

. Inventory Analysis--Provide a
comprehensive survey, data
collection and analysis of the
scope of the Year 2000 problem by
application, line of business or
enterprise.

. Portfolio Assessment--Perform an
in-depth assessment of all of the
date fields and date processing
routines. Source code is analyzed
and computer program interaction
is documented.

. Change Strategy--Determine the
conversion schedule and logistics
by focusing on the relationships
of computer system components.

. Application Renovation--Deliver
on-site project management and
analysis at the customer facility,
combined with the renovation of
affected code.

. Testing--Provide unit testing and
parallel testing comparisons back
to the predetermined baseline of
each application system.

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SOFTWARE AND HARDWARE SOLUTIONS

One of the Company's goals is to provide comprehensive turnkey IT solutions
for its customers. Primarily for its middle market customers, the Company
incorporates product procurement services into the IT solutions that it
provides, including electronic product ordering, product configuration,
testing and delivery.

COMMAND SYSTEMS SOLUTIONS

DESCRIPTION

COMMANDWARE--The Company can offer
complete IT solutions, including the . Turnkey solutions to middle market
procurement of software and hardware customers as a value-added
products necessary for the rapid reseller of hardware products from
migration toward new technological several leading manufacturers.
environments.

. Software products and application
solutions through value-added
resales of software products from
several leading software
developers.

. C-BOLT--Character-Based On Line
Testing for Year 2000 mainframe
automated software quality
assurance testing through a
proprietary terminal emulation
software product that extends the
power of the Rational SQA Suite.

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ADDITIONAL TECHNOLOGY SERVICES

COMMAND SYSTEMS SOLUTIONS

DESCRIPTION

.Requirements definition and vision
COMMANDPRO--Project-based .General analysis
application development and .Prototype sizing and functionality
implementation services, including assessment
turnkey application systems .Detail analysis
development, migration and/or .Platform and tool selection
integration of client/server systems .Data modeling and interface
through all phases of the development
development life cycle from design .Development and implementation
through production implementation. scheduling

.Prototype development
The Company develops application .Prototype deployment to selected
systems utilizing leading technology users
tools provided by vendors such as: .Full architectural and platform
development

.Microsoft .Total application system
.Powersoft development
.Oracle .Enterprise testing

.Implementation

.Rational

.Lotus/IBM

.Cognos

COMMANDNET--Integrated network
services to design and deploy . Workstation Migration--Deploys
networks, including related hardware consistent enterprise user
and software systems to: workstations.

. Messaging--Provides better
communications and reduced cost of
management.

.Reduce network complexity
.Improve deployment speed
.Standardize platforms . Network Systems Engineering--
.Integrate messaging Designs and deploys LAN/WAN
software and hardware.
.Manage software assets
.Reduce help desk support . Enterprise Software Management--
.Improve enterprise network Designs and deploys software
efficiency management solutions.

.Reduce cost of ownership

COMMANDWEB--Internet/intranet .Web-enabling legacy application
application development services. development
Provides web-based application and .Web page design
communication solutions to improve .Graphics and multimedia
internal and external communications .Security protection
and services. .Internet application development

CommandWEB incorporates the use of
leading technologies such as: Java,
HTML, PERL, and leading web servers
from Microsoft, Oracle and Sun
Microsystems.
. Incorporate the use of business
COMMANDOO--Object-oriented objects within the application
development services to improve new design.
application development time to . Establish a repeatable process for
market and reduce ongoing the project life cycle.
application maintenance expense by
providing and utilizing leading
object-oriented tools, methodologies
and expertise.

. Develop and utilize enterprise-
wide object repository.

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COMMAND SYSTEMS SOLUTIONS DESCRIPTION

Outsource and/or insource ongoing
COMMANDSOURCE--Provides and manages customer application maintenance and
long-term maintenance of application enhancement needs across
systems by utilizing a range of client/server and mainframe computer
technology toolsets. The Company environments, onsite at customer
provides carefully selected and locations, offsite at the Company's
qualified resources that are fully domestic offices and/or at the
integrated into the customer's IT Offshore Technology Resource Center.
environment.

In addition to the foregoing services, the Company, to a limited extent,
provides educational services to its customers' IT staff as required for
application systems' development, and provides management consulting services
to address the needs of its customers' senior IT management.

CUSTOMERS

The Company focuses its sales efforts on Fortune 500 companies in the
financial services industries and middle market companies in the insurance,
banking and brokerage industries with significant IT budgets and recurring
software development needs. During 1997, the Company provided services to over
100 customers. The Company seeks to maximize its customer retention rate and
secure additional engagements by (i) providing quality services and customer
responsiveness, (ii) leveraging its expertise within the financial services
industry into a larger, more diverse customer base and (iii) cross-selling
additional services to existing customers.

Typical development projects for insurance companies include applications
systems such as claims processing; agency management; coordination of benefits
and subrogation, pension, premium and loss reporting; accounting;
compensation; annual statement; actuarial; underwriting and benefits. Typical
development projects for other financial services organizations include
applications for mutual fund analysis, fund tracking, stock transfer, customer
information, cash distribution, accounting, annual statement, portfolio
accounting and human resource systems. Organizations in these industries are
highly information dependent and use IT systems to gain a competitive
advantage.

The Company has historically derived, and may in the future derive, a
significant amount of revenue from a relatively small number of customers.
During the six months ended June 30, 1998, MONY and The Hartford accounted for
14.1% and 10.1% of the Company's total revenue, respectively. For the year
ended December 31, 1997, The Hartford, New York Life and Phoenix accounted for
13.1%, 13.0% and 10.3% of the Company's total revenue, respectively. For the
year ended December 31, 1996, The Hartford and New York Life accounted for
13.6% and 12.6% of the Company's total revenue, respectively. No other single
customer accounted for more than 10% of the Company's total revenue during
these periods. For each of the fiscal years ended December 31, 1996 and 1997
existing customers from the previous fiscal year generated at least 60% of the
Company's revenue.

Organizations to which the Company provided services during the year ended
December 31, 1997 include among others: Aetna, Boston Mutual, Fleet Services,
G.E. Capital, General Reinsurance, J.P. Morgan, Liberty Mutual Group,
MassMutual, New York Life, Otis Eastern Service, Phoenix, QualMed, The
Hartford, MONY, TransAmerica Leasing and United Parcel Service.

REPRESENTATIVE ENGAGEMENTS

Examples of the Company's engagements, which are representative of the
nature of the Company's services and customer relationships, are set forth
below:

COMMAND2000--An ongoing Year 2000 solutions services project for a large New
York-based insurance company. Command was awarded a multi-million dollar
contract to assess and renovate over eight million lines

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of code for century change compliance. Due to the speed, efficiency and
effectiveness of the Command2000 process, the Company has been engaged to
renovate another two million lines of code for this customer.

COMMANDPRO--Project management and application development for a major New
England-based, Fortune 500 insurance company. The Company was awarded a
contract to manage a turnkey project to develop an insurance underwriting
application system, designed to fully automate the underwriting process. The
Company developed a system with built-in sophisticated algorithms and
underwriting business logic to automatically calculate business ratings and
various premiums. The Company's expertise in the insurance industry also
enabled it to develop the underwriting system so that it was fully integrated
with the customer's accounting system in order to streamline and automate the
customer's billing process. The Company utilized a team of 12 CommandPRO
consultants with insurance industry expertise in order to reengineer this
component of the customer's business process. Command has successfully
delivered many other services to this insurance company.

COMMANDNET--The Company provided project management and implementation for a
network and workstation migration and infrastructure upgrade of more than
3,000 desktops for another Fortune 500 insurance company at the customer's
corporate headquarters. The Company is also in the process of providing such
services at over 75 field offices for this customer. The Company was awarded
this multi-million dollar contract to develop a turnkey process to provide a
standardized single workstation environment to support over 200 applications
on desktop workstations. The Company is also training all of the customer's
affected employees in order to minimize productivity interruptions. The
Company planned and implemented the deployment, managed the rollout and
successfully migrated these desktops at the customer's headquarters ahead of
schedule. The solution provides central desktop and application
administration, automated update and version control. Command has successfully
delivered many other services to this insurance company.

COMMANDWEB--The Company web-enabled an enrollment application for a large
Midwest-based, managed health care company. The Company was awarded a contract
to develop a three-tier, interactive online health benefits enrollment program
utilizing Internet technology and subsequently designed and coded an online
extranet application for this customer. This enrollment application
(consisting of fractional and architectural components such as Javascript
code, NetDynamics Application Server, Netscape Fasttrack Web Server and Oracle
Database Server) allows users to execute certain transactions via the
Internet, such as opening a new enrollment, adding additional dependents to
the existing plan, deleting dependents and terminating coverage. Once entered,
data is processed by a legacy application using a customized feed from an
Oracle database.

SALES AND MARKETING

The Company markets its services through a direct sales force located
throughout the Company's offices in Farmington and Stamford, Connecticut,
Natick, Massachusetts and New York, New York, as well as senior executives
from corporate headquarters. The Company sells to customers utilizing a sales
team approach in which each team is led by a senior sales executive and
supported by one or more junior sales executives, recruiters and technology
leaders. The members of the team combine their efforts to present a
comprehensive solution proposal to each customer.

In order to develop an in-depth understanding of each customer's individual
needs and to form strong customer relationships, sales executives are assigned
to a limited number of customers that generally does not exceed twelve. These
executives are responsible for providing highly responsive service and
ensuring that the Company's applications solutions achieve customer
objectives. Commissions based upon the gross profit generated from each
business transaction constitute a substantial portion of the total
compensation for each sales executive.

The Company focuses its marketing efforts on financial services
organizations with substantial IT budgets and recurring IT staffing and
services needs. Marketing programs include direct mail campaigns, seminars,
conferences, trade shows and other activities intended to generate and
maintain an interest in the Company's

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<PAGE>

services. In addition, the Company has organized its staff into areas of
technology expertise and has branded such areas to promote market awareness
and differentiation.

The Company's services require a substantial financial commitment by
customers and, therefore, typically involve a long sales cycle. Once a lead is
generated, the Company endeavors to understand quickly the potential
customer's business needs and objectives in order to develop the appropriate
solution and bid accordingly. The Company's technology leaders are involved
throughout the sales cycle to ensure mutual understanding of customer goals,
including time to completion, and technological requirements. Sales cycles for
complex business solutions projects typically range from one to six months
from the time the Company initially meets with a prospective customer until
the customer decides whether to authorize commencement of an engagement.

As of June 30, 1998, the Company had 26 persons engaged in sales and
marketing full-time. In addition to its sales and marketing force, the Company
also uses an outside public relations firm that coordinates all corporate
communications, including the scheduling of press conferences to promote the
Company's services and delivery methodologies.

HUMAN RESOURCES

As of June 30, 1998, the Company employed 22 full-time personnel dedicated
to recruiting IT professionals and managing its human resources. The Company
actively recruits in the United States and India. Recruiting methods include
advertisement on television, in leading newspapers, in trade magazines and on
the Company's web site and through participation in career fairs. The Company
also participates in on-campus recruiting for recent college graduates and has
hired employees from various schools with degrees in computer science and
management information systems. In addition, the Company has established an
employee referral plan, which actively involves employees in referring
individuals and screening candidates for new positions. The Company also
utilizes stock options as part of its recruitment and retention strategy.

The Company's strategy for employee retention includes career planning,
thorough initial and ongoing training, allocation of assignments in accordance
with employee skills and career objectives and a comprehensive benefits
package, including incentive-based compensation and tuition reimbursement. As
part of its retention efforts, the Company seeks to minimize turnover by
emphasizing (i) contractual limitations effective upon termination of
employment, (ii) competitive salaries, (iii) employee stock options and (iv)
deferred compensation.

All IT professionals receive ongoing training on a variety of technology
platforms. The Company's education and training department helps employees
make the transition from legacy to client/server skills by providing cross-
platform training in new technologies. In addition to comprehensive technical
training, the Company provides extensive training in software quality
implementation processes. The Technology Education Centers provide ancillary
benefits to the Company by reducing the cost to train its own software
developers and provide the Company with highly trained individuals. The
training services provided by the Company also provide it with a pool of new
talent for development projects.

The Company's IT professionals typically have Bachelor's or Master's degrees
in Computer Science or another technical discipline, and, as of June 30, 1998,
the average U.S.-based professional, including newly hired personnel, had over
10 years of relevant industry work experience. As of June 30, 1998, the
Company had 381 employees comprised of 297 salaried IT professionals, 26 sales
and marketing personnel, 22 recruiting and human resource personnel and 36
general and administrative personnel. As of June 30, 1998, the Company also
utilized 54 independent contractors to supplement its IT workforce.

The Company believes that there is a shortage of, and significant
competition for, IT professionals and that its future success is highly
dependent upon its ability to attract, train, motivate and retain skilled IT
consultants with the advanced technical skills necessary to perform the
services offered by the Company.

The Company's employees are not represented by any labor unions. The Company
considers its relations with its employees to be good.

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COMPETITION

The IT services industry is highly competitive and fragmented and served by
numerous international, national, regional and local firms, all of which are
either existing or potential competitors of the Company. Primary competitors
include other IT service providers, along with participants from a variety of
market segments, including "Big Five" accounting firms, implementation firms,
applications software firms, service groups of computer equipment companies,
general management consulting firms, programming companies and temporary
staffing firms, as well as in-house IT departments. In addition, a significant
and increasing number of companies have recently announced that they offer
Year 2000 solutions services or automated Year 2000 solutions services
software products. Many of the Company's competitors have significantly
greater financial, technical and marketing resources and generate greater
revenue than the Company, and there can be no assurance that the Company will
not lose existing customers to such competitors. The Company believes that the
principal competitive factors in the IT services industry include the range of
services offered, industry expertise, technical expertise, responsiveness to
customer needs, speed in delivering IT solutions, quality of service and
perceived value. See "Risk Factors--Competition."

INTELLECTUAL PROPERTY RIGHTS

The Company relies upon a combination of copyright and trade secret laws,
nondisclosure and other contractual arrangements in order to protect its
proprietary rights in its various intellectual properties. India is a member
of the Berne Convention, an international treaty. As a member of the Berne
Convention, the government of India has agreed to extend copyright protection
under its domestic laws to foreign works, including works created or produced
in the United States. The Company believes that laws, rules, regulations and
treaties in effect in the United States and India are adequate to protect it
from misappropriation or unauthorized use of its intellectual property.
However, there can be no assurance that such laws will not change and, in
particular, that the laws of India will not change in ways that may prevent or
restrict the transfer of software components, libraries and toolsets from
India to the United States. The Company enters into confidentiality agreements
with its employees and limits distribution of proprietary information. There
can be no assurance, however, that the steps taken by the Company to protect
its proprietary rights will be adequate to deter misappropriation of its
intellectual property, or that the Company will be able to detect unauthorized
use and take appropriate steps to enforce its rights. The Company presently
holds no patents or registered copyrights. Although the Company believes that
its intellectual property rights do not infringe on the intellectual property
rights of others, there can be no assurance that such a claim will not be
asserted against the Company in the future, that assertion of such claims will
not result in litigation or that the Company would prevail in such litigation
or be able to obtain a license for the use of any infringed intellectual
property from a third party on commercially reasonable terms. Additionally,
the Company may in the future license certain technologies to its customers.
There can be no assurance that the Company will be able to successfully
license these technologies, protect them from infringement or misuse, or
prevent infringement claims against the Company in connection with its
licensing efforts. The Company expects that the risk of infringement claims
against the Company will increase if more of the Company's competitors are
able to successfully obtain patents for software products and processes. Any
such claims, regardless of their outcome, could result in substantial cost to
the Company and divert management's attention from the Company's operations.
Any infringement claim or litigation against the Company could, therefore,
have a material adverse effect on the Company's business, financial condition
and results of operations. See "Risk Factors--Intellectual Property Rights."

FACILITIES

The Company leases approximately 15,065 square feet of office space in
Farmington, Connecticut which is used by the Company's senior management,
administrative personnel, human resources and sales and marketing functions.
This lease expires on March 31, 2003. The Company also leases facilities in
Stamford, Connecticut, Natick, Massachusetts, and New York, New York.

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In addition, the Company leases approximately 23,450 square feet of office
space in downtown Bangalore, India for its Offshore Technology Resource
Center. This lease expires on September 15, 2000 and is renewable at the
option of the Company for a two-year period.

The Company believes that these facilities, together with additional space
to be obtained at the Company's headquarters in Farmington, Connecticut and,
if necessary, in Bangalore, India will be adequate for its presently
anticipated future needs.

LEGAL PROCEEDINGS

On or about May 6, 1998, a complaint was filed in the United States District
Court for the Southern District of New York by named plaintiffs Don M. Doney
Jr. and Madelyn J. McCabe against the Company, certain of the Company's
officers and directors (Edward G. Caputo, Stephen L. Willcox, Robert B. Dixon,
John J.C. Herndon, James M. Oates and Joseph D. Sargent) and the managing
underwriters of the Company's Initial Public Offering (Cowen & Company and
Volpe Brown Whelan & Company, LLC) (the "Doney Litigation"). On or about June
22, 1998, an amended complaint relating to the Doney Litigation was filed in
the United States District Court for the Southern District of New York. On or
about May 8, 1998, a second complaint was filed in the United States District
Court for the Southern District of New York by named plaintiff Chaile B.
Steinberg against the same defendants. On or about June 26, 1998, a third
complaint was filed in the United States District Court for the Southern
District of New York by named plaintiff Michael Makinen against the same
defendants (the "Makinen Litigation"). Each of the plaintiffs purports to
represent a class consisting of purchasers of common stock pursuant to the
Initial Public Offering. These actions were consolidated by order of the
United States District Court for the Southern District of New York, and a
consolidated complaint styled In Re Command Systems, Inc. Securities
Litigation was filed on September 30, 1998. The consolidated complaint alleges
that defendants violated the Act and claims the sale of unregistered shares
breached the disclosure and filing requirements of the Act. The plaintiffs
seek rescission of the Initial Public Offering and unspecified damages,
including rescissionary damages, interest, costs and fees. Such litigation, if
concluded in favor of the plaintiffs, could have a material adverse effect on
the Company's business, financial condition and results of operations. Based
upon the status of the consolidated complaint the Company cannot currently
estimate a range of loss.

44
<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The directors and executive officers of the Company are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------ --- -------------------------------------------------------------------------
<S> <C> <C>
Edward G. Caputo........ 48 President, Chief Executive Officer and Chairman of the Board
Stephen L. Willcox...... 47 Executive Vice President, Chief Operating Officer, Secretary and Director
Robert B. Dixon......... 61 Vice President of Finance and Treasurer
Glenn M. King........... 45 Vice President of Recruiting and Assistant Secretary
Lee Lapioli............. 57 Vice President of Management Consulting Services
Mary Lou Welch.......... 50 Vice President of Sales
William P.
Scharfenstein.......... 51 Vice President of Operations
John J.C.
Herndon(1)(2).......... 66 Director
James M. Oates(1)(2).... 52 Director
Joseph D.
Sargent(1)(2).......... 68 Director
</TABLE>
- --------

(1) Member of Audit Committee.

(2) Member of Compensation Committee.

Edward G. Caputo founded the Company in April 1985 and has served as its
President, Chief Executive Officer and Chairman of the Board of Directors
since inception. Prior to founding the Company, for eight years Mr. Caputo
served as President of Computech, Inc. ("Computech"), a privately held
consulting services company which he founded in 1977 and sold to Price
Waterhouse in 1985. From 1972 until he founded Computech, Mr. Caputo was a
programmer for Electronic Data Systems, a systems integration company.

Stephen L. Willcox has served as Executive Vice President, Chief Operating
Officer and Secretary since December 1997 and as a Director of the Company
since October 1997. From July 1997 until December 1997, Mr. Willcox served as
a strategic and financial consultant for the Company. From January 1995 to
December 1996, Mr. Willcox served in various executive capacities, including
President and Chief Operating Officer, of United HealthCare Administrators,
Inc. (including its predecessor), a subsidiary of United HealthCare, a
publicly held managed care company. From January 1993 to December 1994, Mr.
Willcox served as the Vice President of Employee Benefits for The Travelers
Corporation ("Travelers"). From January 1982 to December 1993, Mr. Willcox
held various positions in The Travelers Insurance Companies, where he most
recently served as its Vice President of Corporate Finance. From 1973 to 1981,
Mr. Willcox was employed by Coopers & Lybrand, including as General Practice
Manager. Mr. Willcox is also a Certified Public Accountant and a Certified
Management Accountant.

Robert B. Dixon has served as Vice President of Finance for the Company
since March 1997 and as Treasurer for the Company since December 1997. From
October 1996 to March 1997, Mr. Dixon served as a financial consultant to the
Company. From July 1993 to October 1996, Mr. Dixon served as the Deputy
Director and Executive Vice President of the Connecticut Development
Authority, a quasi-public merchant bank that was responsible for the economic
development of the State of Connecticut. In 1986 Mr. Dixon founded Dixon &
Associates, a financial consulting services firm, and from inception until
July 1993, Mr. Dixon served as its principal. Previously, Mr. Dixon has held
senior financial positions with Citibank, The Hertz Corporation, The Gillette
Company and The Ford Motor Company.

Glenn M. King has been employed by the Company in various capacities since
September 1986, most recently as Vice President of Recruiting since June 1998
and as Vice President of Marketing from November 1997 through June 1998. From
May 1983 to September 1986, Mr. King served as a Systems Analyst for the
Travelers Insurance Company, the Hartford Insurance Group and Vantage Computer
Systems. From May 1979 to May 1983, Mr. King served as a Licensed Insurance
Adjuster for Metropolitan Property and Casualty Insurance Co.

45
<PAGE>

Lee Lapioli has served as Vice President of Management Consulting Services
for the Company since June 1997. From December 1994 to May 1997, Mr. Lapioli
served as Senior Vice President and Chief Information Officer of New York
Life, a multi-line mutual insurance company. From February 1982 to November
1994, Mr. Lapioli served as Senior Vice President for Phoenix Home Life, a
mutual insurance company. From February 1973 to January 1982, Mr. Lapioli
served as Vice President and Chief Operating Officer of Penn Mutual Life, a
mutual insurance company. From February 1964 to January 1973, Mr. Lapioli
served as Manager of Actuarial Services for Provident Mutual Life, a mutual
insurance company.

Mary Lou Welch has served as Vice President of Sales since June 1998, and
also served as Vice President of Recruiting for the Company from November 1997
through June 1998. From July 1995 to July 1997, Ms. Welch served as Vice
President of Sales and Marketing for Portable Data Collection for WPI
Oyster/Termiflex. From November 1994 to July 1995, Ms. Welch served as
Director of Marketing for Worldwide Services for Data General Corporation.
From June 1984 to November 1994, Ms. Welch held various positions from Sales
Executive to Director of Marketing to the banking industry for Digital
Equipment Corporation. From June 1977 to June 1984, Ms. Welch served as a
Sales Representative for Control Data Corporation.

William P. Scharfenstein has served as Vice President of Operations since
February 1998. From 1973 to February 1998, Mr. Scharfenstein served in various
capacities for Pratt & Whitney including Senior System Programmer, Business
Support from 1973 to 1982, Senior Systems Analyst, Operations Research from
1982 to 1986, Superior Systems Programming & Operations from 1986 to 1992, MIS
Manager, Powerplant Production from 1992 to June 1997, and MIS Manager, Eagle
Service from July 1997 to February 1998. Previously, Mr. Scharfenstein served
as Systems Analyst for Dunham-Bush, Beneficial Computing Services and
Travelers Insurance Company.

John J.C. Herndon has served as a Director of the Company since December
1997. Mr. Herndon has served as the Vice President of Strategic Development
for Phoenix since April 1996. In 1995, Mr. Herndon was a consultant to the
Advest Group and successfully raised a venture capital fund for investment in
companies based in Connecticut. From 1993 to 1994, he was President of the
Connecticut Development Authority, a quasi-public merchant bank for economic
development, and he served as Deputy Chief of Staff under Governor Lowell
Weicker. From 1977 to 1985, Mr. Herndon was Senior Vice President of City
Investing Company in New York, a diversified international corporation engaged
in insurance, manufacturing, construction and consumer services.

James M. Oates has served as a Director of the Company since December 1997.
In addition, since November 1996 to the present he has been the Chairman of
IBEX Capital Markets, LLC. Mr. Oates currently is, and since 1994 has been,
Managing Director of the Wydown Group, a consulting firm specializing in
start-ups and growth strategies. From 1984 to 1994, Mr. Oates served as
President and Chief Executive Officer of Neworld Bancorp. From 1983 to 1984,
Mr. Oates served as President and Chief Operating Officer of Burgess and
Leith, a full service brokerage firm. From 1977 to 1983, Mr. Oates served as
President and Chief Operating Officer to Metro Bancholding Corporation. From
1973 to 1977, Mr. Oates served as Vice President of Centerre Bank, N.A. Mr.
Oates serves on the Board of Directors of Investors Financial Services, Inc.,
Stifel Financial, Phoenix Investment Partners, Plymouth Rubber Company and
Connecticut River Bancorp, all of which are publicly traded companies, and
Phoenix Funds, Investors Bank & Trust, The Govett Funds and Emerson
Investment, all of which are registered investment companies under the
Investment Company Act of 1940.

Joseph D. Sargent has served as a Director of the Company since January
1998. Mr. Sargent has served as Chairman and Principal of Bradley, Foster &
Sargent since 1993. Mr. Sargent also currently serves as Vice Chairman and
Director of Connecticut Surety Corporation and its several affiliates. From
1995 to 1996, Mr. Sargent served as Chairman and Director of S-K-I Ltd. Mr.
Sargent served as Chairman, and later as Vice Chairman, of Conning & Company,
an investment banking firm, from 1991 to 1995 and as its Chairman and Chief
Executive Officer from 1988 to 1991. Mr. Sargent is a Director of Trenwick
Group Inc., E.W. Blanch Holdings, Policy Management Systems Corporation,
Mutual Risk Management Ltd., MMI Companies, Inc. and Executive Risk, Inc., all
of which are publicly held companies.

46
<PAGE>

During the period of Mr. Willcox's service as Vice President of Corporate
Finance for Travelers, the Commission commenced an investigation into the
manner in which Travelers and its wholly-owned subsidiary The Travelers
Insurance Company ("TIC") implemented an accounting rule known as FAS 97. FAS
97, which was promulgated by the Financial Accounting Standards Board in 1988,
required the elimination in 1989 of certain types of reserves for real estate
investments. The Commission contended that Travelers had omitted to state
material facts in its 1988 annual report and in the 1989 annual and quarterly
reports of Travelers and TIC by failing to eliminate a $231 million risk
reserve and taking a $231 million charge against its 1989 earnings, which
would have reduced Travelers' 1989 earnings to $277 million from the reported
$508 million. In early 1989, Travelers' Chief Financial Officer assigned Mr.
Willcox to assemble and lead a task force to recommend the proper
implementation of FAS 97 with respect to certain reserves maintained by TIC's
Asset Management and Pension Services Department ("AMPS"). The task force
consisted of several of Travelers' employees, representing a cross section of
Travelers' employees with information relevant to the implementation of FAS
97, and included representatives from AMPS' and Travelers' financial
standards, corporate tax, and financial reporting units. While the task force
reviewed information provided by AMPS' personnel regarding how the reserve was
developed and funded, representatives from Travelers and its independent
accountants, a nationally recognized accounting firm, also worked on TIC's
implementation of FAS 97. Following investigative proceedings pursuant to
Section 21C of the Exchange Act, the Commission in May 1994 entered into an
order (the "Travelers' Order") (i) requiring Travelers and TIC to restate
their consolidated financial statements as of and for the year ended December
31, 1989 in order to implement FAS 97 properly and (ii) directing TIC,
Travelers' Chief Financial Officer and Mr. Willcox to cease and desist from
violating or causing violations of Section 13(a) of the Exchange Act and Rules
12b-20, 13a-1 and 13a-13. As part of the settlement with the Commission,
Travelers, its Chief Financial Officer, TIC and Mr. Willcox agreed to the
Travelers' Order without admitting or denying the charges. Following the
release of the Travelers' Order, the AICPA closed an investigation as to
whether Mr. Willcox violated the Codes of Professional Conduct of the AICPA or
the Connecticut Society of CPAs and took no action.

