COMPUTER HORIZONS CORP, S-2, 1995-05-04

COMPUTER HORIZONS CORP
S-2, 1995-05-04
COMPUTER PROGRAMMING SERVICES

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As filed with the Securities and Exchange Commission on May 4, 1995

Registration No. 33-

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________
FORM S-2
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
____________

COMPUTER HORIZONS CORP.
(Exact name of registrant as specified in its charter)
New York 13-2638902
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization)
Identification Number)

49 Old Bloomfield Avenue
Mountain Lakes, New Jersey 07046-1495
(201) 402-7400
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)

JOHN J. CASSESE
Computer Horizons Corp.
49 Old Bloomfield Avenue
Mountain Lakes, New Jersey 07046-1495
(201) 402-7400
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPIES TO:

Robert A. Cantone, Esq. Eric D. Martins, Esq.
Proskauer Rose Goetz & Mendelsohn LLP Ivan W. Dreyer, Esq.
1585 Broadway Baer Marks & Upham
New York, New York 10036 805 Third Avenue
New York, New York 10022

Approximate date of commencement of proposed sale of securities to the public:
As soon as practicable after the effective date of this Registration Statement.

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 the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this form, check the following box: [ ]

<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE

Title of Each Amount Proposed Proposed Maximum Amount of
Class of Securities to be Maximum Offering Aggregate Registration
to be Registered Registered Price Per Share(1) Offering Price(1) Fee
<S> <C> <C> <C> <C>
Common Stock, par value $.10 (2) 1,265,000 $ 12.75 $16,128,750 $5,561.62
</TABLE>

(1) Estimated pursuant to Rule 457(c) solely for the purpose of calculating
the registration fee on the basis of the average of the high and low
prices for the Common Stock, as reported on the Nasdaq National Market on
May 2, 1995, and as adjusted to reflect the three-for-two Common Stock
split effected as a dividend to be paid on May 30, 1995 to holders of
record on May 9, 1995.
(2) Includes 165,000 shares of Common Stock which may be purchased by the
Underwriters to cover over-allotments, if any.
____________

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
COMPUTER HORIZONS CORP.

<TABLE>
<CAPTION>
Cross Reference Sheet Showing Location in Prospectus of

Information Required by Items of Form S-2

Registration Statement
Item and Heading Location in Prospectus
---------------- ----------------------

<S> <C>
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus . . . . Outside Front Cover Page of Prospectus

2. Inside Front and Outside Back Cover Pages of
Prospectus . . . . . . . . . . . . . . . . . . Inside Front and Outside Back Cover Pages of
Prospectus; Available Information; Documents
Incorporated by Reference

3. Summary Information, Risk Factors and Ratio of
Earnings to Fixed Charges . . . . . . . . . . . Prospectus Summary; Summary Consolidated
Financial Data; Selected Consolidated Financial
and Operating Data

4. Use of Proceeds . . . . . . . . . . . . . . . . Prospectus Summary; Use of Proceeds

5. Determination of Offering Price . . . . . . . . Not Applicable

6. Dilution . . . . . . . . . . . . . . . . . . . Not Applicable

7. Selling Security Holders . . . . . . . . . . . Selling Shareholder

8. Plan of Distribution . . . . . . . . . . . . . Outside Front Cover Page of Prospectus; Selling
Shareholder; Underwriting

9. Description of Securities to be Registered . . Prospectus Summary; Description of Securities;
Underwriting

10. Interests of Named Experts and Counsel . . . . Not Applicable

11. Information with Respect to the Registrant . . Inside Front Cover Page of Prospectus;
Prospectus Summary; The Company; Use of
Proceeds; Price Range of Common Stock; Dividend
Policy; Capitalization; Selected Consolidated
Financial and Operating Data; Management's
Discussion and Analysis of Financial Condition
and Results of Operations; Business;
Management; Description of Securities;
Consolidated Financial Statements

12. Incorporation of Certain Information by Documents Incorporated by Reference
Reference . . . . . . . . . . . . . . . . . . .

13. Disclosure of Commission Position on Indem-
nification for Securities Act Liabilities . . . Not Applicable
</TABLE>

<PAGE>

SUBJECT TO COMPLETION, DATED MAY 4, 1995
PROSPECTUS
1,100,000 Shares [LOGO]

COMPUTER HORIZONS CORP.

Common Stock
__________________

Except as otherwise indicated, all information in this Prospectus has been
adjusted to reflect the three-for-two Common Stock split effected as a dividend
to be paid on May 30, 1995 to holders of record on May 9, 1995.

Of the 1,100,000 shares of Common Stock offered hereby, 1,025,000 are being
offered by the Company and 75,000 are being offered by the Selling Shareholder.
The Common Stock is traded on the Nasdaq National Market under the symbol
"CHRZ." On an unadjusted basis, the closing sales price for the Common Stock on
May 2, 1995 as reported on the Nasdaq National Market was $19.125 per share, or
$12.75 per share as adjusted.
__________________

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

<TABLE>
<CAPTION>
Underwriting Proceeds to
Price Discounts and Proceeds to Selling
to Public Commissions(1) Company(2) Shareholder
<S> <C> <C> <C> <C>
Per Share . . . . . . . . . . . . $ $ $ $
Total(3) . . . . . . . . . . . . $ $ $ $
</TABLE>

(1) The Company and the Selling Shareholder have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933. See "Underwriting."
(2) Before deducting expenses payable by the Company, estimated at $ .
(3) The Company and the Selling Shareholder have granted the Underwriters a
30-day option to purchase up to 165,000 additional shares of Common Stock
on the same terms and conditions as set forth above, solely to cover over-
allotments, if any. If the Underwriters exercise the option in whole or
in part, the shares of Common Stock purchased thereunder will be sold by
the Selling Shareholder to the extent that he, in his discretion, so
elects, and the Company will sell the balance, if any, of the shares
thereunder. If the option is exercised in full, the total Price to Public
and Underwriting Discounts and Commissions will be $ and $
, respectively. If all of the shares covered by the option are sold by
the Selling Shareholder, the proceeds to the Selling Shareholder will be $
; if all of the shares covered by the option are sold by the
Company, the total Proceeds to the Company will be $ . See
"Selling Shareholder" and "Underwriting."
_____________________

The shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as and if delivered to and accepted by them, and subject to
certain other conditions, including the right of the Underwriters to withdraw,
cancel, modify or reject any order in whole or in part. It is expected that
delivery of the shares will be made on or about , 1995, at the
offices of Janney Montgomery Scott Inc., 26 Broadway, New York, New York.
_____________________
Janney Montgomery Scott Inc. Robert W. Baird & Co.
Incorporated
The date of this Prospectus is , 1995

<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 securities
laws of any such State.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS MAY ENGAGE IN PASSIVE
MARKET MAKING TRANSACTIONS IN THE COMMON STOCK ON NASDAQ IN ACCORDANCE WITH RULE
10b-6A UNDER THE SECURITIES EXCHANGE ACT OF 1934. SEE "PLAN OF DISTRIBUTION."

____________

AVAILABLE INFORMATION

The Prospectus omits certain of the information contained in the Registration
Statement relating to the securities offered hereby which is on file with the
Securities and Exchange Commission (the "Commission"). The Company is subject
to the informational requirements of the Securities Exchange Act of 1934 (the
"Exchange Act"), and in accordance therewith, files periodic reports, proxy
statements, and other information with the Commission. Such Registration
Statement, periodic reports, proxy statements, and other information can be
inspected, without charge, and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549, and at its regional offices located at Seven World
Trade Center, Suite 1300, New York, New York 10048 and Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60061. Copies of
such material can be obtained at prescribed rates from the Public Reference
Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549.

DOCUMENTS INCORPORATED BY REFERENCE

The Company's Annual Report on Form 10-K for the year ended December 31,
1994, and the Company's Quarterly Report on Form 10-Q for the quarter ended
March 30, 1995, which have been filed with the Commission by the Company
pursuant to the Exchange Act, are incorporated by reference into this Prospectus
and made a part hereof.

Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
modifies, supersedes, or replaces such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus. Any person receiving a copy of this
Prospectus may obtain without charge, upon written or oral request, a copy of
any of the documents incorporated by reference herein, except for exhibits to
such documents (unless such exhibits are specifically incorporated by reference
into documents which this Prospectus incorporates). Requests should be directed
to: Corporate Secretary, Computer Horizons Corp., 49 Old Bloomfield Avenue,
Mountain Lakes, New Jersey 07046, telephone number (201) 402-7400.

____________

-2-

<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and consolidated financial statements, including the notes thereto,
appearing elsewhere in or incorporated by reference into this Prospectus.

Except as otherwise indicated, all information in this Prospectus (i) assumes
no exercise of the Underwriters' over-allotment option and (ii) has been
adjusted to reflect the three-for-two Common Stock dividends paid on April 13,
1993 and March 22, 1994 and the three-for-two Common Stock split effected as a
dividend to be paid on May 30, 1995 to holders of record on May 9, 1995. Unless
the context otherwise requires, all references in this Prospectus to the Company
refer to Computer Horizons Corp. and its subsidiaries.

The Company

The Company provides a wide range of information technology services and
solutions to major corporations. Historically, a professional services staffing
firm, the Company has, over the past four years, developed the technological and
managerial infrastructure to offer its clients value added services including
client/server systems development and migration, network and facility management
and administration, systems and business process re-engineering and outsourcing
("solutions"). The Company markets solutions to both existing and potential
clients with the objective of becoming one of such clients' preferred providers
of comprehensive information technology services and solutions. Solutions
engagements, which represented less than five percent of the Company's
consolidated revenues in 1992, accounted for approximately 25% of its
consolidated revenues in 1994. The Company believes that the range of services
and solutions that it offers, combined with its national network of branch
offices, provides it with significant competitive advantages in the information
technology marketplace.

The Company's clients primarily are Fortune 1,000 companies with significant
information technology budgets and recurring staffing or software development
needs. In 1994, the Company provided information technology services to 455
clients, including 55 to which it provided solutions. Among the Company's
solutions clients were American Telephone & Telegraph Company ("AT&T"),
BellSouth Corporation, Citicorp, The Dow Chemical Company, Florida Power & Light
Co., Ford Motor Company, International Business Machines Corporation ("IBM"),
Merrill Lynch & Co., Inc., NYNEX Corporation and The Prudential Insurance
Company of America. The Company believes that its large client base presents
excellent opportunities for further marketing of its solutions capabilities.
See "Business -- Strategies."

The Gartner Group, an industry research firm, estimates that the worldwide
information technology services market was approximately $11.8 billion in 1994,
and projects that such market will grow to approximately $25.1 billion by 1999.
The commercial information technology services industry is highly fragmented and
without a dominant company. Competitors vary by market segment and geographic
area, and range from national accounting firms, the professional service groups
of computer equipment companies and large scale independent firms to small
regional and niche firms.

The Company believes that a number of factors will cause the demand for
information technology services to continue to grow. These factors include
global competition, businesses' focus on "core competencies," accelerating
technological change and the need for enterprise-wide system integration arising
from the rapid growth in the number of software applications and end-users
throughout organizations. The principal technology-driven change is the
continuing movement by large corporations to open, distributed computer networks
using client/server architecture. These technological changes are making it
increasingly difficult and expensive for businesses to maintain in-house the
necessary technical and management capabilities to handle all of their
information technology needs. Information technology service providers such as
the Company allow clients to maximize their information technology resources.

-3-

<PAGE>

The Company has 29 branch offices in 22 states across the United States and a
staff of approximately 2,200, including approximately 1,900 software
professionals. Its solutions engagements are supported, developed and managed
by specialized groups thereby assuring that each solutions engagement is
performed with the same state-of-the-art methodologies and processes and proven
management techniques.

The Company's strategy is to continue its growth and further establish its
position as a comprehensive provider of information technology services and
solutions by (i) increased marketing of solutions to existing clients; (ii)
enhancing its solutions capabilities; (iii) acquiring entities that may provide
the Company with further competitive advantages and enhanced profitability; and
(iv) developing off-shore facilities that give more cost effective alternatives
to clients. See "Business -- Strategies."

____________

<TABLE>
<CAPTION>
The Offering

<S> <C>
Common Stock offered by the Company . . . . . . . . 1,025,000 shares.

Common Stock offered by the Selling Shareholder . . 75,000 shares.
Common Stock to be outstanding after the offering . 10,018,937 shares (1).

Use of Proceeds . . . . . . . . . . . . . . . . . . Repayment of short-term debt, working capital and other general
corporate purposes, including possible acquisitions. See "Use of
Proceeds."

Nasdaq National Market Symbol . . . . . . . . . . . CHRZ
</TABLE>
__________________

(1) Does not include 1,072,535 shares subject to outstanding options granted
under the Company's stock option and appreciation plans with a weighted
average exercise price of $5.40. See Note 4 to Notes to Consolidated
Financial Statements.

(Prospectus Summary continues on following page.)

-4-

<PAGE>

<TABLE>
<CAPTION>
Summary Consolidated Financial Data

Three Months Ended
Year Ended December 31, March 30,
----------------------------------------------- ------------------
1990 1991 1992 1993 1994 1994 1995
---- ---- ---- ---- ---- ---- ----
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Revenues . . . . . . . . . . . . . . $ 99,432 $ 94,543 $102,206 $121,550 $152,192 $ 33,171 $ 43,867
Income from operations . . . . . . . 6,754 4,777 4,470 7,494 11,011 2,235 3,207
Income before income taxes . . . . . 5,868 4,084 3,892 6,910 10,373 2,085 3,032
Net income . . . . . . . . . . . . . $ 3,334 $ 2,266 $ 2,026 $ 3,704 $ 5,686 $ 1,114 $ 1,682
Net income per share of Common Stock $ .38 $ .26 $ .22 $ .37 $ .60 $ .12 $ .18
Weighted average number of shares
of Common Stock outstanding . . 8,676 8,802 9,083 9,996 9,506 9,520 9,502

<CAPTION>
December 31, March 30, 1995
1994 -----------------------
-------------- Actual As Adjusted(1)
------ --------------
<S> <C> <C> <C>
Balance Sheet Data:
Working capital . . . . . . . . . . . . . . . . $ 20,484 $ 21,826 $
Total assets . . . . . . . . . . . . . . . . . 49,150 51,461
Notes payable - banks (2) . . . . . . . . . . . 3,200 3,950 --
Long-term debt, including current portion . . . 5,844 5,716 5,716
Shareholders' equity . . . . . . . . . . . . . 29,917 31,723
</TABLE>
__________________

(1) Adjusted to give effect to the receipt by the Company of the net proceeds
from the offering at an assumed public offering price of $ per share,
after deducting estimated offering expenses of $ , and the
application of such proceeds. See "Use of Proceeds."
(2) Represents amounts outstanding under the Company's lines of credit. See
"Management's Discussion and Analysis of Financial Condition and Results
of Operations."

-5-

<PAGE>
USE OF PROCEEDS
The net proceeds from the sale of the 1,025,000 shares of Common Stock
offered by the Company, assuming an offering price of $ per share and
after deducting underwriting discounts and commissions and other expenses of the
offering estimated at $ ($ if the Underwriters' over-
allotment option is exercised in full and the shares are sold by the Company),
will be approximately $ ($ if the Underwriters' over-
allotment option is exercised in full and the shares are sold by the Company).
The Company will not receive any of the proceeds from the sale of the 75,000
shares of Common Stock being offered by the Selling Shareholder.

The Company intends to use approximately $6,000,000 of the net proceeds to
repay the outstanding indebtedness under its lines of credit with two banks.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources." During 1994, the weighted
average interest rate under these lines of credit was 6.71%. The Company does
not intend to use any of the net proceeds to prepay the Company's outstanding
principal amount of long-term debt of $4,300,000 at May 2, 1995 because such
prepayment would trigger certain penalties.

The Company intends to use the balance of the net proceeds for working
capital and other general corporate purposes, including the expansion of its
business. The Company may use a portion of the net proceeds to acquire other
information technology businesses, although there can be no assurance that any
such acquisition will be made. While the Company regularly evaluates
acquisition and merger candidates, conducts preliminary discussions and intends
to pursue acquisition and merger opportunities available to it, the Company has
no present commitments or agreements with respect to any such acquisition or
merger. Pending its use, the Company intends to invest the net proceeds in
short-term, investment grade securities.

PRICE RANGE OF COMMON STOCK

The Common Stock is traded in the over-the-counter market and is quoted on
the Nasdaq National Market under the symbol CHRZ. The following table sets
forth for each period indicated the high and low closing sales prices for the
Common Stock as reported on the Nasdaq National Market. Such prices do not
include retail markups, markdowns or commissions. The following information has
been adjusted to reflect the three-for-two Common Stock split effected as a
dividend to be paid on May 30, 1995 to holders of record of Common Stock on May
9, 1995.
High Low
---- ---
1993
First Quarter . . . . . . . . . . . $ 3.55 $ 2.74
Second Quarter . . . . . . . . . . . 3.67 3.03
Third Quarter . . . . . . . . . . . 4.95 3.22
Fourth Quarter . . . . . . . . . . . 5.95 4.33

1994
First Quarter . . . . . . . . . . . 8.33 5.17
Second Quarter . . . . . . . . . . . 8.17 5.50
Third Quarter . . . . . . . . . . . 8.00 5.50
Fourth Quarter . . . . . . . . . . . 10.50 7.67

1995
First Quarter . . . . . . . . . . . 12.67 8.83
Second Quarter (through May 2, 1995) 14.00 11.00

On May 2, 1995, the last reported sale price of the Common Stock was $12.75
per share. As of May 1, 1995, the Company had approximately 1,139 stockholders
of record.

-6-

<PAGE>
DIVIDEND POLICY

The Company has never paid cash dividends on the Common Stock and does not
contemplate paying cash dividends on the Common Stock in the foreseeable future.
Earnings, if any, will be used to finance the development and expansion of the
Company's business. Future dividend policy will depend upon the Company's
earnings, capital requirements, financial condition and other factors considered
relevant by the Company's Board of Directors. The amount of cash dividends the
Company may pay on the Common Stock is limited by the agreement governing its
long-term debt.