Pursuant to the Company's Certificate of Incorporation and By-Laws, on or
prior to the date on which the Company first provides notice of an annual
meeting of the stockholders (or a special meeting in lieu thereof) following
the Initial Public Offering (the "Initial Public Meeting"), the Board of
Directors of the Company shall divide the directors nominated for election at
such meeting into three classes, as nearly equal in number as reasonably
possible, with the term of office of the first class to expire at the first
annual meeting of stockholders or any special meeting in lieu thereof
following the Initial Public Meeting, the term of office of the second class
to expire at the second annual meeting of stockholders or any special meeting
in lieu thereof following the Initial Public Meeting, and the term of office
of the third class to expire at the third annual meeting of stockholders or
any special meeting in lieu thereof following the Initial Public Meeting. At
each annual meeting of stockholders or special meeting in lieu thereof
following such initial classification, directors elected to succeed those
directors whose terms expire shall be elected for a term of office to expire
at the third succeeding annual meeting of stockholders or special meeting in
lieu thereof after their election and until their successors are duly elected
and qualified.

There are no family relationships among any of the executive officers and
directors of the Company.

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors has a Compensation Committee, which makes
recommendations concerning salaries and incentive compensation for employees
of and consultants to the Company, establishes and approves salaries and
incentive compensation for executive officers and administers the Company's
1997 Employee, Director and Consultant Stock Plan, and an Audit Committee,
which reviews the results and scope of audits and other services provided by
the Company's independent public accountants.

47
<PAGE>

COMPENSATION OF DIRECTORS

Non-employee directors each receive a monthly fee of $1,000 and are
reimbursed for reasonable out-of-pocket expenses incurred in attending
meetings. Non-employee directors are also eligible for participation in the
Company's 1997 Employee, Director and Consultant Stock Plan and the Company
has, and may in the future, grant non-qualified stock options to non-employee
directors as an incentive to join or remain on the Board of Directors. Upon
joining the Board of Directors, each of Messrs. Herndon and Oates were granted
an option to purchase 5,000 shares of Common Stock at an exercise price of
$9.00 per share, 25% of which vested immediately and the remainder of which
will vest ratably on each of the first, second and third anniversary of the
date of the initial grant. Mr. Sargent has been granted an option, effective
as of March 12, 1998, to purchase 5,000 shares of Common Stock at an exercise
price of $12.00 per share, 25% of which will vest immediately and the
remainder of which will vest ratably on each of the first, second and third
anniversary of March 12, 1998.

KEY PERSON LIFE INSURANCE

The Company presently maintains key person life insurance in the amount of
$5.0 million on Edward G. Caputo, the Company's President and Chief Executive
Officer.

EXECUTIVE COMPENSATION

The following table sets forth certain summary information concerning the
compensation earned by the Company's Chief Executive Officer and its four
other most highly compensated executive officers (the "Named Executive
Officers") whose total salary and bonus for fiscal 1997 exceeded $100,000, for
services rendered to the Company and its subsidiaries in all capacities during
that fiscal year. No executive who would otherwise have been includable in
such table on the basis of salary and bonus earned for fiscal 1997 has
resigned or otherwise terminated employment during fiscal 1997.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION(2) AWARDS
---------------- ------------
SECURITIES
UNDERLYING
SALARY BONUS OPTIONS
NAME AND PRINCIPAL POSITION(1) YEAR ($) ($) (#)
- -------------------------------------------- ---- -------- ------- ------------
<S> <C> <C> <C> <C>
Edward G. Caputo............................ 1997 151,198 -- --
President and Chief Executive Officer
Robert B. Dixon(3).......................... 1997 107,333 10,000 12,500
Vice President of Finance
Glenn M. King............................... 1997 100,833 10,000 14,250
Vice President of Recruiting and Assistant
Secretary
Lee Lapioli................................. 1997 116,574 -- --
Vice President of Management Consulting
Services
David R. Wheeland........................... 1997 110,000 10,000 12,500
Former Vice President of Operations
</TABLE>
- --------

(1) Mr. Willcox, Ms. Welch and Mr. Scharfenstein, who commenced employment
with the Company in January 1998, November 1997 and February 1998,
respectively, would be among the five most highly compensated individuals
had they been with the Company during all of fiscal 1997. Mr. Willcox's
base salary is $175,000, Ms. Welch's base salary is $120,000 and Mr.
Scharfenstein's base salary is $120,000.
(2) The costs of certain benefits are not included because they did not
exceed, in the case of each Named Executive Officer, the lesser of $50,000
or 10% of the total annual salary and bonus for such Named Executive
Officer.
(3) Mr. Dixon's salary includes $24,000 received as compensation for
consulting services rendered to the Company for the first two months of
1997.

48
<PAGE>

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth information concerning individual grants of
stock options made pursuant to the Company's 1997 Plan during 1997 to each of
the Named Executive Officers.(1)

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
----------------------------------------------- VALUE AT ASSUMED
NUMBER OF ANNUAL RATES OF
SECURITIES STOCK PRICE
UNDERLYING PERCENT OF TOTAL EXERCISE APPRECIATION FOR
OPTIONS OPTIONS GRANTED OR BASE OPTION TERM(3)
GRANTED TO EMPLOYEES IN PRICE EXPIRATION ---------------------
NAME (#)(2) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
- ------------------------ ---------- ---------------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Edward G. Caputo........ -- -- -- -- -- --
Robert B. Dixon......... 12,500 5.9% 4.00 3/5/07 31,445 79,687
Glenn M. King........... 12,500 5.9% 4.00 3/5/07 31,445 79,687
1,750 * 9.00 12/31/07 9,905 25,101
Lee Lapioli............. -- -- -- -- -- --
David R. Wheeland....... 12,500 5.9% 4.00 3/5/07 31,445 79,687
</TABLE>
- --------
* Less than one percent.
(1) Mr. Willcox was granted an option to purchase 50,000 shares of Common
Stock on January 1, 1998 at an exercise price of $9.00 per share. Ms.
Welch was granted an option to purchase 12,500 shares of Common Stock on
December 31, 1997 at an exercise price of $9.00 per share. Mr.
Scharfenstein was granted an option, effective as of March 12, 1998, to
purchase 12,500 shares of Common Stock at an exercise price of $12.00 per
share.
(2) Options which expire on March 5, 2007 were granted on March 5, 1997 in
exchange for units of shadow stock previously granted under the Company's
Shadow Stock Incentive Plan. All other options are granted pursuant to and
in accordance with the Company's 1997 Plan. See "--Employee Benefit
Plans."
(3) Potential realizable value is based on the assumption that the price per
share of Common Stock appreciates at the assumed annual rate of stock
appreciation for the option term. The assumed 5% and 10% annual rates of
appreciation (compounded annually) over the term of the option are set
forth in accordance with the rules and regulations adopted by the
Commission and do not represent the Company's estimate of stock price
appreciation.

49
<PAGE>

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

The following table sets forth information concerning each exercise of
options during 1997 by each of the Named Executive Officers and the fiscal
year-end value of unexercised in-the-money options.

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED
OPTIONS AT FISCAL VALUE OF UNEXERCISED
YEAR-END IN-THE-MONEY
(#) OPTIONS AT FISCAL YEAR-END ($)
------------------------- -------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE(1)(2)
---- ----------- ------------- ----------- -------------------
<S> <C> <C> <C> <C>
Edward G. Caputo........ -- -- -- --
Robert B. Dixon......... -- 12,500 -- 62,500
Glenn M. King........... 12,500 1,750 62,500 --
Lee Lapioli............. -- -- -- --
David R. Wheeland....... 7,500 5,000 37,500 25,000
</TABLE>
- --------
(1) Based on the fair market value of the Common Stock at December 31, 1997 of
$9.00 per share as determined by the Board of Directors, less the exercise
price payable for such shares.
(2) Mr. Willcox was granted an option to purchase 50,000 shares of Common
Stock on January 1, 1998 at an exercise price of $9.00 per share. Ms.
Welch was granted an option to purchase 12,500 shares of Common Stock on
December 31, 1997 at an exercise price of $9.00 per share. Mr.
Scharfenstein was granted an option, effective as of March 12, 1998, to
purchase 12,500 shares of Common Stock at an exercise price of $12.00 per
share.

Employment Agreements

The Company and Mr. Caputo have entered into an employment agreement (the
"Employment Agreement") with an initial term expiring January 1, 2001, and
which will be automatically extended annually for an additional period of one
year unless either Mr. Caputo or the Company gives 60 days' prior written
notice to the other that such automatic extension will not occur. The
Employment Agreement sets forth (i) the terms of Mr. Caputo's employment as
President and Chief Executive Officer of the Company, (ii) Mr. Caputo's
agreement not to compete with the Company by rendering IT consulting or
staffing services to customers in the insurance, banking, brokerage or other
financial services industries during the term of his employment and for a
period of two (2) years following the expiration or termination of such
employment and (iii) Mr. Caputo's agreement to protect and preserve
information and property which is confidential and proprietary to the Company.
The Employment Agreement does not provide for any specified compensation to
Mr. Caputo and contains no provisions regarding compensation in the event of
his severance or upon a change of control of the Company.

The Company and Mr. Willcox have entered into an employment agreement
pursuant to which, among other things, in the event that Mr. Willcox's
employment is terminated voluntarily or by the Company for any reason other
than for "cause" (as defined in the agreement), Mr. Willcox will be entitled
to a severance payment equal to one-half of his annual base salary in effect
on the date of termination, but in no event less than $87,500. The Company may
pay this severance either as a lump sum or over a six-month period following
termination.

The Company and Mr. King have entered into an employment agreement pursuant
to which, among other things, in the event that Mr. King's employment is
terminated without "cause" (as defined in the agreement), Mr. King will be
entitled to a severance payment equal to one-half of his annual base salary.
Mr. King's current annual base salary is $120,000.

EMPLOYEE BENEFIT PLANS

1997 Employee, Director and Consultant Stock Plan

The Company's 1997 Employee, Director and Consultant Stock Plan (the "1997
Plan"), was approved by the Company's Board of Directors and stockholders in
August 1997. The 1997 Plan provides for the grant of stock options and shares
of Common Stock ("Stock Grants") to employees, directors and consultants of
the

50
<PAGE>

Company or its affiliates. Under the 1997 Plan, the Company may grant
incentive stock options and non-qualified stock options. Incentive stock
options may only be granted to employees of the Company. Effective upon the
closing of the Initial Public Offering, a total of 427,500 shares of Common
Stock were reserved for issuance under the 1997 Plan. As of October 30, 1998,
options to purchase a total of 163,750 shares of Common Stock were outstanding
under the 1997 Plan, and no options to purchase Common Stock had been
exercised. As of October 30, 1998, no Stock Grants had been made under the
1997 Plan.

The 1997 Plan is administered by the Compensation Committee of the Board of
Directors (the "Administrator"), except to the extent such authority is
retained by the Board of Directors. Subject to the provisions of the 1997
Plan, the Administrator has the authority to administer the provisions of the
1997 Plan and to select the participants to whom options or Stock Grants are
to be granted and to determine the terms of each option or Stock Grant,
including (i) the number of shares of Common Stock subject to such option or
Stock Grant, (ii) when an option becomes exercisable, (iii) the option
exercise price or Stock Grant purchase price, which, in the case of incentive
stock options, must be at least 100% (110% in the case of incentive stock
options granted to a stockholder owning in excess of 10% of the Company's
voting stock) of the fair market value of the Common Stock as of the date of
grant, (iv) the duration of the option (which, in the case of incentive stock
options, generally may not exceed ten years) and (v) in the case of Stock
Grants, the terms of any right of the Company to reacquire the shares of
Common Stock subject to the Stock Grant, including the time and events upon
which such rights shall accrue and the purchase price therefor, if any.

An incentive stock option granted under the 1997 Plan may be exercised after
the termination of the optionholder's employment with the Company (other than
by reason of death, disability or termination for "cause" as defined in the
1997 Plan), to the extent exercisable on the date of termination, at any time
prior to the earlier of the option's specified expiration date or 3 months
after such termination. The Administrator may specify the termination or
cancellation provisions applicable to a non-qualified stock option. In the
event of the optionholder's death or disability, both incentive stock options
and non-qualified stock options generally may be exercised, to the extent
exercisable on the date of death or disability, by the optionholder or the
optionholder's survivors at any time prior to the earlier of the option's
specified expiration date or one year from the date of death or disability.
Generally, in the event of the optionholder's termination for cause, all
outstanding and unexercised options are forfeited.

If the Company is to be consolidated with or acquired by another entity in a
merger, sale of all or substantially all of the Company's assets or otherwise
(an "Acquisition"), all outstanding options shall become fully exercisable. In
addition, the Administrator or the board of directors of any entity assuming
the obligations of the Company under the 1997 Plan shall as to outstanding
options under the plan, either (i) make appropriate provision for the
continuation of such options by substituting, on an equitable basis, for the
shares then subject to such options, the consideration payable with respect to
the outstanding shares of Common Stock in connection with the Acquisition or
securities of the successor or acquiring entity; or (ii) upon written notice
to the optionholders, provide that all options must be exercised within a
specified number of days of the date of such notice, at the end of which
period the options shall terminate; or (iii) terminate all options in exchange
for a cash payment equal to the excess of the fair market value of the shares
subject to each such option over the exercise price thereof.

Shadow Stock Incentive Plan

In March 1997, an aggregate of 61,500 Exchange Options were issued to eight
employees in exchange for an aggregate of 61,500 outstanding shadow purchase
units that had previously been granted to such employees under the Shadow
Stock Incentive Plan. The Exchange Options have an exercise price of $4.00 per
share and expire on March 5, 2007. The Shadow Stock Incentive Plan has been
terminated and no shadow purchase units are outstanding.

401(k) Retirement Savings Plan

The Company's 401(k) Retirement Savings Plan (the "401(k) Plan") is a
defined contribution plan covering all full-time employees of the Company who
have six months of service and are age twenty and one-half or

51
<PAGE>

older. Each year, participants may contribute up to 15% of pretax annual
compensation, subject to the statutory limit (a maximum of $10,000 in 1998).
Participants may also contribute amounts representing distributions from other
qualified defined benefit or contribution plans. Additional amounts may be
contributed at the option of the Company's Board of Directors. Participants
are immediately vested in their contributions plus actual earnings thereon.
Vesting in the Company's discretionary contribution portion of their accounts
plus actual earnings thereon is based on years of continuous services. A
participant is 100% vested after six years of credited service.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Company's Board of Directors did not have a Compensation Committee
during 1997. Consequently, all Directors participated in deliberations
concerning executive compensation, including decisions relative to their own
compensation. In January 1998 following the addition of Messrs. Herndon and
Oates, the Board of Directors created a Compensation Committee. The Company's
Compensation Committee makes recommendations concerning salaries and incentive
compensation for employees of and consultants to the Company, establishes and
approves salaries and incentive compensation for executive officers and
administers the 1997 Plan. No executive officer of the Company serves as a
member of the board of directors or compensation committee of any entity that
has one or more executive officers serving as a member of the Company's Board
of Directors or Compensation Committee. Mr. Herndon is the Vice President of
Strategic Development for Phoenix. Mr. Oates is a director of Phoenix Duff &
Phelps and Phoenix Funds which are affiliates of Phoenix. See "Certain
Transactions."
CERTAIN TRANSACTIONS

TRANSACTIONS WITH PHOENIX

In June 1996, the Company entered into an agreement with Phoenix to
establish the Offshore Technology Resource Center. In connection therewith,
the Company formed Command International Holdings, LLC, a corporation
organized under the laws of Mauritius ("Command Holdings"), and Command
International Software Pvt., an Indian unlimited liability company ("Command
Software"). Pursuant to the terms of the agreement the Company owned 100% of
the outstanding equity of Command Holdings which in turn owned 51% of the
outstanding equity of Command Software. The remaining 49% ownership in Command
Software was owned by PHL Global Holding Co., a wholly-owned subsidiary of PM
Holdings, Inc., which in turn is wholly-owned by Phoenix. During 1996 and
1997, Phoenix invested an aggregate of approximately $1.0 million to the
Offshore Technology Resource Center. In addition, during the period from July
11, 1996 to April 3, 1997, Phoenix made advances pursuant to a subordinated
debt agreement to the Company and Command Holdings totaling approximately $2.0
million in the aggregate. Approximately $1.4 million of this was used by the
Company to directly fund the Offshore Technology Resource Center and
approximately $600,000 was used by the Company itself to develop the
infrastructure needed in the United States to support the Offshore Technology
Resource Center. Notes evidencing these advances (the "Notes") bore interest
at 15% per annum and were due and payable in full five years from the date of
each such Note. At the time the Offshore Technology Resource Center was
established, the only relationship between the Company and Phoenix was that
the Company provided IT services to Phoenix.

On August 26, 1997, the Company and Phoenix effected a transaction pursuant
to which the Notes, including the right to receive prior interest accrued
thereon, evidencing indebtedness to Phoenix of approximately $2.2 million,
were exchanged for an aggregate of 100 shares of Series A Convertible
Preferred Stock. These shares of Series A Convertible Preferred Stock were
convertible on a 5,225 for one basis into 522,500 shares of the Company's
Common Stock. In addition, the Series A Convertible Preferred Stock was
entitled to a mandatory 10% cash dividend. Phoenix was granted certain
registration rights in connection with this transaction. See "Shares Eligible
for Future Sale--Registration Rights." In August 1997, at the Company's
request, Phoenix exchanged the Notes for equity securities in the Company.
Following the Company's request, representatives of Phoenix and the Company
negotiated the terms of the exchange, pursuant to which shares of Series A
Convertible Preferred Stock were issued to Phoenix in exchange for
approximately $2.2 million of indebtedness represented by the Notes. In
determining the fairness of the transaction to the Company, the Company's
Board of Directors considered, among other things, (i) the advantage of the
debt-for-equity exchange, including the

52
<PAGE>

impact on the Company's balance sheet and the added flexibility under the
Company's line of credit facility with People's Bank, (ii) the reduction of
the 15% rate of interest to a 10% dividend rate, (iii) the fairness of the
terms of the Series A Convertible Preferred Stock, (iv) the advantages of
having Phoenix as a long-term stockholder, including increasing the incentives
of Phoenix to remain as a customer as a result of its equity position in the
Company and (v) the absence of reasonable alternative means to raise
additional equity in the near term. The Company has pledged all of its shares
held in Command Holdings (the "CH Shares"), its wholly-owned subsidiary, to
Phoenix to secure the Company's dividend and redemption obligations arising
under the Series A Convertible Preferred Stock. In connection with the
foregoing transactions, Edward G. Caputo transferred all the shares owned by
him in Command Holdings to the Company, which shares constituted a portion of
the CH Shares. In addition, Mr. Caputo guaranteed the Company's dividend and
redemption obligations arising under the Series A Convertible Preferred Stock.

As of December 31, 1997, the Company and Phoenix completed a transaction
whereby the 49% interest in Command Software owned by PHL Global Holding Co.
("PHL"), an indirect wholly-owned subsidiary of Phoenix, was exchanged for 100
shares of Series B Convertible Preferred Stock. These shares of Series B
Convertible Preferred Stock were convertible on a 6,592.5 for one basis into
659,250 shares of Common Stock and are entitled to a mandatory 10% cash
dividend. Phoenix was granted certain registration rights in connection with
this transaction. See "Shares Eligible for Future Sale--Registration Rights."

All shares of Series A and Series B Convertible Preferred Stock outstanding
as of the consummation of the Initial Public Offering were converted into an
aggregate of 1,181,750 shares of Common Stock.

In connection with the issuance of the Series A and Series B Convertible
Preferred Stock, the Company entered into a Co-Sale Agreement with Mr. Caputo
and each of Phoenix and PHL (collectively, the "Co-Sale Agreements"). Pursuant
to the Co-Sale Agreements, Mr. Caputo granted to Phoenix and PHL the right to
participate in any sale of Common Stock or preferred stock, if any, of the
Company (collectively, "Co-Sale Stock") by Mr. Caputo, upon the same terms and
conditions as the proposed sale, with the exception of certain specified
transfers. The Co-Sale Agreements will terminate upon the earliest to occur of
(i) ten years after the date of such agreement, (ii) the date that Mr. Caputo
ceases to own shares of Co-Sale Stock constituting at least 25% of the
Company's issued and outstanding Common Stock on a fully-diluted basis and
(iii) the date that Phoenix and PHL, together with their respective
affiliates, cease to own shares of Common Stock constituting at least 5% of
the Company's issued and outstanding Common Stock on a fully-diluted basis.

During the years ended December 31, 1994, 1995 and 1996, the Company
provided IT services to Phoenix that generated revenue to the Company of
approximately $3.3 million, $2.8 million and $1.3 million, respectively. For
the year ended December 31, 1997, the Company provided IT services to Phoenix,
which generated revenue of approximately $2.6 million. These services were
provided on terms no less favorable to the Company than were obtained during
these same periods from unaffiliated third parties. Mr. Herndon, a director of
the Company, is the Vice President of Strategic Development for Phoenix. There
can be no assurance that the Company will continue to provide this level of
services to Phoenix, if at all.

TRANSACTIONS WITH OFFICERS

All transactions, including any loan from the Company to its officers,
directors, principal stockholders or affiliates, will be approved by a
majority of the Board of Directors, including a majority of the independent
and disinterested members of the Board of Directors or, if required by law, a
majority of disinterested stockholders, and will be on terms no less favorable
to the Company than could be obtained from unaffiliated third parties.

53
<PAGE>

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock prior to, and as of October
30, 1998, as adjusted to reflect, the sale of the shares offered by the
Company and the Selling Stockholders in the Initial Public Offering, by (i)
each person (or group of affiliated persons) known by the Company to
beneficially own more than five percent of the outstanding shares of Common
Stock, (ii) each Selling Stockholder, (iii) each of the Company's directors,
(iv) each of the Named Executive Officers and (v) all directors and executive
officers of the Company as a group.

<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
SHARES OF COMMON STOCK BENEFICIALLY OWNED AFTER
BENEFICIALLY OWNED PRIOR TO THE
THE INITIAL PUBLIC OFFERING(1) INITIAL PUBLIC OFFERING(1)
------------------------------- -------------------------------
SHARES
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER PERCENT(2) OFFERED NUMBER PERCENT
- ------------------------------------ ----------- ---------- ------- ---------------- -------------
<S> <C> <C> <C> <C> <C>
Edward G. Caputo........ 4,275,000 78.3% 302,500 3,972,500 51.9%
c/o Command Systems,
Inc.
76 Batterson Park Road,
Farmington, Connecticut
06032
Phoenix................. 1,181,750(3) 21.7 602,500 579,250 7.6
One American Row
P.O. Box 5956
Hartford, CT 06102
Stephen L. Willcox...... 10,000(4) -- -- 10,000(4) --
Robert B. Dixon......... 2,500(4) * -- 2,500(4) *
Glenn M. King........... 12,500(4) * -- 12,500(4) *
Lee Lapioli............. -- -- -- -- --
David R. Wheeland....... 7,500(4) * -- 7,500(4) *
John J.C. Herndon....... 1,183,000(5) 21.7 602,500 580,500(5) 7.6
James M. Oates.......... 1,250(6) * -- 1,250(6) *
Joseph D. Sargent....... 1,250(4) * -- 1,250(4) *
All current directors
and executive officers
as
group (10 persons)...... 5,485,500(7) 100.0% 905,000 4,580,500(7) 59.7%
</TABLE>
- --------
* Represents beneficial ownership of less than 1% of the Common Stock.
(1) Except as indicated in footnotes to this table, the Company believes that
the stockholders named in this table have sole voting and investment power
with respect to all shares of Common Stock shown to be beneficially owned
by them based on information provided to the Company by such stockholders.

(2) Applicable percentage of ownership is based on 5,456,750 shares of Common
Stock outstanding prior to the consummation of the Initial Public Offering
and 7,656,750 Shares of Common Stock outstanding as of the date of this
Prospectus.

(3) Consists of 1,181,750 shares of Common Stock issued upon the Preferred
Stock Conversion, 522,500 of which are beneficially owned by Phoenix and
659,250 of which are beneficially owned by PHL, an indirectly wholly-owned
subsidiary of Phoenix. The 579,250 shares owned following the Initial
Public Offering are beneficially owned by PHL.
(4) Consists solely of shares of Common Stock underlying options which are
exercisable as of the date of this Prospectus or within 60 days of such
date.
(5) Includes 1,181,750 shares of Common Stock owned by Phoenix and PHL. Mr.
Herndon is the Vice President of Strategic Development for Phoenix, a New
York domiciled mutual life insurance company. Mr. Herndon expressly
disclaims beneficial ownership of such shares. Also includes 1,250 shares
of Common Stock underlying options which are exercisable as of the date of
this Prospectus or within 60 days of such date.
(6) Consists solely of shares of Common Stock underlying options which are
exercisable as of the date of this Prospectus or within 60 days of such
date. Mr. Oates is a director of each of Phoenix Duff & Phelps and Phoenix
Funds, both of which are affiliates of Phoenix.

(7) See Notes 4, 5 and 6. Excludes shares beneficially owned by David R.
Wheeland, a former officer who is a Named Executive Officer.

54
<PAGE>

DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 25,000,000 shares of
Common Stock, par value $.01 per share, and 4,999,800 shares of undesignated
preferred stock, par value $.01 per share.

COMMON STOCK

The Company has 7,656,750 shares of Common Stock outstanding. Holders of
Common Stock are entitled to one vote for each share held of record on all
matters submitted to a vote of stockholders and are not entitled to cumulative
voting rights. Holders of Common Stock are entitled to receive dividends
ratably, if any, as may be declared from time to time by the Board of
Directors out of funds legally available therefor. See "Dividend Policy." In
the event of a dissolution, liquidation or winding-up of the Company, holders
of Common Stock are entitled to share ratably in all assets remaining after
payment of liabilities and any payment required to be made to holders of
preferred stock. Holders of Common Stock have no preemptive or other
subscription rights and no right to convert their Common Stock into any other
securities. There are no redemption or sinking fund provisions applicable to
the Common Stock. All outstanding shares of Common Stock are fully paid and
nonassessable.