CAPITALIZATION

The following table sets forth the Company's short-term and long-term debt,
shareholders' equity and total capitalization as of March 30, 1995 and as
adjusted to reflect the sale of the 1,025,000 shares of Common Stock offered by
the Company at an assumed public offering price of $ per share and the
application of the net proceeds therefrom.

<TABLE>
<CAPTION>
March 30, 1995
-----------------------------
Actual As Adjusted (1)
------ -----------
(In thousands)
<S> <C> <C> <C>
Notes payable - banks (2) . . . . . . . . . . . . . . . . . . . . . $ 3,950 $ --
Long-term debt, including current portion . . . . . . . . . . . . . 5,716 5,716
Shareholders' equity:
Preferred Stock, $.10 par value; authorized and unissued,
200,000 shares, including, 50,000 shares of Series A . . -- --
Common Stock, $.10 par value; authorized, 30,000,000 shares;
issued, 10,758,320 and 11,783,320 shares, as adjusted(1) 1,076 1,178
Additional paid-in capital . . . . . . . . . . . . . . . . . . 13,762
Retained earnings . . . . . . . . . . . . . . . . . . . . . . 31,533 31,533
-------- ---------
46,371
Less shares held in treasury, at cost, 1,786,883 shares . . . 14,648 14,648
-------- ---------
Total shareholders' equity . . . . . . . . . . . . . 31,723
-------- ---------
Total capitalization . . . . . . . . . . . . . . . . . . . . . . . $ 41,389 $
======== =========
</TABLE>
___________________

(2) Represents amounts outstanding under the Company's lines of credit.

-7-

<PAGE>
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

The selected financial data as of March 30, 1995 and for the three months
ended March 30, 1994 and 1995 have been derived from the unaudited consolidated
financial statements of the Company and notes thereto included elsewhere in this
Prospectus and should be read in conjunction with those unaudited consolidated
financial statements and notes and reflect all adjustments (consisting of normal
recurring accruals) which are, in the opinion of management, necessary to
present fairly the data as of such date and for such periods. The results for
interim periods are not necessarily indicative of results to be expected for the
year. The selected financial data as of and for the five-year period ended
December 31, 1994 have been derived from the audited consolidated financial
statements of the Company. The income statement data for the years ended
December 31, 1992, December 31, 1993, and December 31, 1994, and the balance
sheet data at December 31, 1993 and December 31, 1994, are derived from, and are
qualified by reference to, the audited consolidated financial statements and
notes thereto included elsewhere in this Prospectus and should be read in
conjunction with those consolidated financial statements and notes. The income
statement data for the years ended December 31, 1990 and December 31, 1991, and
the balance sheet data at December 31, 1990, December 31, 1991 and December 31,
1992 are derived from audited consolidated financial statements not included or
incorporated by reference in this Prospectus.

<TABLE>
<CAPTION>
Three Months
Ended
Year Ended December 31, March 30,
--------------------------------------------- ------------------
1990 1991 1992 1993 1994 1994 1995
---- ---- ---- ---- ---- ---- ----
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Revenues . . . . . . . . . . . $ 99,432 $ 94,543 $102,206 $121,550 $152,192 $ 33,171 $ 43,867
Costs and expenses:
Direct costs . . . . . . . . 71,563 68,098 74,200 87,800 108,189 23,655 31,366
Selling, administrative and
general . . . . . . . . . . . 21,115 21,668 22,651 26,256 32,992 7,281 9,294
Merger and related expenses
(1) . . . . . . . . . . . . . -- -- 885 -- -- -- --
Income from operations . . . . 6,754 4,777 4,470 7,494 11,011 2,235 3,207
Other income (expense):
Interest income . . . . . . . 156 312 312 235 53 35 37
Interest expense . . . . . . (1,042) (1,005) (890) (819) (691) (185) (212)
-------- -------- -------- -------- -------- -------- --------
Income before income taxes . . 5,868 4,084 3,892 6,910 10,373 2,085 3,032
Income taxes . . . . . . . . . 2,534 1,818 1,866 3,206 4,687 971 1,350
-------- -------- -------- -------- -------- -------- --------
Net income . . . . . . . . . . $ 3,334 $ 2,266 $ 2,026 $ 3,704 $ 5,686 $ 1,114 $ 1,682
======== ======== ======== ======== ======== ======== ========
Net income per share:
Primary . . . . . . . . . . . $ .38 $ .26 $ .22 $ .37 $ .60 $ .12 $ .18
Fully diluted . . . . . . . . $ .38 $ .26 $ .22 $ .36 $ .60 $ .12 $ .18
Weighted average number of
shares outstanding:
Primary . . . . . . . . . . . 8,676 8,802 9,083 9,996 9,506 9,520 9,502
Fully diluted . . . . . . . . 8,775 8,828 9,230 10,331 9,534 9,558 9,562

<CAPTION>
December 31, March
30,
---------------------------------------------------- ----------
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Working capital . . . . . . . $ 17,573 $ 18,972 $ 20,317 $ 17,531 $ 20,484 $ 21,826
Total assets . . . . . . . . 36,683 37,220 41,249 40,600 49,150 51,461
Notes payable - banks (2) . . -- -- -- -- 3,200 3,950
Long-term debt, including
current portion . . . . . . 10,325 10,000 8,572 7,399 5,844 5,716
Shareholders' equity . . . . 19,010 21,711 26,856 25,689 29,917 31,723

Operating Data:
Employees . . . . . . . . . . 1,258 1,251 1,414 1,603 2,150 2,202
Branch offices . . . . . . . 24 24 27 27 29 29
</TABLE>
_______________
(1) In 1992, the Company recorded a non-recurring charge of $885,000 resulting
from the acquisition of Worldwide Computer Services Inc. The charge
consisted of redundant facility and personnel expenses. See Note 2 of
Notes to Consolidated Financial Statements.
(2) Represents amounts outstanding under the Company's lines of credit.

-8-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with, and
is qualified in its entirety by, the Consolidated Financial Statements,
including the Notes thereto, and Selected Consolidated Financial and Operating
Data included elsewhere in this Prospectus. Historical results are not
necessarily indicative of trends in operating results for any future period.

Results of Operations
The following table sets forth, for the periods indicated (i) certain income
and expense items expressed as a percentage of the Company's consolidated
revenues and (ii) the percentage increase in the amount of such items in 1994
compared to 1993 and the first quarter of 1995 compared to the first quarter of
1994, respectively:

<TABLE>
<CAPTION>
Year Ended December 31, Percentage Three Months Ended March 30, Percentage
------------------------ Increase ---------------------------- Increase
1992 1993 1994 1993/1994 1994 1995 1994/1995
------------------------ ---------- ---------------------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues . . . . . . . . 100.0% 100.0% 100.0% 25.2% 100.0% 100.0% 32.2%
Direct costs . . . . . . 72.6 72.2 71.1 23.2 71.3 71.5 32.6
Selling, administrative
and general . . . . . . . 22.2 21.6 21.7 25.7 21.9 21.2 27.6
Income from operations . 4.4(1) 6.2 7.2 46.9 6.7 7.3 43.5
Interest expense, net . . 0.6 0.5 0.4 9.2 0.5 0.4 16.7
Income before income
taxes . . . . . . . . . 3.8 5.7 6.8 50.1 6.3 6.9 45.4
Net income . . . . . . . 2.0 3.0 3.7 53.5 3.4 3.8 51.0
</TABLE>
________________________

(1) Reflects a non-recurring charge of $885,000 resulting from the acquisition
of Worldwide Computer Services Inc. This charge consisted of redundant
facility and personnel expenses. (See Note 2 of Notes to Consolidated
Financial Statements.)

Revenues

Consolidated revenues for the first quarter of 1995 increased 32% compared to
the first quarter of 1994. The increase was the result of both the further
development of the Company's solutions business and the continued expansion in
its core business of providing professional software personnel services.

Consolidated revenues in 1994 increased by 25% compared to 1993, and in 1993
consolidated revenues increased by 19% compared to 1992. The increase in 1994
was attributable equally to the expansion of the Company's professional software
personnel services business and the continued development of its solutions
business. See "Business -- Overview." The increase in consolidated revenues in
1993 was attributable to the acquisition in August 1992 of Worldwide Computer
Services Inc. (see Note 2 of Notes to Consolidated Financial Statements) and
internal expansion. The Company began the development of its solutions business
in 1991.

The Company provides its services primarily to businesses in five principal
Standard Industrial Classification Code sectors. The largest portion of the
Company's consolidated revenues in each of 1994, 1993 and in 1992 was derived
from manufacturing sector clients, 28% in each of 1994 and 1993 and 24% in 1992.
In dollars, these amounts were $42.9, $34.1 and $24.6 million in 1994, 1993 and
1992, respectively. Revenues were broad-based within this sector, with
particular emphasis in transportation, petroleum refining and chemical/allied
products manufacturing.

Consolidated revenues derived from financial services clients were 26% of
Company revenues in each of 1994 and 1993 and 23% in 1992. In dollars, such
revenues were $39.9, $31.5 and $23.1 million in 1994, 1993 and 1992,
respectively. The increase in consolidated revenues from 1992 to 1994 was
experienced across all subsectors, including insurance, brokerage, banking and
non-depository credit institutions.

-9-
<PAGE>
Telecommunications/utilities clients represented 23% of the Company's
consolidated revenues in 1994, 24% in 1993, and 26% in 1992. In dollars, the
1994, 1993 and 1992 amounts were $35.0, $28.8 and $26.4 million, respectively.

The Company's services sector, which includes business services and computer
processing services, recognized significantly increased revenues during the
three-year period. For 1994, 1993 and 1992, revenues from this sector were 15%,
13% and 13%, respectively, of the Company's consolidated revenues. In dollars,
the amounts were $22.5, $16.3 and $13.2 million.

Wholesale/retail trade clients contributed revenues of $11.9, $10.9 and $14.9
million in 1994, 1993 and 1992, respectively, representing 8%, 9% and 15% of the
Company's consolidated revenues, respectively. But for a large retail project
completed in 1992, this sector has been relatively flat.

Direct Costs

Direct costs as a percentage of consolidated revenues were 71.5% and 71.3%
for the first quarters of 1995 and 1994, respectively. Direct costs as a
percentage of consolidated revenues were 71.1%, 72.2% and 72.6% for 1994, 1993
and 1992, respectively. The improvements in 1994 and 1993 were attributable to
the Company's implementation of tighter controls over pricing, wages, costs and
benefits.

Selling, Administrative and General

Selling administrative and general expenses were 21.2% of consolidated
revenues for the first quarter of 1995, compared to 21.9% for the same period in
1994. This decrease is attributable to both tighter cost controls and higher
consolidated revenues during the past year. The dollar expenditures were $9.3
million and $7.3 million for the respective periods.

Selling, administrative and general expenses have remained essentially stable
as a percentage of consolidated revenues: 21.7%, 21.6% and 22.2% for 1994, 1993
and 1992, respectively. In dollars, they were $33.0, $26.3 and $22.7 million,
respectively, for these years.

Profitability

Consolidated income from operations was $3.2 million in the first quarter of
1995, compared to $2.2 million in the first quarter of 1994, representing 7.3%
and 6.7% of consolidated revenues, respectively. The gains are primarily
attributable to increased revenues and various cost containment initiatives.
The Company's business is labor intensive and, as such, is sensitive to
inflationary trends, client billing rates, as well as payroll costs.

Consolidated income from operations was $11.0 million in 1994, compared to
$7.5 million in 1993 and $4.5 million in 1992. As a percentage of consolidated
revenues, income from operations were 7.2%, 6.2% and 4.4% for 1994, 1993 and
1992, respectively. The gains are attributable to increased revenues, improved
gross margins and containment of selling, administrative and general expenses.
The Company's business is labor intensive and, as such, is sensitive to
inflationary trends. This sensitivity applies to client billing rates as well
as payroll costs.

Consolidated net income for the first quarter of 1995 was $1.7 million, or
$.18 per share, compared with $1.1 million, or $.12 per share in 1994. The
Company's effective tax rate for Federal, state and local income taxes was 44.5%
and 46.6% for the first quarter of 1995 and 1994, respectively. The effective
rate for the first quarter of 1995 decreased due to profits increasing more than
non-tax benefited charges. After accounting for non-tax benefited charges such
as goodwill amortization and certain travel and entertainment deduction
limitations, the Company's standard marginal income tax rate for these periods
was approximately 42%.

Consolidated net income for 1994 was $5.7 million, or $.60 per share,
compared with $3.7 million, or $.37 per share, in 1993, and $2.0 million, or
$.22 per share, in 1992. The Company's effective tax rate for Federal, state
and local income taxes was 45.2%, 46.4% and 47.9% for 1994, 1993 and 1992,
respectively.

-10-
<PAGE>
Liquidity and Capital Resources

As of March 30, 1995, the Company had a current ratio of 2.5 to 1. Available
bank lines of credit totaled $8.0 million at March 30, 1995 ($12.0 million less
$4.0 million outstanding). As of May 2, 1995, the outstanding borrowings under
these facilities was $6.2 million. Borrowings have been used to finance the
growth in accounts receivable resulting from increased revenues and, in the
first quarter of 1995, the effect of normal year-end purchase order expirations
and resultant payment delays. Borrowings also were used to finance the
repurchase of shares of Common Stock for approximately $2.8 million from the
Company's former Vice Chairman and Executive Vice President, who announced his
retirement in October 1994, effective February 15, 1995. During 1994, the
average outstanding amount under such lines of credit was $1.1 million and the
weighted average interest rate was 6.71%. During 1993, the Company borrowed
$4.0 million at the lender's prime lending rate (6%) to finance the purchase of
treasury stock. This loan was repaid prior to December 31, 1993. See Note 4 of
Notes to Consolidated Financial Statements.

The Company's long-term debt consists primarily of notes issued to a
financial institution in the outstanding principal amount of $5.7 million as of
March 30, 1995. The notes are payable in installments of $1.4 million on April
15th of each year through 1998 and bear interest at the rate of 9.55% per annum.

The Company has certain contingent payment obligations over the next several
years and will pay an aggregate of approximately $0.5 million in 1995 pursuant
to such obligations. See Note 2 of Notes to Consolidated Financial Statements.
In April 1995, the Company contributed $0.5 million for its 50% interest in a
joint venture with the Birla Group of India, a large multi-national
conglomerate. See "Business - Recent Solutions Capability Developments."

The Company believes that the net proceeds of this offering, together with
its lines of credit and internally generated funds, will permit it to repay the
outstanding short-term debt, to continue to meet its working capital obligations
and fund the further development of its business for the next 12 months.

-11-
<PAGE>
BUSINESS
Overview

The Company has 29 branch offices in 22 states across the United States and a
staff of approximately 2,200, including approximately 1,900 software
professionals. Its solutions engagements are supported, developed and managed
by specialized groups based at the Company's headquarters, thereby assuring that
each solutions engagement is performed with the same state-of-the-art
methodologies and processes and proven management techniques.

The Commercial Information Technology Services Industry

The Company competes in the commercial information technology services
industry. Commercial information technology services consist of the
development, operation and maintenance of computerized information systems. The
Gartner Group, an industry research firm, estimates that the worldwide
commercial and governmental information technology services market was
approximately $11.8 billion in 1994, and projects that such market will grow to
approximately $25.1 billion by 1999. The principal buyers of commercial
information technology services are large corporations with recurring staffing
and solutions needs. The industry is highly fragmented and without a dominant
company. Competitors vary by market segment and geographic area, and range from
several of the "Big Six" accounting firms, the professional service groups of
computer equipment companies and large scale outsourcers such as Electronic Data
Systems Corporation, to small regional and niche firms, although there has been
a trend in the past decade towards consolidation, with larger companies gaining
revenue and expertise by acquiring smaller firms.

The Company believes that a number of factors will cause the demand for
commercial information technology services to continue to grow. These factors
include global competition, businesses' focus on "core competencies,"
accelerating technological change and the need for enterprise-wide system
integration arising from the rapid growth in the number of software applications
and end-users throughout organizations. The principal technology-driven change
is the continuing movement by large corporations to open, distributed computer
networks using client/server architecture. These technological changes are
making it increasingly difficult and expensive for businesses to maintain in-
house the necessary technical and management capabilities to handle all of their
information technology needs. Commercial information technology service
providers such as the Company allow clients to maximize their information
technology resources.

-12-
<PAGE>
The major technological development in information services in recent years
has been the transition to distributed and open computing environments utilizing
client/server architectures. Historically, enterprise-wide computing has been
conducted on proprietary host-based systems operating on mainframes and
minicomputers typically supplied by a single vendor. These host-based systems
offered centralized data processing to a small group of users and helped
automate tasks such as financial reporting. In the 1980s, the ease-of-use and
low cost of personal computers, combined with the increased availability of
computer end-user software, such as financial spreadsheets and word processing,
led to rapid growth in the number of computer users throughout organizations.
Computing environments became increasingly varied and included personal
computers and workstations from different vendors as well as traditional
minicomputers and mainframes, all of which were interconnected by local area
networks ("LANs"). This decentralized, or distributed, computing environment
soon required organizations to seek methods of improving communication and
information processing across varying computer hardware and software
configurations. The resultant move to open, standards based computing
environments continues to accelerate today as a result of improvements in
price/performance ratios for computer systems and advances in open
computing standards and enabling technologies.

Strategies

The Company's objective is to continue its growth and further establish its
position as a comprehensive provider of information technology solutions and
services. The Company's principal strategies for achieving these goals are as
follows:

- - Increased Marketing of Solutions to Existing Clients. The Company has
established long-term relationships with many of its clients. During 1994, 1993
and 1992, 93.2%, 91.8% and 88.5%, respectively, of the Company's revenues were
derived from clients to which it had provided services or solutions in the
preceding year. The Company believes that the access and goodwill these client
relationships offer provide it with significant advantages in marketing
additional services and solutions to such clients. The Company believes that
its long-term client relationships and ability to work in partnership with its
clients throughout the life cycle of their information systems, from design and
development through testing and implementation to refurbishment and re-
engineering, combined with its ability to outsource or staff the operation of
such systems, distinguishes it from many of its competitors and provides it with
the opportunity to become a preferred provider for a broad range of its existing
and new clients' information technology solutions needs.

- - Enhancing its Solutions Capabilities. The Company believes that it will be
able to increase the revenues that it derives from its existing clients,
increase the size of the projects that it undertakes and attract new clients by
enhancing the information technology solutions that it offers. The Company has
begun to develop proprietary "products": solutions to specific information
technology problems consisting of a package of outsourcing, project management
and professional services utilizing proprietary software tools and methodologies
acquired or developed by the Company. Such solutions products can serve to
distinguish the Company and provide it with a significant competitive advantage.
See "Business - Recent Solutions Capability Developments."

- - Acquiring Entities that May Provide the Company with Further Competitive
Advantages and Enhanced Profitability. Given the highly fragmented nature of
the information technology marketplace, the Company believes that significant
acquisition opportunities exist. The Company continuously evaluates potential
acquisition candidates for expanding its branch office network, increasing its
technical expertise or providing it with other competitive advantages. The
Company, however, has no present agreement or commitment with respect to any
such acquisition, and there can be no assurance that any such acquisition will
be consummated.

- - Developing Off-shore Facilities that Give More Cost Effective Alternatives to
Clients. The Company believes that the utilization of off-shore facilities will
allow it to offer its clients services and solutions in a more cost effective
manner. Off-shore facilities take advantage of lower-cost technical personnel
to carry out legacy systems maintenance, client/server systems development and
migration, help desk activities and program design and coding. The Company has
recently entered into a joint venture with the Birla Group, a major Indian
industrial enterprise, to open its first such facility. See "Business - Recent
Solutions Capability Developments."

-13-

<PAGE>
Services

In addition to its core professional services staffing business, the Company
offers its clients a wide range of information technology solutions, including
client/server systems development and migration, network and facilities
management and administration, and systems and business process re-engineering.
The Company can supply each of these solutions alone or together with others as
a comprehensive package. The Company augments its ability to provide solutions
utilizing state-of-the art technology by entering into arrangements with leading
hardware, software and systems vendors. Pursuant to these arrangements, the
Company is authorized to incorporate these entities' products in its offerings.
The Company can undertake full or shared project responsibility with the client
or simply provide software professionals with specified skills to augment the
client's staff on an as-needed basis. Projects can be performed at the client's
facilities or at the Company's own software facilities.

The following is a brief description of certain of the Company's principal
services:

- - Professional Services Staffing. Providing highly skilled software
professionals to augment the internal information management staffs of major
corporations remains the Company's primary business, accounting for
approximately 75% of the Company's consolidated revenues in 1994. The Company
offers its clients centralized vendor management, supplying their staffing needs
from among the Company's approximately 1,900 software professionals. The
Company is committed to expanding its professional services staffing operations
in conjunction with its solutions business.

- - Client/Server Systems Development and Migration. The Company has the
capability to develop and implement open computer systems using client/server
architecture and integrating servers, mini and mainframe systems, workstations,
terminals and communication gateways into complete, flexible networks. Such
services include project management, selection of viable systems platforms,
creation of migration plans, development of customized software applications,
and systems and database integration. The Company specializes in integrating
local area network ("LAN") environments into single heterogeneous networks and
unifying enterprise networks into wide area network ("WAN") environments.

- - Network and Facilities Management and Administration. In addition to
client/server systems development and migration, the Company provides
comprehensive applications development and systems maintenance services for
legacy systems. It can also manage, operate and administer data center
facilities, including both large and small centralized main frame (or "glass
house") data centers, and provide help desk and network administration services.
The Company can provide (or "outsource") such services and solutions either at
the client's facilities or at state-of-the-art software facilities located at
its Mountain Lakes, New Jersey, Pompano Beach, Florida and Minneapolis,
Minnesota branch offices and, through its new joint venture with the Birla
Group, New Delhi, India. The Company's Pompano Beach facility is fully
bilingual, and currently provides data processing services for the Latin
American operations of a major United States bank.

- - Systems and Business Processing Re-engineering. The Company provides its
clients with proven methodologies, software tools, procedures and project
management practices to maximize the life span and productivity of their legacy
systems. The Company's capabilities in this area extend beyond traditional re-
engineering and involve creation of data and process models and the extraction
of imbedded business rules.

- - Knowledge Transfer and Training. The Company offers both standard curricula
and custom-tailored courses for a client's particular environment and needs.
Comprehensive courses cover languages, hardware, software, tools, methodologies
and management and productivity skills. The Company's offerings include
application downsizing, graphical interfaces, open systems, Computer aided
software engineering ("CASE") and information engineering technologies,
relational technology and personal computer software and hardware. The Company
also has reseller and training rights in selected markets to certain development
tools used as an aid in building client/server applications.

-14-
<PAGE>
Recent Solutions Capability Developments

On March 9, 1995 the Company introduced its first solutions product utilizing
an internally developed software tool, CHC's Signature 2000, pursuant to which
the Company can identify all of the date occurrences within an application and
reformat the date fields to permit the processing of dates after December 31,
1999. Many existing computer systems run software programs permitting only two
digit entries for years (e.g., "95" for the year 1995) and, consequently, cannot
properly process dates in the next century. The Company believes that its CHC's
Signature 2000 product can update applications more quickly and inexpensively
than is otherwise possible. The Company was recently awarded its first contract
for its CHC's Signature 2000 product.

Also in March, the Company announced that it had entered into a joint venture
with the Birla Group, a major Indian industrial enterprise with annual sales of
approximately $4.5 billion. In April, the Company and the Birla Group each made
initial cash contributions of $0.5 million and each received a 50% interest in
the joint venture. The Birla Group will also contribute the net assets of its
existing information technology company to the joint venture, which will be
known as Birla Horizons International, and the Company will provide it with
technological and management support. The Company has worked successfully on
solution projects with the Birla Group over the last several years and believes
that the joint venture will be able to provide clients with solutions such as
legacy systems maintenance, client/server systems development and migration,
help desk activities and program design and coding through its software
facilities in New Delhi, India more cost effectively than can be done
domestically.

Organization

The Company's organizational structure has evolved in conjunction with the
development of its solutions capability. It is designed to provide clients
across the United States with responsive, efficient service utilizing state-of-
the art software standards, methodologies and management techniques applied
consistently from engagement to engagement.

The Company services its clients through a network of 29 branch offices
located in 22 states across the United States. Each branch office is
responsible for staffing the professional personnel needs of clients within its
assigned geographic region. In addition, the branch offices provide the
professional staff for the Company's solutions engagements in that area under
the management of the specialized solutions groups described below. The number
of software professionals attached to each branch office ranges from
approximately 15 to 190, with the average being approximately 70. Twenty-seven
of the Company's branch offices are organized into three geographic regions
headed by Senior Vice Presidents who report directly to the Company's Chief
Executive Officer. An additional two offices constitute the Company's
Communications Clients Group, and serve primarily telecommunications companies.
Set forth below is a list of the Company's branch offices:

<TABLE>
<S> <C> <C>
Eastern Region Central States Region Midwest/West Region

Hartford, CT Atlanta, GA Phoenix, AZ
Washington, DC Indianapolis, IN Los Angeles, CA
Miami, FL Louisville, KY Colorado Springs, CO
Boston, MA Raleigh, NC Denver, CO
Mountain Lakes, NJ Cincinnati, OH Cedar Rapids, IA
New York, NY Cleveland, OH Chicago, IL
Philadelphia, PA Columbus, OH Kansas City, KS
Dayton, OH Detroit, MI
Memphis, TN Minneapolis, MN
Dallas, TX
Houston, TX

Communications Clients Group

Tampa, FL
Clark, NJ
</TABLE>

-15-
<PAGE>
The technical and management infrastructure for the Company's solutions
capability is provided by three specialized subsidiaries: Horizons Consulting,
Inc. ("HCI"), Unified Systems Solutions, Inc. ("USS") and Strategic Outsourcing
Services, Inc. ("SOS"). The Company established HCI in June 1992; USS was
acquired by the Company in January 1993; and SOS was acquired in June 1994.
Both USS and SOS were acquired in the development stage, and in each case the
Company had provided initial financing to the founders. See Note 2 of Notes to
Consolidated Financial Statements. Each of HCI, USS and SOS possess the
technical and management resources to manage a key area of the Company's
solutions capabilities: HCI provides applications development, systems
maintenance and systems and business process and re-engineering for legacy
systems; USS designs, develops and integrates client/server networks, effects
mainframe migrations and provides related services, including custom software
development and training; and SOS operates and administers glass house data
facilities.

For biographical information regarding the founders of HCI, USS and SOS, each
of which reports directly to the Company's Chief Executive Officer, see
"Management." Although treated as separate entities for certain internal
corporate purposes, HCI, USS and SOS operate through and with the Company's
branch office system. Depending upon the nature of each solutions engagement,
project managers from one or more of the subsidiaries will be assigned to design
and manage the project, which is staffed through the branch offices.

The Company's knowledge transfer and training services are provided through
its ComputerKnowledge division ("CKC"). CKC operates training centers in the
Company's Mountain Lakes, Cincinnati, Detroit and Minneapolis offices, and
provides training at client facilities throughout the United States.

Marketing and Clients

The Company markets through a combination of account representatives located
both at the branch offices and the solutions subsidiaries. Approximately
70 people are engaged in marketing full time. Account representatives are
assigned to a limited number of accounts, generally no more than eight, in order
to develop an in-depth understanding of each client's information technology
needs and form strong client relationships. As noted above, the cross-marketing
of multiple services is an important Company strategy. See "Business -
Strategies." Commissions constitute a significant portion of the total
compensation of account representatives, and are based upon the gross profit
from business originated by each representative. Professional services are
generally billed to clients on an hourly or daily basis. The Company undertakes
solutions engagements on both a fixed price and best efforts basis. In fixed
price arrangements, the Company bears the risk that project costs will exceed
estimates. Consequently, the analysis of the scope and complexity of a project
and the development of a viable, competitive bid is a critical aspect of the
Company's solutions business.

The Company focuses its marketing efforts on large businesses and
institutions with significant information technology budgets and recurring
staffing or software development needs. Its clients are engaged in a broad
spectrum of industries. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations." The following is a selected list of
clients for which the Company provided services in 1994:

<TABLE>
<S> <C> <C>
American Express Company Florida Power & Light Co. MCI Communications Corp.
AT&T Ford Motor Company Merrill Lynch & Co., Inc.
BellSouth Corporation GTE Corporation NYNEX Corporation
British Petroleum Company P.L.C. General Electric Company The Prudential Insurance
CIGNA Corporation IBM Company of America
Citicorp Lehman Brothers, Inc. Time Warner Inc.
Eli Lilly and Company
</TABLE>

The Company has historically derived, and expects in the future to derive, a
significant percentage of its total revenue from a relatively small number of
clients. In 1994, the Company's two largest clients, AT&T and IBM, accounted
for 9% and 6%, respectively, of consolidated revenues, but the Company provided
services through various engagements for a number of different divisions of each
of these clients.

In accordance with industry practice, most of the Company's contracts are
terminable by either the client or the Company on short notice. The Company
does not believe that backlog is material to its business.

-16-
<PAGE>
Professional Staff and Recruitment

As of March 30, 1995 the Company had a staff of approximately 2,200,
including approximately 1,900 software professionals. As of that date,
approximately 350 of the Company's software professionals were working on
solutions engagements.

The Company's success is dependent upon its ability to attract and retain
qualified professional computer personnel. In particular, competition for the
limited number of qualified project managers and professionals with certain
"niche" skills, such as a working knowledge of certain sophisticated computer
software, is intense. Although the Company generally has been successful in
attracting employees with the skills needed to fulfill customer engagements,
demand for qualified professionals conversant with certain technologies may
outstrip supply as new and additional skills are required to keep pace with
evolving computer technology. Accordingly, the Company devotes significant
resources to recruitment, maintaining over 50 recruiters at the branch, regional
and corporate levels. Each potential applicant is interviewed, tested and
graded by the Company's recruiting personnel, and the applicant's file is
scanned into the Company's imaged-based centralized repository. This data base,
which may be accessed by appropriate personnel throughout the Company, can be
searched by a number of different criteria, including specific skills or
qualifications.

Competition

The commercial information technology services market is highly competitive
and served by numerous firms, many of which serve only their respective local
markets. The market includes participants in a variety of market segments,
including systems consulting and integration firms, professional services
companies, application software firms, temporary employment agencies, the
professional service groups of computer equipment companies such as Hewlett-
Packard Company, Unisys Corporation and Digital Equipment Corporation,
facilities management and management information systems ("MIS") outsourcing
companies, certain "Big Six" accounting firms, and general management consulting
firms. The Company's competitors also include companies such as Andersen
Consulting, Technology Solutions Corporation, Cambridge Technology Partners,
Inc., SHL Systemhouse Inc., Cap Gemini America, Business System Group, the
consulting division of Computer Sciences Corporation, Computer Task Group, Inc.,
Analysts International Corp. and Keane, Inc.

Many participants in the information technology consulting and software
solutions market have significantly greater financial, technical and marketing
resources and generate greater revenues than the Company. The Company believes
that the principal competitive factors in the commercial information technology
services industry include responsiveness to client needs, speed of application
software development, quality of service, price, project management capability
and technical expertise. Pricing has its greatest importance as a competitive
factor in the area of professional service staffing. The Company believes that
its ability to compete also depends in part on a number of competitive factors
outside its control, including the ability of its competitors to hire, retain
and motivate skilled technical and management personnel, the ownership by
competitors of software used by potential clients, the price at which others
offer comparable services and the extent of its competitors' responsiveness to
customer needs.

Intellectual Property Rights

The Company's success is dependent in part upon its software development
methodology and other proprietary intellectual property rights. The Company
relies upon a combination of trade secret, nondisclosure and other contractual
arrangements, technical measures and copyright and trademark laws to protect its
proprietary rights. The Company holds no patents or registered copyrights. The
Company generally enters into confidentiality agreements with its employees,
consultants, clients and potential clients and limits access to and distribution
of its proprietary information. There can be no assurance that the steps taken
by the Company in this regard will be adequate to deter misappropriation of its
proprietary information or that the Company will be able to detect unauthorized
use and take appropriate steps to enforce its intellectual property rights.

-17-

<PAGE>
The Company's business includes the development of custom software
applications in connection with specific client engagements. Ownership of such
software is generally assigned to the client. In addition, the Company also
develops object-oriented software components that can be reused in software
application development and certain foundation and application software
products, or software "tools," most of which remain the property of the Company.

Although the Company believes that its services and products 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.

Facilities

The Company's principal executive offices, the headquarters of HCI, USS, SOS
and CKC, one of its three software/outsourcing facilities are located in two
facilities with an aggregate of approximately 56,000 square-feet and are leased
at an aggregate current annual rent of approximately $800,000 for terms expiring
on December 31, 1999. The Company's remaining 28 offices, including two
additional software facilities, aggregate approximately 83,000 square feet and
are leased at aggregate current annual rents of approximately $1,146,000 for
various terms, with no lease commitment extending past May 15, 2000.

-18-
<PAGE>
MANAGEMENT
The following table sets forth certain information with respect to the
Company's directors and senior management.

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
John J. Cassese 50 Chairman of the Board and President
Thomas J. Berry 70 Director
Wilfred R. Plugge 71 Director
Bernhard Hubert 50 Executive Vice President
Michael Shea, CPA 35 Chief Accounting Officer and Controller
Barry D. Olson 46 Senior Vice President
Robert J. Palmieri 43 Senior Vice President
Terry C. Quinn 38 Senior Vice President
David W. Bialick, CPA 52 Vice President and Treasurer
Charles J. McCourt 51 Vice President
David M. Reingold 47 Vice President - Marketing and Strategic Services
Carl T. Bergeman 57 President, ComputerKnowledge Division
John A. Sisto 60 President, Horizons Consulting, Inc.
Edward D. Williams 62 President, Strategic Outsourcing Services, Inc.
Michael Fitton 37 President, Unified Systems Solutions, Inc.
</TABLE>

John J. Cassese, a co-founder of the Company, has been its Chairman of the
Board and President since 1982.

Thomas J. Berry, a director of the Company since 1989, was Executive Advisor
and Executive Assistant to the Postmaster General, U.S. Postal Services, from
1986 to 1993. Prior thereto, he was a Vice President of AT&T until his
retirement in 1986.

Wilfred R. Plugge, a director of the Company since 1983, retired in 1987 as
Vice President - International Operations of SRI International, a private
research institute.

Bernhard Hubert became the Company's Executive Vice President in 1995. Prior
thereto, he had been the Company's Senior Vice President and Chief Financial
Officer since 1982.

Michael Shea became the Company's Controller in March 1995. Prior thereto,
he was the Director of Internal Audit, from September 1992 to February 1995, and
the Manager of Financial Reporting, from January 1989 to August 1992, at Booz,
Allen & Hamilton, Inc., a management consulting company.

Barry D. Olson, who became a Senior Vice President of the Company in November
1994, has been in charge of the Company's Midwest/West Region since 1989. Mr.
Olson joined the Company in 1984.

Robert J. Palmieri became a Senior Vice President of the Company in November
1994. He has directed the Company's Eastern Region since 1992, and for a number
of years prior thereto was responsible for other regions of the Company's
business. Mr. Palmieri joined the Company in 1972.

Terry C. Quinn became a Senior Vice President of the Company in charge of the
Central Region in November 1994, a responsibility he had held as Regional Vice
President since 1987. Prior thereto, Mr. Quinn, who joined the Company in 1983,
had been a branch manager.

David W. Bialick, CPA has been a Vice President since 1980 and the Treasurer
since 1976. He also served as Controller from 1971 to March 1995.

-19-
<PAGE>
Charles J. McCourt has been a Regional Vice President in charge of the
Communications Clients Group since 1992. Mr. McCourt held a number of project
manager and marketing positions after joining the Company in 1988.

David M. Reingold became Vice President - Marketing and Strategic Services in
December 1994. He also serves as Vice Chairman of Birla Horizons International.
Mr. Reingold, who joined the Company in 1978, served as the Company's Vice
President responsible for corporate staffing and recruitment from 1983 to 1994.

Carl T. Bergeman has been President of the Company's ComputerKnowledge
Division since 1990. After joining the Company in 1984, he served as a Vice
President of the Company responsible for consulting and professional services in
the Company's then Mid-Atlantic Region.