PREFERRED STOCK

The Company's Certificate of Incorporation permits the Company's Board of
Directors, without further vote or action by the stockholders, to issue shares
of the preferred stock in one or more series and to determine the
designations, preferences, voting powers, qualifications and special or
relative rights and privileges of the shares of each such series, including
the dividend rights, dividend rate, conversion rights, voting rights, terms of
redemption (including sinking fund provisions), redemption price or prices,
liquidation preferences, the number of shares constituting any series and the
designation of such series. These rights and privileges could limit the voting
power of holders of Common Stock and restrict their rights to receive
dividends or liquidation proceeds in an adverse manner.

The Company has granted the Board of Directors authority to issue preferred
stock and to determine its rights and preferences to eliminate delays
associated with a stockholder vote on specific issuances. The Company believes
that this authority will provide flexibility in connection with possible
corporate transactions. However, it could also have the effect of making it
more difficult for a third-party to acquire, or of discouraging a third-party
from attempting to acquire, control of the Company. Further, the issuance of
preferred stock could adversely affect the voting power of holders of Common
Stock and restrict their rights to receive payments upon liquidation of the
Company. The Board of Directors could also utilize shares of preferred stock
in order to adopt a stockholders' rights plan (a so-called "poison pill"),
which could also have the effect of discouraging or delaying a takeover of the
Company. The Company has no present plans to issue any shares of preferred
stock.

DELAWARE LAW AND CERTAIN CHARTER AND BY-LAW PROVISIONS

The Company is a Delaware corporation and is subject to Section 203 of the
Delaware General Corporation Law (the "DGCL"). In general, Section 203
prevents an "interested stockholder" (defined generally as a person owning 15%
or more of a company's outstanding voting stock), from engaging in a "business
combination" (as defined in Section 203), with such company for three years
following the date that person becomes an interested stockholder unless (a)
before that person became an interested stockholder, such company's Board of
Directors approved the transaction in which the interested stockholder became
an interested stockholder or approved the business combination; (b) upon
completion of the transaction that resulted in the interested stockholder
becoming an interested stockholder, the interested stockholder owns at least
85% of the voting stock outstanding at the time the transaction commenced
(excluding stock held by directors who are also officers of such company and
by employee stock plans that do not provide employees with the right to
determine confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer); or (c) following the transaction in
which that person became an interested stockholder, the business combination
is approved by such company's Board of

55
<PAGE>

Directors and authorized at a meeting of stockholders by the affirmative vote
of the holders of at least 66 2/3% of the outstanding voting stock not owned
by the interested stockholder.

The Company's Certificate of Incorporation authorizes the Board of Directors
to issue, without stockholder approval, 4,999,800 shares of preferred stock
with voting, conversion and other rights and preferences that could adversely
affect the voting power or other rights of the holders of Common Stock. The
issuance of preferred stock or of rights to purchase preferred stock could be
used to discourage an unsolicited acquisition proposal. In addition, the
possible issuance of preferred stock could discourage a proxy contest, make
more difficult the acquisition of a substantial block of the Company's Common
Stock or limit the price that investors might be willing to pay in the future
for shares of the Company's Common Stock. The Certificate of Incorporation
also provides that: (i) the affirmative vote of the holders of at least 70% of
the voting power of all of the then outstanding shares of the capital stock of
the Company shall be required to adopt, amend or repeal any provision of the
By-Laws of the Company; (ii) stockholders of the Company may not take any
action by written consent and a meeting of the stockholders may only be called
by the Board of Directors; (iii) on or prior to the date on which the Company
first provides notice of an annual meeting of the stockholders (or a special
meeting in lieu thereof) following the Initial Public Offering, the Board of
Directors will be classified into three classes with staggered terms of three
years each; (iv) advance notice of stockholder nominations for the election of
directors and of business to be brought by stockholders before any meeting of
the stockholders of the Company shall be given in a timely manner as provided
in the By-Laws of the Company and (v) members of the Board of Directors may be
removed only for cause and after reasonable notice and an opportunity to be
heard before the body proposing to remove such director. The Certificate of
Incorporation also provides that the affirmative vote of the holders of shares
of voting stock of the Company representing at least seventy percent (70%) of
the voting power of all of the then outstanding shares of the capital stock of
the Company entitled to vote generally in the election of directors, voting
together as a single class, shall be required to (i) reduce or eliminate the
number of authorized shares of Common Stock or the number of authorized shares
of preferred stock or (ii) amend or repeal, or adopt certain provisions of the
Certificate of Incorporation regarding the management of the Company, the
indemnification of officers and directors, the election and classification of
the Board of Directors, the ability of the Board of Directors or the
stockholders to amend or repeal the Certificate of Incorporation or the By-
Laws and the super majority voting requirements. The foregoing provisions of
the Certificate of Incorporation could have the effect of delaying, deterring
or preventing a change in control of the Company. See "Risk Factors--Certain
Anti-Takeover Provisions."

The Company's Certificate of Incorporation contains provisions eliminating
or limiting the personal financial liability of the Company's directors to the
fullest extent permitted by the DGCL. Delaware law provides that directors
will not be personally liable to a corporation or its stockholders for
monetary damages for breach of their fiduciary duties as directors, except for
liability where there has been a breach of the duty of loyalty, a failure to
act in good faith, an act of intentional misconduct, a knowing violation of
law, certain unlawful payments of dividends, stock repurchases or redemptions,
or any transaction from which the director derives an improper personal
benefit. In addition, the Company's Certificate of Incorporation and By-Laws
include provisions to indemnify its officers and directors and persons serving
in various other capacities at the request of the Company to the fullest
extent permitted by the DGCL against expenses, judgments, fines and amounts
paid in connection with threatened, pending or completed suits and proceedings
against such persons by reason of having served as officers or directors or in
other capacities.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is Boston Equiserve,
Inc.

SHARES ELIGIBLE FOR FUTURE SALE

The Company has outstanding 7,656,750 shares of Common Stock. Of such
shares, the 3,105,000 shares registered pursuant to the Registration
Statements will be freely tradable by persons other than "affiliates" of the
Company without restriction. The remaining 4,551,750 shares held by current
stockholders of the Company

56
<PAGE>

were subject to Lock-Up Agreements under which the holders of such shares
agreed not to sell or otherwise dispose of such shares without the prior
written consent of Cowen & Company, one of the Representatives of the
Underwriters, until September 9, 1998. Upon expiration of the Lock-Up
Agreements (and assuming no exercise of outstanding options), approximately
3,972,500 additional shares of Common Stock became available for sale in the
public market, subject to the provisions of Rule 144 under the Securities Act.
The remaining 579,250 shares of Common Stock will become eligible for sale in
the public market, subject to the provisions of Rule 144, over a period of
less than one year and could be sold earlier if the holders thereof exercise
their registration rights. The Company intends to register an aggregate of
427,500 shares of Common Stock issuable under the 1997 Employee, Director and
Consultant Stock Plan.

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated with those of others), including any affiliate of
the Company, is entitled to sell in brokers' transactions or directly to
market makers within any three-month period a number of Restricted Shares that
does not exceed the greater of (i) 1% of the class of such shares then
outstanding (76,567 shares of Common Stock based on the number of shares
currently outstanding after consummation of this offering) or (ii) the average
weekly trading volume of the class of such shares in the over-the-counter
market during the four calendar weeks preceding the date on which notice of
such sale is filed with the Commission, provided that certain current public
information concerning the Company is then available, that the seller complies
with certain manner of sale provisions and notice requirements, and that at
least one year has elapsed since the Restricted Shares were fully paid for and
acquired from the Company or an affiliate of the Company. A person (or persons
whose shares are aggregated with those of others), who is not an affiliate of
the Company at any time during the three months preceding any sale by such
person, is entitled to sell such shares, under Rule 144(k), without regard to
the limitations described above, provided that at least two years have lapsed
since the Restricted Shares were fully paid for and acquired from the Company
or an affiliate of the Company. The above is a summary of Rule 144 and is not
intended to be a complete description thereof or of the rights of the parties
to sell shares of Common Stock thereunder.

As of October 30, 1998, options to purchase 220,050 shares of Common Stock
are outstanding, 72,100 of which options are currently vested. Upon exercise
of these options, the underlying shares of Common Stock will be eligible for
sale to the public in the open market under Rule 701.

In general, under Rule 701 as currently in effect, absent contractual
restrictions on transfer, any employee, officer or director of or consultant
or advisor to, the Company who purchases shares from the Company pursuant to a
written compensatory stock option or other benefit plan or written contract
relating to compensation is eligible to resell such shares, in each case
commencing 90 days after March 12, 1998, in reliance on Rule 144, but without
compliance with certain restrictions contained in Rule 144. Shares acquired
pursuant to Rule 701 may be sold by nonaffiliates without regard to the
holding period, volume limitations, information or notice requirements of Rule
144, and by affiliates without regard to the holding period requirement.

The Company has reserved an aggregate of 427,500 shares of Common Stock for
issuance pursuant to the 1997 Employee, Director and Consultant Stock Plan.
The Company may elect to register such shares under the Securities Act. Shares
so registered will be eligible for sale in the public market after the
effective date of such registration, subject to Rule 144 limitations
applicable to affiliates and subject to the lock-up agreements described
below.

Except as indicated above, the Company is unable to estimate the amount,
timing or nature of future sales of outstanding Common Stock. There was no
market for the Common Stock prior to this offering, and no predictions can be
made as to the effect, if any, that market sales of shares or the availability
of shares for sale will have on the market price prevailing from time to time.
Nevertheless, sales of substantial amounts of the Common Stock in the public
market may have an adverse effect on the market price thereof, and could
impair the Company's ability to raise capital through the future sale of its
equity securities.

REGISTRATION RIGHTS

PHL holds in the aggregate 579,250 shares of the Company's Common Stock (the
"Registrable Securities"). Each of PHL or its transferees are entitled to
certain rights with respect to the registration of such

57
<PAGE>

securities under the Act. These rights are provided under the terms of an
agreement between the Company and the holders of the Registrable Securities.
If the Company registers any of its securities either for its own account or
for the account of other security holders, the holders of Registrable
Securities are entitled to include their securities in the registration,
subject to the ability of the underwriters to limit the number of shares
included in an underwritten offering. When use of such form becomes available
to the Company, any holder of the Registrable Securities may request that the
Company register all or any portion of their Registrable Securities on Form S-
3 provided that the reasonably anticipated aggregate price to the public is at
least $500,000 and that no more than one such registration may be requested
and obtained during any nine month period. All registration expenses must be
borne by the Company and all selling expenses relating to the Registrable
Securities must be borne by the holders of the securities being registered.
Except to the extent included herein, the holders of the Registrable
Securities have waived their right to have such securities registered under
the Act as part of the Initial Public Offering and until September 9, 1998.

LOCK-UP AGREEMENTS

Pursuant to the Underwriting Agreement, all of the Company's directors,
executive officers and stockholders, owning as of the date all of the
outstanding Common Stock prior to the Initial Public Offering (representing an
aggregate of 4,611,350 shares of Common Stock, including 59,600 shares of
Common Stock that may be acquired pursuant to the exercise of options which
were then exercisable), agreed that they will not, without the prior written
consent of Cowen & Company, offer, sell or otherwise dispose of any shares of
Common Stock, options or warrants to acquire shares of Common Stock or
securities exchangeable for or convertible into shares of Common Stock owned
by them, until September 9, 1998. See "Plan of Distribution."

58
<PAGE>

PLAN OF DISTRIBUTION

Subject to the terms and conditions of the underwriting agreement dated
March 12, 1998 (the "Underwriting Agreement"), the Company and the Selling
Stockholders sold to each of the Underwriters named below, and each of the
Underwriters, for whom Cowen & Company and Volpe Brown Whelan & Company, LLC
acted as representatives (the "Representatives"), purchased from the Company
and the Selling Stockholders the respective number of shares of Common Stock
set forth opposite the name of such Underwriter below:

<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
NAME COMMON STOCK
---- ------------
<S> <C>
Cowen & Company................................................. 1,212,184
Volpe Brown Whelan & Company, LLC............................... 808,126
BT Alex. Brown Incorporated..................................... 77,941
CIBC Oppenheimer Corp........................................... 77,941
Furman Selz LLC................................................. 77,941
J.P. Morgan Securities Inc...................................... 77,941
NationsBanc Montgomery Securities LLC........................... 77,941
UBS Securities LLC.............................................. 77,941
Adams, Harkness & Hill, Inc..................................... 32,476
Advest, Inc..................................................... 32,476
Robert W. Baird & Co. Incorporated.............................. 32,476
George K. Baum & Company........................................ 32,476
Chatsworth Securities, LLC...................................... 32,476
Crowell, Weedon & Co............................................ 32,476
Gaines, Berland Inc............................................. 32,476
Gerard Klauer Mattison & Co., LLC............................... 32,476
Janney Montgomery Scott Inc..................................... 32,476
Legg Mason Wood Walker, Incorporated............................ 32,476
Neuberger & Berman.............................................. 32,476
Parker/Hunter Incorporated...................................... 32,476
Pennsylvania Merchant Group..................................... 32,476
Ragen Mackenzie Incorporated.................................... 32,476
Raymond James & Associates, Inc................................. 32,476
The Seidler Companies Incorporated.............................. 32,476
Soundview Financial Group....................................... 32,476
Tucker Anthony Incorporated..................................... 32,476
H.C. Wainwright & Co., Inc...................................... 32,476
---------
Total......................................................... 3,105,000
=========
</TABLE>

The Underwriters offered the shares of Common Stock, in part, directly to
the public at the initial public offering price of $12.00 and, in part, to
certain dealers at such price less a concession not in excess of $0.47 per
share. The Underwriters may have allowed, and such dealers may have reallowed,
a concession not in excess of $0.10 per share to certain brokers and dealers.

The Selling Stockholders granted the Underwriters an option, exercisable for
up to 30 days after the date of this Prospectus, to purchase up to an
aggregate of 405,000 additional shares of Common Stock to cover over-
allotments, if any. The Underwriters purchased such shares pursuant to an
exercise of the over-allotment option on March 25, 1998 and the foregoing
table gives effect to such exercise.

59
<PAGE>

The Company and the Selling Stockholders agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the Act,
and to contribute to payments that the Underwriters may be required to make in
respect thereof.

The Company, the Company's officers and directors, and all Selling
Stockholders agreed not to offer, sell, contract to sell or otherwise dispose
of any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or any right to acquire Common
Stock until September 9, 1998 without the prior written consent (which consent
may be given without notice to the Company's stockholders or other public
announcement) of Cowen & Company. Cowen & Company has advised the Company that
it has no present intention of releasing any of the Company's stockholders
from such lock-up agreements. See "Shares Eligible for Future Sale."

The Representatives have been making a market in the Company's Common Stock
following the Initial Public Offering although they have no obligation to do
so and may cease such market making at any time. There can be no assurance
that a market in the Common Stock will continue.

Prior to the consummation of the Initial Public Offering, the
Representatives advised the Company and the Selling Stockholders that the
Underwriters did not intend to confirm sales in excess of 5% of the shares
offered hereby to any accounts over which they exercise discretionary
authority.

Prior to the Initial Public Offering, there was no public market for the
Common Stock. Consequently, the initial public offering price was determined
by negotiation among the Company, the Selling Stockholders and the
Representatives. Among the factors considered in such negotiations were the
prevailing market conditions, the results of operations of the Company in
periods prior to the Initial Public Offering, the market capitalization and
stage of development of other companies that the Company, the Selling
Stockholders and the Representatives believed to be comparable to the Company,
estimates of the business potential of the Company, the then current state of
the Company's development and other factors deemed relevant.

The Common Stock is quoted on the Nasdaq National Market under the symbol
"CMND."

Neither the Underwriters nor the Representatives have participated in the
preparation, review or dissemination of the Additional Shares Registration
Statement or the Prospectus forming a part of the Additional Shares
Registration Statement; and neither the Underwriters nor the Representatives
have passed upon, or performed any investigation regarding any of the factual
or legal matters set forth in the Additional Shares Registration Statement or
the Prospectus forming a part of the Additional Shares Registration Statement,
except to the extent such investigation was performed in connection with the
Initial Public Offering and the Initial Registration Statement (and the
prospectus dated March 12, 1998 that formed a part of the Initial Registration
Statement) relating thereto.

LEGAL MATTERS

The validity of issuance of the Registered Shares was passed upon for the
Company by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Boston,
Massachusetts, the Company's former securities counsel which served as the
Company's counsel in the Initial Public Offering. The validity of the issuance
of the Additional Shares was passed upon for the Company by Fulbright &
Jaworski L.L.P., New York, New York. Certain legal matters were passed upon
for the Underwriters by Buchanan Ingersoll, Princeton, New Jersey.

EXPERTS

The Consolidated Financial Statements and schedule of the Company at
December 31, 1997 and 1996, and for each of the three years in the period
ended December 31, 1997, appearing in this Prospectus and the Registration
Statements have been audited by Ernst & Young LLP, independent auditors, as
set forth in their reports thereon appearing elsewhere herein, and are
included in reliance upon such reports given upon the authority of such firm
as experts in accounting and auditing.

60
<PAGE>

ADDITIONAL INFORMATION

The Company has filed with the Commission, Washington, D.C. 20549, the
Registration Statements, each on Form S-1 under the Act, with respect to the
Shares. This Prospectus, which constitutes part of each of the Registration
Statements, does not contain all of the information set forth in the
Registration Statements and the exhibits and schedules filed therewith,
certain portions of which have been omitted as permitted by the rules and
regulations of the Commission. For further information with respect to the
Company and the Shares, reference is hereby made to the Registration
Statements and to the exhibits and schedules filed therewith. Statements
contained in this Prospectus regarding the contents of any contract or other
document referred to are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to either Registration Statement, each such statement being deemed to
be qualified in its entirety by such reference. The Registration Statements,
including all exhibits and schedules thereto, may be inspected without charge
at the principal office of the Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following regional offices of the Commission: the New
York regional office located at 7 World Trade Center, Suite 1300, New York,
New York 10048, and the Chicago regional office located at the Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511.
Copies of this material may also be obtained from the Commission's Public
Reference Section at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. In addition, such material may also be accessed
electronically at the Commission's Internet home page: (http://www.sec.gov).

The Company is subject to the informational requirements of the Exchange
Act, and, in accordance therewith, files periodic reports and other
information with the Commission. For further information with respect to the
Company, reference hereby is made to such reports and other information which
can be inspected and copied at the public reference facilities maintained by
the Commission referenced above.

61
<PAGE>

COMMAND SYSTEMS, INC.

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Auditors........................................... F-2
AUDITED FINANCIAL STATEMENTS:
Consolidated Balance Sheets at December 31, 1996 and 1997................ F-3
Consolidated Statements of Operations for the years ended December 31,
1995, 1996 and 1997..................................................... F-4
Consolidated Statements of Stockholders' Equity (Deficit) for the years
ended December 31, 1995, 1996 and 1997 ................................. F-5
Consolidated Statements of Cash Flows for the years ended December 31,
1995, 1996 and 1997..................................................... F-6
Notes to Consolidated Financial Statements............................... F-7
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
Condensed Consolidated Balance Sheet at June 30, 1998.................... F-16
Condensed Consolidated Statement of Operations for the six months ended
June 30, 1997 and 1998.................................................. F-17
Condensed Consolidated Statement of Cash Flows for the six months ended
June 30, 1997 and 1998.................................................. F-18
Condensed Consolidated Statement of Stockholders' Equity (Deficit) for
the six months ended June 30, 1998...................................... F-19
Notes to Unaudited Condensed Consolidated Financial Statements........... F-20
PRO FORMA FINANCIAL DATA:
Headnote to Pro Forma Financial Data..................................... P-1
Pro Forma Statement of Operations for the year ended December 31, 1997... P-2
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholders
Command Systems, Inc.

We have audited the accompanying consolidated balance sheets of Command
Systems, Inc. as of December 31, 1996 and 1997, and the related consolidated
statements of operations, stockholders' equity (deficit) and cash flows for
each of the three years in the period ended December 31, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Command
Systems, Inc. at December 31, 1996 and 1997, and the consolidated results of
its operations and its cash flows for each of the three years in the period
ended December 31, 1997, in conformity with generally accepted accounting
principles.

Ernst & Young LLP

Hartford, Connecticut
February 9, 1998

F-2
<PAGE>

COMMAND SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1996 1997
---------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash................................................ $ 443,505 $ 391,687
Accounts receivable, net of allowance for doubtful
accounts of $24,500 and $259,893 in 1996 and 1997.. 2,375,064 4,203,241
Prepaid expenses and other assets................... 416,116 354,950
Deferred income taxes .............................. -- 52,024
---------- -----------
Total current assets............................... 3,234,685 5,001,902
Equipment and improvements:
Furniture and equipment............................. 914,452 2,007,254
Leasehold improvements.............................. 554,873 852,476
---------- -----------
1,469,325 2,859,730
Less accumulated depreciation....................... (396,785) (825,562)
---------- -----------
Net equipment and improvements........................ 1,072,540 2,034,168
Other assets:
Goodwill............................................ -- 6,845,338
Deposits............................................ 441,644 428,005
Other non-current assets............................ 67,396 115,674
---------- -----------
$4,816,265 $14,425,087
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Line of credit...................................... $1,378,890 $ 857,535
Bank loan........................................... -- 556,952
Accounts payable and accrued expenses............... 1,281,058 2,218,540
Accrued payroll and related costs................... 376,305 610,933
Loan payable to officer............................. 73,224 --
Deferred revenue.................................... 150,434 219,544
Income taxes payable................................ 1,700 78,535
Deferred income taxes............................... 72,095 381,987
---------- -----------
Total current liabilities.......................... 3,333,706 4,924,026
Notes payable......................................... 1,145,463 --
---------- -----------
Total liabilities.................................. 4,479,169 4,924,026
Minority interest..................................... 395,561 --
Preferred stock, $.01 par value, 5,000,000 shares
authorized...........................................
Series A convertible preferred stock, 100 shares
authorized, issued and outstanding................. -- 2,223,475
Series B convertible preferred stock, 100 shares
authorized, issued and outstanding................. -- 8,000,000
Stockholders' equity (deficit):
Common stock, 25,000,000 shares authorized, $.01 par
value; 4,275,000 shares issued and outstanding..... 1,000 1,000
Retained earnings (deficit)......................... (59,465) (636,509)
Cumulative translation adjustment................... -- (86,905)
---------- -----------
Total stockholders' equity (deficit)............. (58,465) (722,414)
---------- -----------
Total liabilities and stockholders' equity
(deficit)....................................... $4,816,265 $14,425,087
========== ===========
</TABLE>

See accompanying notes.

F-3
<PAGE>

COMMAND SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------
1995 1996 1997
----------- ----------- -----------
<S> <C> <C> <C>
Revenue................................. $12,436,529 $17,069,417 $25,057,039
Cost of revenue......................... 9,108,436 12,494,448 16,972,812
----------- ----------- -----------
Gross profit.......................... 3,328,093 4,574,969 8,084,227
Selling, general and administrative
expenses............................... 3,012,869 5,171,912 7,254,992
----------- ----------- -----------
Income (loss) from operations......... 315,224 (596,943) 829,235
Other income (expense):
Other income.......................... -- 42,786 --
Interest income....................... 2,195 14,138 32,911
Interest expense...................... (52,405) (132,482) (309,657)
----------- ----------- -----------
(50,210) (75,558) (276,746)
----------- ----------- -----------
Income (loss) before income taxes and
minority interest...................... 265,014 (672,501) 552,489
Income tax (provision) benefit.......... (43,577) 8,056 (597,751)
----------- ----------- -----------
221,437 (664,445) (45,262)
----------- ----------- -----------
Minority interest....................... -- 241,439 (451,431)
----------- ----------- -----------
Net income (loss)....................... 221,437 (423,006) (496,693)
----------- ----------- -----------
Preferred stock dividends and
accretion.............................. -- -- (80,351)
----------- ----------- -----------
Income (loss) applicable to common
stockholders........................... $ 221,437 $ (423,006) $ (577,044)
=========== =========== ===========
Pro forma results of operations:
Adjustments to U.S. federal income tax
provision assuming
C corporation status and the
realization of net operating losses
for all periods...................... $ (53,720) $ -- $ 633,000
----------- ----------- -----------
Net income (loss), as adjusted........ 167,717 (423,006) 136,307
Preferred stock dividends and
accretion............................ -- -- (80,351)
----------- ----------- -----------
Income (loss) applicable to common
stockholders......................... $ 167,717 $ (423,006) $ 55,956
=========== =========== ===========
Pro forma earnings per common share:
Basic earnings (loss) per common
share.............................. $ 0.04 $ (0.10) $ 0.01
=========== =========== ===========
Diluted earnings (loss) per common
share.............................. $ 0.04 $ (0.10) $ 0.01
=========== =========== ===========
</TABLE>

See accompanying notes.

F-4
<PAGE>

COMMAND SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
COMMON STOCK RETAINED CUMULATIVE
---------------- EARNINGS TRANSLATION
SHARES AMOUNT (DEFICIT) ADJUSTMENT TOTAL
--------- ------ --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1995.. 4,275,000 $1,000 $ 142,104 $ -- $143,104
Net income................. -- -- 221,437 -- 221,437
--------- ------ --------- -------- ---------
Balance at December 31,
1995....................... 4,275,000 1,000 363,541 -- 364,541
Net loss................... -- -- (423,006) -- (423,006)
--------- ------ --------- -------- ---------
Balance at December 31,
1996....................... 4,275,000 1,000 (59,465) -- (58,465)
Net loss................... -- -- (496,693) -- (496,693)
Preferred stock dividends
and accretion............. -- -- (80,351) -- (80,351)
Translation adjustment..... -- -- -- (86,905) (86,905)
--------- ------ --------- -------- ---------
Balance at December 31,
1997....................... 4,275,000 $1,000 $(636,509) $(86,905) $(722,414)
========= ====== ========= ======== =========
</TABLE>

See accompanying notes.