John A. Sisto has been President of Horizons Consulting, Inc. since its
inception in 1992. He joined the Company in October 1991 and served in a sales
management capacity until 1992. Prior thereto, Mr. Sisto was the Northeast
Regional Manager of IBM's Professional Services Division from 1985 to 1991.

Edward D. Williams, the founder of Strategic Outsourcing Services, Inc.'s
business, has been its President since 1990.

Michael Fitton, the founder of Unified Systems Solutions, Inc., has been its
President since 1992. From 1991 to 1992, Mr. Fitton was a Vice President of
General Logistics, Inc., an information technology services company. Prior
thereto, he was a Director of Technical Services for the Company from 1986 to
1991.

The Board of Directors, currently consisting of three members, intends to
expand its size by two directors, with one of the newly created directorships to
be filled by an outsider. Although no specific date can be given, the Board of
Directors anticipates effecting such expansion during 1995.

-20-

<PAGE>
SELLING SHAREHOLDER

The following table sets forth certain information with respect to Common
Stock beneficially owned by John J. Cassese, the Chairman of the Board and
President and a co-founder of the Company (the "Selling Shareholder"), as of the
date of this Prospectus and as adjusted to reflect the sale by the Selling
Shareholder of 75,000 shares of Common Stock in the offering. The Selling
Shareholder may sell up to an additional 165,000 shares of Common Stock in
connection with the exercise of the Underwriting over-allotment option. See
"Underwriting." Included in the aggregate shares of Common Stock beneficially
owned by the Selling Shareholder are 193,125 shares that may be acquired upon
the exercise of options granted under the Company's stock option and
appreciation plans that either are currently exercisable or will become
exercisable within 60 days of the date of this Prospectus.

<TABLE>
<CAPTION>
Beneficial Beneficial
Ownership of Ownership of
Common Stock Common Stock
Prior to the Offering After the Offering
--------------------- ------------------

Shares to
Number be sold in the Number
of Shares Percent(1) Offering of Shares Percent(1)
--------- ------- -------- --------- -------
Name
- ----
<S> <C> <C> <C> <C> <C>
John J. Cassese 1,271,559 13.8% 75,000 1,196,559 11.7%
Chairman of the Board
and President
</TABLE>
_____________________________
(1) The shares subject to options were deemed outstanding for purposes of this
calculation.

DESCRIPTION OF SECURITIES

General

The Company is authorized to issue 30,000,000 shares of Common Stock and
200,000 shares of preferred stock, $.10 par value (the "Preferred Stock"). As
of May 1, 1995, 8,993,937 shares of Common Stock and no shares of Preferred
Stock were outstanding. In addition, as of such date 4,414,685 shares of Common
Stock were reserved for issuance under the Company's stock option plans, of
which 1,072,535 shares were subject to outstanding options.

Common Stock

Each outstanding share of Common Stock entitles the holder to one vote on all
matters requiring a vote of shareholders. Since the Common Stock does not have
cumulative voting rights, the holders of shares having more than 50% of the
voting power, if they choose to do so, may elect all the directors of the
Company and the holders of the remaining shares would not be able to elect any
directors. Under New York law, the approval of the holders of two-thirds of all
outstanding stock is required to effect a merger of the Company or disposition
of all or substantially all of the Company's assets.

Subject to the rights of holders of any series of Preferred Stock that may be
issued in the future, the holders of the Common Stock are entitled to receive
dividends when, as and if declared by the Board of Directors out of funds
legally available therefor. See "Dividend Policy." In the event of a voluntary
or involuntary liquidation of the Company, all shareholders are entitled to a
pro rata distribution of the assets of the Company remaining after payment of
claims of creditors and liquidation preferences of any preferred stock.

The transfer agent for the Common Stock is Registrar & Transfer Company, 10
Commerce Drive, Cranford, New Jersey 07016.

-21-

<PAGE>
Preferred Stock

The Company is authorized to issue 200,000 shares of Preferred Stock in one
or more series, the terms of which may be fixed by the Board of Directors.
Except as described below under "Preferred Stock Purchase Rights," the Board of
Directors has not created any series of Preferred Stock, and it is not possible
to state the actual effect of any issuance of one or more series of preferred
stock upon the rights of holders of Common Stock until the Board of Directors of
the Company determines the rights of the holders of such series of preferred
stock. Such effects might, however, include: (a) reduction of the amount of
funds otherwise available for payment of cash dividends on Common Stock; (b)
restrictions on the payment of cash dividends on Common Stock; (c) dilution of
the voting power of the Common Stock, to the extent that any series of issued
preferred stock has voting rights or is convertible into Common Stock; and (d)
the holders of Common Stock not being entitled to share in the assets of the
Company upon liquidation until satisfaction of liquidation preferences, if any,
in respect of any outstanding series of preferred stock.

Preferred Stock Purchase Rights

Pursuant to a Rights Agreement dated as of July 6, 1989, as amended ("Rights
Agreement"), between the Company and Chemical Bank, as Rights Agent, each
outstanding share of Common Stock has attached to it one Right which entitles
the registered holder of such Share to purchase from the Company 0.0030% of a
share of Series A Preferred Stock, par value $.10 per share (the "Series A
Preferred"), at a price of $30.00 per one one-hundredth (1/100) of a share (the
"Purchase Price"), subject to certain adjustments.

The Rights are attached to all certificates representing shares of Common
Stock and no separate Right certificates are distributed nor will be distributed
until the earlier to occur of (i) 10 days following a public announcement that a
person or group of affiliated or associated persons has acquired, or obtained
the right to acquire beneficial ownership of 20% or more of the outstanding
Common Stock (an "Acquiring Person"), or (ii) 10 business days (or such later
day as may be determined by action of the Board of Directors prior to such time
as any person or group becomes an Acquiring Person) following the commencement
of a tender offer or exchange offer if, upon consummation thereof, any person or
group would be the beneficial owner of 20% or more of the outstanding Common
Stock (the earlier of such dates being called the "Distribution Date"). The
date of announcement of the existence of an Acquiring Person referred to in
clause (i) above is hereinafter referred to as the "Share Acquisition Date."

The Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with and only with the Common Stock. Until the Distribution
Date (or earlier redemption, exchange or expiration of the Rights), all new
Common Stock certificates issued upon the transfer or new issuance of shares of
Common Stock will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption, exchange or
expiration of the Rights), the surrender for transfer of any certificates for
Common Stock outstanding will also constitute the transfer of the Rights
associated with Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights (the "Rights Certificates") will be mailed to holders of record of
the Common Stock on the Distribution Date and, thereafter, such separate Rights
Certificates alone will evidence the Rights.

The Rights are not exercisable until the Distribution Date and will expire at
the close of business on July 16, 1999, unless earlier redeemed or exchanged by
the Company as described below.

In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, the Rights Agreement provides that proper
provisions shall be made so that each holder of a Right, except as provided
below, shall thereafter have the right to receive, upon exercise, shares of
Common Stock (or, in the Company's option, Common Stock Equivalents, as such
term is defined in the Rights Agreement) having a value equal to two times the
exercise price of the Right. Upon the occurrence of the event described in the
first sentence of this paragraph, any Rights beneficially owned by (i) an
Acquiring Person or an Associate or Affiliate (as such terms are defined in the
Rights Agreement) of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such, or (iii) a transferee

-22-
<PAGE>
of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has a primary
purpose or effect the avoidance of the Rights Agreement, shall become null and
void without any further action and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision of
the Rights Agreement or otherwise.

In the event that, following the earlier of the Distribution Date and the
Share Acquisition Date, (i) the Company engages in a merger or other business
combination transaction in which the Company is not the surviving corporation,
(ii) the Company engages in a merger or other business combination transaction
with another person in which the company is the surviving corporation, but in
which the Common Stock are changed or exchanged, or (iii) more than 50% of the
Company's assets or earning power is sold or transferred, the Rights Agreement
provides that proper provision shall be made so that each holder of a Right
(except Rights which previously have been voided as described above) shall
thereafter have the right to receive, upon exercise thereof at the then current
exercise price of the Right, common stock of the acquiring company having a
value equal to two times the exercise price of the Right.

The Purchase Price payable, and the number of shares of Series A Preferred or
other securities issuable, upon exercise of the Rights are subject to adjustment
from time to time to prevent dilution (i) in the event of a stock dividend on,
or a subdivision, combination or reclassification of, the Series A Preferred,
(ii) upon the grant to holders of the Series A Preferred of certain rights,
options or warrants to subscribe for shares of Series A Preferred or convertible
securities at less than the current market price of the Series A Preferred, or
(iii) upon the distribution to holders of Series A Preferred of evidences of
indebtedness, shares of Preferred Stock, assets or cash (excluding a regular
semiannual cash dividend) or of subscription rights, options or warrants (other
than those referred to above).

The number of outstanding Rights and the number of shares of Series A
Preferred issuable upon exercise of each Right are also subject to adjustment in
the event of a stock split of the Common Stock or a stock dividend on the Common
Stock payable in shares of Common Stock or subdivisions, consolidations or
combinations of the Common Stock occurring, in any such case, prior to the
Distribution Date.

With certain exceptions, no adjustment in the Purchase Price will be required
until cumulative adjustments require an adjustment of at least 1% in such
Purchase Price. No fractional shares will be issued (other than fractions which
are integral multiples of one one-hundredth of a share of Series A Preferred,
which may, at the election of the Company, be evidenced by depository receipts)
and, in lieu thereof, an adjustment in cash will be made based on the market
price of the Series A Preferred on the last trading date prior to the date of
exercise.

At any time prior to the Share Acquisition Date, the Board of Directors of
the Company may redeem the Rights in whole, but not in part, at a price of $.01
per Right (the "Redemption Price"). Before the redemption period expires, it
may be extended by the Board. Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights, the Rights will
terminate and the only right to the holders of Rights will be to receive the
Redemption Price. At any time after the time that any person or group of
affiliated or associated persons becomes an Acquiring Person, the Board of
Directors of the Company may exchange the Rights (except Rights which previously
have been voided as described above), in whole, but not in part, at an exchange
ratio of one share of Common Stock (or one Common Stock Equivalent) per Right.

Until a Right is exercised, the holder thereof, as such, will have no rights
as a shareholder of the Company, including, without limitation, the right to
vote or to receive dividends. The terms of the Rights may be amended by the
Company and the Rights Agent, provided, that, following the earlier of the Share
Acquisition Date and the Distribution Date, the amendment does not adversely
affect the interests of holders of Rights (other than an Acquiring Person) and
provided that no amendment shall be made which decreases the Redemption Price.

-23-
<PAGE>
The Rights have certain anti-takeover effects. The Rights would cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Board of Directors of the Company, except pursuant
to an offer conditioned on a substantial number of Rights being acquired. The
Rights should not interfere with any merger or other business combination
approved by the Board of Directors of the Company at a time when the Rights are
redeemable.

Certain Provisions of New York Law

New York law regulates "business combinations," a term covering a broad range
of transactions, between "resident domestic corporations" (as defined, which
term includes the Company) and an "interested shareholder", which is defined as
any person beneficially owning 20% or more of the outstanding voting stock of
the resident domestic corporation or any affiliate or associate of such owner.
However, if the interested shareholder has owned at least 5% of such outstanding
voting stock at all times from October 30, 1985 to the date on which the
interested shareholder first attains 20% ownership (the "Stock Acquisition
Date"), the proposed business combination is exempt from this statute. Under
the statute, a resident domestic corporation may not engage in any business
combination with any interested shareholder unless (a) if the business
combination is to occur within five years of the date the shareholder acquired
20% or more ownership, either the business combination or the stock acquisition
was previously approved by the board of directors, or (b) the business
combination is approved by a majority of outstanding voting shares (not
including those shares owned by the interested shareholder) which approval may
not be effectively given until approximately five years after the interested
shareholder's Stock Acquisition Date, or (c) the business combination occurs
after five years after the interested shareholder's Stock Acquisition Date and
the consideration paid to the non-interested shareholders meets certain
stringent conditions imposed by the statute. The restrictions imposed by the
statute will not apply to a corporation which amends its by-laws by the
affirmative vote of a majority of its outstanding voting stock (not including
those shares held by an interested shareholder) to "opt out" of the statute;
provided that such amendment will not be effective for 18 months after such vote
and will not apply to any business combination where the Stock Acquisition Date
is on or prior to the date of the amendment. The Company has not opted out of
the statute and the Board of Directors does not anticipate seeking shareholder
approval therefor.

UNDERWRITING

The Underwriters named below, acting through their representatives, Janney
Montgomery Scott Inc. and Robert W. Baird & Co. Incorporated (together, the
"Representatives"), have severally agreed, subject to the terms and conditions
of the underwriting agreement by and among the Company, the Selling Shareholder
and the Underwriters (the "Underwriting Agreement"), to purchase from Company
the number of shares of Common Stock set forth below opposite each such
Underwriter's name, at the offering price less the underwriting discounts and
commissions set forth on the cover page of this Prospectus:

<TABLE>
<CAPTION>
Underwriter Number of Shares
----------- ----------------
<S> <C>
Janney Montgomery Scott Inc. . . . . . . . . .
Robert W. Baird & Co. Incorporated . . . . . . .

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

Total . . . . . . . . . . . . . . . . .
============
</TABLE>

The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent, and that the Underwriters will
purchase the total number of shares of Common Stock shown above if any of such
shares are purchased.

-24-
<PAGE>
The Company has been advised by the Representatives that the Underwriters
propose initially to offer the shares of Common Stock directly to the public at
the offering price set forth on the cover page of this Prospectus and to certain
dealers, including the Underwriters, at such price less concession not in excess
of $ per share. The Underwriters may allow, and such dealers may
reallow, a concession not in excess of $ per share to certain other
dealers.

The Company and the Selling Shareholder have granted the Underwriters an
over-allotment option, exercisable not later than 30 days after the date of this
Prospectus, to purchase up to 165,000 additional shares of Common Stock at the
offering price, less the underwriting discounts and commissions set forth on the
cover page of this Prospectus. The Underwriting Agreement provides that any
shares acquired by the Underwriters pursuant to the over-allotment option will
be purchased from the Selling Shareholder to the extent that the Selling
Shareholder, in his discretion, so elects, and the balance of the shares, if
any, will be purchased from the Company. To the extent that the Underwriters
exercise such option, each Underwriter will be committed, subject to certain
conditions, to purchase a number of the additional shares of Common Stock
proportionate to such Underwriter's initial commitment as indicated in the
preceding table. The over-allotment option may be exercised for fewer than all
of the shares subject to such option. The Underwriters may exercise this option
only to cover over-allotments, if any, made in connection with the sale of the
shares of Common Stock offered hereby. If purchased, the Underwriters will sell
such additional shares on the same terms as those on which the shares are being
offered.

The Company and the Selling Shareholder have agreed to indemnify the
Underwriters against, or to contribute to losses arising out of, certain
liabilities in connection with this offering, including liabilities under the
Securities Act of 1933.

The Company and each of its directors and executive officers have agreed not
to sell, contract to sell or otherwise dispose of any shares of Common Stock
(except, in the case of the Company, pursuant to the exercise of currently
outstanding options granted under the Company's stock option and appreciation
plans) for a period of 180 days from the date of this Prospectus without the
prior written consent of Janney Montgomery Scott Inc. ("JMS").

JMS has provided financial advisory services to the Company, including advice
on capital raising strategies. The Company will pay JMS $75,000 upon completion
of this offering for such services.

The foregoing includes a summary of the principal terms of the Underwriting
Agreement and does not purport to be complete. Reference is made to the copy of
the Underwriting Agreement that is on file as an exhibit to the Registration
Statement of which this Prospectus is a part.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby is being passed
upon for the Company and the Selling Shareholder by Proskauer Rose Goetz &
Mendelsohn LLP, 1585 Broadway, New York, New York 10036. Certain legal matters
in connection with this Offering will be passed upon for the Representatives by
Baer Marks & Upham, a partnership including a professional corporation, 805
Third Avenue, New York, New York 10022.

EXPERTS

The consolidated financial statements of the Company as of December 31, 1993
and 1994, and for each of the three years in the period ended December 31, 1994
appearing elsewhere in this Prospectus have been audited by Grant Thornton LLP,
independent certified public accountants, and have been included herein in
reliance upon their authority as experts in accounting and auditing.

-25-
<PAGE>
COMPUTER HORIZONS CORP.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page
----

Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . F-2

Financial Statements:
- ---------------------

Consolidated Balance Sheets at
December 31, 1993 and 1994 and March 30, 1995 (unaudited) . . . . . . . F-3

Consolidated Statements of Income for the
years ended December 31, 1992, 1993 and 1994 and for the
three months ended March 30, 1994 and March 30, 1995 (unaudited) . . . F-4

Consolidated Statement of Shareholders'
Equity for the years ended
December 31, 1992, 1993 and 1994 and for the three months
ended March 30, 1995 (unaudited) . . . . . . . . . . . . . . . . . . . . F-5

Consolidated Statements of Cash Flows
for the years ended
December 31, 1992, 1993 and 1994 and for the three months
ended March 30, 1994 and March 30, 1995 (unaudited) . . . . . . . . . . F-6

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . F-7

F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT

Board of Directors and Shareholders
Computer Horizons Corp.

We have audited the accompanying consolidated balance sheets of Computer
Horizons Corp. and Subsidiaries as of December 31, 1994 and 1993, and the
related consolidated statements of income, shareholders' equity and cash flows
for each of the three years in the period ended December 31, 1994. 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 Computer Horizons
Corp. and Subsidiaries as of December 31, 1994 and 1993 and the consolidated
results of their operations and their consolidated cash flows for each of the
three years in the period ended December 31, 1994, in conformity with generally
accepted accounting principles.

As discussed in Note 1, the Company changed its method of accounting for income
taxes in 1993.

We have also audited Schedule II of Computer Horizons Corp. and Subsidiaries for
each of the three years in the period ended December 31, 1994. In our opinion,
this schedule presents fairly, in all material respects, the information
required to be set forth therein.