F-5
<PAGE>

COMMAND SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------
1995 1996 1997
--------- ----------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)........................ $ 221,437 $ (423,006) $ (496,693)
Adjustments to reconcile net income
(loss) to net cash (used in) provided by
operating activities:
Depreciation and amortization.......... 58,963 136,796 428,777
Bad debt expense....................... -- 24,500 235,395
Deferred income taxes.................. 42,079 (15,948) 257,868
Minority interest...................... -- (241,439) 451,431
Accrued interest capitalized........... -- 38,370 132,674
Other.................................. -- 4,773 --
Changes in operating assets and
liabilities:
Accounts receivable.................. (718,936) (637,497) (2,063,572)
Prepaid expenses and other assets.... (23,566) (386,286) 61,166
Deposits and other noncurrent
assets.............................. (17,410) (489,258) (34,639)
Accounts payable and accrued
expenses............................ 268,475 691,485 937,482
Accrued payroll and related costs.... 60,716 74,760 234,628
Deferred revenue..................... -- 150,434 69,110
Income taxes payable................. -- -- 76,835
--------- ----------- ----------
Net cash (used in) provided by
operating activities.............. (108,242) (1,072,316) 290,462
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment and improvements.. (263,884) (954,602) (1,497,783)
--------- ----------- ----------
Net cash used in investing
activities........................ (263,884) (954,602) (1,497,783)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings (payments) under revolving
line of credit agreement................ 512,400 503,390 (521,355)
Proceeds from bank loan.................. -- -- 806,952
Principal payments of bank loan.......... -- -- (250,000)
Minority investment in affiliate......... -- 637,000 391,098
Proceeds from notes payable.............. -- 1,107,093 869,630
Payment of loan payable to officer....... -- -- (73,224)
Preferred stock issuance costs........... -- -- (43,013)
--------- ----------- ----------
Net cash provided by financing
activities........................ 512,400 2,247,483 1,180,088
--------- ----------- ----------
Effect of exchange rate changes on cash... -- -- (24,585)
Increase (decrease) in cash............... 140,274 220,565 (51,818)
Cash, beginning of year................... 82,666 222,940 443,505
--------- ----------- ----------
Cash, end of year......................... $ 222,940 $ 443,505 $ 391,687
========= =========== ==========
CASH PAID FOR:
Interest expense......................... $ 52,405 $ 104,482 $ 193,202
Income taxes............................. 1,498 3,581 271,130
NON-CASH FINANCING ACTIVITIES:
Preferred stock exchanged for notes
payable................................. $2,186,137
Preferred stock issued for purchase of
minority interest....................... 8,000,000
</TABLE>

See accompanying notes.

F-6
<PAGE>

COMMAND SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1997

1. ORGANIZATION

Command Systems, Inc. (the "Company") provides information technology
solutions and services to financial services organizations.

Through December 31, 1997, the Company held a 51% interest in Command
International Software Pvt. ("CIS"), an Indian unlimited liability company,
with the remaining 49% interest held by Phoenix Home Life Mutual Insurance Co.
("PHL"). On December 31, 1997, the Company purchased PHL's holdings (see Note
5).

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of
the Company and its wholly and majority owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated in consolidation.

Concentration of Credit Risk

The Company markets its services primarily to the financial services
industry. The Company performs periodic credit evaluations of a customer's
financial condition and generally does not require collateral. Credit losses
have been within management's expectations.

Revenue Recognition

The Company recognizes revenue on time-and-materials contracts as the
services are performed. Revenue on fixed-price contracts are recognized using
the percentage of completion method. Under this method, applicable fees and
profits on such contracts are recorded concurrently with costs incurred
thereon. The Company bears the risk of cost overruns and inflation with
respect to its fixed-price projects. If estimates indicate a probable ultimate
loss on a fixed-price contract, provision is made at that date for the entire
estimated loss.

Revenue from product sales, primarily equipment and commercially available
software, are recognized upon shipment.

Billings in excess of revenue earned are classified as deferred revenue.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Equipment and Improvements

Equipment and improvements are stated at cost. Depreciation on equipment is
calculated on a straight-line basis over the estimated useful lives of the
assets. Leasehold improvements are being amortized on a straight-line basis
over the shorter of the lease term or estimated useful life of the assets.

Income Taxes

The Company had previously elected to be taxed as an S Corporation in
accordance with the provisions of the Internal Revenue Code. As an S
Corporation, the taxable income of the Company is reportable on the individual
stockholder's federal tax return. In conjunction with the formation of the
Company as a Delaware holding corporation (see Note 6) and the issuance of its
Series A convertible preferred stock, the S Corporation election was
terminated and the Company became subject to U.S. federal income taxes. The
Company utilizes the asset and liability method of accounting for income
taxes. Under this method, deferred income taxes are recorded to reflect the
tax consequences of future years differences between tax basis of assets and
liabilities and their financial reporting amounts at each year-end based on
enacted tax laws and statutory tax rates applicable to the periods in which
the differences are expected to affect taxable income. A valuation allowance
is provided against the future benefit of deferred tax assets if it is
determined that it is more likely than not that the future tax benefits
associated with the deferred tax asset will not be realized (see Note 4).

F-7
<PAGE>

COMMAND SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Impairment of Long-Lived Assets

Long-lived assets, including goodwill, are reviewed for impairment and
written down to fair value whenever events or changes in circumstances
indicate that the carrying amount of the asset may not be recoverable. At
December 31, 1997, no such impairment existed. The Company measures the
potential impairment of long-lived assets, including goodwill, by the
undiscounted value of expected operating cash flow in relation to the assets
to which it applies.

Fair Value of Financial Instruments

The carrying amounts reported in the balance sheet for cash, accounts
receivable, accounts payable, and other accrued liabilities approximate fair
value due to the short maturity of these items. The carrying value of the
notes payable approximate fair value based on the Company's borrowing rate for
similar financing arrangements. Amounts due under the line of credit
approximate fair value because the interest rates vary with market interest
rates.

Stock-Based Compensation

Effective in fiscal 1996, the Company adopted Financial Accounting Statement
No. 123, "Accounting for Stock-Based Compensation." This statement defines a
fair value based method of accounting for employee stock compensation plans.
However, it also allows an entity to continue to measure compensation cost for
those plans in accordance with Accounting Principle Board ("APB") Opinion No.
25, "Accounting for Stock Issued to Employees." Under APB No. 25, compensation
cost is the excess, if any, of the market price of the stock at the grant date
over the amount the employee must pay to acquire the stock. The Company has
elected to continue to account for awards granted under its Shadow Stock
Incentive Plan and the Command Systems, Inc. 1997 Employee, Director and
Consultant Stock Plan under APB No. 25.

Foreign Currency Translation

The financial statements of the Company's foreign subsidiaries which have a
functional currency other than the U.S. dollar reflect the translation of
assets and liabilities into United States dollars at current exchange rates
with income and expense accounts being translated at average rates of exchange
prevailing during the period. The related adjustments are recognized as a
separate component of the stockholder's equity. Foreign currency transaction
gains and losses, which are not material, are recognized in net income (loss)
when incurred.

Earnings Per Share

In February 1997, the FASB issued Statement No. 128, "Earnings Per Share."
This statement replaced the calculation of primary and fully diluted earnings
per share with basic and diluted earnings per share. Unlike primary earnings
per share, basic earnings per share excludes any dilutive effects of options,
warrants and convertible securities. Diluted earnings per share is very
similar to the previously reported fully diluted earnings per share. All
earnings per share amounts for all periods have been presented, and where
appropriate, restated to conform to the Statement No. 128 requirements.

Pro forma earnings per common share reflect adjustments in the U.S. federal
income tax provision assuming C corporation status and the realization of net
operating losses for all periods presented.

3. DEBT

The Company maintains a line of credit with a current availability of
$2,500,000 or 75% ($1,000,000 prior to May 26, 1997) of the Company's accounts
receivable less than 90 days past due. Interest is charged at the bank's prime
rate of interest plus 0.5% (10%, 8.75% and 9% in 1995, 1996 and 1997,
respectively).

F-8
<PAGE>

COMMAND SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The line of credit is guaranteed by the Company's President, and is
collateralized by all personal property of the Company. The agreement also
contains several restrictive covenants which require, among other things, the
Company to maintain defined financial ratios and prohibits the declaration and
payment of dividends, other than payment of dividends to the holder of its
Series A and Series B convertible preferred stock, provided that no event of
default exists. The agreement expires August 15, 1998.

On July 1, 1996, the Company and its wholly-owned subsidiary Command
International Holdings ("CIH") entered into a note purchase agreement (the
"Agreement") with Phoenix Home Life Mutual Insurance ("PHL") under which the
Company could issue up to $3 million (U.S. dollars) aggregate principal amount
of its 15% Subordinated Secured Series Notes (the "C Notes"), accrued and
capitalized interest on such notes and its Zero Coupon Receivables-Based
Subordinated Secured Series Notes (the "Z Notes"). Also, under this Agreement,
CIH was authorized to issue up to $3 million (U.S. dollars) aggregate
principal amount of its 15% Guaranteed Senior Secured Series Notes (the "M
Notes") and accrued capitalized interest on such notes. The payment
obligations of the Company in respect to the C Notes and the Z Notes rank
junior and subordinate in right of payment to the senior indebtedness of the
Company under the M Notes.

At December 31, 1996, outstanding debt (including accrued interest of
$38,370) on the C, Z and M Notes amounted to $214,370, $196,000 and $735,093,
respectively. Repayment of the debt is due in 2001. The payment obligations of
the Company in respect of the C, Z and M Notes are subordinate to the senior
indebtedness of the Company under the line of credit.

On August 26, 1997, the Company entered into an agreement with PHL whereby
the Company issued to PHL 100 shares of its Series A convertible preferred
stock in exchange for the aggregate outstanding indebtedness of $2,186,137 of
the C, Z, and M Notes, including accrued capitalized interest of $171,044.

CIS entered into a RS. 20,000,000 ($560,000) letter of credit facility on
December 31, 1996; no amounts related thereto were outstanding at December 31,
1996 and 1997.

CIS has a short term credit facility whereby each borrowing under the
facility has a term of six months from the date of disbursement and bears
interest at varying rates based upon the prime lending rate and the currency
borrowed; borrowing may be denominated in Indian rupees or U.S. dollars. At
December 31, 1997, rates of interest ranged from 10.65% to 16.00%. There were
no outstanding balances under this credit facility at December 31, 1996;
$556,952 was outstanding at December 31, 1997.

4. INCOME TAXES

Comparisons of the provision for income taxes follow:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
1995 1996 1997
------- ------- ---------
<S> <C> <C> <C>
Federal
Current........................................ $ -- $ -- $ 334,871
Deferred....................................... -- -- 293,078
------- ------- ---------
Total federal................................ -- -- 627,949
State
Current........................................ 1,498 5,270 5,012
Deferred....................................... 42,079 (13,326) (35,210)
------- ------- ---------
Total state.................................. 43,577 (8,056) (30,198)
------- ------- ---------
Total provision.............................. $43,577 $(8,056) $ 597,751
======= ======= =========
</TABLE>

F-9
<PAGE>

COMMAND SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

With the issuance of the Series A convertible preferred stock, the Company's
ability to be taxed as an S Corporation automatically terminated and the
ability to report on the cash basis of accounting ceased. The Company
recognized additional taxable income as a result and incurred a liability of
approximately $693,000. Under current statutes this liability will be payable
over a period of four years.

The effective tax rate from operations differed from the federal statutory
rate for the following reasons:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31
--------------------
1995 1996 1997
----- ----- -----
<S> <C> <C> <C>
Federal statutory rate................................ 34.0% 34.0% 34.0%
State income taxes, net of federal benefit............ 16.4 (1.2) (5.5)
No federal income tax benefit (provision) for S
corporation period income (loss)..................... (34.0) (9.6) 15.9
Tax effect of conversion from S corporation to C
corporation, related primarily to accounting method
change............................................... -- -- 125.5
Foreign profits and losses not subject to tax......... -- (24.4) (56.7)
Other................................................. -- -- (5.0)
----- ----- -----
Effective income tax rate............................. 16.4% (1.2)% 108.2%
===== ===== =====
</TABLE>

The significant components of the Company's deferred tax assets and
liabilities are:

<TABLE>
<CAPTION>
DECEMBER 31
----------------
1996 1997
------- --------
<S> <C> <C> <C>
Deferred tax assets
State net operating loss carryforwards............... $11,000 $ 36,639
Bad debt reserve..................................... -- 125,272
Reserves and accruals................................ -- 136,714
Accrued payroll and related costs.................... -- 84,341
------- --------
11,000 382,966
------- --------
Deferred tax liabilities
Cash basis of accounting............................. 78,700 --
Tax effect of change from S corporation to C
corporation, primarily related to accounting method
change.............................................. -- 693,031
Tax over book depreciation........................... 4,300 19,898
------- --------
83,000 712,929
------- --------
Net deferred federal and state liabilities......... $72,000 $329,963
======= ========
</TABLE>
The Company has net operating loss ("NOL") carryforwards for state tax
purposes of approximately $118,000 and $450,000 as of December 31, 1996 and
1997, respectively. The NOL expires through 2010.

The financial statements reflect no foreign income tax provision. Under
Indian tax laws, CIS is not currently subject to a corporate tax since it
earns all of its income from export activities. This exemption is for a period
of five consecutive years during an eight year period which began in 1996. CIH
is also eligible for certain tax exemptions under the laws of Mauritius. As a
result of such exemptions, no deferred tax asset or liability is recognized.
During 1996 and 1997 income (loss) of the Company's foreign subsidiaries
before minority interest was $(492,732) and $921,287, respectively.

F-10
<PAGE>

COMMAND SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. MINORITY INTEREST

During 1996, the Company entered into an agreement with PHL to establish a
joint venture in India which would provide software services on a
subcontracting basis to the Company. Under the terms of the agreement, the
Company owned a 51% interest. PHL invested $637,000 and $391,098 in this
venture during 1996 and 1997, respectively.

On December 31, 1997, PHL exchanged its 49% interest for 100 shares of the
Company's Series B convertible preferred stock valued at $8,000,000. The
Company recorded this as a purchase and recognized the excess of the purchase
price $6,845,338 over the fair value of the assets acquired and liabilities
assumed as goodwill. The Company will amortize this goodwill over a 15 year
period.

The pro forma results of operations for the years ended December 31, 1996
and 1997 which reflect the elimination of interest expense, minority interest
in earnings of this subsidiary and the amortization of goodwill are as
follows, and assume the transaction had occurred at the beginning of the
periods presented:

<TABLE>
<CAPTION>
1996 1997
----------- -----------
<S> <C> <C>
Revenue............................................ $17,069,417 $25,057,039
Net (loss)......................................... (740,164) (449,295)
Income (loss) per share applicable to common
stockholders--diluted............................. (0.14) (0.08)
</TABLE>

At December 31, 1996 and 1997, included in prepaid expenses and other assets
are receivables from PHL approximating $365,000 and $4,000, respectively;
included in accounts payable and accrued expenses are payables to PHL
approximating $481,000 and $248,000, respectively.

6. STOCKHOLDERS' EQUITY

On July 1, 1997 Command Systems, Inc., a Delaware corporation ("CSI"), was
established and exchanged 4,275,000 shares of its common stock for the 100
shares of issued and outstanding common stock of the Company held by its sole
stockholder and became the ultimate holding company for the Command group of
companies. CSI was authorized to issue 10,650,000 shares of $.01 par value
common stock and 1,000 shares of $.01 par value preferred stock. This
contribution was accounted for at historical cost in a manner similar to a
pooling of interests. The number of common shares authorized, issued and
outstanding have been restated for all periods to reflect this
recapitalization. Effective December 31, 1997 the Company was authorized to
issue up to 25,000,000 shares of its common stock and 5,000,000 shares of
preferred stock. The consolidated financial statements have been adjusted to
reflect this change. On February 5, 1998, the Company effectuated a 1-for-2
reverse stock split. All share and per share data have been restated
retroactively.

On August 26, 1997, CSI issued 100 shares of its Series A convertible
preferred stock. The Series A convertible preferred stock has a liquidation
preference of $2,186,137 plus accrued and unpaid dividends. Such dividends
amounted to $75,474 at December 31, 1997. The Series A convertible preferred
stock entitles the holder to one vote per convertible common share, including
the right to elect one director as a class, and has a dividend requirement of
10% per annum which shall accrue on a cumulative basis (which rate will
increase to 15% if certain thresholds are not met). These shares are
convertible at any time into 522,500 shares of CSI common stock and are
redeemable by PHL after July 31, 1999. These shares automatically convert
following a qualified public offering.

On December 31, 1997, the Company issued 100 shares of Series B convertible
preferred stock. The Series B convertible preferred stock has a liquidation
preference of $8,000,000 and has a dividend requirement of 10% per annum which
shall accrue on a cumulative basis. The holders are also entitled to one vote
per convertible common share and the right to elect one director as a class.
These shares are redeemable after July 31, 1999 and

F-11
<PAGE>

COMMAND SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

are convertible at any time into 659,250 shares of the Company's common stock.
The Series B convertible preferred stock automatically converts following a
qualified public offering.

The Company has filed a registration statement for the initial public
offering of 2,200,000 shares of its common stock. Assuming the successful
completion of the offering and the conversion of the Series A and B
convertible preferred stock, the Company would have stockholders' equity at
December 31, 1997 as follows:

<TABLE>
<CAPTION>
ACTUAL PRO FORMA
--------- -----------
<S> <C> <C>
Common stock......................................... $ 1,000 $ 34,817
Additional paid-in capital........................... -- 33,711,319
Accumulated deficit.................................. (636,509) (680,042)
Cumulative translation adjustment.................... (86,905) (86,905)
--------- -----------
$(722,414) $32,979,189
========= ===========
</TABLE>

The Company had maintained a Shadow Stock Incentive Plan (the "Shadow Plan")
for certain key employees, whereby awards, expressed in units, were earned
only upon the occurrence of certain events including continued employment for
five years after the grant date. The Shadow Plan provided for any earned
benefits to be paid either in cash or in the form of common stock of the
Company. At December 31, 1995 and 1996 there were 53,750 and 61,500 units
outstanding, respectively. The Company accounted for this Shadow Plan as a
stock appreciation right and, therefore, accrued amounts based on a formula
value defined in the Shadow Plan which reflected the benefits to be earned.
There was no compensation expense recognized under the Shadow Plan for the
years ended December 31, 1995, 1996 and 1997, respectively. In March 1997 the
Company issued options to purchase 61,500 shares of its common stock
exercisable at a price of $4.00 per share (the fair market value as determined
by the Board of Directors of such stock at the date of grant) to certain
persons who, upon such issuance, relinquished their rights under the Company's
Shadow Plan.

In August 1997, the Company created the Command Systems, Inc. 1997 Employee,
Director and Consultant Stock Plan (the "Option Plan"). The Company reserved
427,500 shares of its common stock for issuance under the Option Plan. In
December 1997, the Company granted options to purchase 89,050 shares of its
common stock at a price of $9.00 per share to certain employees and directors.
Options granted under the plan generally have a five year term. Options
generally vest in increments of 20% on the anniversary of the date of grant.

Pro forma information regarding net income and earnings per share is
required by SFAS No. 123, which also requires that the information be
determined as if the Company had accounted for its employee stock options
granted subsequent to December 31, 1995 under the fair value method of that
Statement. The fair value of these options was estimated at the date of grant
using a Black-Scholes option pricing model with the following weighted-average
assumptions for 1997: risk-free interest rate of 6%, volatility factor of the
expected market price of the Company's common stock of 40.4% and a weighted-
average expected life for the options of 5 years.

The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in
the subjective input assumptions can materially affect the fair value
estimate, in management's opinion, the existing models do not necessarily
provide a reliable single measure of the fair value of its employee stock
options.

F-12
<PAGE>

COMMAND SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

For the purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The
Company's pro forma net loss would have been approximately $660,000 and pro
forma loss per common share basic and diluted would have been $0.15 for 1997.

In accordance with the provisions of SFAS No. 123, the pro forma disclosures
include only the effect of stock options granted in 1997. These pro forma
effects may not be representative of the effects of SFAS No. 123 on future
years because of the fact that options vest over several years and new grants
generally are made each year.

Changes in outstanding options were as follows:

<TABLE>
<CAPTION>
WEIGHTED AVERAGE
OPTIONS EXERCISE PRICE
------- ----------------
<S> <C> <C>
Outstanding December 31, 1996....................... -- --
Options granted:
March 1997....................................... 61,500 $4.00
December 1997.................................... 89,050 $9.00
Options exercised................................. -- --
Options cancelled................................. -- --
------- -----
Outstanding December 31, 1997....................... 150,550 $6.96
======= =====
</TABLE>

As of December 31, 1997, there were options exercisable for 45,550 shares.
Outstanding options at December 31, 1997 had exercise prices ranging from
$4.00 to $9.00.

A former employee has pledged 7,500 common stock purchase options as
collateral for a bank loan. The Company has granted the bank a put option
whereby upon default of the loan, the bank could require the Company to
repurchase the options for the outstanding balance of the loan.

7. LEASES

The Company leases office space from unrelated third parties. Total rent
expense for the years ended December 31, 1995, 1996 and 1997 was $132,839,
$251,597 and $543,700, respectively.

The Company is required to maintain security deposits for office space
rented in Bangalore, India. Such deposits amounted to $421,862 and $413,807 at
December 31, 1996 and 1997, respectively.

Future minimum lease payments under non-cancelable operating leases at
December 31, 1997 are as follows:

8. BENEFIT PLANS

The Company has established a 401(k) Retirement Savings Plan (the "401(k)
Plan"). All employees of the Company's domestic operations are eligible to
participate in the 401(k) Plan after completing six months of service and
attaining age twenty and one-half. Employees are allowed to contribute between
1% and 15% of their annual compensation up to the maximum contribution
allowable each year under IRS regulations. The Company contributed $27,000 to
the 401(k) Plan during 1997. No such contributions were made in 1995 or 1996.

F-13
<PAGE>

COMMAND SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. RELATED PARTY TRANSACTIONS

The Company had a noninterest bearing loan payable to its President. The
outstanding balance at December 31, 1996 was $73,224. The loan was payable on
demand and was subordinated to the debt described in Note 3. The loan was
repaid in October 1997.

The Company provided IT services to PHL representing revenues of
approximately $2,800,000, $1,300,000 and $2,600,000 for the years ended
December 31, 1995, 1996 and 1997, respectively.

10. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings
per share:

<TABLE>
<CAPTION>
1995 1996 1997
---------- ---------- ----------
<S> <C> <C> <C>
Numerator:
Net income (loss).................... $ 221,437 $ (423,006) $ (496,693)
Preferred stock dividends............ -- -- (80,351)
---------- ---------- ----------
Numerator for basic and diluted earn-
ings per share-income available to
common stockholders................. $ 221,437 $ (423,006) $ (577,044)
Denominator:
Weighted-average shares outstanding
for basic and diluted earnings per
share............................... 4,275,000 4,275,000 4,275,000
---------- ---------- ----------
Basic and diluted earnings (loss) per
share................................ $ 0.05 $ (0.10) $ (0.13)
========== ========== ==========
</TABLE>

Options to purchase 150,550 shares of the Company's common stock and
1,181,750 shares of the Company's common stock issuable upon the conversion of
the Series A and B convertible preferred stock were not included in the
computation of diluted earnings per share because the effect of their
inclusion would be antidilutive. For additional disclosures regarding the
outstanding Series A and B convertible preferred stock and the employee stock
options see Note 6.

F-14
<PAGE>

COMMAND SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

For purposes of computing pro forma basic and diluted earnings, the Company
has assumed that it was taxed as a C corporation for U.S. federal income tax
purposes at statutory tax rates.

11. GEOGRAPHIC DATA AND MAJOR CUSTOMERS

The Company is engaged in one segment of business, providing information
technology services to large organizations. The Company operates in two
geographic areas. Prior to 1996, the Company only operated in the United
States.

<TABLE>
<CAPTION>
1996 United States India Elimination Consolidated
-------------------------------------------------------------------

<S> <C> <C> <C> <C>
Revenue $17,069,417 $ -- -- $17,069,417
Income (loss) from operations (82,194) (514,749) -- (596,943)
Identifiable assets 3,434,094 1,382,171 -- 4,816,265
<CAPTION>
1997
-------------------------------------------------------------------

<S> <C> <C> <C> <C>
Revenue $25,057,039 $2,870,150 $(2,870,150) $25,057,039
Income (loss) from operations (99,974) 929,209 -- 829,235
Identifiable assets 12,173,801 2,251,286 -- 14,425,087
</TABLE>

For the years ended December 31, 1995 and 1996, two customers accounted for
approximately 12% and 23%, and 14% and 13%, respectively, of revenue. For the
year ended December 31, 1997, three customers accounted for approximately 13%,
13% and 10%, respectively, of revenue.

12. RISKS AND UNCERTAINTIES OF DOING BUSINESS

Many of the Company's engagements involve projects that are critical to the
operations of its customers' businesses and provide benefits that may be
difficult to quantify. Any failure in a customer's system could result in a
claim for substantial damages against the Company, regardless of the Company's
responsibility for such failure. In addition, the Company's failure to
complete a project in the contractually prescribed time period, particularly a
Year 2000 solutions services contract, may result in a claim for substantial
damages against the Company. Although the Company attempts to limit
contractually its liability for damages arising from errors, mistakes or
omissions in rendering its IT services, there can be no assurance that the
limitations of liability set forth in its services contracts will be
enforceable in all instances or would otherwise protect the Company from
liability for damages. Although the Company maintains general liability
insurance coverage, including coverage for errors or omissions in the amount
of $5.0 million, there can be no assurance that such coverage will continue to
be available on reasonable terms or will be available in sufficient amounts to
cover one or more large claims, or that the insurer will not disclaim coverage
as to any future claim. The successful assertion of one or more large claims
against the Company that exceed available insurance coverage, or changes in
the Company's insurance policies, including premium increases or the
imposition of large deductible or co-insurance requirements, could adversely
affect the Company's business, financial condition and results of operations.

F-15
<PAGE>

COMMAND SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

<TABLE>
<CAPTION>
JUNE 30,
1998
-----------
(UNAUDITED)
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents....................................... $20,716,654
Accounts receivable, net of allowance for doubtful accounts of
$78,391........................................................ 5,252,026
Prepaid expenses and other current assets....................... 602,012
Deferred income taxes........................................... 84,738
-----------
Total current assets.......................................... 26,655,430
Furniture & equipment........................................... 2,624,721
Leasehold & improvements........................................ 969,820
-----------
Total fixed assets.............................................. 3,594,541
Less accumulated depreciation................................... (1,138,514)
-----------
Net equipment and improvements.................................. 2,456,027
Other assets:
Goodwill, net of accumulated amortization expense of $228,178... 6,617,160
Security deposits............................................... 378,629
Other noncurrent assets......................................... 99,217
-----------
Total assets.................................................. $36,206,463
===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Line of credit.................................................. $ --
Bank loan....................................................... --
Accounts payable and accrued expenses........................... 2,772,180
Deferred revenue................................................ 89,350
Accrued payroll and related costs............................... 616,344
Income taxes payable............................................ --
Deferred income taxes........................................... --
-----------
Total liabilities............................................. 3,477,874
Preferred stock -- Series A..................................... --
Preferred stock -- Series B..................................... --
Stockholders' equity (deficit):
Common stock, $.01 par value, 25,000,000 authorized, 7,656,750
issued and outstanding......................................... 34,818
Additional paid-in-capital...................................... 33,425,140
Retained earnings (deficit)..................................... (417,629)
Cumulative translation adjustment............................... (313,740)
-----------
Total stockholders' equity (deficit).......................... 32,728,589
-----------
Total liabilities and stockholders' equity (deficit).......... $36,206,463
===========
</TABLE>

See notes to unaudited condensed consolidated financial statements.