GRANT THORNTON LLP

Parsippany, New Jersey
January 31, 1995

F-2
<PAGE>
<TABLE>
<CAPTION>
COMPUTER HORIZONS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, March 30,
-------------------- -----------
Assets 1993 1994 1995
-------- -------- -----------
(unaudited)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . $ 4,370 $ 2,278 $ 234
Accounts receivable, net of allowance for doubtful
accounts of $462,000, $566,000 and $542,000 at
December 31, 1993, 1994, and March 30, 1995, respectively . . 20,601 30,636 34,525
Deferred income tax benefit . . . . . . . . . . . . . . . . . . . 414 771 516
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 919 1,108 1,380
------- ------ ---------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . 26,304 34,793 36,655
------ ------ --------
Property and equipment:
Furniture, equipment and other . . . . . . . . . . . . . . . . . 4,675 5,983 6,268
Less accumulated depreciation . . . . . . . . . . . . . . . . . . 2,639 3,348 3,577
------- ------- ---------
2,036 2,635 2,691
------- ------- ---------
Other assets - net:
Goodwill (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . 11,286 11,065 11,337
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 974 657 778
------- ------- ---------
12,260 11,722 12,115
------ ------ --------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . $40,600 $49,150 $ 51,461
====== ====== ========
Liabilities and Shareholders' Equity
Current liabilities:
Notes payable - banks . . . . . . . . . . . . . . . . . . . . . . $ -- $ 3,200 $ 3,950
Current portion of long-term debt (Note 3) . . . . . . . . . . . 1,556 1,556 1,428
Accrued payroll, payroll taxes and benefits . . . . . . . . . . . 6,017 7,305 6,441
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . 287 560 731
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . 175 880 1,422
Other accrued expenses . . . . . . . . . . . . . . . . . . . . . 738 808 857
------- ------- ---------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . 8,773 14,309 14,829
------- ------ --------
Long-term debt (Note 3) . . . . . . . . . . . . . . . . . . . . . . . 5,843 4,288 4,288
------- ------ ---------
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 295 636 621
------- ------- ---------
Commitments (Note 7) . . . . . . . . . . . . . . . . . . . . . . . .
Shareholders' equity:
Preferred stock, $.10 par; authorized and unissued,
200,000 shares, including 50,000 Series A . . . . . . . . . .
Common stock, $.10 par; authorized, 30,000,000 shares;
issued 10,277,514 shares, 10,715,922 shares and
10,758,320 shares at December 31, 1993, 1994 and
March 30, 1995, respectively . . . . . . . . . . . . . . . . 1,028 1,072 1,076
Additional paid-in capital . . . . . . . . . . . . . . . . . . . 11,664 13,642 13,762
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . 24,165 29,851 31,533
------ ------ ------
36,857 44,565 46,371
------ ------ ------
Less Shares:
Shares held in treasury, at cost; 1,437,278 shares at
December 31, 1993 and 1,786,883 shares at December 31, 1994
and March 30, 1995 . . . . . . . . . . . . . . . . . . . . . 10,539 14,648 14,648
Notes receivable, officers . . . . . . . . . . . . . . . . . 629 -- --
------- ------ ------
11,168 14,648 14,648
------ ------ ------
Total shareholders' equity . . . . . . . . . . . . . . . . . . . 25,689 29,917 31,723
------ ------ ------
Total Liabilities and Shareholders' Equity . . . . . . . . . . . $40,600 $49,150 $ 51,461
====== ====== ========
</TABLE>
The accompanying notes are an integral part of these statements.

F-3
<PAGE>
<TABLE>
<CAPTION>
COMPUTER HORIZONS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)

Year Ended Three Months Ended
December 31, March 30,
------------------------------------ ---------------------------
1992 1993 1994 1994 1995
-------- -------- --------- ----------- ----------

(unaudited)
<S> <C> <C> <C> <C> <C>
Revenues (Note 8) $102,206 $121,550 $152,192 $ 33,171 $ 43,867
------- ------- ------- ---------- ---------
Costs and expenses:

Direct costs . . . . . . . . . . . 74,200 87,800 108,189 23,655 31,366

Selling, administrative and general 22,651 26,256 32,992 7,281 9,294

Merger and related expenses (Note 2) 885
---------- ---------- ------------ --------- ---------
97,736 114,056 141,181 30,936 40,660
--------- -------- --------- ------------ ---------

Income from operations 4,470 7,494 11,011 2,235 3,207
---------- --------- ---------- ------------ ---------

Other income (expense):

Interest income . . . . . . . . . . 312 235 53 35 37

Interest expense . . . . . . . . . (890) (819) (691) (185) (212)
---------- ------- -------- -------------- ----------

(578) (584) (638) (150) (175)
---------- -------- --------- -------------- ----------
Income before income taxes 3,892 6,910 10,373 2,085 3,032
---------- -------- --------- ------------ ----------

Income taxes (Notes 1 and 5):

Current . . . . . . . . . . . . . . 1,809 3,116 5,044 915 1,095

Deferred . . . . . . . . . . . . . 57 90 (357) 56 255
----------- --------- -------- ------------- ------------

1,866 3,206 4,687 971 1,350
---------- -------- -------- ----------- -------------

Net Income $ 2,026 $ 3,704 $ 5,686 $ 1,114 $ 1,682
========== ========= ======== ============ ==========
Earnings per share:

Primary . . . . . . . . . . . . . . $ .22 $ .37 $ .60 $ .12 $ .18
========== ========== ======== ============= ============

Fully diluted . . . . . . . . . . . $ .22 $ .36 $ .60 $ .12 $ .18
========== ========== ======== ============= ============

Weighted average number of shares
outstanding:

Primary . . . . . . . . . . . . . . 9,083 9,996 9,506 9,520 9,502
========== ========= ======== ============ ===========

Fully diluted . . . . . . . . . . . 9,230 10,331 9,534 9,558 9,562
========== ======== ======== ========= ========
</TABLE>
The accompanying notes are an integral part of these statements.

F-4
<PAGE>
<TABLE>
<CAPTION>
COMPUTER HORIZONS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(Dollars in thousands)

Years Ended December 31, 1992, 1993 and 1994 and
the Three Months Ended March 30, 1995

Additional
Common Stock Treasury Stock Notes
--------------------- paid-in Retained ----------------- receivable
Shares Amount capital earnings Shares Amount officers
--------- ------ -------- -------- ------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1992 . . 3,378,274 $338 $ 8,167 $18,435 837,578 $ 4,621 $ 608
Shares issued in connection
with acquisition . . . . . 330,000 33 3,019
Stock options exercised . . . 12,100 1 87 21
Net income for the year . . . 2,026
---------- ------ ---------- --------- --------- ---------- ---------
Balance, December 31, 1992 . 3,720,374 372 11,273 20,461 837,578 4,621 629

Three-for-two stock split
declared March 1993 . . . 1,441,398 144 (144)
Stock options exercised . . . 204,500 21 1,026
Purchases of treasury stock . 599,700 5,918
Net income for the year . . . 3,704
---------- ------ ---------- --------- --------- ---------- ---------
Balance, December 31, 1993 . 5,366,272 537 12,155 24,165 1,437,278 10,539 629

Three-for-two stock split
declared February 1994 . . 1,964,497 196 (196)
Stock options exercised . . . 408,807 41 1,981
Purchases of treasury stock . 349,605 4,109
Repayment of notes
receivable, officers . . . (629)
Net income for the year . . . 5,686
---------- ------ ---------- --------- --------- ---------- ---------
Balance, December 31, 1994 . 7,739,576 774 13,940 29,851 1,786,883 14,648 ---

Three-for-two stock split
declared April 1995
(unaudited) . . . . . . . 2,976,346 298 (298)
Stock options exercised
(unaudited) . . . . . . . 42,398 4 120
Net income for the period 1,682
(unaudited) . . . . . . . ---------- ------ ---------- --------- --------- ---------- ---------
Balance, March 30, 1995
(unaudited) . . . . . . . 10,758,320 $1,076 $ 13,762 $ 31,533 1,786,883 $ 14,648 $ ---
========== ====== ========== ========= ========= ========== =========
</TABLE>

F-5
<PAGE>
<TABLE>
<CAPTION>
COMPUTER HORIZONS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

Year Ended Three Months Ended
December 31, March 30,
------------------------------------ ---------------------
1992 1993 1994 1994 1995
---------- --------- -------- -------- -------
(unaudited)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities
Net income . . . . . . . . . . . . . . . . . . $ 2,026 $ 3,704 $ 5,686 $ 1,114 $ 1,682
Adjustments to reconcile net income to net cash
provided by operating activities:
Deferred taxes . . . . . . . . . . . . . 57 90 (357) 56 255
Depreciation . . . . . . . . . . . . . . 575 693 754 174 229
Amortization of intangibles . . . . . . . 401 521 568 114 117
Changes in assets and liabilities, net of
acquisitions:
(Increase) decrease in accounts receivable 1,322 (3,564) (9,770) (6,081) (3,889)
(Increase) decrease in refundable income
taxes . . . . . . . . . . . . . . . . . . . 611 321
(Increase) decrease in other current assets (339) 49 (433) (229) (272)
Increase (decrease) in accrued payroll,
payroll taxes and benefits . . . . . . . . . (224) 2,088 1,287 774 (864)
Increase (decrease) in accounts payable . . 476 (448) 273 602 171
Increase (decrease) in income taxes payable 161 705 750 542
Increase (decrease) in other accrued
expenses . . . . . . . . . . . . . . . . . (697) (267) 11 353 (100)
Increase (decrease) in other liabilities . 341 (15)
------- ---------- --------- ------- ------------
Net cash provided by (used in) operating
activities . . . . . . . . . . . . . . . 4,208 3,348 (935) (2,373) (2,144)
------- -------- --------- ------- -----------
Cash flows from investing activities
Purchases of furniture and equipment . . . . . (477) (955) (1,353) (436) (285)
Acquisitions, net . . . . . . . . . . . . . . (383) (388) (245) (240)
(Increase) decrease in other assets . . . . . (185) (127) 254 11 (121)
Loans to officers, net . . . . . . . . . . . . (21) 629
------- ---------- --------- --------- ----------
Net cash used in investing activities . . (1,066) (1,470) (715) (425) (646)
------- -------- --------- --------- ---------
Cash flows from financing activities
Increase in notes payable - banks, net . . . . 3,200 200 750
Payments of long-term debt . . . . . . . . . . (1,853) (1,427) (1,555) (127) (128)
Stock options exercised . . . . . . . . . . . 88 1,046 2,022 119 124
Purchases of treasury stock . . . . . . . . . (5,918) (4,109)
------- -------- --------- ---------- ----------
Net cash provided by (used in) financing
activities . . . . . . . . . . . . . . . (1,765) (6,299) (442) 192 746
------- -------- ---------- ---------- ----------
Net increase (decrease) in cash and cash
equivalents . . . . . . . . . . . . . . . . . . . 1,377 (4,421) (2,092) (2,606) (2,044)
Cash and cash equivalents at beginning of year
or period . . . . . . . . . . . . . . . . . . 7,414 8,791 4,370 4,370 2,278
------- -------- --------- --------- ---------
Cash and cash equivalents at end of year
or period . . . . . . . . . . . . . . . . . . $ 8,791 $ 4,370 $ 2,278 $ 1,764 $ 234
======= ======== ========= ========= =========
Cash paid for:
Interest . . . . . . . . . . . . . . . . . . . $ 918 $ 828 $ 713 $ 8 $ 46
Income taxes . . . . . . . . . . . . . . . . . 1,704 2,621 4,269 165 674
In 1992, the Company acquired all of the
outstanding capital stock of Worldwide Computer
Services Inc. in exchange for approximately
742,500 shares of the Company's common stock. In
connection with the acquisition, liabilities were
assumed as follows:
Fair value of assets acquired . . . . . . . $ 5,092
Stock issued and acquisition costs . . . . 3,533
-------
Liabilities assumed . . . . . . . . . . . . $ 1,559
=======
</TABLE>

The accompanying notes are an integral part of these statements.

F-6
<PAGE>
COMPUTER HORIZONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 1994, 1993 and 1992

(Amounts and Information Applicable to March 30, 1994
and 1995 are unaudited)

Note 1 - Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of Computer
Horizons Corp. and its wholly-owned subsidiaries (the "Company"). All
material intercompany accounts and transactions have been eliminated.

Revenue Recognition

The Company recognizes revenues as professional services are performed.

Recruitment Costs

Recruitment costs are charged to operations as incurred.

Cash and Cash Equivalents

Cash and cash equivalents include highly liquid debt instruments with a
maturity of three months or less and consist of the following at:
<TABLE>
<CAPTION>
December 31, March 30,
1993 1994 1995
--------- ----------- -------------
(unaudited)
(in thousands)
<S> <C> <C> <C>
Cash $ 1,435 $ 2,121 $ (96)
Commercial paper 1,998
Repurchase agreements 900 119 310
Certificates of deposit 37 38 20
------- ------- ------
$ 4,370 $ 2,278 $ 234
======= ======= ======
</TABLE>

Concentrations of Credit Risk

Financial Accounting Standards Board Statement No. 105 ("FASB No. 105")
requires the disclosure of significant concentrations of credit risk,
regardless of the degree of such risk. Financial instruments, as defined
by FASB No. 105, which potentially subject the Company to concentrations of
credit risk, consist principally of cash and cash equivalents and trade
accounts receivable. The Company invests the majority of its excess cash
in commercial paper, repurchase agreements and certificates of deposit of
high credit, high quality financial institutions or companies, with certain
limitations as to the amount that can be invested in any one entity.

The Company maintains its cash balances in principally two financial
institutions located in New Jersey. These balances are insured by the
Federal Deposit Insurance Corporation up to $100,000 for each entity
at each institution. At December 31, 1994 and March 30, 1995, uninsured
amounts held at these financial institutions total approximately $2,010,000
and $908,000, respectively.

F-7

<PAGE>
COMPUTER HORIZONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 (continued)

The Company's customers are generally very large, Fortune 500 companies in
many industries and with wide geographic dispersion. The Company's two
largest customers account for approximately 12% of accounts receivable at
December 31, 1994. Two customers accounted for approximately 18% of
accounts receivable at March 30, 1995. The Company establishes an
allowance for doubtful accounts based upon factors surrounding the credit
risk of specific customers, historical trends, and other information.

Property and Equipment and Depreciation

Property and equipment are stated at cost. Depreciation is computed using
the straight-line method over the estimated useful lives of the assets.

Goodwill

Goodwill, the cost in excess of the net assets of acquired businesses, is
being amortized by the straight-line method over thirty years. Accumulated
amortization is $2,363,000 and $2,828,000 at December 31, 1993 and 1994,
respectively, and $2,945,000 at March 30, 1995. On an ongoing basis,
management reviews the valuation and amortization of goodwill. As part of
this review, the Company estimates the value and future benefits of net
income generated to determine that no impairment has occurred.

Income Taxes

Deferred income taxes resulted primarily from differences between income
reported for financial and income tax purposes. These temporary
differences result primarily from restructuring charges, allowance for
doubtful accounts and other accrued expenses which are deductible only when
paid.

Effective January 1, 1993, the Company adopted the provisions of Statement
of Financial Accounting Standards No. 109 ("SFAS No. 109"), "Accounting for
Income Taxes." This statement amends the provisions of SFAS No. 96,
"Accounting for Income Taxes," which the Company had previously adopted.
As of January 1, 1993, the effect of this change was not significant to the
consolidated financial statements.

Earnings Per Share

Earnings per share are based on the weighted average number of common and
common equivalent shares outstanding. Primary earnings per share take into
account the shares that may be issued upon exercise of stock options,
reduced by the shares that may be repurchased with the funds received from
the exercise, based on the average price during the year. Fully diluted
earnings per share use the higher of the period-end price or the average
price.

Unaudited Interim Financial Data

The accompanying unaudited financial statements as of March 30, 1995 and
1994 have been prepared in accordance with generally accepted accounting
principles for interim financial information in accordance with Article 10
of Regulation S-X. In the opinion of the management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. The results for interim periods are not
necessarily indicative of results to be expected for the year.

F-8

<PAGE>
COMPUTER HORIZONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note (1) continued

Reclassifications

Certain reclassifications have been made to the prior year's balance sheet
to conform to the 1994 presentation.

Note 2 - Acquisitions

In June 1994, the Company acquired the net assets of Strategic Outsourcing
Services, Inc. ("SOS"), a New Jersey-based provider of data processing
services, for approximately $250,000. In addition, the acquisition
agreement also provides for contingent consideration based on the future
performance of SOS, through 1998. The acquisition was accounted for as a
purchase.

The results of operations of SOS are included in the consolidated financial
statements from June 1, 1994. The consolidated results of operations in
1994 would not be materially different had the acquisition taken place at
the beginning of the year.

In January 1993, the Company acquired Unified Systems Solutions, Inc.
("USS"), a New Jersey-based provider of systems and network integration
services, for approximately $750,000. The acquisition agreement also
provides for contingent consideration based on the future performance of
USS through 1996. The acquisition was accounted for as a purchase. The
excess of cash over the fair value of assets acquired, totalling
approximately $509,000, was recorded as goodwill. The Company recorded
contingent consideration, totalling approximately $245,000 in 1994 and
$389,000 in 1995, including $149,000 which was paid on May 1, 1995, as
additional goodwill, with certain additional amounts payable subject to
future performance.

The results of operations of USS are included in the consolidated financial
statements from January 15, 1993. The consolidated results of operations
in 1993 would not be materially different had the acquisition taken place
at the beginning of the year.

In August 1992, the Company acquired all of the outstanding capital stock
of Worldwide Computer Services Inc. ("WCS"), a New Jersey-based information
management services company, in exchange for approximately 1,113,750 shares
of the Company's common stock (approximately $3,533,000, including direct
acquisition expenses). The acquisition was accounted for as a purchase.
The fair value of the assets acquired approximated $5,092,000 and the
liabilities assumed approximated $1,559,000.

The results of operations of WCS are included in the consolidated financial
statements from August 4, 1992. Subsequent to the merger, the Company
assessed and integrated the WCS operations, resulting in a charge to
earnings of $885,000 in 1992 for redundant facility and personnel expenses.
All costs have been incurred and charged to the provision by December 31,
1993.

F-9

<PAGE>
COMPUTER HORIZONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3 - Long-Term Debt and Lines of Credit

Long-term debt consists of the following at:

<TABLE>
<CAPTION>
December 31, March 30,
1993 1994 1995
----------- -------------- -----------
(unaudited)
(in thousands)
<S> <C> <C> <C>
9.55% senior notes $7,144 $5,716 $5,716
Notes payable at prime 255 128
------ ------ ------
7,399 5,844 5,716
Less current maturities 1,556 1,556 1,428
----- ----- -----
$5,843 $4,288 $4,288
===== ===== =====
</TABLE>

In 1988, the Company issued two senior notes aggregating $10,000,000
bearing interest at 9.55%, payable semiannually. The notes are payable in
annual installments of $1,428,000 from April 15, 1992 through 1997 with a
final payment of $1,432,000 due April 15, 1998 and are subject to the
provisions of the loan agreement, including, among other things,
restrictions on additional borrowings, prepayments, dividends and stock
purchases (which were waived in connection with certain purchases of
treasury stock), and maintenance of a minimum net worth of $13,500,000.

The notes payable at prime consist of promissory notes to four individuals
payable on January 15, 1995. Such notes arose in connection with the USS
acquisition.

Long-term debt matures as follows at:

<TABLE>
<CAPTION>
December 31, March 30,
1994 1995
------------- ------------
(unaudited)
(in thousands)
<S> <C> <C>
1995 $1,556 $1,428
1996 1,428 1,428
1997 1,428 1,428
1998 1,432 1,432
----- -----
$5,844 $5,716
===== =====
</TABLE>

At December 31, 1994 and March 30, 1995, the Company had two bank lines of
credit totalling $12,000,000 at rates below the banks' prime lending rates,
of which approximately $3,200,000 and $3,950,000, respectively, are
outstanding.
The maximum amount outstanding during the year was $4,900,000. The average
debt outstanding and weighted average interest rate under these lines were
$1,067,000 and 6.71%, respectively.

F-10

<PAGE>
COMPUTER HORIZONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 4 - Shareholders' Equity

Authorized Shares

On June 15, 1994, the Company approved an amendment to the Company's
Certificate of Incorporation increasing the authorized number of shares of
the Company's common stock from 10,000,000 to 30,000,000.

Stock Splits

On February 17, 1994, the Board of Directors declared a three-for-two
common stock split in the form of a 50% stock distribution, payable on
March 22, 1994, to shareholders of record on March 1, 1994. On March 10,
1993, the Board of Directors declared a three-for-two common stock split in
the form of a 50% stock distribution, payable on April 13, 1993, to
shareholders of record on March 23, 1993. On April 25, 1995, the Board of
Directors declared a three-for-two common stock split in the form of a 50%
stock distribution, payable on May 30, 1995, to shareholders of record on
May 9, 1995. Amounts equal to the $.10 par value of the common shares
distributed have been retroactively transferred from additional paid-in
capital to common stock. All references in the financial statements with
regard to number of shares of common stock, except for treasury stock,
common stock prices and per share amounts have been restated to reflect the
stock splits.

Repurchases of Stock

In 1994, the Company repurchased 350,000 shares of its common stock from
three officers of the Company for approximately $4,109,000. The repurchase
of 240,000 shares for $2,792,000 was related to the retirement of the Vice
Chairman and Executive Vice President (Note 7). The remaining 110,000
shares were repurchased for $1,317,000 from two other active officers.
Approximately $824,000 of the repurchase amount was used by these officers
to repay amounts they owed the Company, $629,000 in note repayments and
$195,000 in accrued interest.

In 1993, the Company repurchased 597,000 shares of its common stock from
Compagnie Generale d'Informatique for approximately $5,895,000, including
expenses.

Stock Options and Notes Receivable, Officers

In 1994, the Company adopted a stock option plan which provides for the
granting, to officers and key employees, of options for the purchase of a
maximum of 3,375,000 shares of common stock and stock appreciation rights
(SARs). The exercise price per share on all options and/or SARs granted may
not be less than the fair value at the date of the option grant. Options
and SARs generally expire five years from the date of grant and become
exercisable in specified amounts during the life of the respective options.
No SARs have been granted as of December 31, 1994. This plan, which
replaces the Company's 1985 Plan, will terminate on June 15, 2004.

F-11

<PAGE>
COMPUTER HORIZONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 4 (continued)
Following is summary of option transactions for the:
<TABLE>
<CAPTION>
Three Months Ended
Years Ended December 31, March 30,
1992 1993 1994 1995
---- ---- ---- ----
(unaudited)
(in thousands)
<S> <C> <C> <C> <C>
Shares under option at beginning of period
($2.11 - $9.17) 1,202 1,323 1,184 896
Granted ($2.22 - $10.00) 266 531 326 147
Exercised ($2.11 - $6.33) (41) (459) (614) (42)
Cancelled ($2.11 - $3.11) (104) (211)
------- ------ ------- -------
Shares under option at end of period
($2.11 - $10.00) 1,323 1,184 896 1,001
====== ====== ====== =====
Shares available for option 593 273 3,167 3,019
======= ====== ====== =====
Shares exercisable 615 644 443 615
======= ====== ====== =====
</TABLE>

Certain officers have the right to borrow from the Company against the
exercise price of options exercised. These borrowings, exclusive of
accrued interest, are shown as a reduction in shareholders' equity in 1993
and 1992. Such borrowings were repaid in 1994 in connection with the
repurchase of common stock from these officers.

In 1994, the Company amended the Directors' Stock Option Plan (i)
increasing the maximum number of shares of common stock that may be
acquired pursuant to the exercise of options granted under the Plan from
168,750 to 375,000 and (ii) providing that each director of the Company who
is not an employee of the Company shall receive up to five annual grants to
purchase 4,500 shares of its common stock at its then current fair market
value. The plan expires on March 4, 2001. There were 85,500 options
outstanding at December 31, 1994.

In 1993, the Company issued warrants to purchase 10,125 shares of common
stock as part of an agreement with an outside business consulting firm.
The exercise price is the fair value at the date of grant.

Shareholder Rights Plan

In July 1989, the Board of Directors declared a dividend distribution of
eight preferred stock purchase rights on each twenty-seven outstanding
shares of common stock of the Company. The rights were amended on February
13, 1990. Each right will, under certain circumstances, entitle the holder
to buy one one-hundredth (1/100) of a share of Series A preferred stock at
an exercise price of $30.00 per one one-hundredth (1/100) share, subject to
adjustment. Each one one-hundredth (1/100) of a share of Series A
preferred stock has voting, dividend and liquidation rights and preferences
substantively equivalent to one share of common stock.

The rights will be exercisable and transferable separately from the common
stock only if a person or group acquires 15%, amended to 20% in 1994, or
more, subject to certain exceptions, of the Company's outstanding common
stock or announces a tender offer that would result in the ownership of 20%
or more of the common stock. If a person becomes the owner of at least 20%
of the Company's common shares (an "Acquiring Person"), each holder of a
right other than the Acquiring Person is entitled, upon payment of the then
current exercise price per right (the "Exercise Price"), to receive shares
of common stock (or common stock equivalents) having a market value equal
to twice the Exercise Price.

F-12

<PAGE>
COMPUTER HORIZONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 4 (continued)

Additionally, if the Company subsequently engages in a merger or other
business combination with the Acquiring Person in which the Company is not
the surviving corporation, or in which the outstanding shares of the
Company's common stock are changed or exchanged, or if more than 50% of the
Company's assets or earning power is sold or transferred, a right would
entitle a Computer Horizon Corp. shareholder, other than the Acquiring
Person and its affiliates, to purchase upon payment of the Exercise Price,
shares of the Acquiring Person having a market value of twice the Exercise
Price. Prior to a person becoming an Acquiring Person, the rights may be
redeemed at a redemption price of one cent per right, subject to
adjustment. The rights are subject to amendment by the Board. No
shareholder rights have become exercisable. The rights will expire on July
16, 1999.

Note 5 - Income Taxes

The provision for income taxes consists of the following for the:

<TABLE>
<CAPTION>
Three Months
Years Ended December 31, Ended March 30,
1992 1993 1994 1994 1995
---- ---- ---- ---- ----
(unaudited)
(in thousands)
<S> <C> <C> <C> <C> <C>
Current
Federal $1,275 $2,191 $3,518 $654 $782
State 534 925 1,399 261 313
Deferred
Federal 33 63 (102) 40 182
State 24 27 (255) 16 73
------ -------- ------ ---- ---
1,866 3,206 4,560 971 1,350
Tax benefit from exercise of stock options 127 - -
--------- --------- ------ ----- ------
$1,866 $3,206 $4,687 $971 $1,350
===== ===== ===== === =====
</TABLE>

Deferred tax assets and liabilities consist of the following at:
<TABLE>
<CAPTION>
December 31, March 30,
1993 1994 1995
--------- ---------- ----------
(unaudited)
(in thousands)
<S> <C> <C> <C> <C>
Deferred tax assets
Accrued insurance $183 $284 $
Accrued payroll and benefits 175 379 381
Deferred lease obligations 124 124 118
Allowance for doubtful accounts 73 103 113
Other 36 70 83
---- ---- ----
591 960 695
---- ---- ---
Deferred tax liabilities
Depreciation 145 187 177
Other 32 2 2
---- ----- ---
177 189 179
---- ---- ===
Deferred tax assets, net $414 $771 $516
=== === ===
</TABLE>

F-13
<PAGE>
COMPUTER HORIZONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5 (continued)

Deferred taxes (benefit) for the year ended December 31, 1992, applicable
to differences between assets and liabilities for financial statement and
tax return purposes, were provided as follows:

1992
----
(in thousands)
Accrued payroll and benefits $ (52)
Restructuring charges 171
Allowance for doubtful accounts --
Accrued insurance (54)
Other (8)
-----
$ 57
====

A reconciliation of income taxes as reflected in the accompanying statements
with the statutory Federal income tax rate of 34% is as follows for the:

<TABLE>
<CAPTION>
Years Ended Three Months Ended
December 31, March 30,
1992 1993 1994 1994 1995
---- ---- ---- ---- ----
(unaudited)
(in thousands)
<S> <C> <C> <C> <C> <C>
Statutory Federal income taxes $1,323 $2,349 $3,527 $ 709 $1,031
State and local income taxes, net of Federal
tax benefit 311 632 858 165 254
Amortization of goodwill 163 155 158 39 39
Other, net 69 70 144 58 26
------ ------- ------ ------ -----
$1,866 $3,206 $4,687 $ 971 $1,350
===== ===== ===== ===== =====
</TABLE>

Note 6 - Savings Plan

The Company maintains a defined contribution savings plan covering eligible
employees. The Company makes contributions up to a specific percentage of
participants' contributions. The Company contributed approximately
$175,000, $192,000 and $204,000 in 1992, 1993 and 1994, respectively, and
$48,000 and $52,000 for the three months ended March 30, 1994 and 1995,
respectively.

F-14
<PAGE>
COMPUTER HORIZONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 7 - Commitments

Leases

The Company leases office space under long-term operating leases expiring
through 2000. Approximate minimum rental commitments were as follows at:

<TABLE>
<CAPTION>
December 31, 1994 March 30, 1995
----------------- --------------
(unaudited)
Year ending (in thousands)
<S> <C> <C>
1995 $1,676 $1,433
1996 1,441 1,705
1997 1,241 1,505
1998 1,067 1,331
1999 729 993
Thereafter 33 33
----- -----
$6,187 $7,000
===== =====
</TABLE>

Office rentals are subject to escalations based on increases in real estate
taxes and operating expenses. Aggregate rent expense for operating leases
approximated $1,436,000, $1,595,000 and $1,796,000 for the years ended
December 31, 1992, 1993 and 1994, respectively, and $449,000 and $419,000 for
the three months ended March 30, 1994 and 1995, respectively.

Other

In October 1994, the former Vice Chairman and Executive Vice President of the
Company announced his resignation effective February 15, 1995 to pursue
personal interests. The Company recorded approximately $400,000 of deferred
compensation in 1994 to be paid over the next several years as a result of
this resignation. The Company also agreed to retain this former officer as a
consultant for a three-year period for approximately $75,000 each year and
entered into a noncompetition agreement for that period. In connection with
this resignation, the Company repurchased approximately 240,000 shares of
common stock of the Company from this former officer for approximately
$2,792,000.

Note 8 - Business and Major Clients

The Company offers to its clients a broad range of business and technical data
processing platforms that encompass the entire life cycle of contract
performance, utilizing its vast reserves of knowledge and experience in
leading-edge methodologies, tools and technologies. The Company helps its
clients with advanced technology solutions to complex problems in the areas of
outsourcing, client/server migration and development, network integration and
management, data center and operations' management, and knowledge transfer and
training.

The Company's two largest clients accounted for 9% and 6%, respectively, of
the Company's consolidated revenues in 1994, 13% and 8%, respectively, in
1993, and 11% and 15%, respectively, in 1992.

F-15
<PAGE>
COMPUTER HORIZONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9 - Selected Quarterly Financial Data (Unaudited)
For the years ended December 31, 1993 and 1994, selected quarterly financial
data is as follows:

<TABLE>
<CAPTION>
Quarters
---------------------------------------------------------------
First Second Third Fourth
----- ------ ----- ------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
1993
Revenues $29,413 $29,771 $29,498 $32,868
Income from operations 1,727 1,963 1,709 2,095
Net income 858 988 829 1,029

Earnings per share $ .9 $ .10 $ .8 $ .11
1994
Revenues $33,171 $36,278 $39,136 $43,607
Income from operations 2,235 2,798 2,856 3,122
Net income 1,114 1,459 1,493 1,620

Earnings per share $ .12 $ .15 $ .16 $ .17
</TABLE>

Note 10 - Subsequent Event

The Company has formed a software development and services joint venture
with a large multinational conglomerate located in India. The joint
venture will be headquartered in New Delhi, India and will have operations
in the United States and the United Kingdom.

Operations are anticipated to commence on or about April 1, 1995. The
Company is committed to invest $500,000 in this joint venture in the near
future. Such payment was made on April 4, 1995.

F-16
<PAGE>
No dealer, salesperson or
other person has been authorized
to give any information or to
make any representations other
than those contained in this
Prospectus, and, if given or
made, such information or
representation must not be
relied upon as having been
authorized by the Company or the
Underwriters. This Prospectus
does not constitute an offer to
sell, or a solicitation of an
offer to buy, any of the
securities offered hereby in any
jurisdiction in which, or to any
person to whom, such offer or
solicitation may not lawfully be
made. Neither the delivery of
this Prospectus nor any sales
made hereunder shall, under any
circumstances, create any
implication that the information
contained herein is correct as
of any time subsequent to the
date hereof.

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

TABLE OF CONTENTS

Page
----

Available Information . . . 2
Documents Incorporated
by Reference . . . . . . 2
Prospectus Summary . . . . 3
Use of Proceeds . . . . . . 6
Price Range of Common Stock 6
Dividend Policy . . . . . . 7
Capitalization . . . . . . 7
Selected Consolidated Financial
and Operating Data . . . 8
Management's Discussion and
Analysis of
Financial Condition and
Results of Operations . . . 9
Business . . . . . . . . 12
Management . . . . . . . 19
Selling Shareholder . . . 21
Description of Securities 21
Underwriting . . . . . . 24
Legal Matters . . . . . . 25
Experts . . . . . . . . . 25
Consolidated Financial
Statements . . . . . . . F-1

1,100,000 Shares

COMPUTER HORIZONS CORP.

Common Stock

-------------------
PROSPECTUS
-------------------

Janney Montgomery Scott Inc.

Robert W. Baird & Co.
Incorporated

________ __, 1995
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.

The following table sets forth an itemized statement of all expenses in
connection with the issuance and distribution of the securities being registered
hereby other than the Underwriters' discounts and commissions.

SEC registration fee . . . . . . . . . . . . . . . . . . . . . . . . $ 5,561.62
NASD additional registration fee . . . . . . . . . . . . . . . 2,112.88
NASDAQ additional listing fee . . . . . . . . . . . . . . . . 17,500.00
Accounting fees and expenses . . . . . . . . . . . . . . . . . . . . .
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . . . . .
Blue sky expenses and counsel fees . . . . . . . . . . . . . . . . . .
Cost of printing and engraving . . . . . . . . . . . . . . . . . . . .
Transfer agent's fees . . . . . . . . . . . . . . . . . . . . . . . . .
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $_______*
=======
* All amounts except the registration fees and Nasdaq additional listing fee
are estimated. Items which are not included will be supplied by amendment.
__________________

Item 15. Indemnification of Directors and Officers

The Company's Certificate of Incorporation, as amended (the "Certificate of
Incorporation") provides, as permitted by Section 402(b) of the New York
Business Corporation Law (the "BCL"), that no director shall be personally
liable to the Company or any shareholder for damages for any breach of duty as a
director, provided that the Certificate of Incorporation does not eliminate or
limit the liability of any director if a judgment or other final adjudication
adverse to him establishes that (i) his acts or omissions were in bad faith or
involved intentional misconduct or a knowing violation of law, (ii) he
personally gained in fact a financial profit or other advantage to which he was
not legally entitled or (iii) his acts violated Section 719 of the BCL.

The Certificate of Incorporation also provides, in accordance with Section
722 of the BCL, that each person who was or is made a party or is threatened to
be made a party to or is involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a "proceeding"),
by reason of the fact that he, or a person of whom he is the legal
representative, (1) is or was a director or officer of the Company or (2) is or
was serving at the request of the Company 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 employee benefit plans (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 Company to the fullest extent authorized or permitted by applicable 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 Company to provide
broader indemnification rights than said law permitted the Company to provide
prior to such amendment), against all expense, liability and loss (including
attorneys' fees, judgements, fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement) actually and reasonably incurred or suffered
by such person in connection therewith and such indemnification shall continue
as to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of his heirs, executors and administrators, provided,
however, that, except for actions brought to enforce such indemnification
rights, the Company shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board of Directors of
the Company. The right to indemnification conferred in the Certificate of
Incorporation is a contract right and includes the rights to be paid by the
Company the expenses incurred in defending any such proceeding in advance of its
final disposition, provided, however, that, if the BCL requires, the payment of
such expenses incurred by a director or officer in his capacity as such (and not
in any other capacity in which service was or is rendered by such person

II-1
<PAGE>
while a director or officer, including, without limitation, service with respect
to an employee benefit plan) in advance of the final disposition of a
proceeding, shall be made only upon delivery to the Company of an undertaking by
or on behalf of such director or officer to repay all amounts so advanced as to
which it shall ultimately be determined that such director or officer is not
entitled to be indemnified.