F-16
<PAGE>

COMMAND SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)

<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE
30,
1997 1998
----------- -----------
<S> <C> <C>
Revenue............................................. $10,880,168 $16,630,819
Cost of revenue..................................... 7,832,623 11,059,173
----------- -----------
Gross profit........................................ 3,047,545 5,571,646
Selling, general and administrative................. 3,205,438 5,522,546
----------- -----------
Income (loss) from operations....................... (157,893) 49,100
Other income (expense):
Foreign exchange gain............................. -- 90,618
Interest income................................... 15,506 331,218
Interest expense.................................. (183,023) (40,366)
----------- -----------
(167,517) 381,470
----------- -----------
Income (loss) before income taxes and minority
interest........................................... (325,410) 430,570
Provision (benefit) for income taxes................ 830 (48,607)
Minority interest................................... (23,834) --
----------- -----------
Net income (loss)................................... $ (350,074) $ 479,177
=========== ===========
Preferred stock dividends and accretion............. -- (260,303)
----------- -----------
Income (loss) applicable to common stockholders..... $ (350,074) $ 218,874
=========== ===========
Basic earnings (loss) per share..................... $ (0.08) $ 0.03
=========== ===========
Diluted earnings (loss) per share................... $ (0.08) $ 0.03
=========== ===========
</TABLE>

See notes to unaudited condensed consolidated financial statements.

F-17
<PAGE>

COMMAND SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-----------------------
1997 1998
---------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)................................... $ (350,074) $ 479,177
Adjustments to reconcile net income (loss) to net
cash used in operating activities:
Depreciation and amortization..................... 146,259 548,005
Bad debt expense.................................. 130,000 (181,502)
Minority interest................................. 23,834 --
Accrued interest capitalized...................... 39,710 --
Deferred income taxes............................. -- (414,701)
Other............................................. 7,794 --
Changes in operating assets and liabilities:
Accounts receivable............................. (1,436,517) (867,283)
Prepaid expenses and other current assets....... 205,759 (247,062)
Security deposits and other non-current assets.. (69,704) 58,958
Accounts payable and accrued expenses........... 283,152 590,983
Accrued payroll and related costs............... 102,071 5,411
Deferred revenue................................ (80,976) (130,194)
Income taxes payable............................ 2,506 (78,535)
---------- -----------
Net cash used in operating activities......... (996,186) (236,743)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment and improvements............. (869,040) (734,810)
---------- -----------
Net cash used in investing activities......... (869,040) (734,810)
CASH FLOWS FROM FINANCING ACTIVITIES:
(Payments) borrowings under revolving line of credit
agreement.......................................... 298,645 (857,535)
(Payments of) proceeds from bank loan............... 250,000 (556,952)
Minority investment in affiliate.................... 400,135 --
Proceeds from notes payable......................... 975,794 --
Issuance of common stock............................ -- 23,235,483
Payment of preferred stock dividend................. -- (297,641)
---------- -----------
Net cash provided by financing activities..... 1,924,574 21,523,355
Effect of exchange rate changes on cash............. 9,332 (226,835)
Increase in cash.................................... 68,680 20,324,967
Cash, beginning of period........................... 443,505 391,687
---------- -----------
Cash, end of period................................. $ 512,185 $20,716,654
========== ===========
CASH PAID FOR:
Interest expense.................................... $ 183,023 $ 42,740
Income taxes........................................ $ 830 $ 409,831
</TABLE>

See notes to unaudited condensed consolidated financial statements.

F-18
<PAGE>

COMMAND SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

(UNAUDITED)

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL RETAINED CUMULATIVE
----------------- PD IN CAPIT'L EARNINGS TRANSLATION
SHARES AMOUNT AMOUNT (DEFICIT) ADJUSTMENT TOTAL
--------- ------- ------------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1997................... 4,275,000 $ 1,000 $ -- $(636,509) $(86,905) $ (722,414)
--------- ------- ----------- --------- --------- -----------
Net Income............ 479,177 -- 479,177
Issuance of common
stock................ 2,200,000 22,000 24,530,000 -- -- 24,552,000
Conversion of
preferred stock...... 1,181,750 11,818 10,211,658 -- -- 10,223,476
Cost of issuance of
common stock......... -- -- (1,316,518) -- -- (1,316,518)
Preferred stock
dividends and
accretion............ -- -- -- (260,297) -- (260,297)
Translation
adjustment........... -- -- -- -- (226,835) (226,835)
--------- ------- ----------- --------- --------- -----------
Balance at June 30, 1998
(unaudited)............ 7,656,750 $34,818 $33,425,140 $(417,629) $(313,740) $32,728,589
========= ======= =========== ========= ========= ===========
</TABLE>

See notes to unaudited condensed consolidated financial statements.

F-19
<PAGE>

COMMAND SYSTEMS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 1998

NOTE 1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the six month
period ended June 30, 1998 are not necessarily indicative of the results that
may be expected for the year ended December 31, 1998.

The Company computes its income tax provision on a quarterly basis and
provides for deferred income taxes based upon the difference between the
financial statement and tax basis of assets and liabilities. A valuation
allowance is provided when necessary to reduce the deferred tax assets to the
amount expected to be realized.

For further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's registration statement on Form S-
1.

NOTE 2. STOCKHOLDERS' EQUITY

The Company made its initial public offering on March 12, 1998, pursuant to
an effective registration statement covering 2,400,000 shares of $.01 par
value common stock plus an additional 360,000 shares for an overallotment
option granted to the underwriters. Shortly before the effective date, the
size of the offering was increased by 300,000 shares plus an additional 45,000
shares to increase the overallotment option. The additional 345,000 shares
were sold by the Company (100,000 shares) and selling stockholders (245,000
shares) at the public offering price of $12.00 per share. While the increase
in size of the offering was reflected in the final prospectus, a registration
statement pursuant to Rule 462(b) of the Securities Act of 1933 covering the
additional 345,000 shares was not filed with the Commission. The Company
intends to file a registration statement covering these shares.

As provided in the Securities Act of 1933, as amended (the "Act"), certain
persons purchasing securities sold in violation of its registration provisions
may recover the consideration paid for such securities with interest upon the
tender of such securities, less the amount of any income received, or damages
if such person no longer owns the securities. The maximum rescission liability
with respect to the 100,000 unregistered shares sold by the Company would be
$1,200,000 (100,000 shares at $12 per share) plus interest. The Company has
not recognized a liability based on the rescission of the 100,000 unregistered
shares it sold because, as noted above, the right to rescind rests only with a
purchaser in the initial public offering who still holds such shares. Given
the large trading volume in the Company's common stock subsequent to the
offering (indicating substantial turnover in share ownership) and the
inability to identify which securities were unregistered, the Company is of
the belief that it is not probable that it will be required to effect an
actual rescission, as opposed to paying rescissionary damages. As indicated
previously, shareholders who purchased unregistered shares in the offering may
recover damages if they sold such securities at a loss. Based upon the
preliminary status of the lawsuit described therein, the range of such
damages, if any, cannot reasonably be estimated. The Company and the selling
stockholders in the initial public offering have entered into an agreement
with the Company's former securities counsel which served as the Company's
counsel in the initial public offering which would hold the Company and the
selling stockholders harmless for damages which might result from any claims
as a consequence of the aforementioned circumstances. In view of such hold
harmless agreement, and in light of assurances the Company has received
concerning the professional indemnity insurance maintained by such counsel,
the Company does not believe that any claims relating to the foregoing will
have a material adverse

F-20
<PAGE>

COMMAND SYSTEMS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

JUNE 30, 1998

effect on its financial condition. In addition, plaintiffs in the purported
consolidated class action seek rescission of the sales of the shares in the
initial public offering and unspecified damages, including rescissionary
damages, interest, costs and fees. See Note 3--Legal Proceedings.

The Company sold 2,200,000 of the aforementioned shares, 2,100,000 of which
were registered, and received net proceeds of $24,552,000 after underwriters'
discounts and before other offering expenses in the amount of $1,317,000.

Simultaneously with the initial public offering, all the holders of Series A
and B convertible preferred stock exchanged their 200 shares for 1,181,750
shares of common stock. Dividends accrued during the period and previously
unamortized offering expenses have been recognized as a reduction to net
income. The Company has paid dividends of $298,000 from the proceeds.

On February 5, 1998 the Company effected a 1-for-2 reverse stock split. All
shares and per share data have been retroactively restated.

NOTE 3. LEGAL PROCEEDINGS

On or about May 6, 1998, a complaint was filed in the United States District
Court for the Southern District of New York by named plaintiffs Don M. Doney
Jr. and Madelyn J. McCabe against the Company, certain of the Company's
officers and directors (Edward G. Caputo, Stephen L. Willcox, Robert B. Dixon,
John J.C. Herndon, James M. Oates and Joseph D. Sargent) and the managing
underwriters of the Company's initial public offering (Cowen & Company and
Volpe Brown Whelan & Company, LLC) (the "Doney Litigation"). On or about June
22, 1998, an amended complaint relating to the Doney Litigation was filed in
the United States District Court for the Southern District of New York. On or
about May 8, 1998, a second complaint was filed in the United States District
Court for the Southern District of New York by named plaintiff Chaile B.
Steinberg against the same defendants. On or about June 26, 1998, a third
complaint was filed in the United States District Court for the Southern
District of New York by named plaintiff Michael Makinen against the same
defendants (the "Makinen Litigation"). Each of the plaintiffs purports to
represent a class consisting of purchasers of common stock pursuant to the
initial public offering. These actions were consolidated by order of the
United States District Court for the Southern District of New York, and a
consolidated complaint styled In Re Command Systems, Inc. Securities
Litigation was filed on September 30, 1998. The consolidated complaint alleges
that defendants violated the Act and claims the sale of unregistered shares
breached the disclosure and filing requirements of the Act. The plaintiffs
seek rescission of the sales of the shares in the initial public offering and
unspecified damages, including rescissionary damages, interest, costs and
fees. Such litigation, if concluded in favor of the plaintiffs, could have a
material adverse effect on the Company's business, financial condition and
results of operations. Based upon the status of the consolidated complaint the
Company cannot currently estimate a range of loss.

NOTE 4. EARNINGS PER SHARE

In February 1997, the FASB issued Statement No. 128, "Earnings Per Share."
This statement replaced the calculation of primary and fully diluted earnings
per share with basic and diluted earnings per share. Unlike primary earnings
per share, basic earnings per share excludes any dilutive effects of options,
warrants and convertible securities. Diluted earnings per share are very
similar to the previously reported fully diluted earnings per share. All
earnings per share amounts for all periods have been presented, and where
appropriate, restated to conform to the Statement No. 128 requirements.

F- 21
<PAGE>

COMMAND SYSTEMS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

JUNE 30, 1998

The following table sets forth the computation of basic and diluted earnings
per share:

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
----------------------
1997 1998
---------- ----------
<S> <C> <C>
Numerator for basic and diluted:
Net income (loss)..................................... $ (350,074) $ 479,177
Preferred stock dividends and accretion............... -- (260,303)
---------- ----------
Numerator for basic and diluted earnings per share
income (loss) applicable to common stockholders.... $ (350,074) $ 218,874
========== ==========
Denominator:
Denominator for basic earnings per share weighted
average shares....................................... 4,275,000 6,266,851
Effect of dilutive securities:
Employee stock options................................ -- 40,741
---------- ----------
Denominator for diluted earnings per share weighted
average shares..................................... 4,275,000 6,307,592
========== ==========
</TABLE>

NOTE 5. COMPREHENSIVE INCOME

During 1998, the Company adopted FASB Statement No. 130, Reporting
Comprehensive Income. Statement No. 130 requires the reporting of
comprehensive income in addition to net income from operations. Comprehensive
income is a more inclusive financial reporting methodology that indicates
disclosure of certain financial information that historically has not been
recognized in the calculation of net income.

The following table represents the components of comprehensive income for
the three and six months ended June 30:

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
------------------
1997 1998
(IN THOUSANDS) -------- --------
<S> <C> <C>
Net income (loss)............................................ $(350) $ 479
Other comprehensive income:
Foreign currency translation adjustments................... 9 (227)
-------- --------
Other comprehensive income................................... $(341) $ 252
======== ========
</TABLE>

Accumulated other comprehensive income equals the amount included in
retained earnings for cumulative translation adjustments which is the only
component of other comprehensive income included in the Company's financial
statements.

F-22
<PAGE>

PRO FORMA FINANCIAL DATA
(UNAUDITED)

On December 31, 1997 the Company issued 100 shares of its Series B
Convertible Preferred Stock valued at $8,000,000 to PHL in exchange for PHL's
49% interest in the Offshore Technology Resource Center. This transaction has
been treated as a purchase and the excess of cost over the fair value of the
assets acquired and liabilities assumed has been recognized as goodwill.

The pro forma statement of operations for the year ended December 31, 1997
reflects the effects of this transaction as if it had occurred at the
beginning of the year. In addition, this statement reflects adjustments to the
Company's U.S. federal income tax provision to recognize what the Company's
earnings would have been had the Company historically been taxed as a C
corporation.

The pro forma statement of operations also takes into effect the use of net
proceeds of the Company's initial public offering and the conversion of the
Series A and B Convertible Preferred Stock.

The pro forma results of operations are not necessarily indicative of
results to be expected in the future.

P-1
<PAGE>

COMMAND SYSTEMS, INC.

PRO FORMA STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
(UNAUDITED)

<TABLE>
<CAPTION>
ACTUAL ADJUSTMENT PRO FORMA
----------- ---------- -----------
<S> <C> <C> <C>
Revenue............................. $25,057,039 $25,057,039
Cost of revenue..................... 16,972,812 16,972,812
----------- -----------
Gross profit...................... 8,084,227 8,084,227
Selling, general and administrative
expenses........................... 7,254,992 $456,356(a) 7,711,348
----------- -----------
Income from operations............ 829,235 372,879
Other income (expense).............. (276,746) 132,674(b) (43,432)
100,640(d)
----------- -----------
Income before income taxes and
minority interest.................. 552,489 329,447
Income tax (provision) benefit...... (597,751) 693,000(g) 95,249
----------- -----------
(45,262) 424,696
Minority interest................... (451,431) 451,431(c) --
----------- -----------
Net income (loss)................... (496,693) 424,696
Preferred stock dividends and
accretion.......................... (80,351) 80,351(f) --
----------- -----------
Income (loss) applicable to common
stockholders....................... $ (577,044) $ 424,696
=========== ===========
Earnings per common share:
Basic earnings (loss) per share... $ (0.13) $ 0.06 (e)
=========== ===========
Diluted earnings (loss) per
share............................ $ (0.13) $ 0.06 (e)
=========== ===========
</TABLE>

Notes to Statement:
(a) To reflect the amortization of goodwill over an estimated useful life of
15 years.
(b) To reflect the elimination of interest expense related to the C, Z, and M
notes used to finance the operations of the Offshore Technology Resource
Center.
(c) To eliminate the 49% minority interest previously held by PHL.
(d) To eliminate interest on the Company's domestic line of credit assumed to
be refinanced by the proceeds of the Company's public offering of
2,200,000 shares of common stock.

(e) Earnings per share is computed using weighted average shares outstanding
of 7,656,750, which assumes the conversion of the Series A and B
Convertible Preferred Stock and the issuance of 2,200,000 shares of common
stock in connection with the assumed initial public offering.
(f) To eliminate the preferred stock dividends and accretion.
(g) To eliminate the U.S. Federal income tax provision associated with the
Company's conversion from S Corporation to C Corporation status to assume
that the Company had historically been treated as a C Corporation for tax
purposes.

P-2
<PAGE>

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

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDERS, ANY OF THE
UNDERWRITERS OR ANY OTHER PERSON. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL, OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED
HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANYONE IN ANY JURISDICTION IN
WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION TO SUCH PERSON.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UN-
DER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary....................................................... 2
Risk Factors............................................................. 6
Use of Proceeds.......................................................... 16
Dividend Policy.......................................................... 16
Price Range of Common Stock.............................................. 17
Capitalization........................................................... 18
Dilution................................................................. 19
Selected Consolidated Financial Data..................................... 20
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 22
Business................................................................. 32
Management............................................................... 45
Certain Transactions..................................................... 52
Principal and Selling Stockholders....................................... 54
Description of Capital Stock............................................. 55
Shares Eligible For Future Sale.......................................... 56
Plan of Distribution..................................................... 59
Legal Matters............................................................ 60
Experts.................................................................. 60
Additional Information................................................... 61
Index to Financial Statements............................................ F-1
</TABLE>

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

3,105,000 SHARES

LOGO

COMMON STOCK

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

PROSPECTUS

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

NOVEMBER , 1998

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the Registrant's expenses in connection with
the issuance and distribution of the securities being registered.

<TABLE>
<S> <C>
SEC Registration Fee.......................................... $ 10,991.70
NASD Filing Fee............................................... 3,812.00
Nasdaq Listing Fees........................................... 69,375.00
Legal Fees and Expenses....................................... 596,122.00
Blue Sky Fees and Expenses.................................... 5,000.00
Accounting Fees and Expenses.................................. 310,175.00
Printing and Engraving........................................ 135,599.00
Transfer Agent and Registrar Fees and Expenses................ 30,813.00
Miscellaneous................................................. 155,112.30
-------------
Total....................................................... $1,317,000.00
=============
</TABLE>

All of the above expenses will be paid by the Registrant.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Article NINTH of the Registrant's Amended and Restated Certificate of
Incorporation provides as follows:

NINTH: 1. To the fullest extent permitted by the Delaware General
Corporation Law as the same now exists or may hereafter be amended, the
Corporation shall indemnify, and advance expenses to, its directors, officers
and any person who is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, or of a
partnership, joint venture, trust or other enterprise, if such person was or
is made a party to or is threatened to be made a party to or is otherwise
involved (including, without limitation, as a witness) in any action, suit or
proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a director or officer of the Corporation
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, or of a partnership, joint venture,
trust or other enterprise, including service with respect to an employee
benefit plan; provided, however, that except with respect to proceedings to
enforce rights to indemnification or as is otherwise required by law, the By-
Laws of the Corporation may provide that the Corporation shall not be required
to indemnify, and advance expenses to, any director, officer or other person
in connection with a proceeding (or part thereof) initiated by such director,
officer or other person, unless such proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation. The Corporation, by
action of its Board of Directors, may provide indemnification or advance
expenses to employees and other agents of the Corporation or other persons
only on such terms and conditions and to the extent determined by the Board of
Directors in its sole and absolute discretion.

2. The indemnification and advancement of expenses provided by, or granted
pursuant to, this Article NINTH shall not be deemed exclusive of any other
rights to which a person seeking indemnification or advancement of expenses
may be entitled under any By-Law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office.

3. The Corporation shall have the power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the

II-1
<PAGE>

Corporation as a director, officer, employee or agent of another corporation,
or of a partnership, joint venture, trust or other enterprise, against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would have
the power to indemnify him against such liability under this Article NINTH.

4. The indemnification and advancement of expenses provided by, or granted
pursuant to, this Article NINTH shall, unless otherwise specified when
authorized or ratified, continue as to a person who has ceased to be a
director or officer and shall inure to the benefit of the heirs, executors and
administrators of such director or officer. The indemnification and rights to
advancement of expenses that may have been provided to an employee or agent of
the Corporation by action of the Board of Directors, pursuant to the last
sentence of Paragraph 1 of this Article NINTH, shall, unless otherwise
specified when authorized or ratified, continue as to a person who has ceased
to be an employee or agent of the Corporation and shall inure to the benefit
of the heirs, executors and administrators of such person, after the time such
person has ceased to be an employee or agent of the Corporation, only on such
terms and conditions and to the extent determined by the Board of Directors in
its sole discretion. No repeal or amendment of this Article NINTH shall
adversely affect any rights of any person pursuant to this Article NINTH which
existed at the time of such repeal or amendment with respect to acts or
omissions occurring prior to such repeal or amendment.

Article TENTH of the Registrant's Amended and Restated Certificate of
Incorporation provides as follows:

TENTH: No director shall be personally liable to the Corporation or its
stockholders for any monetary damages for breaches of fiduciary duty as a
director, notwithstanding any provision of law imposing such liability;
provided that this provision shall not eliminate or limit the liability of a
director, to the extent that such liability is imposed by applicable law, (i)
for any breach of the director's duty of loyalty to the Corporation or its
Stockholders; (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) under Section 174
or successor provisions of the General Corporation Law of the State of
Delaware; or (iv) for any transaction from which the director derived an
improper personal benefit. This provision shall not eliminate or limit the
liability of a director for any act or omission if such elimination or
limitation is prohibited by the General Corporation Law of the State of
Delaware. No amendment to or repeal of this provision shall apply to or have
any effect on the liability or alleged liability of any director for or with
respect to any acts or omissions of such director occurring prior to such
amendment or repeal. If the Delaware General Corporation Law is amended to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the Delaware
General Corporation Law, as so amended.

Article VIII of the Registrant's By-Laws provides as follows:

Section 1. Right to Indemnification. Each person who was or is made a party
or is threatened to be made a party to or is otherwise involved (including,
without limitation, as a witness) in any action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that
he is or was a director or an officer of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee or agent of
another corporation, or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan
(hereinafter an "Indemnitee"), whether the basis of such proceeding is alleged
action in an official capacity as a director, officer, employee or agent or in
any other capacity while serving as a director, officer, employee or agent,
shall be indemnified and held harmless by the Corporation to the fullest
extent authorized by the Delaware General Corporation Law, as the same exists
or may hereafter be amended (but, in the case of any such amendment, only to
the extent that such amendment permits the Corporation to provide broader
indemnification rights than such law permitted the Corporation to provide
prior to such amendment), against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid in settlement), reasonably incurred or suffered by such Indemnitee in
connection therewith; provided, however, that, except as provided in Section 3
of this Article with respect to proceedings to enforce rights to
indemnification or as otherwise required by law, the Corporation shall not be

II-2
<PAGE>

required to indemnify or advance expenses to any such Indemnitee in connection
with a proceeding (or part thereof) initiated by such Indemnitee unless such
proceeding (or part thereof) was authorized by the Board of Directors of the
Corporation.

Section 2. Right to Advancement of Expenses. The right to indemnification
conferred in Section 1 of this Article shall include the right to be paid by
the Corporation the expenses (including attorney's fees) incurred in defending
any such proceeding in advance of its final disposition; provided, however,
that, if the Delaware General Corporation Law requires, an advancement of
expenses incurred by an Indemnitee in his capacity as a director or officer
(and not in any other capacity in which service was or is rendered by such
Indemnitee, including, without limitation, service to an employee benefit
plan) shall be made only upon delivery to the Corporation of an undertaking,
by or on behalf of such Indemnitee, to repay all amounts so advanced if it
shall ultimately be determined by final judicial decision from which there is
no further right to appeal that such Indemnitee is not entitled to be
indemnified for such expenses under this Section 2 or otherwise. The rights to
indemnification and to the advancement of expenses conferred in Sections 1 and
2 of this Article shall be contract rights and such rights shall continue as
to an Indemnitee who has ceased to be a director, officer, employee or agent
and shall inure to the benefit of the Indemnitee's heirs, executors and
administrators. Any repeal or modification of any of the provisions of this
Article shall not adversely affect any right or protection of an Indemnitee
existing at the time of such repeal or modification.

Section 3. Right of Indemnitees to Bring Suit. If a claim under Section 1 or
2 of this Article is not paid in full by the Corporation within sixty (60)
days after a written claim has been received by the Corporation, except in the
case of a claim for an advancement of expenses, in which case the applicable
period shall be twenty (20) days, the Indemnitee may at any time thereafter
bring suit against the Corporation to recover the unpaid amount of the claim.
If successful in whole or in part in any such suit, or in a suit brought by
the Corporation to recover an advancement of expenses pursuant to the terms of
an undertaking, the Indemnitee shall also be entitled to be paid the expenses
of prosecuting or defending such suit. In (i) any suit brought by the
Indemnitee to enforce a right to indemnification hereunder (but not in a suit
brought by the Indemnitee to enforce a right to an advancement of expenses) it
shall be a defense that, and (ii) any suit brought by the Corporation to
recover an advancement of expenses pursuant to the terms of an undertaking,
the Corporation shall be entitled to recover such expenses upon a final
adjudication that, the Indemnitee has not met any applicable standard for
indemnification set forth in the Delaware General Corporation Law. Neither the
failure of the Corporation (including its Board of Directors, independent
legal counsel, or its Stockholders) to have made a determination prior to the
commencement of such suit that indemnification of the Indemnitee is proper in
the circumstances because the Indemnitee has met the applicable standard of
conduct set forth in the Delaware General Corporation Law, nor an actual
determination by the Corporation (including its Board of Directors,
independent legal counsel, or its Stockholders) that the Indemnitee has not
met such applicable standard of conduct, shall create a presumption that the
Indemnitee has not met the applicable standard of conduct or, in the case of
such a suit brought by the Indemnitee, be a defense to such suit. In any suit
brought by the Indemnitee to enforce a right to indemnification or to an
advancement of expenses hereunder, or brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the burden of
proving that the Indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this Article or otherwise shall be on the
Corporation.

Section 4. Non-Exclusivity of Rights. The rights to indemnification and to
the advancement of expenses conferred in this Article shall not be exclusive
of any other right which any person may have or hereafter acquire under any
statute, the Corporation's Certificate of Incorporation as amended from time
to time, these by-laws, any agreement, any vote of stockholders or
disinterested directors or otherwise.

Section 5. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such
expense, liability or loss under the Delaware General Corporation Law.

II-3
<PAGE>

Section 6. Indemnification of Employees and Agents of the Corporation. The
Corporation may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification and to the advancement of expenses
to any employee or agent of the Corporation to the fullest extent of the
provisions of this Article with respect to the indemnification and advancement
of expenses of directors and officers of the Corporation.

OTHER INDEMNIFICATION PROVISIONS

Section 145 of the Delaware General Corporation Law, as amended, provides
that a corporation has the power to indemnify a director, officer, employee or
agent of the corporation and certain other persons serving at the request of
the corporation in related capacities against amounts paid and expenses
incurred in connection with an action or proceeding to which he is or is
threatened to be made a party by reason of such position, if such person shall
have acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and, in any criminal
proceeding, if such person had no reasonably cause to believe his conduct was
unlawful; provided that, in the case of actions brought by or in the right of
the corporation, no indemnification shall be made with respect to any matter
as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the adjudicating court
determines that such indemnification is proper under the circumstances.

Under Section 6 of the Underwriting Agreement, the Underwriters are
obligated, under certain circumstances, to indemnify directors and officers of
the Registrant against certain liabilities, including liabilities under the
Securities Act. Reference is made to the form of Underwriting Agreement filed
as Exhibit 1.1 hereto.

The Registrant has obtained insurance which insures the officers and
directors of the Registrant against certain losses and which insures the
Registrant against certain of its obligations to indemnify such officers and
directors.

The Company and the selling stockholders in the Company's Initial Public
Offering (as defined in Item 15 below) have entered into an agreement (the
"Indemnification Agreement") with the Company's former securities counsel
which served as the Company's counsel in the Initial Public Offering, which
would hold the Company (including its officers, directors and employees)
harmless for damages which might result from any claims as a consequence of
the circumstances described under the caption "Risk Factors--Sale of
Unregistered Shares; Violation of the Act." The Indemnification Agreement is
filed as Exhibit 10.16.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

In the three years preceding the filing of the Registration Statements, the
Corporation has sold the following securities that were not registered under
the Securities Act:

In August 1997, the Company issued 100 shares of Series A Convertible
Preferred Stock (522,500 shares of Common Stock on an as-converted to Common
Stock basis) to Phoenix in exchange for notes, including the right to receive
prior interest accrued thereon, evidencing indebtedness of approximately $2.2
million.