The Certificate of Incorporation further provides, in accordance with the
BCL, that the indemnification rights provided therein are not exclusive of any
other rights that any person may have, and that the Company may, subject to
certain restrictions imposed by the BCL, maintain insurance to protect itself
and its officers and directors against expenses, liabilities and losses, whether
or not the Company would be permitted to indemnify such person against such
expenses, liabilities and losses under the BCL.

The Company currently has a $5,000,000 directors' and officers' liability
insurance policy.

Item 16. Exhibits

Exhibit Description Incorporated by Reference to:

1.1 Form of Underwriting
Agreement Among the Company
and Janney Montgomery Scott
Inc. and Robert W. Baird &
Co. Incorporated as
Representatives of the
Underwriters

1.2 Form of Agreement Among
Underwriters

1.3 Form of Selected Dealers
Agreement
3.1 Certificate of Incorporation Exhibit 3(a) to the
of the Company as amended Company's Registration
through 1971. Statement on Form S-1,
File No. 2-42259.

3.2 Certificate of Amendment Exhibit 3(a-2) to the
dated May 16, 1983 to Company's Annual Report on
Certificate of Incorporation Form 10-K for the year
of the Company. ended February 28, 1983.

3.3 Certificate of Amendment Exhibit 3(a-3) to the
dated June 15, 1988 to Company's Annual Report on
Certificate of Incorporation Form 10-K for the year
of the Company. ended December 31, 1988.

3.4 Certificate of Amendment Exhibit 3(a-4) to the
dated July 6, 1989 to Company's Annual Report
Certificate of Incorporation Form 10-K for the year
of the Company. ended December 31, 1994.

3.5 Certificate of Amendment Exhibit 3(a-4) to the
dated February 14, 1990 to Company's Annual Report on
Certificate of Incorporation Form 10-K for the year
of the Company. ended December 31, 1989.

3.6 Certificate of Amendment Exhibit 3(a-6) to the
dated May 1, 1991 to the Company's Annual Report on
Certificate of Incorporation Form 10-K for the year
of the Company. ended December 31, 1994.

3.7 Certificate of Amendment Exhibit 3(a-7) to the
dated July 12, 1994 to the Company's Annual Report on
Certificate of Incorporation Form 10-K for the year
of the Company. ended December 31, 1994.

II-2
<PAGE>
Exhibit Description Incorporated by Reference to:

3.8 Bylaws of the Company, as Exhibit 3(b) to the
amended. Company's Annual Report on
Form 10-K for the year
ended December 31, 1988.

4.1 Rights Agreement dated as of Exhibit 1 to the Company's
July 6, 1989 between the Registration Statement on
Company and Chemical Bank, Form 8-A dated July 7,
as Rights Agent ("Rights 1989.
Agreement") which includes
the form of Rights
Certificate as Exhibit B.

4.2 Amendment No. 1 dated as of Exhibit 1 to the Company's
February 13, 1990 to Rights Amendment No. 1 on Form 8
Agreement. dated February 13, 1990 to
the Company's Registration
Statement on Form 8-A.

4.3 Amendment No. 2 dated as of Exhibit 4(c) to the
August 10, 1994 to Rights Company's Annual Report on
Agreement. Form 10-K for the year
ended December 31, 1994.

5* Opinion of Proskauer Rose
Goetz & Mendelsohn LLP.

10.1 Employment Agreement dated Exhibit 10(a) to the
as of February 16, 1990 Company's Annual Report on
between the Company and John Form 10-K for the year
J. Cassese. ended December 31, 1989.

10.2 Employment Agreement dated Exhibit 10(c) to the
as of February 16, 1990 Company's Annual Report on
between the Company and Form 10-K for the year
Bernhard Hubert. ended December 31, 1989.

10.3 Employment Agreement dated Exhibit 10(d) to the
as of January 1, 1992 Company's Annual Report on
between the Company and form 10-K for the year
David W. Bialick. ended December 31, 1991.

10.4 Note Agreement dated as of Exhibit 10(i) to the
March 15, 1988 between the Company's Annual Report on
Company and Massachusetts Form 10-K for the year
Mutual Life Insurance ended December 31, 1988.
Company
10.5 Lease ("Lease") dated Exhibit 12(a) to the
September 21, 1989 between Company's Annual Report on
Glen Properties and the Form 10-K for the year
Company. ended December 31, 1989.

10.6 Modification to Lease, dated Exhibit 12(b) to the
September 28, 1989. Company's Annual Report on
Form 10-K for the year
ended December 31, 1989.

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

* To be filed by amendment.

II-3

<PAGE>
Exhibit Description Incorporated by Reference to:

10.7 1991 Directors' Stock Option Exhibit 10(g) to the
Plan, as amended Company's Annual Report on
Form 10-K for the Year
ended December 31, 1994.

10.8 1994 Incentive Stock Option Exhibit 10(h) to the
and Appreciation Plan Company's Annual Report on
Form 10-K for the Year
ended December 31, 1994.

10.9 $5,000,000 Promissory Note Exhibit 10(i) to the
payable to The Bank of New Company's Annual Report on
York, N.A. Form 10-K for the Year
ended December 31, 1994.

10.10 $7,000,000 Commercial Exhibit 10(j) to the
Purpose Loan Note payable to Company's Annual Report on
Chemical Bank New Jersey Form 10-K for the Year
N.A. ended December 31, 1994.

11 Statement regarding
computation of per share
earnings (for the years
ended December 31, 1992,
1993 and 1994)

23.1 Consent of Grant Thornton
LLP

23.2* Consent of Proskauer Rose
Goetz & Mendelsohn LLP

24 Power of Attorney (included
on the signature page of the
Registration Statement).

27 Financial Data Schedule
____________________

* To be filed by amendment

Item 17. Undertakings

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

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Act, 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.

II-4
<PAGE>

(2) For the purpose of determining any liability under the Act, 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.

II-5
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-2 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Mountain Lakes, State of New Jersey, on the 4th day
of May, 1995.

COMPUTER HORIZONS CORP.

By: /s/ John J. Cassese
----------------------------------------------
John J. Cassese
Chairman of the Board and President

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints John J. Cassese and Bernhard Hubert, and either
of them, his attorney-in-fact, with full power of substitution, for him in all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorneys-in-fact, or
either of them, or their substitutes, may do or cause to be done by virtue
hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on May 4, 1995.

<TABLE>
<S> <C>
/s/ John J. Cassese Chairman of the Board and President
-----------------------------
John J. Cassese

/s/ Bernhard Hubert Executive Vice President and
----------------------------- Chief Financial Officer
Bernhard Hubert (Principal Financial Officer)

/s/ Michael Shea, CPA Chief Accounting Officer
------------------------------ and Controller
Michael Shea, CPA (Principal Accounting Officer)

/s/ Thomas J. Berry Director
-----------------------------
Thomas J. Berry

/s/ Wilfred R. Plugge Director
------------------------------
Wilfred R. Plugge
</TABLE>

II-6

<PAGE>

<TABLE>
<CAPTION>
Computer Horizons Corp. and Subsidiaries
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

For the years ended December 31, 1994, 1993 and 1992

Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------

Balance at Charge to Balance at
beginning costs and Deductions - end of
Description of Period expenses describe (1) period
----------- --------- -------- ------------ ------

<S> <C> <C> <C> <C>
Year ended December 31, 1994
Allowance for doubtful accounts $462,000 $244,000 $140,000 $566,000
======= ======= ======= =======

Year ended December 31, 1993
Allowance for doubtful accounts $505,000 $136,000 $179,000 $462,000
======= ======= ======= =======

Year ended December 31, 1992
Allowance for doubtful accounts $401,000 $166,000 $ 62,000 $505,000
======= ======= ======= =======
</TABLE>

Notes
-----

(1) Uncollectible accounts written off, net of recoveries.

S-1
<PAGE>
Index to Exhibits

Exhibit Description Incorporated by Reference to:

1.1 Form of Underwriting
Agreement Among the Company
and Janney Montgomery Scott
Inc. and Robert W. Baird &
Co. Incorporated as
Representatives of the
Underwriters
1.2 Form of Agreement Among
Underwriters
1.3 Form of Selected Dealers
Agreement
3.1 Certificate of Incorporation Exhibit 3(a) to the
of the Company as amended Company's Registration
through 1971. Statement on Form S-1,
File No. 2-42259.
3.2 Certificate of Amendment Exhibit 3(a-2) to the
dated May 16, 1983 to Company's Annual Report
Certificate of Incorporation on Form 10-K for the
of the Company. year ended February 28,
1983.
3.3 Certificate of Amendment Exhibit 3(a-3) to the
dated June 15, 1988 to Company's Annual Report
Certificate of Incorporation on Form 10-K for the
of the Company. year ended December 31,
1988.

3.4 Certificate of Amendment Exhibit 3(a-4) to the
dated July 6, 1989 to Company's Annual Report
Certificate of Incorporation Form 10-K for the year
of the Company. ended December 31, 1994.
3.5 Certificate of Amendment Exhibit 3(a-4) to the
dated February 14, 1990 to Company's Annual Report
Certificate of Incorporation on Form 10-K for the
of the Company. year ended December 31,
1989.
3.6 Certificate of Amendment Exhibit 3(a-6) to the
dated May 1, 1991 to the Company's Annual Report
Certificate of Incorporation on Form 10-K for the
of the Company. year ended December 31,
1994.
3.7 Certificate of Amendment Exhibit 3(a-7) to the
dated July 12, 1994 to the Company's Annual Report
Certificate of Incorporation on Form 10-K for the
of the Company. year ended December 31,
1994.
3.8 Bylaws of the Company, as Exhibit 3(b) to the
amended. Company's Annual Report
on Form 10-K for the
year ended December 31,
1988.

4.1 Rights Agreement dated as of Exhibit 1 to the
July 6, 1989 between the Company's Registration
Company and Chemical Bank, Statement on Form 8-A
as Rights Agent ("Rights dated July 7, 1989.
Agreement") which includes
the form of Rights
Certificate as Exhibit B.

4.2 Amendment No. 1 dated as of Exhibit 1 to the
February 13, 1990 to Rights Company's Amendment No.
Agreement. 1 on Form 8 dated
February 13, 1990 to the
Company's Registration
Statement on Form 8-A.
4.3 Amendment No. 2 dated as of Exhibit 4(c) to the
August 10, 1994 to Rights Company's Annual Report
Agreement. on Form 10-K for the
year ended December 31,
1994.
5* Opinion of Proskauer Rose
Goetz & Mendelsohn LLP.
<PAGE>
Exhibit Description Incorporated by Reference to:

10.1 Employment Agreement dated Exhibit 10(a) to the
as of February 16, 1990 Company's Annual Report
between the Company and John on Form 10-K for the
J. Cassese. year ended December 31,
1989.

10.2 Employment Agreement dated Exhibit 10(c) to the
as of February 16, 1990 Company's Annual Report
between the Company and on Form 10-K for the
Bernhard Hubert. year ended December 31,
1989.
10.3 Employment Agreement dated Exhibit 10(d) to the
as of January 1, 1992 Company's Annual Report
between the Company and on form 10-K for the
David W. Bialick. year ended December 31,
1991.
10.4 Note Agreement dated as of Exhibit 10(i) to the
March 15, 1988 between the Company's Annual Report
Company and Massachusetts on Form 10-K for the
Mutual Life Insurance year ended December 31,
Company 1988.
10.5 Lease ("Lease") dated Exhibit 12(a) to the
September 21, 1989 between Company's Annual Report
Glen Properties and the on Form 10-K for the
Company. year ended December 31,
1989.
10.6 Modification to Lease, dated Exhibit 12(b) to the
September 28, 1989. Company's Annual Report
on Form 10-K for the
year ended December 31,
1989.

10.7 1991 Directors' Stock Option Exhibit 10(g) to the
Plan, as amended Company's Annual Report
on Form 10-K for the
Year ended December 31,
1994.
10.8 1994 Incentive Stock Option Exhibit 10(h) to the
and Appreciation Plan Company's Annual Report
on Form 10-K for the
Year ended December 31,
1994.

10.9 $5,000,000 Promissory Note Exhibit 10(i) to the
payable to The Bank of New Company's Annual Report
York, N.A. on Form 10-K for the
Year ended December 31,
1994.
10.10 $7,000,000 Commercial Exhibit 10(j) to the
Purpose Loan Note payable to Company's Annual Report
Chemical Bank New Jersey on Form 10-K for the
N.A. Year ended December 31,
1994.
11 Statement regarding
computation of per share
earnings (for the years
ended December 31, 1992,
1993 and 1994)
23.1 Consent of Grant Thornton
LLP

23.2* Consent of Proskauer Rose
Goetz & Mendelsohn LLP
24 Power of Attorney (included
on the signature page of the
Registration Statement).

27 Financial Data Schedule
____________________
* To be filed by amendment

Exhibit 1.1

1,265,000 Shares of Common Stock
COMPUTER HORIZONS CORP.

UNDERWRITING AGREEMENT

, 1995
----------------

JANNEY MONTGOMERY SCOTT INC.
1801 Market Street
20th Floor
Philadelphia, Pennsylvania 19103
Attention: Syndicate Department

ROBERT W. BAIRD & CO. INCORPORATED
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: Syndicate Department

Ladies and Gentlemen:

Computer Horizons Corp., a New York corporation (the "Company") ,
proposes to issue and sell to the several underwriters named in Schedule I
hereto (the "Underwriters") 1,025,000 shares of Common Stock of the Company
(the "Company Firm Shares"), and Mr. John J. Cassese, Chairman of the
Board, President and Chief Executive Officer of the Company (the "Selling
Shareholder") proposes to sell to the Underwriters 75,000 shares of Common
Stock of the Company (the "Selling Shareholder Firm Shares" and, together
with the Company Firm Shares, the "Firm Shares"). In addition, the Selling
Shareholder and the Company each propose to grant severally to the
Underwriters, solely for the purpose of covering over-allotments, the
option described in Section 5 of this Agreement to purchase up to 165,000
additional shares of Common Stock of the Company (the "Additional Shares").
The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the "Shares."

You, as representatives of the Underwriters (the "Representatives"),
have advised the Company and the Selling Shareholder that you and the other
Underwriters desire to purchase, severally, the Firm Shares and that you
have been authorized by the Underwriters to execute this agreement (this
"Agreement") on their behalf. The Company and the Selling Shareholder
hereby severally confirm the agreement made by them with respect to the
purchase of the Shares by the several Underwriters on whose behalf you are
signing this Agreement, as follows:

<PAGE>

1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters that:

(a) Registration Statement and Prospectus. The Company has
filed with the Securities and Exchange Commission ("Commission") a
registration statement on Form S-2 (No. 33-________) for the registration
under the Securities Act of 1933, as amended (the "Securities Act"), of the
Shares and may have filed one or more amendments thereto, copies of which
have heretofore been delivered to you. The registration statement,
including the prospectus, financial statements and exhibits and documents
and information incorporated by reference therein, when it shall become
effective, and such additional information, if any, with respect to the
offering permitted to be omitted from such registration statement when it
becomes effective if subsequently filed with the Commission pursuant to
Rule 430A of the General Rules and Regulations of the Commission under the
Securities Act (the "Rules under the Securities Act") is hereinafter called
the "Registration Statement" and the final prospectus included as part of
the Registration Statement is herein called the "Prospectus," except that,
if any revised prospectus shall be provided to the Underwriters by the
Company for use in connection with the offering of the Shares which differs
from the Prospectus on file at the Commission at the time the Registration
Statement becomes effective (whether or not such revised prospectus is
required to be filed by the Company pursuant to Rule 424(b) of the Rules
under the Securities Act) , the term "Prospectus" shall refer to such
revised prospectus from and after the time it is first provided to the
Underwriters for such use. The term "Preliminary Prospectus" as used in
this Agreement means a preliminary prospectus as defined in Rule 430 of the
Rules under the Securities Act. The Securities Act, the Securities
Exchange Act of 1934, as amended ("Exchange Act"), and the rules and
regulations promulgated thereunder are sometimes collectively referred to
in this Agreement as the "Acts."

(b) Compliance with Securities Act, etc. When the Registration
Statement shall become effective and at all times subsequent thereto, up to
and including the Closing Date and the Option Closing Date (as such terms
are herein defined), and during such longer period until any post-effective
amendment to the Registration Statement shall become effective, the
Registration Statement (and any post-effective amendment to the
Registration Statement) (i) will contain all statements which are required
to be stated therein in accordance with the Securities Act and the Rules
under the Securities Act, (ii) will fully comply in all material respects
with the applicable provisions of the Securities Act and the Rules under
the Securities Act, and (iii) will not contain any untrue statement of a
material fact and will not omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and
the Prospectus and any amendment or supplement thereto will at all times up
to and including the Closing Date and the Option Closing Date, and during
such longer period as the Prospectus may be required to be delivered in
connection with sales of Firm Shares or Additional Shares by the
Underwriters or any dealer, fully comply in all material respects with the
provisions of the Securities Act and the Rules under the Securities Act and
will not contain any untrue statement of a material fact and will not omit
to state any material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made,

-2-

<PAGE>

not misleading; provided, however, that the Company makes no
-------- -------
representations or warranties as to the information contained in or omitted
from the Registration Statement and any post-effective amendment to the
Registration Statement or the Prospectus or any amendment of, or supplement
to, either of them in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter
through the Representatives or by the Selling Shareholder specifically for
use in connection with the preparation of the Registration Statement or of
the Prospectus. It is understood that the statements set forth in the
Prospectus on page 2 with respect to stabilization, under the section
entitled "Underwriting" and the identity of counsel for the Underwriters
under the section entitled "Legal Matters" constitute the only information
furnished in writing by or on behalf of the Underwriters for inclusion in
the Registration Statement and Prospectus, as the case may be.