In December 1997, the Company issued 100 shares of Series B Convertible
Preferred Stock (659,250 shares of Common Stock on an as-converted to Common
Stock basis) to PHL Global Holding, Co., a wholly-owned subsidiary of Phoenix
in exchange for the 49% minority interest in Command International Software
Pvt., an Indian unlimited liability company of which the Company owned 51% of
the outstanding equity.

Since the Company's inception through December 31, 1997, the Company has
issued options for an aggregate of 218,050 shares of Common Stock to employees
and consultants of the Company in exchange for services. No shares of Common
Stock have been issued upon exercise of such options.

The sale and issuance of the above securities were deemed to be exempt from
registration under the Securities Act in reliance on Section 4(2) of the
Securities Act, or Regulation D promulgated thereunder, or Rule 701
promulgated under Section 3(b) of the Securities Act, as transactions by an
issuer not involving a public offering or transactions pursuant to
compensatory benefit plans and contracts relating to compensation as

II-4
<PAGE>

provided under such Rule 701. The recipients of securities in each such
transaction represented their intention to acquire the securities for
investment only and not with a view to or for sale in connection with any
distribution thereof and appropriate legends were affixed to the share
certificates and instruments issued in such transactions. All recipients had
adequate access, through their relationships with the Company, to information
about the Registrant.

The Company conducted its underwritten initial public offering (the "Initial
Public Offering") pursuant to an effective registration statement covering
2,400,000 shares of Common Stock plus an additional 360,000 shares of Common
Stock subject to the underwriters' overallotment option (collectively, the
"Registered Shares"). Shortly before the effective date, the size of the
offering was increased by 300,000 shares, plus an additional 45,000 shares to
increase the overallotment option (collectively, the "Additional Shares," and
together with the Registered Shares, the "Shares"). The increase in size of
the offering was reflected in a final prospectus. However, a registration
statement pursuant to Rule 462(b) of the Securities Act covering the
Additional Shares was not filed with the Securities and Exchange Commission.
As a result, the Shares were sold pursuant to a registration statement which
registered the sale of the Registered Shares but not the sale of the
Additional Shares. As provided in the Securities Act, certain persons
purchasing securities sold in violation of the registration provisions of the
Securities Act may recover the consideration paid for such securities with
interest upon the tender of such securities, less the amount of any income
received, or damages if such person no longer owns the securities.

The Initial Public Offering was co-managed by Cowen & Company and Volpe
Brown Whelan & Company, LLC.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits

II-5
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
*10.5 Amendment No. 1, dated December 31, 1997 to Co-Sale Agreement
between Registrant, Edward G. Caputo and Phoenix Home Life Mutual
Insurance Co.
*10.6 Co-Sale Agreement dated December 31, 1997 between Registrant,
Edward G. Caputo and PHL Global Holding Co.
*10.7 Employment Contract dated January 1, 1998 between Registrant and
Edward G. Caputo.
*10.8 Loan and Security Agreement dated November 30, 1993 between
Registrant and People's Bank.
*10.9 Amendment dated December 21, 1994 to Loan and Security Agreement
between Registrant and People's Bank.
*10.10 Second Amendment dated May 28, 1996 to Loan and Security Agreement
between Registrant and People's Bank.
*10.11 Third Amendment dated June 30, 1997 to Loan and Security Agreement
between Registrant and People's Bank.
*10.12 Assumption Agreement dated December 1997 by and between Registrant
and People's Bank.
*10.13 Loan Agreement by and between Command International Software Pvt.
and Deutsche Bank.
*10.14 Employment Agreement dated January 1, 1998 between Registrant and
Stephen L. Willcox.
*10.15 Form of Lock-Up Letter.
**10.16 Indemnification Agreement, by and among Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C. and Registrant, Phoenix Home Life Mutual
Insurance Company, PHL Global Holding Co. and Edward G. Caputo.
10.17 Employment Agreement dated as of December 1, 1997 by and between
Registrant and Glenn M. King.
10.18 Loan and Security Agreement dated October 29, 1998 by and between
Registrant and People's Bank.
*21.1 Subsidiaries of the Company.
23.1 Consent of Ernst & Young LLP, independent auditors.
*23.2 Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (see
Exhibit 5.1).
23.3 Consent of Fulbright & Jaworski L.L.P. (see Exhibit 5.2)
24.1 Power of Attorney (see page II-10).
*27.1 Financial Data Schedule.
</TABLE>
- --------

* Incorporated by reference from Registration Statement on Form S-1,
Registration No. 333-43877

** Incorporated by reference from the Registrant's Form 10-Q/A for the three
months ended March 31, 1998

(b) Financial Statement Schedules

Report of Independent Auditors.

Schedule II--Valuation and Qualifying Accounts.

All financial statement schedules other than as provided are omitted because
the information is not required, or is otherwise included in the Consolidated
Financial Statements or the Notes thereto.

II-6
<PAGE>

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholders

Command Systems, Inc.

We have audited the consolidated financial statements of Command Systems,
Inc. as of December 31, 1996 and 1997, and for each of the three years in the
period ended December 31, 1997, and have issued our report thereon dated
February 9, 1998 (included elsewhere in this Registration Statement). Our
audit also included the financial statement schedule listed in Item 16(b) of
this Registration Statement. This schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits.

In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.

/s/ Ernst & Young LLP

Hartford, Connecticut

February 9, 1998

II-7
<PAGE>

SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS

COMMAND SYSTEMS, INC.

YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- ---------- -------------------- ---------- ----------
ADDITIONS
--------------------
CHARGED
BALANCE AT CHARGED TO TO OTHER BALANCE AT
BEGINNING COSTS AND ACCOUNTS- END OF
DESCRIPTION OF PERIOD EXPENSES DESCRIBE DEDUCTIONS PERIOD
----------- ---------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Year ended December 31,
1997....................
Deducted from asset ac-
counts:
Allowance for doubtful
accounts receivable... $24,500 $357,582 $-- $(122,189) $259,893
Year ended December 31,
1996....................
Deducted from asset ac-
counts:
Allowance for doubtful
accounts receivable... $ -- $ 24,500 $-- $ -- $ 24,500
Year ended December 31,
1995....................
Deducted from asset ac-
counts:
Allowance of doubtful
accounts receivable... $ -- $ -- $-- $ -- $ --
</TABLE>

II-8
<PAGE>

ITEM 17. UNDERTAKINGS

(a) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under "Item 14--
Indemnification of Directors and Officers" above, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.

(b) The undersigned Registrant hereby undertakes that:

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

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

(c) The undersigned Registrant hereby undertakes to provide to the
underwriter at the closing specified in the underwriting agreements,
certificates in such denominations and registered in such names as required by
the underwriter to permit prompt delivery to each purchaser.

II-9
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT AND POST-EFFECTIVE AMENDMENT TO
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF HARTFORD, STATE OF CONNECTICUT, ON
NOVEMBER 4, 1998.

Command Systems, Inc.

/s/ Edward G. Caputo
By: _________________________________
EDWARD G. CAPUTO
PRESIDENT AND CHIEF EXECUTIVE
OFFICER

POWER OF ATTORNEY AND SIGNATURES

We the undersigned officers and directors of Command Systems, Inc., hereby
severally constitute and appoint Edward G. Caputo and Stephen L. Willcox, and
each of them singly (with full power to each of them to act alone), our true
and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution in each of them for him and in his name, place and stead, and
in any and all capacities, to sign any and all amendments (including post-
effective amendments) to this Registration Statement and Post-Effective
Amendment to Registration Statement, and to file the same, with all exhibits
thereto and 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 do and perform each and every act and
thing requisite or necessary to be done in and about the premises, as full to
all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them or
their or his substitute or substitutes may lawfully do or cause to be done by
virtue hereof.

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT AND POST-EFFECTIVE AMENDMENT TO REGISTRATION STATEMENT
HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES
INDICATED.

SIGNATURE TITLE DATE

/s/ Edward G. Caputo President, Chief November 4,
- ------------------------------------- Executive Officer and 1998
EDWARD G. CAPUTO Chairman of the Board
(Principal executive
officer)

Executive Vice
/s/ Stephen L. Willcox President, Chief November 4,
- ------------------------------------- Operating Officer, 1998
STEPHEN L. WILLCOX Secretary and
Director (Principal
financial officer)

/s/ Robert B. Dixon Vice President of November 4,
- ------------------------------------- Finance and Treasurer 1998
ROBERT B. DIXON (Principal accounting
officer)

Director
/s/ John J.C. Herndon November 4,
- ------------------------------------- 1998
JOHN J.C. HERNDON

Director
/s/ James M. Oates November 4,
- ------------------------------------- 1998
JAMES M. OATES

Director
/s/ Joseph D. Sargent November 4,
- ------------------------------------- 1998
JOSEPH D. SARGENT

II-10
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
*1.1 Form of Underwriting Agreement.
*3.1 Amended and Restated Certificate of Incorporation of the Registrant.
*3.2 Certificate of Amendment to Registrant's Amended and Restated
Certificate of Incorporation filed on February 5, 1998.
*3.3 By-Laws of the Registrant.
*4.1 Specimen Certificate for shares of the Company's Common Stock.
*5.1 Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. with
respect to the legality of certain securities being registered.
5.2 Opinion of Fulbright & Jaworski L.L.P. with respect to the legality
of certain securities being registered.
*10.1 1997 Employee, Director and Consultant Stock Plan.
*10.2 Registration Rights Agreement dated August 26, 1997 between
Registrant and Phoenix Home Life Mutual Insurance Company.
*10.3 Registration Rights Agreement dated December 31, 1997 between
Registrant and PHL Global Holding Co.
*10.4 Co-Sale Agreement dated August 26, 1997 between Registrant, Edward G.
Caputo and Phoenix Home Life Mutual Insurance Company.
*10.5 Amendment No. 1, dated December 31, 1997 to Co-Sale Agreement between
Registrant, Edward G. Caputo and Phoenix Home Life Mutual Insurance
Co.
*10.6 Co-Sale Agreement dated December 31, 1997 between Registrant, Edward
G. Caputo and PHL Global Holding Co.
*10.7 Employment Contract dated January 1, 1998 between Registrant and
Edward G. Caputo.
*10.8 Loan and Security Agreement dated November 30, 1993 between
Registrant and People's Bank.
*10.9 Amendment dated December 21, 1994 to Loan and Security Agreement
between Registrant and People's Bank.
*10.10 Second Amendment dated May 28, 1996 to Loan and Security Agreement
between Registrant and People's Bank.
*10.11 Third Amendment dated June 30, 1997 to Loan and Security Agreement
between Registrant and People's Bank.
*10.12 Assumption Agreement dated December 1997 by and between Registrant
and People's Bank.
*10.13 Loan Agreement by and between Command International Software Pvt. and
Deutsche Bank.
*10.14 Employment Agreement dated January 1, 1998 between Registrant and
Stephen L. Willcox.
*10.15 Form of Lock-Up Letter.
**10.16 Indemnification Agreement, by and among Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C. and Registrant, Phoenix Home Life Mutual
Insurance Company, PHL Global Holding Co. and Edward F. Caputo.
10.17 Employment Agreement, dated as of December 1, 1997 by and between
Registrant and Glenn M. King.
10.18 Loan/and Security Agreement dated October 29, 1998 by and between
Registrant and People's Bank.
*21.1 Subsidiaries of the Company.
23.1 Consent of Ernst & Young LLP, independent auditors.
*23.2 Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (see
Exhibit 5.1).
23.3 Consent of Fulbright & Jaworski, L.L.P. (see Exhibit 5.2).
24.1 Power of Attorney (see page II-10).
*27.1 Financial Data Schedule.
</TABLE>
- --------

* Incorporated by reference from Registration Statement on Form S-1,
Registration No. 333-43877

** Incorporated by reference from the Registrant's Form 10-Q/A for the three
months ended March 31, 1998

<PAGE>

EXHIBIT 5.2

[LETTERHEAD OF FULBRIGHT & JAWORSKI L.L.P]

November 3, 1998

Command Systems, Inc.
76 Batterson Park Road
Farmington, CT 06032

Dear Sirs:

In connection with the Registration Statement on Form S-1 (File No.
_________ ) (the "Registration Statement") filed by Command Systems, Inc., a
Delaware corporation (the "Company"), under the Securities Act of 1933, as
amended (the "Act"), registering 345,000 shares of the Company's Common Stock,
$.01 par value per share (the "Shares"), which were sold pursuant to the
Company's initial public offering in March 1998, we, as counsel for the Company,
have examined such corporate records, other documents and questions of law as we
have considered necessary or appropriate for the purposes of this opinion. Our
opinion set forth below is limited to the General Corporation Law of the State
of Delaware.

In our examination of the foregoing documents, we have assumed the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents submitted
to us as certified or photostatic copies, and the authenticity of the originals
of such latter documents.

Based on the foregoing, we advise you that in our opinion the Shares have
been duly and validly authorized and were legally issued, fully paid and non-
assessable.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the reference to this firm under the caption "Legal
Matters" in the Prospectus contained therein. This consent is not to be
construed as an admission that we are a party whose consent is required to be
filed with the Registration Statement under the provisions of the Act or the
rules and regulations of the Securities and Exchange Commission promulgated
thereunder.

The opinion expressed herein is solely for your benefit, and may be
relied upon only by you.

Very truly yours,

/s/ Fulbright & Jaworski L.L.P.

<PAGE>

EXHIBIT 10.17

EMPLOYMENT AGREEMENT
--------------------

Employment Agreement dated as of December 1, 1997 by and between GLENN M.
KING, residing at 135 Countryside Drive, Rocky Hill, CT 06067 ("Employee"), and
Command Systems Incorporated, a Delaware corporation with its principal office
at Pond View Corporate Center, 76 Batterson Park Road, Farmington, CT 06032
("Employer").

WITNESSETH:

WHEREAS, Employee has been employed by Employer; and

WHEREAS, Employee is desirous of continuing his employment with Employer;
and,

WHEREAS, Employer is desirous of having Employee remain with Employer; and

WHEREAS, Employer and Employee are desirous of setting out the terms and
conditions of said employment.

NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein set forth, the parties hereto agree as follows:

1. PRIOR AGREEMENTS. Employer and Employee agree that this Employment
Agreement will supersede any prior Employment Agreement.

2. EMPLOYMENT. Employer hereby employs Employee for the services and
duties described in this Agreement and Employee hereby accepts the employment
upon the terms and conditions hereinafter set forth.

3. DUTIES. Employee shall perform his duties and functions under this
Agreement in a manner satisfactory to the Employer. Employee's duties hereunder
shall include, but not be limited to, performing duties on behalf of the parent
corporation (if any) of Employer and Employer's affiliates and subsidiaries.
Employee's primary function shall be that of a Vice President of Recruiting as
defined by Employer, which work shall include but not be limited to:

Manage Recruiting Functions for All Branch Locations;
Achieve Profit Goals to Ensure Continued Growth and Profitability;
Manage Recruiters;
Provide Forecasting for Staffing, Profit and Revenue; and,
Participate as Member of the Senior Management Team.

Employee shall devote his entire time, attention and energies to the performance
of his duties for Employer pursuant to this Employment Agreement and shall not
during the term of this Employment Agreement be engaged in any other business
activity, whether or not such business activity is pursued for gain, profit or
other pecuniary advantage, provided that the foregoing shall not prohibit
investment activities by Employee for his own benefit and account provided such

1
<PAGE>

investment activities by Employee shall not require any services on Employee's
part in any operations and shall not interfere with the duties to be performed
by Employee hereunder for Employer. Employee shall not engage in any activities
whatsoever which conflict with the objectives of Employer's business or its
affiliates and subsidiaries or any company Employer shall merge with.

4. TERM. This Employment Agreement shall not constitute an agreement by
the Employer to employ Employee for any specific period of time. Employee does
hereby agree that Employee shall be at all times an Employee at will and the
employment relationship may be terminated at any time by either Employee or
Employer. This Employment Agreement may also be terminated by either party for
cause at any time upon written notice. "Cause" shall be defined to mean (1) the
Employee's continued willful failure to substantially perform his duties with
the Company after a written demand for substantial performance is delivered to
him by the President or the Board, which demand specifically identifies the
manner in which the President or the Board believes that he has failed to
substantially perform his duties, (2) the Employee's conviction of a felony, (3)
the Employee's willful misconduct that is materially and demonstrably injurious
to the Company, or (4) the Employee's violation of Sections 14 and 15 hereof;
provided, however, that the Employee shall not be terminated for "Cause" unless
and until the President or the Board has given the Employee reasonable notice of
its intended actions and the alleged events or activities giving rise thereto
and with respect to those events or activities for which a cure is possible, a
reasonable opportunity to cure such breach, and there shall have been delivered
to him a written notice from the President or a copy of a resolution duly
adopted by the Board regarding such actions.

5. NOTICE OF TERMINATION. Any purported termination of the Employee's
employment by the Company or by him shall be communicated by a written notice
("Notice of Termination") that shall indicate the specific termination provision
in this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Employee's
employment under the provision so indicated.

6. DATE OF TERMINATION. "Date of Termination" shall mean if the
Employee's employment is terminated by the Company, the date specified in the
Notice of Termination.

7. SEVERANCE. In the event Employer shall terminate Employee's employment
without cause, then and in that event, Employee shall be entitled to receive six
month's salary less appropriate deductions for federal, state and city income
taxes, if any, FICA contributions and any other deductions required by law.

8. COMPENSATION. Employer shall pay to Employee, in consideration of the
services to be rendered hereunder, compensation in the form of an annual salary
to equal the rate of One Hundred Twenty Thousand Dollars and Zero Cents
($120,000.00) (less appropriate deductions for federal, state and city income
taxes, if any, FICA contributions and any other deductions required by law). In
the event of termination for any reason whatsoever, Employee forfeits all
commissions and/or bonuses as of the last day of payroll.

Employee acknowledges that the annual salary and the other terms that are
set out in this Employment Agreement is the consideration for Employee executing
the Non-Competition Agreement and Confidential Information

2
<PAGE>

Agreement, both set out as Articles 14 and 15 respectively.

9. VACATIONS. As set out in Employer's Employee Manual, a copy of which
Employee has received.

10. ILLNESS OR INCAPACITY. As set out in Employer's Employee Manual, a
copy of which Employee has received.

11. FRINGE BENEFITS. As set out in Employer's Employee Manual, a copy of
which Employee has received.

12. EXPENSES. Employer shall reimburse the Employee for all reasonable
travel other than by automobile, entertainment and other business expenses
incurred or paid by the Employee in performing his duties under this Agreement,
upon presentation by the Employee of expense statements or vouchers and such
other supporting information as Employer may from time to time request, provided
Employer shall have previously approved such expenditures. Employer agrees
Employee shall receive a car allowance as additional compensation in an amount
equal to Five Hundred Dollars and Zero Cents ($500.00) per month until same is
changed by the Company or Employee is no longer employed by Employer for
whatever the reason.

13. Employee shall also be reimbursed for expenses associated with
membership to Indian Hill Country Club, Newington, CT for client golf outings.
Expenses must be documented according to current Expense Policy Reimbursement.

14. NON-COMPETITION. To induce Employer to enter into this Employment
Agreement, Employee covenants and agrees as follows:

A. For so long as Employee shall be employed by Employer pursuant to
this Employment Agreement or otherwise, and for a period of one (1) year after
the date on which Employee is no longer employed by Employer, Employee shall
not:

(i) solicit any Customers for the purchase of any services and/or
products which may be furnished or offered by the Employer or any
parent, subsidiary or affiliate of the Employer unless Employee is
involved in the Employer's "Right-to-Hire" program in which case
Employer's Customer has a "Right-to-Hire" and Employee has a right to
become an employee of the Employer's Customer under the terms and
conditions of the "Right-to-Hire" program;

(ii) employ or engage as an independent contractor, or enter into a
business relationship with any person who at such time is an officer
or employee of the Employer, or who then is a partner, principal or
employee of the Employer, or any parent, subsidiary or affiliate of
the Employer at any time during the term of this Agreement (any such
person herein referred to as a "Targeted Employee") or offer any
Targeted Employee such employment, engagement or relationship or,
during the term of this Agreement, advise, urge or counsel any other
person or legal entity to employ, engage as an independent contractor,
or enter into a business relationship with, any Targeted Employee;

(iii) compete with Employer within the State of Connecticut directly
or indirectly, whether as an officer, director, shareholder, partner,
independent contractor, agent or employee of any person or entity
which is engaged in a business similar to that of the Employer and
which relationship was created as a result of and/or during employment
with Employer; and,

(iv) enter into a business relationship of any nature with any
supplier of any products sold by the Employer or any parent,
subsidiary or affiliate of the Employer on or before the Effective
Date first written above, for the sale or distribution of any such
products or services sold or offered by the

3
<PAGE>

Employer, directly or indirectly, to any Customer.

B. Employee acknowledges (i) that his position with Employer will require
the performance of services which are special, unique, extraordinary and
intellectual in character and place him in a position of confidence and trust
with the Employer's Customers and Employer's employees and its affiliates, (ii)
that the goodwill of Employer will be generated among Employer's Customers,
potential customers and Employer's employees by Employee during the course of
services performed by him for Employer, (iii) that the covenants set forth above
are necessary in order to protect and maintain the goodwill to be generated by
Employee on behalf of Employer, and (iv) that Employer would not have entered
into this Employment Agreement nor given the Employee the renumeration set out
in Article 8 of this Agreement as consideration for Articles 15 and 16, unless
Employee agreed to the stated covenants.

C. Employee acknowledges that the covenants set forth herein are
reasonable as to time and scope and that the enforcement of the covenants set
forth above will not prevent him from earning a livelihood.

15. CONFIDENTIAL INFORMATION. To induce Employer to enter into this
Employment Agreement, Employee covenants and agrees to be bound by this Article.
Employee agrees that a breach of such Confidential Information shall constitute
a breach of this Employment Agreement.

Employee is being employed by the Employer and will be receiving wages or
salary, benefits and other compensation in connection therewith. In
consideration thereof and in recognition of the specialized, unique and highly
confidential aspects of the Employer's business to which Employee may be exposed
or in which Employee may participate during the course of his employment,
Employee is willing to undertake the obligations to be undertaken on his part as
hereinafter more fully set forth. The Employer is likewise willing to undertake
the obligations to be undertaken on its part as hereinafter more fully set
forth.

A. For all purposes of this Agreement, the following terms shall have the
meanings respectively set forth for them as follows:

(i) "Propriety Information" shall mean any and all sales data,
internal procedures, future strategies, plans, automation strategies,
organization, inventions, research, designs, products, processes,
formulae, know-how, customer lists, trade secrets and/or other non-
public information or data related, directly or indirectly, to the
business of the Employer or to the business of Employer's customers as
the same is carried on from time to time;

(ii) "Proprietary Rights" shall mean all computer systems, programs,
software and devices, including information in regards to the design,
methodology, techniques, and documentation thereof, all patents,
copyrights, rights of creators and/or similar rights and privileges,
whether domestic or foreign, statutory or at common law, filed or not
filed, perfected or unperfected, or otherwise, relating to any
Proprietary Information;

(iii) "Proprietary Proceeds" shall mean all proceeds and products of
any Proprietary Information and/or Proprietary Rights; and

(iv) "Proprietary Assets" shall mean Proprietary Information and/or
Proprietary Rights and/or Proprietary Proceeds, considered
collectively or separately.

B. Employee acknowledges that any and all Proprietary Assets wholly or
partially created, completed and/or developed by Employee, acting alone or
jointly with others at any time during Employee's employment with the Employer
or within a period of one year (1) following the termination of Employee's
employment with the Employer, shall be deemed to be and to have been at all
times, the sole and exclusive property of the Employer.

4
<PAGE>

C. Employee specifically agrees, confirms and acknowledges that (i) any
and all Proprietary Assets, however, whenever and from whomever acquired by the
Employer, are and shall at all times remain the sole and exclusive property of
the Employer, (ii) Employee shall not use, possess, disclose, transfer and/or
otherwise deal with any such Proprietary Assets at any time during his
employment other than specifically within the scope of his employment and in
furtherance of the business and affairs of the Employer and (iii) Employee shall
not use, possess, disclose, transfer and/or otherwise deal with any Proprietary
Assets at any time after the termination of his employment under any
circumstances whatsoever, provided that following termination of Employee's
employment, these restrictions shall not apply to such Proprietary Assets which
are then in the public domain (provided the Employee was not responsible,
directly or indirectly, for such Proprietary Assets entering the public domain)
without the written consent of the Employer.

D. Employee agrees that he shall not, throughout the term and/or within
the scope of his employment, use, possess, disclose, transfer and/or otherwise
deal with any information, rights, proceeds or other assets which are in the
nature of Proprietary Assets relating to the business or affairs of the Employer
for any purpose other than the business of the Employer.

E. Employee agrees that he, throughout the term of his employment with
the Employer and at any and all times following the termination thereof, execute
and deliver all such further instruments and documents, and do and perform all
such further acts and things, as may be necessary or helpful and/or as may be
reasonably requested by the Employer in furtherance of the purposes and intent
of this Agreement. By way of illustration and not by way of limitation of the
foregoing, Employee specifically agrees that he shall:

(i) immediately communicate and thoroughly describe to the Employer in
writing any and all such Proprietary Information;

(ii) promptly execute and deliver all such instruments or agreements
of assignment and/or transfer as the Employer may from time to time
request to carry out the purposes and intent of this Agreement.

(iii) assist the Employer, at such times and in such manner as the
Employer may request in connection with the Employer's efforts to
secure, apply for, renew or otherwise perfect Proprietary Rights with
respect to any and all Proprietary Assets; and

(iv) upon the termination of Employee's employment, immediately
deliver to the Employer any and all written, recorded or other
physical evidence of any and all Proprietary Assets in his possession
or under his control;

F. All Proprietary Information which is newly developed for, presented
to, or otherwise brought to the attention of the Company during Employee's
employment shall be the Proprietary Information of the Company. Any
compensation to be paid for the development or acquisition of such Proprietary
Information shall be at the sole discretion of the Company.

G. Employee represents and covenants that he is not presently and will
not hereafter become a party to any contract or agreement which contravenes any
of the terms, provisions, purposes or intent of this Agreement.

The parties hereto stipulate as their express mutual intention, in the
event that any provision of this Agreement shall be held by a court of competent
jurisdiction to be invalid and/or enforceable, that (a) such court reform the
offensive provision consistent with the balance of this Agreement but to the
least extent possible such that the offensive provision shall thereafter be
valid and enforceable, and (b) the balance of this Agreement be unaffected
thereby and continue in full force and effect.

5
<PAGE>

16. COSTS AND EXPENSES. In the event Employer shall incur or sustain any
costs or expenses including attorney's fees, in connection with or arising out
of any breach, threatened breach or otherwise to obtain the full and prompt
performance of this Employment Agreement by Employee, Employee shall pay such
costs or expenses on Employer's demand.

17. AMENDMENT AND MODIFICATION. This Employment Agreement contains the
entire agreement between the parties with respect to the subject matter hereof.
Subject to applicable law, this Employment Agreement may be amended, modified
and supplemented by written agreement of Employer and Employee with respect to
any of the terms contained herein.

18. WAIVER OF COMPLIANCE. Any failure of either party to comply with any
obligation, covenant, agreement or condition on its part contained herein may be
expressly waived in writing by the other party, but such waiver or failure to
insist upon strict compliance shall not operate as a waiver of any subsequent or
other failure. Whenever this Employment Agreement requires or permits consent
by or on behalf of any party, such consent shall be given in writing.

19. NOTICES. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if delivered by hand or mailed, certified or registered mail
with postage prepaid, return receipt requested, courier service, express mail,
and properly addressed to the other party at the addresses hereinafter set
forth:

(a) if to Employer: Pond View Corporate Center
76 Batterson Park Road
Farmington, CT 06032

with a copy to: Kleinman & Associates, P.C.
22 Masonic Street
New London, CT 06320
Attn: Stewart F. Kleinman, Esquire

(b) if to Employee: 135 Countryside Drive
Rocky Hill, CT 06067

20. ASSIGNMENT. This Employment Agreement shall inure to the benefit of
Employee and Employer and be binding upon the successors and general assigns of
Employer and the heirs, executors and administrators of Employee. Except as
provided herein, this Employment Agreement shall not be assignable except by
Employer to an affiliate, subsidiary or company Employer is merged with. Any
assignment or delegation made by Employee shall be void ab initio.

21. If any of the provisions of this Agreement, or any part thereof, is
hereinafter construed to be invalid or unenforceable, the same shall not affect
the remainder of such provision or provisions, which shall be given in full
effect, without regard to the invalid portions. If any of the provisions of
this Agreement, or any part thereof, is held to be unenforceable because of the
duration of such provision or the type of conduct prohibited therein, the
parties agree that the court making such determination shall have the power to
modify the duration or other terms of such provision and, as so modified, said
provision shall then be enforceable. In the event that the courts of any one or
more jurisdictions shall hold such provisions wholly or partially unenforceable
by reason of the scope thereof or otherwise, it is the intention of the parties
hereto that such determination not bar or in any way affect the Company's right
to the relief provided for herein in the courts of any other jurisdictions as to
breaches or threatened breaches of such provisions in such other jurisdictions,
the above provisions as they relate to each jurisdiction being, for this
purpose, severable into diverse and independent covenants.

6
<PAGE>

22. Employee does hereby consent to the jurisdiction of the courts of the
State of Connecticut for any action arising out of or in connection with this
Agreement, and Employee does hereby agree that the Superior Court of the
Judicial District of Hartford/New Britain at Hartford shall be a proper venue
for any such action.

23. CONSTRUCTION. This Agreement shall be deemed as regards each
reference contained herein to "he", "him" or "his", to refer to "she", "her" or
"hers", as the context may require, and as regards each reference to the
singular to include the plural and vice versa, as the context may require.

24. SURVIVAL. Employee acknowledges and agrees that his/her undertakings
and agreements in this Agreement shall survive the termination of his/her
employment and shall continue and be binding upon his/her following such
termination.

25. ADDITIONAL PROVISIONS. (a) Employee acknowledges that the remedy at
law for any breach or threatened breach of the provision of this Agreement by
Employee will be inadequate, and that, accordingly, the Employer shall, in
addition to all other available remedies be entitled to injunctive relief,
without being required to post bond or other security and without having to
prove the inadequacy of the available remedies at law or in equity. Employee
agrees not to plead or defend on any grounds of adequate remedy at law or any
similar defense in any action by the Company against Employee for injunctive
relief or for specific performance of any Employee's obligations hereunder.
Nothing herein shall be construed prohibiting Company from pursuing any other
remedies for any breach or threatened breach hereof by Employee.

(b) In the event that any action, suit or other proceeding in law or in
equity is brought to enforce the provisions of this Agreement or to obtain money
damages for the breach thereof, and such action results in the award of a
judgment for money damages or in the granting of any other relief in favor of
the Employer, all expenses (including reasonable attorney's fees) of the Company
in such action, suit or other proceeding shall (on the demand of the Employer)
be paid by Employee. In the event the Employee is successful in defending said
action, then Employee shall be entitled to be reimbursed for all expenses
(including reasonable attorney's fees) in defending said action, suit or other
proceeding.

(c) Employee acknowledges that Employer or Employee on behalf of the
Employer, will commit Employee to various Customer assignments from time to time
and that these assignments require the Employee to complete certain projects
within certain time parameters. In the event of termination, for any reason
whatsoever, Employee agrees to use his best efforts to complete the assignment
or provide a reasonable transition period that will not jeopardize the
completion of the Customer's project.

IN WITNESS WHEREOF, the parties have executed this Employment Agreement as
of the day and the year first written above.

COMMAND SYSTEMS INCORPORATED

/s/ Debra Leavitt 7/02/98
______________________________ _________
Date

/s/ Glenn M. King 7/02/98
______________________________ _________
Glenn M. King Date

<PAGE>

Exhibit 10.18

LOAN AND SECURITY AGREEMENT

THIS AGREEMENT made this 29th day of October, 1998, by and between COMMAND
SYSTEMS, INC. with a principal place of business at 76 Batterson Park Road,
Farmington, Connecticut 06032 ("Debtor"), and PEOPLE'S BANK, a Connecticut
banking corporation with an address of One Financial Plaza, Hartford,
Connecticut 06103 ("Secured Party").

WITNESSETH:

WHEREAS, Debtor has requested Secured Party make available to it loans from
time to time (collectively, "Loans" and individually, the "Loan" ) pursuant to
the provisions of Paragraph 4 herein, and Secured Party is willing to make the
Loans to Debtor on the terms and conditions and in reliance upon the
representations and warranties of Debtor hereinafter set forth:

NOW, THEREFORE, in consideration of the foregoing and in further
consideration of the mutual covenants herein contained, the parties hereto agree
as follows:

1. SECURITY INTEREST. Debtor hereby assigns and grants to Secured Party
-----------------
a security interest in all Debtor's tangible and intangible personal properties
(excluding Motor Vehicles) whether now owned or hereafter acquired by it,
including, without limitation, Equipment, Accounts, Inventory, Chattel Paper,
General Intangibles and Instruments, together with the products and proceeds
thereof (sometimes collectively called the "Collateral") to secure payment to
Secured Party of the Obligations.

2. DEFINITIONS. As used herein the following terms shall have the
-----------
following meanings:

(a) "Accounts" shall mean any right to payment held by Debtor, whether
in the form of accounts receivable, notes, drafts, acceptances or other forms of
obligations and receivables now or hereafter received by or belonging to Debtor
for Inventory sold or leased by it or for services rendered by it whether or not
earned by performance, together with all guarantees and security, therefor and
all proceeds thereof, whether cash proceeds or otherwise, including, but not
limited to, all right, title and interest of Debtor in the Inventory which gave
rise to any such Accounts, including, but not limited to, the right of stoppage
in transit and all returned, rejected, rerouted or repossessed Inventory;

(b) "Affiliate" shall mean any Person, directly or indirectly,
controlling, controlled by, or under common control with Debtor. A Person shall
be conclusively deemed to be in control of or to be controlled by another Person
if it holds thirty percent (30%) or more of the outstanding equity interest in
such other person or such other person holds thirty percent (30%) or more of its
outstanding equity interest. As used herein the term "equity interest" in the
case of a corporation shall mean the outstanding
<PAGE>

shares of such corporation having voting power to elect a majority of its Board
of Directors, whether or not at the time the holders of any other class or
classes of securities of such corporation shall or might have such voting power
by reason of the happening of any contingency;

(d) "Chattel Paper" shall mean a writing or writings which evidence
both a monetary obligation and a security interest in or a lease of specific
goods, whether now or hereafter held by Debtor;

(e) "Equipment" shall mean all the machinery, equipment, furniture,
tools, goods and other tangible personal property, excluding Motor Vehicles and
Inventory, now owned or hereafter acquired by Debtor;

(f) "Event of Default" shall mean the existence of a state of facts
which constitute a default under the provisions of Paragraph 11 of this
Agreement or which after the passage of time, the giving of notice, or both,
would constitute such a default under said Paragraph 11;

(g) "General Intangibles" shall mean any intangible personal property
(including, but not limited to, things in action) now or hereafter held by
Debtor, other than Accounts, Chattel Paper and Instruments;

(h) "Instruments" shall mean a negotiable instrument or a security, as
defined in the Uniform Commercial Code of Connecticut, or any other writing
which evidences a right to the payment of money and is not itself a security
agreement or lease and is of a type which, in the ordinary course of business,
is transferred by delivery with any necessary endorsement or assignment, whether
now or hereafter held by Debtor;

(i) "Interest Period" shall mean the thirty, sixty or ninety day time
period provided for in any LIBOR Rate Loan advance pursuant to Paragraph 4(d)
herein;

(j) "Inventory" shall mean all goods, merchandise, raw materials, work
in process, finished goods and products and other tangible personal property now
owned or hereafter acquired by Debtor and held for sale or lease or furnished or
to be furnished under contracts of service or used or consumed in Debtor's
business;

(k) "LIBOR" = LIBOR Base Rate
-------------------------
1 - Reserve Percentage

- 2 -
<PAGE>

"LIBOR Base Rate" shall mean the rate quoted by Secured Party two (2)
Business Days prior to the first day of such Interest Period for the offering by
Secured Party to prime commercial banks in the London Interbank Eurodollar
market of Dollar deposits in immediately available funds for a period equal to
such Interest Period and in an amount equal to the amount of such Eurodollar
Loan;

"Reserved Percentage" shall mean the maximum marginal percentage as
prescribed by the Board of Governors of the Federal Reserve system (or any
successor) for determining the reserve requirement for Secured Party in respect
of Eurodollar deposits having a maturity equal to the Interest Period as the
Debtor may elect pursuant to Paragraph 4(d) herein;

(l) "LIBOR Rate" shall mean LIBOR plus 175 basis points;

(m) "Loan" or "Loans" shall mean all loans from time to time
outstanding;

(n) "Motor Vehicles" shall have the same meaning as that contained in
Section 14-1(30) of the General Statutes of Connecticut, as revised to 1998;

(o) "Obligations" shall mean the Loan or Loans and any and all other
advances made hereunder, together with interest thereon, and any and all other
liabilities and obligations of whatever nature of Debtor to Secured Party, no
matter how or when arising and whether under this Agreement, the agreements,
instruments and documents required to be executed and delivered by Debtor to
Secured Party pursuant to the terms hereof and executed by Debtor, or under
any other agreements, guarantees, instruments or documents, past, present or
future, and the amount due on any notes, or other obligations of Debtor given
to. received by or held by Secured Party (including, but not limited to,
overdrafts or any debt, liability, or obligation of Debtor to others which
Secured Party may obtain by assignment or otherwise) for or on account of any of
the foregoing, whether, in each case, direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising;

(p) "Person" shall mean a natural person, a corporation, a
partnership, or any other entity;

(q) "Prime Rate" shall mean the interest rate announced by Secured
Party from time to time as its average prime rate for commercial loans. The
Prime Rate is not in all cases the best or lowest interest rate offered by
Secured Party.

- 3 -
<PAGE>

(r) "Subsidiary" shall mean a corporation (with respect to another
corporation) of which more than thirty percent (30%) of the outstanding stock
having voting power to elect a majority, of its Board of Directors (whether or
not at the time the holders of any other class or classes of securities of such
corporation shall or might have such voting power by reason of the happening of
any contingency) is at any time directly or indirectly owned by another
corporation or an Affiliate of any such other corporation.

3. REPRESENTATIONS AND WARRANTIES. Debtor represents and warrants to
--------------------------------
Secured Party that:

(a) The financial statements of Debtor, as of June 30, 1998,
previously furnished to Secured Party, are correct in every material respect,
there has not been any material adverse change in the financial condition of
Debtor since the date thereof, and Debtor has no liabilities, fixed or
contingent, which are not fully shown or provided for in said financial
statement as at the date thereof except (i) as otherwise set forth in Exhibit A
---------
annexed hereto and made a part hereof and (ii) obligations to perform after such
date under contracts, purchase orders and other commitments incurred in the
ordinary course of business;

(b) Except as otherwise set forth in Exhibit B annexed hereto and made
---------
a part hereof, Debtor has, or will have, when acquired by it, good and
marketable title to the Collateral free from any adverse liens, security
interests or encumbrances, and no financing statements covering all or any part
of the Collateral are on file in the office of the Secretary of the State of
Connecticut, or the Town Clerk of Farmington, or in any other governmental
office, whether or not properly filed under applicable law, and there are no
liens or encumbrances on any of the other personal properties of Debtor, except
as set forth in said Exhibit B;
---------

(c) Debtor is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware with all the requisite
corporate power and authority to own, operate and lease its properties and to
carry on its business as now being conducted and is duly qualified and in good
standing in every jurisdiction in which the property owned, leased or operated
by it or the nature of the business conducted by it makes such qualification
necessary;

(d) Except as disclosed on Exhibit G attached hereto and made a part
hereof, there is no judgment, decree or order outstanding or litigation or
governmental proceeding or investigation pending, or to the knowledge of the
officers of Debtor threatened against it which might have a material adverse
effect upon its position, financial, operating or otherwise, and Debtor has
filed all tax returns and reports required to be filed by it with the United
States Government and all state and local

- 4 -
<PAGE>

governments and has paid in full or made adequate provision for the payment of
all taxes, interest, penalties, assessments or deficiencies shown to be due or
claimed to be due on or in respect of such tax returns and reports;

(e) The execution and delivery of this Agreement and each and every
other agreement, instrument or document required to be executed and delivered to
Secured Party by Debtor pursuant to the terms hereof, have been duly authorized,
are each valid, legal and binding upon it and enforceable in accordance with
their respective terms;

(f) The execution and delivery of this Agreement and each and every
other agreement, instrument or document required to be executed and delivered to
Secured Party by Debtor pursuant to the terms hereof, the consummation of the
transactions herein contemplated, the fulfillment of or compliance with the
terms and provisions hereof and of each and every other instrument, agreement or
document required to be executed and delivered to Secured Party by Debtor
pursuant to the terms hereof, are within its powers, are not in contravention of
any provisions of its Certificate of Incorporation or any amendments thereto, or
of its By-Laws, and will not conflict with or result in a breach of any of the
terms, conditions or provisions of any agreement, instrument or other
undertaking to which it is a party or by which it is bound, do not constitute a
default thereunder or under any of them, and will not result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
of its property or assets pursuant to the terms of any such agreement,
instrument or other undertaking, do not require the consent or approval of any
governmental body agency or authority and will not violate the provisions of any
laws or regulations of any governmental instrumentality applicable to Debtor.
Debtor is not in default under any agreement, indenture, mortgage, deed of
trust, or any other agreement or any court order or other order issued by any
governmental regulatory authority to which it is a party or by which it may be
bound;

(g) The Collateral, the records relating thereto and the place of
business and chief executive office of Debtor are all at the address of Debtor
first hereinabove set forth;

(h) Subject to any limitations stated therein or in connection
therewith, all information furnished or to be furnished by Debtor pursuant to
the terms hereof will not, at the time the same is furnished, contain any untrue
statement of a material fact and will not omit to state a material fact
necessary in order to make the information so furnished, in the light of the
circumstances under which such information is furnished, not misleading;

- 5 -
<PAGE>

(i) The indebtedness of Debtor for money borrowed by it, as of the
date hereof, is as shown on Exhibit C annexed hereto and made a part hereof, and
---------
there does not exist any default with respect thereto or an event which by the
passage of time, the giving of notice, or both, would constitute such a default.
and which would give rise to a right to accelerate such indebtedness;

(j) To the best of its knowledge after due inquiry, Debtor is in
compliance with all laws, ordinances. rules or regulations, applicable to it, of
all federal, state or local governments or any instrumentality or agency
thereof, including, but not limited to, the Employee Retirement Income Security
Act ("ERISA"), the United States Occupational Safety and Health Act ("OSHA") and
all federal, state and municipal laws, ordinances, rules and regulations
relating to the environment;

(k) The holders of all the outstanding stock of Debtor are as shown on
Exhibit D annexed hereto and made a part hereof, Debtor has no Subsidiaries and
- ----------
has not invested in the stock, common or preferred, of any other corporation,
other than as shown on said Exhibit D and there are no fixed, contingent or
---------
other obligations on the part of Debtor to issue any additional shares of its
capital stock, other than as described in said Exhibit D;
---------

(l) Exhibit E annexed hereto and made a part hereof sets forth all
---------
leases pursuant to which Debtor leases real or personal property of every nature
or description, the amount of rent payable under each such lease and the terms
thereof;

(m) Debtor is not a party to any agreement or instrument or subject to
any corporate restriction (including any restriction set forth in its
Certificate of Incorporation) materially and adversely affecting its operations,
business, properties or financial condition;

(n) Debtor possesses all the trademarks, trade names, copyrights,
patents, licenses and governmental permits, licenses, orders and approvals, or
rights in any thereof, adequate for the conduct of its business as now conducted
and presently proposed to be conducted, without conflict of the rights or
claimed rights of others, and no action or filing with or consent by, any Person
or any governmental or public body or authority, is required to authorize or is
otherwise required in connection with the conduct of Debtor's business as now
and presently proposed to be conducted; and

(o) Debtor conducts its business solely in its own name without the
use of a trade name or the intervention of or through any other entity of any
kind.

4. AMOUNT AND TERMS OF LOANS. Pursuant to the terms of this Agreement
-------------------------
and upon the satisfaction of the conditions precedent referred to in Paragraph
12

- 6 -
<PAGE>

hereof, Secured Party, may, in the exercise of its sole discretion, make
Loans to Debtor, upon its request, which in the aggregate do not exceed Four
Million and 00/100 Dollars ($4,000,000.00). The Loans shall be made on the
following terms and conditions.

(a) The principal amount of the Loans, or such part thereof as may be
from time to time outstanding, shall be evidenced by Debtor's promissory note,
in the form of Exhibit F annexed hereto and made a part hereof (the "Line of
----------
Credit Note"), with appropriate insertions of names, dates and amounts. The
Line of Credit Note shall be in the amount of Four Million and 00/100 Dollars
($4,000,000.00). Nothing contained in this subparagraph (a) shall be deemed to
prohibit Secured Party from lending in excess of the principal amount of the
Line of Credit Note, to delimit the definition of "Obligations" contained herein
or to constitute a waiver, release or subordination by Secured Party of the
security interest in the Collateral herein granted by Debtor to Secured Party as
security for the Obligations. In addition, Debtor hereby agrees that in the
event that it forms or acquires any subsidiaries after the date hereof, any such
subsidiary shall unconditionally guarantee the Obligations hereunder, which
guarantees shall be secured by the grant of a first priority security interest
on the personal property assets of any such subsidiary;

(b) In the event Debtor desires an advance on the Loan, it may request
the same by delivering to Secured Party a written request for advance, or by
telephonic or facsimile notice to Secured Party, upon which telephonic or
facsimile notice Secured Party shall be entitled to rely, Debtor agreeing to
indemnify Secured Party, if it shall have so relied in good faith to its
detriment, for its losses and expenses, if any, arising from such reliance.
Each such request for an advance on the Loan made by telephonic notice shall be
evidenced by Debtor delivering to Secured Party, a written confirmation of the
request for advance. The Loans shall be made by Secured Party depositing the
proceeds thereof in Debtor's operating account maintained with Secured Party;

(c) The aggregate principal amount of the Loans from time to time
outstanding shall bear interest at a rate per annum equal to the Prime Rate;
provided, however, that the rate of interest charged hereunder shall never
exceed the maximum amount, if any, allowable by law. In the event the Prime
Rate is either increased or decreased, the rate of interest on the Loan then
outstanding shall be adjusted on the day the Prime Rate is so changed so as to
reflect such increase or decrease in the Prime Rate. Interest only shall be
payable monthly and shall be charged on the daily outstanding principal balance
of the Loan from time to time outstanding on the basis of the actual days
elapsed and a three hundred sixty (360) day year;

(d) At Debtor's option, which Debtor shall exercise by notifying
Secured Party in writing at least two days prior to any requested advance
pursuant to

- 7 -
<PAGE>

the notice requirements outlined in Subparagraph (b) above, Debtor
may elect that any advance on the Loan in excess of Five Hundred Thousand and
00/100 Dollars ($500,000.00) bear interest at a rate per annum equal to LIBOR
plus 175 basis points ("LIBOR Rate") for Interest Periods of either thirty,
sixty or ninety days as selected by Debtor from the date hereof to October 15,
1999. Any Loan advance that Debtor elects to bear interest at the LIBOR Rate
must be in an amount of at least Five Hundred Thousand and 00/100 Dollars
($500,000.00), and Debtor's option to borrow at the LIBOR Rate shall terminate
at any time that there are outstanding seven LIBOR maturities. No LIBOR
maturity shall have an expiration date after October 15, 1999. Each Interest
Period for a LIBOR Rate Loan advance shall commence on the date a Loan advance
is made, and shall end on the thirty, sixty or ninety day Interest Period date
that Debtor has elected provided that: (i) any Interest Period which would
otherwise end on a day which is not a Business Day shall end on the next
preceding or succeeding Business Day as is Secured Party's custom in the market
to which such LIBOR Rate relates; (ii) all Interest Periods which commence on
the same date shall end on the same date; (iii) each Interest Period which
commences before, and would otherwise end after October 15, 1999, shall end on
October 15, 1999; and (iv) any Interest Period which begins on a day for which
there is no numerically corresponding day in the calendar month during which
such Interest Period is to end, shall (subject to clause (a) above) end on the
last day of such calendar month.

In the event that Secured Party shall have determined that (i) by reason of
circumstances affecting the London Interbank Eurodollar market, adequate and
reasonable means do not exist for determining the LIBOR Rate, or (ii) dollar
deposits in the relevant amount of the relevant maturity are not available to
the Secured Party in the London Interbank Eurodollar market with respect to a
proposed Loan advance, Secured Party shall give Debtor prompt notice of such
determination. If such notice is given, then a requested Loan advance shall
bear interest at the Prime Rate. Until such notice has been withdrawn, Secured
Party shall have no obligation to make Loan advances at the LIBOR Rate or to
maintain outstanding Loan advances at the LIBOR Rate.

Debtor agrees to indemnify Secured Party and hold Secured Party harmless
from any loss or expense (including, without limitation, any lost profit) that
it may sustain or incur as a consequence of any prepayment or any default by
Debtor in the payment of the principal of or interest on a Loan advance bearing
interest at the LIBOR Rate including, but not limited to, any loss of profit or
any interest payable by Secured Party to lenders of funds obtained by it in
order to make or maintain its Loan advances at the LIBOR Rate.

(e) All advances on the Loan made by Secured Party to Debtor pursuant
to this Paragraph 4 shall be recorded in an account on the books of Secured
Party bearing Debtor's name ("Debtor's Account"). There shall also be recorded
in Debtor's Account all payments made by Debtor on the Loan, proceeds of the
Collateral

- 8 -
<PAGE>

received by Secured Party which are, in the exercise of Secured Party's sole
discretion, applied by Secured Party to the Loan, interest and expenses and
other appropriate debits and credits as herein provided. Secured Party shall
from time to time render and send to Debtor a statement of Debtor's Account
showing the outstanding aggregate principal balance of the Loan, together with
interest and other appropriate debits and credits as of the date of the
statement. The statement of Debtor's Account shall be considered correct in all
respects and accepted by and be conclusively binding upon Debtor unless Debtor
make specific written objections thereto within thirty (30) days after the date
the statement of Debtor's Account is sent.

(f) Debtor shall pay to Secured Party on October 15, 1999 the
outstanding principal balance and all accrued interest and any outstanding
charges in connection with the Loan as shown on Debtor's Account; and

(g) The provisions of this Paragraph 4 shall continue in effect until
October 15, 1999, provided, however, that Secured Party may terminate the
provisions of this Paragraph 4 at any time upon the happening of an Event of
Default hereunder. No such termination shall (i) in any way affect or impair the
security interest granted to Secured Party hereunder or any other rights of
Secured Party hereunder or under any other agreements, instruments or documents
required to be executed and delivered to Secured Party pursuant to the terms of
this Agreement, arising prior to any such termination or by reason thereof, (ii)
relieve Debtor of any obligation to Secured Party under this Agreement, any such
other agreement, instrument or document, or otherwise, until all the Obligations
are fully paid and performed, or (iii) affect any right or remedy of Secured
Party, hereunder or under any, such other agreement, instrument or document.

5. AFFIRMATIVE COVENANTS. Debtor covenants and agrees that from the date
----------------------
hereof until full payment of the Obligations, unless Secured Party otherwise
agrees in writing:

(a) Debtor shall maintain at all times (i) an interest coverage ratio
(earnings before interest, taxes, depreciation and amortization divided by
interest expenses) of at least 3.00 to 1.00 to be tested quarterly commencing
December 31, 1998; (ii) a current ratio (current assets divided by current
liabilities as defined by GAAP) of at least 2.00 to 1.00 to be tested quarterly
commencing December 31, 1998; (iii) a ratio of shareholder equity (as defined by
GAAP) to Secured Party's Four Million Dollar Loan commitment of at least 5.00 to
1.00 to be tested quarterly commencing December 31, 1998. For purposes of
determining compliance with this covenant, Debtor acknowledges that shareholder
equity is required to increase annually by seventy-five percent (75%) of net
income with a further upward adjustment for one hundred percent (100%) realized
from any stock offerings. (iv) a ratio of Funded Debt (total debt plus all
guaranty obligations and contingent liabilities) to EBITDA (total

- 9 -
<PAGE>

earnings before interest, taxes, depreciation and amortization calculated for
the preceding four (4) quarters) of not more than 3.00 to 1.00 to be tested
quarterly commencing March 31, 1999; and (v) maintain at all times cash and/or
cash equivalents of at least Five Million and 00/100 Dollars ($5,000,000.00)
which covenant shall be tested quarterly commencing December 31, 1998. Each of
the foregoing financial covenants outlined in subparagraphs (i) through (v)
above shall be determined in each instance by generally accepted accounting
principles consistently applied.

(b) Debtor shall pay and discharge all taxes, general and special,
charges and assessments, and other governmental obligations, which may have been
or shall be levied, charged or assessed on or against it, its property, or its
income or profits before they become delinquent and pay and discharge on or
before their due date any and all other lawful claims and demands whatsoever,
including, but not limited to, trade obligations, provided, however, that the
payment of any such taxes, assessments, governmental obligations or other claims
and demands may be postponed so long as they or any of them are being diligently
contested in good faith and by appropriate proceedings, appropriate reserves
have been provided therefor by Debtor and no lien is placed on any assets of
Debtor in connection with such taxes, assessments, governmental obligations or
other claims or demands so contested by Debtor;

(i) Insurance on its properties against loss by fire and all
available extended coverage risks in such amounts and with such insurers as
may be satisfactory to Secured Party, which insurance shall by the terms of
the policy provide that (x) in the event of loss or damage, if any, the
proceeds thereof shall be payable to Secured Party, as the holder of a
security interest, mortgage or other lien or interest in the personal or
real property of Debtor insured under the policy as Secured Party's
interest may appear; (y) the insurance, as to the interest of Secured
Party, shall not be invalidated by any act or neglect of Debtor, its
directors, officers, agents or employees, by any foreclosure, or other
proceeding, or notice of sale relating to said property or any of it; by
any change in the title or ownership of the property, or any of it; or by
the occupation of the premises where the property, or any of it, is located
for purposes more hazardous than are permitted by the policy; and (z) if
the policy is canceled, for whatever reason, the insurance shall continue
in full force and effect for the benefit of Secured Party for not less than
thirty (30) days after written notice of cancellation to Secured Party from
the insurer which notice the insurer shall agree to give to Secured Party.
Debtor shall cause the insurer to supply to Secured Party certificates, or
other evidence of insurance satisfactory to Secured Party, indicating
compliance with the foregoing, including evidence of continuation thereof
no later than thirty (30) days prior to the expiration of any

- 10 -
<PAGE>

policy of insurance. Secured Party shall have the right to apply the
proceeds of any such insurance in reduction of the Obligations, whether or
not then due and payable, in such manner as Secured Party, in its sole
discretion may determine or to pay over, at such times and in such amounts,
such proceeds or part thereof, as Secured Party in its sole discretion may
determine, to Debtor for the purpose of replacing the Collateral affected
by any loss relating thereto; and

(ii) General public liability insurance against claims for
personal injury death or property damage in such amounts as are
satisfactory to Secured Party and Workmen's Compensation insurance in
statutory amounts with companies licensed to do business in the State of
Connecticut;

(d) Debtor shall maintain and preserve the Collateral in good order
and condition and not permit or suffer the Collateral to be wasted or destroyed;

(e) Debtor shall furnish to Secured Party:

(i) Within ninety (90) days after the end of each of Debtor's
fiscal years following the date hereof, its Form 10K filed with the
Securities and Exchange Commission and audited financial statement
including Debtor's balance sheet, statement of income, and statement of
cash flows. Each such audited financial statement shall set forth in each
case in comparative form the corresponding figures for the preceding fiscal
year, all in reasonable detail, including all supporting schedules,
comments and notes, and shall be prepared in accordance with generally
accepted accounting principles consistently applied from year to year,
including the fiscal year preceding that for which such statement is being
furnished. In addition, Debtor shall deliver to Secured Party within
thirty (30) days after filing copies of all federal and state income tax
returns;

(ii) Simultaneously with the delivery of the financial statement
required in (i) above, a written statement, addressed to Secured Party, of
Debtor's independent certified public accountants referred to in (i) above,
indicating that, in making the examination necessary for rendering their
opinion, as required in (i) above, said accountants have obtained no
knowledge of any default, whether or not cured at the time of such
examination, in the performance of any obligation of Debtor under this
Agreement, or any other agreement, instrument or document executed and
delivered to Secured Party by Debtor pursuant to the terms of this
Agreement, or disclosing all such defaults of which they have obtained
knowledge; provided, however, that in making their examination such
accountants shall not be required to go beyond the limits of generally
accepted auditing standards;

- 11 -
<PAGE>

(iii) Within sixty (60) days after the end of each fiscal
quarter following the date hereof, its Form 10Q filed with the Securities
and Exchange Commission and unaudited management prepared balance sheet as
at the end of such fiscal quarter and the end of the corresponding fiscal
quarter of the preceding fiscal year, and a statement of income of Debtor
for the period between the end of the last fiscal year and the end of such
fiscal quarter and for the corresponding period of the preceding fiscal
year, certified by the President or Treasurer of Debtor as presenting
fairly the financial position of Debtor, the results of its operations and
the changes in its financial position as at the end of each such fiscal
quarter, subject only to normal recurring year-end adjustments which will
not, either singly or in the aggregate, have a material adverse effect on
Debtor's financial condition;

(iv) Concurrently with the delivery of any and all financial
statements required by this Agreement, a certificate by the President or
Treasurer of Debtor stating that to the best of his knowledge and belief
all taxes, assessments and charges levied upon Debtor which have become due
have been paid, or specifying any such taxes, assessments or charges which
have not been paid and stating why they remain unpaid and that he has
reviewed each and every obligation of Debtor hereunder, and under each and
every other agreement, instrument and document executed and delivered to
Secured Party by Debtor pursuant to the terms hereof, that Debtor is not in
default in the performance of any of such obligations, or specifying each
default of which the signer has knowledge and setting forth what action has
been taken to cure any such default.

(v) Promptly, upon Secured Party's request, a copy of each and
every report required to be filed by it with the Internal Revenue Service
or any other governmental unit with respect to income taxes, F.I.C.A., and
other payroll taxes withheld from or required to be paid on account of its
employees' pay and a copy of every depository receipt evidencing the
deposit of the same;

(vi) Promptly upon the issuance thereof, a copy of all orders
issued by any Federal, state or municipal regulatory authority under any
laws or regulations adopted thereby which, if enforced, would have a
material adverse effect upon the condition of Debtor, whether financial,
operating, or otherwise, all reports or other materials filed with or
issued by the Securities and Exchange Commission, and all reports, notices
or statements sent to Debtor's stockholders by Debtor;

(vii) Promptly upon the filing, issuance or receipt thereof,
copies of (A) all annual reports with respect to all pension or other
employee benefit plans (collectively referred to as the "Plans" and
individually as the "Plan") of

- 12 -
<PAGE>

Debtor, subject to ERISA, filed by or on behalf of Debtor with the
Secretary of Labor, the Internal Revenue Service, or the Pension Benefit
Guaranty, Corporation (the "PBGC"), subject to ERISA;

(viii) Promptly upon Secured Party reasonable requests therefor,
such other information relating to Debtor and its affairs as Secured Party
may from time to time request;

(ix) On or before the fifteenth day following the close of each
fiscal quarter, a detailed written report, in form satisfactory to Secured
Party, showing as of the end of the immediately preceding fiscal quarter,
all the Accounts of Debtor, including the name and address of each account
debtor and an aging of such Accounts, and, from time to time as required by
Secured Party, such other reports or other information relating to the
Accounts as Secured Party may reasonably request in writing;

(x) Maintain all operating accounts with Secured Party.

(f) Debtor shall maintain its properties in good repair, working order
and condition and make all needed and proper repairs, renewals, replacements,
additions or improvements thereto and immediately notify Secured Party of any
event causing loss or depreciation in the value of the Collateral and the amount
of such loss or depreciation;

(g) Debtor shall allow Secured Party by or through any of its
officers, agents, attorneys, or accountants designated by it, for the purpose of
ascertaining whether or not each and every provision hereof and of any related
agreement, instrument and document is being performed and for the purpose of
examining the Collateral and the records relating thereto, to enter the offices
of Debtor to examine or inspect any of the properties, books and financial
records of Debtor, to make copies of such books and records or extracts
therefrom, and to discuss the affairs, finances and accounts of Debtor with
Debtor all at such reasonable times and as often as Secured Party, may
reasonably request;

(h) Debtor shall defend the Collateral against all claims and demands
of all persons at any time claiming the same or any interest therein and, in the
event Secured Party's security interest in the Collateral, or part thereof,
would be impaired by an adverse decision, allow Secured Party to contest or
defend any such claim or demand in Debtor's name and pay, upon demand, Secured
Party's reasonable costs, charges and expenses, including, but not limited to,
attorneys' fees, incurred by Secured Party in connection therewith;

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<PAGE>

(i) Debtor shall pay to Secured Party, on demand, any and all
expenses, including reasonable attorney's fees, incurred or expended by Secured
Party in preparation of this Agreement, and all related agreements, instruments
and documents, in making or processing the Loans, in the collection or attempted
collection of the Obligations and in protecting and/or enforcing the rights of
Secured Party, against Debtor and sustaining and/or enforcing the security
interest and other liens, if any, granted to Secured Party hereunder and under
all related agreements, instruments and documents;

(j) Debtor shall from time to time, at the request of Secured Party,
execute, deliver and file one or more financing statements on Form UCC 1 and
other agreements, instruments or documents, and do all other acts as Secured
Party deems necessary or desirable to perfect fully its security interest in the
Collateral and pay, upon demand, all reasonable expenses, including, but not
limited to, attorneys' fees incurred by Secured Party, in connection therewith;

(k) Debtor shall keep complete and accurate books and records
reflecting all facts concerning the Collateral, and pertaining to the
Obligations and Debtor's covenants under this Agreement;

(l) Debtor shall comply with all laws, ordinances and rules and
regulations applicable to Debtor of any Federal, state or local government or
any instrumental or agency thereof, including, but not limited to, ERISA, OSHA,
and Federal, state and municipal laws, ordinances, rules and regulations
concerning the environment except to the extent any such law, ordinance, rule or
regulation, is being contested in good faith by appropriate proceedings provided
that said contest or an adverse decision therein will not have a material
adverse effect on the condition, financial, operating or otherwise, of Debtor;
and

(m) Debtor shall promptly advise Secured Party of the happening of an
Event of Default or the existence of a state of facts which by the passage of
time, the giving of notice, or both, would constitute an Event of Default.

6. NEGATIVE COVENANTS. Debtor covenants and agrees that, from the date
------------------
hereof until full payment of the Obligations, unless Secured Party, shall
otherwise consent in writing, Debtor shall not:

(a) Except in the ordinary course of business, create, incur, assume
or suffer to exist any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind upon or defect in title to or restriction upon the use of any
of Debtor's property or assets of any character, whether owned at the date
hereof or hereafter acquired, or hold or acquire any property or assets of any
character under conditional sales, finance

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<PAGE>

leases (as determined in accordance with generally accepted accounting
principles) or other title retention agreements;

(b) Except in the ordinary course of business, transfer, assign,
lease, or otherwise dispose of (other than disposition of Inventory as permitted
by Paragraph 10 hereof) its properties or assets, or change the nature of its
business, except for the transfer, sale or other disposition of items of the
Equipment, which Debtor determines is obsolete and no longer necessary or
desirable for the proper conduct of its business, provided (i) the proceeds from
any such sale are either applied to the Loan or invested in Equipment, as
determined by Debtor with the prior approval of Secured Party, and (ii) Secured
Party delivers to Debtor a release of its security interest therein, which shall
be delivered upon Secured Party determining to its sole satisfaction that such
transfer, sale or other disposition is permitted hereunder;

(c) Except as disclosed and consented to by Secured Party, create or
assume any obligations for money borrowed from any Person other than Secured
Party;

(d) Make loans or advances or endorse, guaranty, or become surety for
the obligations of any third Person except for the endorsement of checks in the
ordinary course of business. Notwithstanding the foregoing, Debtor is permitted
to make loans or advances to Command International Software so long as there
does not exist an Event of Default hereunder, any such loan or advance does not
create an Event of Default hereunder and Secured Party has received advance
notice of any such loan or advance;

(e) Declare or pay any dividends or make any distributions on its
capital stock or purchase, redeem, retire or otherwise acquire any such shares
other than transfers of shares to or from Debtor's existing shareholders (or
their estate) without the consent of Secured Party.

(f) Intentionally Deleted;

(g) Other than as permitted in Subparagraph (d) above, enter into any
transactions of any kind with any of its Affiliates other than in the ordinary
course of business;

(h) Enter into any merger or consolidation, or sell all or
substantially all of Debtor's assets, or liquidate, dissolve or otherwise
terminate or alter Debtor's existence, form or method of conducting Debtor's
business;

(i) Change its corporate name, adopt any trade names, or conduct its
business under any trade name or style other than as hereinabove set forth, or
change

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<PAGE>

its chief executive office, places of business or the present locations of the
Collateral or the records relating to the Collateral; and

(j) Acquire, form or dispose of any Subsidiaries or acquire all or
substantially all of the assets or capital stock of any other Person or any
portion of the assets of any other Person which constitutes a division, product
line or line of business. Notwithstanding the foregoing, Debtor is, subject to
Secured Party's consent, permitted to acquire a controlling interest of the
outstanding capital stock of any other Person so long as the capital stock is of
an entity engaged in a business related to the business of Debtor. In any such
instance, Debtor is required to pay the purchase price in full from cash from
operations and any such transaction must not result in an Event of Default
hereunder.

7. PAYMENTS BY SECURED PARTY. At its option, Secured Party may pay for
-------------------------
insurance on the Collateral and taxes, assessments or other charges which Debtor
fails to pay in accordance with the provisions hereof, or of any related
agreement. instrument or document, and may discharge any security interest in or
lien upon the Collateral. No such payment or discharge of any such security
interest or lien shall be deemed to constitute a waiver by Secured Party of the
violation of any covenant by Debtor as a result of Debtor's failure to make any
such payment or Debtor's suffering of any such security interest or lien. Any
payment made or expense incurred by Secured Party, pursuant to this or any other
provision of this Agreement shall be added to and become a part of the
Obligations of Debtor to Secured Party, shall bear interest at the rate per
annum charged pursuant to Paragraph 4 hereof and shall be payable on demand.

8. USE OF INVENTORY. Until the happening of an Event of Default, Debtor
----------------
may use the Inventory in any lawful manner not inconsistent with this Agreement
or with the terms or conditions of any policy of insurance thereon and may also
sell, lease or consume the Inventory in the ordinary course of business. A sale
in the ordinary course of business does not include a bulk transfer or a
transfer as security for or in partial or total satisfaction of a debt.

9. RIGHTS OF SECURED PARTY; NOTICES. When the Obligations, or any of
--------------------------------
them, become immediately due and payable, whether by reason of default or upon
demand of Secured Party, Secured Party may, pursue any legal remedy available to
it to collect Obligations outstanding at said time, to enforce its rights
hereunder, and to enforce any and all other rights or remedies available to it
both under the Uniform Commercial Code and otherwise, including, but not limited
to, the right to take possession of the Collateral and dispose of the same on
Debtor's premises, all without judicial process, Debtor hereby waiving any right
Debtor might otherwise have to require Secured Party; to resort to judicial
process and further waiving Debtor's right to notice and hearing under the
Constitution of the United States or any state or under any

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<PAGE>

Federal or state law, and no such action shall operate as a waiver of any other
right or remedy of Secured Party under the terms hereof, any other agreement,
instrument or document executed and delivered to Secured Party pursuant to the
terms hereof, or the law, all rights and remedies of Secured Party being
cumulative and not alternative, In addition, Secured Party may require Debtor to
assemble the Collateral and make it available to Secured Party, at a place to be
designated by Secured Party which is reasonably convenient to both parties. In
the event reasonable notice is required to be given by Secured Party to Debtor
under the provisions of the Uniform Commercial Code of the General Statutes of
Connecticut, such notice shall be deemed to have been given if mailed, postage
prepaid, certified mail, return receipt requested, at least seven (7) days prior
to the happening of the event for which such notice is being given, to Debtor at
Debtor's address first hereinabove written. Any notice required to be given by
Secured Party to Debtor or by Debtor to Secured Party, pursuant to the terms
hereof, shall be deemed to have been given (except as otherwise specifically
provided in this Agreement) upon mailing the same, postage prepaid, certified
mail, return receipt requested, to Debtor or Secured Party, as the case may be,
at its address first hereinabove written. Either of the parties hereto may
notify the other that any, such notice shall be given to such other address as
such party may so instruct by written notice similarly given.

10. COLLECTION OF ACCOUNTS. After an Event of Default hereunder, Debtor
----------------------
shall make collections of proceeds upon its Accounts, hold the proceeds received
from collections in trust for Secured Party and turn over such proceeds to
Secured Party daily and not later than 2:00 p.m. on each business day in the
exact form in which they are received, together with a collection report in form
satisfactory to Secured Party. Secured Party shall immediately apply such
proceeds, and any proceeds of Accounts received by it pursuant to the following
provisions of this Paragraph 12, allowing, and subject to a charge for two (2)
days of clearance (calculated on from time to time the prevailing interest rate
on the Loan) and subject to collection, to the payment of the Obligations in
such order of application as Secured Party, in its sole discretion, may
determine. Debtor shall, when requested by Secured Party after the happening of
an Event of Default;

(a) Assign or endorse the Accounts to Secured Party, and notify
account debtors that the Accounts have been assigned and should be paid directly
to Secured Party;

(b) Turn over to Secured Party all Inventory returned in connection
with any of the Accounts;

(c) Mark or stamp each of its individual ledger sheets or cards
pertaining to its Accounts with the legend "Assigned to People's Bank" and stamp
or

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<PAGE>

otherwise mark and keep its books, records, documents and instruments
relating to the Accounts in such manner as Secured Party may require;

(d) Mark or stamp all invoices with a legend satisfactory to Secured
Party so as to indicate that the same should be paid directly to Secured Party.

Notwithstanding the foregoing, Secured Party shall have the right, at
any time, after the happening of an Event of Default, to itself so notify such
account debtors to make such payments of the Accounts directly to Secured Party
and Secured Party shall have the further right to notify the post office
authorities to change the address for delivery of mail of Debtor to an address
designated by Secured Party and to receive, open and dispose of all mail
addressed to Debtor.

After an Event of Default hereunder, Debtor hereby irrevocably
constitutes Secured Party as Debtor's attorney-in-fact to issue in the name and
execute or endorse on behalf of Debtor each and every notice, instrument and
document necessary to carry out the purposes of the provisions of this Paragraph
10, and to take such action in connection with the collection of the Accounts,
including, but not limited to, suing thereon, compromising or adjusting the
same, as Secured Party, in its sole discretion, deems necessary. The power of
attorney granted hereby shall be self-executing, but Debtor shall promptly
execute and deliver to Secured Party, upon written request of Secured Party such
additional separate powers of attorney, as Secured Party may from time to time
reasonably request.

11. DEFAULT PROVISIONS.
------------------

(a) The Line of Credit Note shall forthwith become due and payable,
without presentment, protest, demand or notice of any kind, if Debtor becomes
insolvent (including in said term an inability to pay its debts as they mature)
or bankrupt, or makes an assignment for the benefit of its creditors, or
consents to the appointment of a trustee or receiver of all or a substantial
part of its properties or such appointment is made without its consent, or if
bankruptcy, reorganization, arrangement, receivership or liquidation proceedings
are instituted by or against Debtor;

(b) Secured Party may at its option declare the Line of Credit Note
due and payable whereupon the same shall become due and payable forthwith,
without presentment, protest, demand or notice of any kind in any of the
following cases:

(i) If any payment of principal or interest or any other payment
required by the terms hereof or by the Line of Credit Note or by any other
instrument, agreement or document executed and delivered to Secured Party
pursuant to the terms hereof shall not be fully paid when demand is made
for the

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<PAGE>

payment of the same (to the extent payable on demand) or when the
same shall fall due, or if any of said obligations shall become or be
declared in default;

(ii) If any payment of principal or interest or any other payment
required by any of the obligations of Debtor for money borrowed by it from
any third Person shall not be fully paid when demand is made for the
payment of the same (to the extent payable on demand) or when the same
shall fall due, or if any of said obligations shall become or be declared
in default;

(iii) If any warranty or representation by Debtor contained
herein or in any related agreement, instrument or document, or in any,
statement furnished by Debtor to Secured Party, proves incorrect in any
respect;

(iv) If default exists in the due observance of any of the
covenants or agreements of Debtor set forth in this Agreement, or in any
other agreement, instrument or document executed and delivered to Secured
Party pursuant to the terms of this Agreement;

(v) If a judgment is entered against Debtor and remains
unsatisfied for a period of thirty (30) days.

12. CONDITIONS PRECEDENT TO MAKING LOAN.
-----------------------------------

(a) On or prior to the first borrowing hereunder, Secured Party shall
have actually received from the party or parties designated below in form and
content satisfactory to Secured Party:

(i) A currently dated certified copy of the resolutions of the
Board of Directors of Debtor authorizing the President of Debtor, or an
authorized officer to execute and deliver this Agreement and all other
agreements, instruments and documents required to be executed and delivered
by each to Secured Party by the terms hereof;

(ii) The Line of Credit Note evidencing the Loan as executed by
Debtor;

(iii) Reimbursement of all of Secured Party's expenses;

(iv) A certificate or other proof of insurance satisfactory to
Secured Party evidencing compliance with the provisions of subparagraph (c)
of Paragraph 5 of this Agreement;

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<PAGE>

(v) A certificate of the Secretary of Debtor which shall certify,
the names of its officers authorized to sign and deliver to Secured Party
requests for advances, together with the true signature of each such
officer. Secured Party may conclusively rely on such certificate until it
shall receive a further certificate of such Secretary canceling or amending
the prior certificate and submitting the name and signature of each officer
named in such further certificate as being authorized to so sign and
deliver such requests on behalf of Debtor;

(vi) Such UCC-1 Financing Statements executed by Debtor and UCC
searches as Secured Party requests;

(vii) Tax Clearance Letters;

(viii) UCC Termination Statements and Releases;

(ix) A certified copy of the Certificate of Incorporation and
Bylaws of Debtor.

(x) Evidence of Operating Account with Secured Party;

(xi) An opinion letter addressed to Secured Party from counsel
satisfactory to Secured Party stating that:

(A) Debtor is a corporation duly organized and existing, with
perpetual corporate existence, and in good standing under the laws of its
state of incorporation, has the corporate power to own its properties, to
carry on the business in which it is engaged and is in good standing in
each state or other jurisdiction in which the conduct of its business or
the ownership or lease of its properties requires qualification, licensing
or registration.

(B) The authorized Capital Stock of Debtor consists of
____________ (______) shares of common stock, without par value, of which
____________ (_____) shares are duly authorized, validly issued and
outstanding, fully paid and non-assessable, and subject to no pre-emptive
rights.

(C) The execution and delivery of this Agreement, and each and
every other agreement, instrument and document required to be executed and
delivered to Secured Party by Debtor pursuant to the terms hereof have been
duly authorized, are valid, legal and binding upon Debtor and are
enforceable in accordance with their respective terms,

- 20 -
<PAGE>

subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, moratorium and other laws affecting the rights of creditors
and third parties generally, and further subject to the fact that Secured
Party may not be entitled to specific performance of some of the provisions
in the Loan and Security Agreement or such other agreements, documents or
instruments.

(D) The execution and delivery of this Agreement, and each and
every other agreement, instrument or document required to be executed and
delivered to Secured Party by Debtor pursuant to the terms hereof, the
consummation of the transactions herein and therein contemplated, the
fulfillment of or compliance with the terms and provisions hereof and
thereof, are within the corporate powers of Debtor, are not in
contravention of any provisions of its Certificate of Incorporation or any
amendments thereto, or of its by laws, and will not conflict with or result
in a breach of any of the terms, conditions or provisions of any agreement,
instrument or other understanding to which Debtor is a party or by which
Debtor is bound, or constitute a default thereunder, or result in the
creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of its properties or assets pursuant to the terms of
any such agreement, instrument or understanding, do not violate any,
Federal, state or local statutes, ordinances, miles or regulations, and do
not require the consent or approval of any governmental body, agency or
authority.

(E) There is no judgment, decree or order outstanding or
litigation or governmental proceeding or investigation pending, or to the
knowledge of such counsel threatened against Debtor which might materially
and adversely affect Debtor's position, financial, operating or otherwise;
Debtor has filed all tax returns and reports required to be filed with the
United States Government and with all other state and local governments
requiring the same to be filed and have paid in full or made adequate
provision for the payment of all taxes, interest, penalties, assessments or
deficiencies shown to be due or claimed to be due on or in respect of such
tax returns and reports.

(F) Secured Party shall have, upon the execution and delivery of
this Agreement and the filing of UCC-1 Financing Statements of Debtor in
the offices of the Secretary of State of Connecticut and Town Clerk of
Farmington, a valid perfected first security interest in the Collateral.

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<PAGE>

(b) At the time of each borrowing hereunder:

(i) The representations and warranties set forth in Paragraph 3
of this Agreement shall be true and correct on and as of such time to the
same effect as though such representations and warranties had been made on
and as of such time;

(ii) Debtor shall be in compliance with all the terms and
provisions set forth in this Agreement and in any other agreement,
instrument or document required or contemplated to be executed and
delivered by it pursuant to the terms hereof and no Event of Default shall
be in existence at such time; and

(iii) Debtor shall have actually made a request for such
borrowing by telephonic notice and shall have actually delivered to Secured
Party a request for advance. Any such request for a Loan shall constitute
an affirmation by Debtor as to the matters set forth in (i) and (ii) above.

13. SET-OFF. Debtor hereby grants to Secured Party, a lien on and a right
-------
of set-off against all monies, deposits and securities and the proceeds thereof,
now or hereafter held or received by, or in transit to, Secured Party from or
for Debtor, whether for safekeeping, pledge, custody, transmission, collection
or otherwise, and all deposits (general or special), balances, sums and credits
with and all claims of Debtor against Secured Party at any time existing.
Secured Party may at any time apply the same or any part thereof to the
Obligations, or any part thereof, whether or not matured at the time of such
application.

14. GENERAL PROVISIONS.
------------------

(a) No delay or failure of Secured Party in exercising any right,
power or privilege hereunder shall affect such right, power or privilege, nor
shall any single or partial exercise preclude any further exercise thereof or
the exercise of any other rights, powers or privileges;

(b) This Agreement, the security interest hereby granted to Secured
Party by Debtor and Guarantor and every representation, warranty, covenant,
promise and other then herein contained shall survive until the Obligations have
been paid in full;

(c) This Agreement is an integrated document and all terms and
provisions are embodied herein and shall not be varied by parol;

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<PAGE>

(d) This Agreement is made, executed and delivered in the State of
Connecticut and it is the specific desire and intention of the parties that it
shall in all respects be construed under the laws of the State of Connecticut,

(e) The captions for the paragraphs contained in this Agreement have
been inserted for convenience only and form no part of this Agreement and shall
not be deemed to affect the meaning or construction of any of the covenants,
agreements, conditions or terms hereof;

(f) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, provided,
however, that Debtor shall not assign, voluntarily, by operation of law or
otherwise, any of its rights hereunder without the prior written consent of
Secured Party and any such attempted assignment without such consent shall be
null and void.

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<PAGE>

IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals, and to a duplicate instrument of the same tenor at Hartford, Connecticut,
the day and year first above written.

Signed, Sealed, and Delivered COMMAND SYSTEMS, INC.
in the Presence of:

/s/ [ILLEGIBLE] BY: /s/ Robert B. Dixon
- -------------------------- --------------------------
Its VP Finance/Treasurer
/s/ [ILLEGIBLE]
- --------------------------

PEOPLE'S BANK

- --------------------------
BY: /s/ Domenic A. Cessario
--------------------------
- -------------------------- Domenic A. Cessario
Its Assistant Vice President

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<PAGE>

EXHIBIT LIST

EXHIBIT A Debtor's Liabilities
EXHIBIT B Liens
EXHIBIT C Outstanding Debts
EXHIBIT D Holders of Outstanding Stock
EXHIBIT E Leases
EXHIBIT F Line of Credit Note
EXHIBIT G Litigation

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<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" and to
the use of our reports dated February 9, 1998, in the Registration Statement
(Form S-1 No. 333_______) for the registration of 345,000 shares of its common
stock and the Post-Effective Amendment No. 1 to the Registration Statement
(Form S-1 No. 333-43877) and related Prospectus of Command Systems, Inc. for
the sale of 3,105,000 shares of its common stock.

/s/ Ernst & Young LLP

Hartford, Connecticut
November 3, 1998