(c) No Stop Order, etc. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus, and each
Preliminary Prospectus, at the time of filing thereof, fully complied in
all material respects with the provisions of the Securities Act and the
Rules under the Securities Act and did not include any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided,
---------
however, that the Company makes no representations or warranties as to the
- -------
information contained in or omitted from any Preliminary Prospectus in
reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of any Underwriter through the Representatives
or by the Selling Shareholder specifically for use in connection with the
preparation of such Preliminary Prospectus.

(d) Accountants. Grant Thorton LLP, independent certified
public accountants, have audited the audited financial statements filed as
part of the Registration Statement and those included in the Prospectus, to
the extent set forth in their reports in the Registration Statement and
Prospectus, and are independent public accountants as required by the
Securities Act and the Rules under the Securities Act.

(e) Reports and Financial Statements. (i) The Company has
previously furnished the Underwriters with true and correct copies of (i)
the Company's Annual Report on Form 10-K for each of the two fiscal years
ended December 31, 1994 and 1993 as filed with the Commission; (ii) its
Quarterly Reports on Form 10-Q for the fiscal quarters ended June 30, 1994,
September 30, 1994 and March 30, 1995, each as filed with the Commission;
and (iii) all other proxy statements, reports or registration statements
filed by the Company with the Commission since January 1, 1994
(collectively, the "Publicly Filed Documents"). As of their respective
dates, the Company's Publicly Filed Documents did not contain any untrue
statement of a material fact, or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. The audited
consolidated financial statements and unaudited interim financial
statements included in any Publicly Filed Document have been prepared in
accordance with generally accepted accounting principals ("GAAP") applied
on a consistent basis (except as may be indicated therein or in the notes
thereto) and fairly present the financial condition, the results

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<PAGE>

of operations and consolidated cash flows of the Company and the
Subsidiaries (as hereinafter defined), at the dates and for the periods
indicated subject, in the case of unaudited interim financial statement, to
normal year-end adjustments. The Company has filed with the Commission all
reports and other filings required to be filed by it since January 1, 1992.

(ii) The consolidated financial statements included in the
Registration Statement and Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Securities Act
and the Rules under the Securities Act. The consolidated financial
statements present fairly the financial condition, results of operations
and consolidated cash flows of the Company at the dates and for the periods
indicated, and have been prepared in conformity with GAAP applied on a
consistent basis throughout the periods involved.

(f) Subsidiaries; Commonly Controlled Entities. The Company
presently has no significant subsidiaries as that term is defined in Rule
405 of the Rules under the Securities Act, other than Computer Knowledge
Corporation, Horizons Consulting, Inc., Strategic Outsourcing Services,
Inc., Unified Systems Solutions, Inc. and Worldwide Computer Services, Inc.
(the "Subsidiaries"). All of the outstanding shares of capital stock of
the Subsidiaries have been duly authorized and validly issued, are fully
paid and non-assessable and are owned beneficially by the Company, free and
clear of any liens, encumbrances, security interests or other restrictions,
and no rights exist, or with the passage of time or otherwise will exist,
to acquire any of the capital stock of the Subsidiaries. Except as
described herein, neither the Company nor any of the Subsidiaries owns any
securities of any corporation or has any equity interest in any firm,
partnership, association or other entity.

(g) No Material Adverse Change. Subsequent to the respective
dates as of which information is given in the Registration Statement and
the Prospectus, the Company has not incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions, not in the ordinary course of business, and there has not
been any material change in the capital stock (including any dividend or
distribution of any kind declared, paid, or made on any class of capital
stock of the Company) or long term debt or obligations under capital leases
of the Company, or any material adverse change or any development involving
a prospective material adverse change, including any proposed legislation
or regulations which, if enacted or adopted, could have a material adverse
change, in the condition (financial or otherwise) , or in the earnings,
business affairs or business prospects of the Company, other than those
reflected in the Registration Statement and the Prospectus.

(h) Capitalization; Descriptions of Securities. The authorized,
issued and outstanding capital stock of the Company is as set forth in the
Prospectus under "Capitalization"; the issued and outstanding Common Stock,
including the Additional Shares which may be purchased by the Underwriters
from the Selling Shareholder, have been duly authorized and validly issued
and are fully paid and non-assessable; the Firm Shares (and, if issued and
sold hereunder by the Company, the Additional Shares) when issued and
delivered by the Company pursuant to this Agreement, will be validly
issued, fully paid and non-assessable. The Common Stock and the preferred
stock of the Company conform to the descriptions of them contained in

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<PAGE>

the Prospectus, and the descriptions of the Common Stock and preferred
stock conform to the rights set forth in the Company's Certificate of
Incorporation, as amended, defining the same. No rights exist, or with the
passage of time or otherwise will exist, to acquire any of the capital
stock of the Company, except as set forth on the Registration Statement.
The issuance of the Firm Shares (and, if issued and sold hereunder by the
Company, the Additional Shares) is not subject to, or in violation of, any
preemptive or other similar rights.

(i) Organization, Qualification, etc. The Company is a duly
organized and validly existing corporation in good standing under the laws
of the State of New York, and has all of the corporate power to own and
lease its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement. Each of the Subsidiaries is a duly organized and validly
existing corporation in good standing under the laws of the state of its
incorporation, each with the corporate power to own and lease its
properties and to conduct its business as described in the Prospectus.
Each of the Company and the Subsidiaries is duly qualified to do business
and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would not have
a material adverse effect on its condition, financial or otherwise, or on
its earnings, business affairs or business prospects.

(j) Regulatory Compliance. The Company and each of the
Subsidiaries hold all material licenses, certificates, permits and other
evidence of regulatory compliance issued by appropriate federal, state or
local governmental agencies or bodies necessary for the conduct of its
business as described in the Prospectus, and neither the Company nor any
Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such license, certificate, permit or
other evidence of compliance which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would materially and
adversely affect its condition, financial or otherwise, or on its earnings,
business affairs or business prospects.

(k) Authority. The Company has full power and lawful authority,
and has taken all corporate action necessary, to enter into this Agreement
and to authorize, issue and sell the Shares on the terms and conditions set
forth in this Agreement, and this Agreement has been duly authorized,
executed and delivered by the Company and constitutes the legal, valid and
binding obligation of the Company enforceable against the Company in
accordance with its terms.

(l) Compliance with Other Instruments; Consents. Neither the
Company nor any Subsidiary is in violation of its charter or bylaws or in
default in the performance or observation of any obligation, agreement,
covenant or condition contained in any rights agreement, indenture,
mortgage, deed of trust, note, bank loan or credit agreement, or any other
material agreement or instrument to which it is a party or by which it is
bound, or to which any of its property or assets are subject (collectively,
"Contracts"), which default or defaults, singly or in the aggregate, are
material to the condition, financial or otherwise, or its earnings,
business affairs or business prospects, and each such Contract is in full
force and effect and is the legal,

-5-

<PAGE>

valid and binding obligation of the Company or a Subsidiary, as the case
may be, and is enforceable against the Company or a Subsidiary, as the case
may be, in accordance with its terms. The execution, delivery and
performance of this Agreement by the Company and the consummation by the
Company of the transactions contemplated herein (i) will not conflict with,
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or give rise to the rights of termination
under, any Contract to which the Company or any Subsidiary is a party or by
which any of their respective properties or assets are bound, or the
charter or bylaws of the Company, or any of the Subsidiaries or any
material law, rule, regulation, judgment, order or decree of any
government, governmental instrumentality or court having jurisdiction over
the Company, the Subsidiaries or their respective properties or operations,
and (ii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the Company
of any of the transactions contemplated hereby, except such as have been
obtained and such as may be required under the Acts, and under state
securities or "Blue Sky" laws in connection with the purchase and
distribution of the Shares by the several Underwriters.

(m) Compliance With Laws. Neither the Company nor any
Subsidiary is in violation of any applicable order, injunction, award,
citation, decree, or writ (collectively, "Orders"), or any applicable law,
statute, code, ordinance, rule, regulation or other requirement
(collectively, "Laws"), of any government or political subdivision thereof,
whether federal, state, local or foreign, or any agency or instrumentality
of any such government or political subdivision, or any court or arbitrator
(collectively, "Governmental Bodies") affecting its assets, affairs or
business, where the effect of any such violation, individually or in the
aggregate, would have a material adverse affect on the business or
financial condition of the Company.

(n) Litigation. Except as set forth in the Prospectus, there is
no action, suit or proceeding before or by any court or governmental agency
or body, domestic or foreign, now pending or, to the knowledge of the
Company, threatened, against or affecting the Company or any of the
Subsidiaries that is required to be disclosed in the Registration Statement
(other than as disclosed therein) , or that might result in a material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company or the
Subsidiaries or that might materially and adversely affect the properties
or assets thereof or that might materially or adversely affect the
consummation of this Agreement.

(o) Payment of Taxes. The Company has filed all United States
federal, state and local tax returns which are required to be filed by it.
All taxes and all assessments to the extent that they have become due have
been paid. The Company has made adequate accruals for all taxes which may
be owed but have not been paid.

(p) Real and Personal Property. Except as disclosed in the
Prospectus, the Company owns outright, in fee simple, title to the real and
personal property purported to be owned by it, free and clear of all liens,
mortgages, charges or encumbrances of any nature, except those which do not
materially diminish the value of the property subject to them or interfere
with or impair the present and continued use of that property in the usual
and normal

-6-

<PAGE>

conduct of its business. All of the leases under which the Company holds
properties or assets as lessee are, in all material respects, as described
in the Prospectus and are valid and in full force and effect and
enforceable against the Company in accordance with their terms, and the
Company is not in default in any respect under any of the terms or
provisions of any such leases, except for any default which would not have
a material adverse change on the business of the Company, and no claim has
been asserted by anyone adverse to the rights of the Company as lessee
under any of the leases mentioned above, or affecting or questioning the
right of the Company to continued possession of the leased premises or
assets under any such lease.

(q) Intellectual Property. The Company owns or possesses
adequate licenses or other rights to use all patents, trade secrets,
trademarks, trade names and copyrights necessary to enable it to conduct
its business as now operated (the "Intellectual Property") and such
Intellectual Property (other than Intellectual Property rights acquired as
licensee) is owned free and clear of any liens, security interests,
mortgages, charges, encumbrances and adverse rights of every kind, nature
and description; and the Company does not have knowledge of any claim and
has not received any notice of infringement of or conflict with asserted
rights of others or have knowledge of infringement by others of its rights
with respect to any of the foregoing which, singly or in the aggregate,
could result in a material adverse change in its condition, financial or
otherwise, or in its earnings, business affairs or business prospects.
Except for the rights of customers under license agreements, (i) the
Intellectual Property is not subject to any licenses, sublicenses, royalty
arrangements, or disputes, and (ii) the Company has the exclusive right to
make, copy, sell, exploit and provide to others the use of the Intellectual
Property and all derivative works thereof free and clear of any liens,
security interests, mortgages, charges, encumbrances and adverse rights of
every kind, nature and description. There are no defects in the
Intellectual Property, which defects would in any material and adverse
respect affect the functioning thereof in accordance with the
specifications therefor, or the use or exploitation thereof. No agreement
exists which would preclude any desired change to the Intellectual
Property. The Company has taken or is taking all actions necessary in its
reasonable judgment to protect the Intellectual Property. No third party
has any interest in or right to compensation from the Company by reason of
the use, exploitation or sale of the Intellectual Property, and the Company
has not received notice or knowledge of any complaint, assertion, threat or
allegation that would contradict the foregoing.

(r) Insurance. The Company has its property adequately insured
against loss or damage by fire, maintains adequate insurance against
liability for negligence, and maintains such other insurance in such nature
and amounts of coverage as is usually maintained by companies engaged in
the same or similar business.

(s) No Stabilization or Manipulation of Price. Neither the
Company nor any officer or director of the Company has taken, and the
Company and each officer and director of the Company have agreed not to
take, directly or indirectly, any action designed to stabilize or
manipulate the price of any security of the Company, or which has
constituted or which might in the future reasonably be expected to
constitute stabilization or manipulation of

-7-

<PAGE>

the price of the Shares in connection with the offering contemplated by the
Registration Statement.

(t) Related Transactions. There are no business relationships
or related-party transactions of the nature described in Item 404 of
Regulation S-K involving the Company and any other persons referred to in
said Item 404 that are required to be described in the Prospectus and which
have not been so disclosed.

(u) No Registration Rights. There are no contracts,
arrangements, or understandings between the Company and any person granting
such person or entity the right to require registration of Common Stock or
other securities of the Company or to require the Company to include such
securities with the Shares registered pursuant to the Registration
Statement.

(v) Lock-up Agreements. The Company has obtained and delivered
to the Underwriters a written agreement, in form satisfactory to Baer Marks
& Upham, counsel for the Underwriters, by each officer, director and
certain shareholders of the Company as of the effective date of the
Registration Statement (the "Effective Date") not to, directly or
indirectly, sell, offer to sell or agree to sell or otherwise dispose of
any Common Shares of the Company for a period of 180 days from the
Effective Date without the prior written consent of the Representatives,
other than pursuant to the Registration Statement.

(w) No Broker or Finder Engaged by the Company. The Company has
not incurred any liability for any finder's fees or similar payments in
connection with any of the transactions herein contemplated.

(x) Labor Relations. Neither of the Company nor any Subsidiary
is involved in any labor dispute which might be expected to result in a
material adverse effect on its condition, financial or otherwise, or on its
earnings, business affairs or business prospects, and no such dispute is
pending or, to the Company's knowledge, threatened.

(y) Dealings. None of the Company, the Subsidiaries, any of
their respective officers or directors, nor any of their respective
employees, agents or any other person acting on behalf of the Company or
the Subsidiaries has, directly or indirectly, given or agreed to give any
money, gift or similar benefit (other than legal price concessions to
customers in the ordinary course of business) to any customer, supplier,
employee or an agent of a customer or supplier, or official or employee of
any governmental agency or instrumentality of any government (domestic or
foreign) or any political party or candidate for office (domestic or
foreign) or other person who was, is, or may be in a position to help or
hinder the business of the Company (or assist in connection with any actual
or proposed transaction) which (a) might subject the Company to any damage
or penalty in any civil, criminal or governmental litigation or proceeding,
(b) if not given in the past, might have had a materially adverse effect on
the assets, business or operations of the Company as reflected in any of
the consolidated financial statements contained in the Prospectus, or (c)
if not continued in the future, might adversely

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<PAGE>

affect the assets, business, operations or prospects of the Company. The
Company's internal accounting controls and procedures are sufficient to
cause the Company to comply with the Foreign Corrupt Practices Act of 1977,
an amended.

(z) Investment Company. The Company is not an "investment
company" or an entity "controlled" by an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended.

2. Representations and Warranties of the Selling Shareholder. The
Selling Shareholder represents and warrants to, and agrees with, each of
the Underwriters and the Company that:

(a) Authority; Compliance with Other Instruments. The Selling
Shareholder has the full right, power and authority to enter into this
Agreement and to sell, transfer and deliver the Additional Shares which may
be sold by the Selling Shareholder hereunder. This Agreement has been duly
executed and delivered by the Selling Shareholder and constitutes the
legal, valid and binding obligations of the Selling Shareholder enforceable
against him in accordance with its terms. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
will not result in a breach by such Selling Shareholder of, or constitute a
default by the Selling Shareholder under, any indenture, mortgage, deed of
trust, note, bank loan or credit agreement or any other agreement or
instrument to which the Selling Shareholder is a party or by which the
Selling Shareholder is bound, or any statute, judgment, decree, order, rule
or regulation of any court or governmental agency or body applicable to the
Selling Shareholder.

(b) Consents. All authorizations, approvals and consents
necessary for the execution and delivery by the Selling Shareholder of this
Agreement, and the sale and delivery of Shares which may be sold by the
Selling Shareholder hereunder (other than, at the time of the execution
thereof, the issuance of the order of the Commission declaring the
Registration Statement effective and such authorizations, approvals or
consents as may be necessary under state securities or "Blue Sky" laws)
have been obtained and are in full force and effect.

(c) Title to Shares. The Selling Shareholder now is, and, on
the Closing Date will be, the lawful owner of the Shares sold by the
Selling Shareholder hereunder, and, in the event of the exercise of the
over-allotment option granted to the Underwriters under Section 5 of this
Agreement, on the Option Closing Date (as hereinafter defined) the Selling
Shareholder will be, the lawful owner of the Additional Shares which may be
sold by the Selling Shareholder hereunder. The Selling Shareholder has,
and on the Closing Date, will have, valid and marketable title to the
Shares which are being sold by the Selling Shareholder hereunder, in each
case free and clear of all liens, encumbrances, security interests or other
restrictions (collectively, "Liens") and, upon proper delivery of and
payment for such Shares, the Underwriters will acquire valid and marketable
title thereto, free and clear of all Liens. The Selling Shareholder has,
and, in the event of the exercise of the over-allotment option granted

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<PAGE>

to the Underwriters under Section 5 of this Agreement, on the Option
Closing Date the Selling Shareholder will have, valid and marketable title
to the Additional Shares which may be sold by the Selling Shareholder
hereunder, in each case free and clear of all Liens and, upon proper
delivery of and payment for such Additional Shares as provided herein, the
Underwriters will acquire valid and marketable title thereto, free and
clear of all Liens.

(d) Accuracy of Registration Statement and Prospectus. The
Selling Shareholder has examined the Registration Statement and the
Prospectus, and all information furnished by or on behalf of the Selling
Shareholder for use in the Registration Statement and Prospectus is, and,
on the Option Closing Date, if any, will be, true, correct and complete,
and, with respect to such information, the Registration Statement and the
Prospectus do not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.

(e) No Broker or Finder. The Selling Shareholder has not
incurred any liability for any finder's fee or similar payments in
connection with the possible sale of the Selling Shareholder's Shares
hereunder.

3. Purchase and Sale of Shares. On the basis of the representations
and warranties herein contained and subject to the terms and conditions
herein set forth, (i) the Company hereby agrees to issue and sell to the
several Underwriters, the Company Firm Shares and each Underwriter,
severally and not jointly, hereby agrees to purchase from the Company, the
number of Company Firm Shares set forth opposite the name of the
Underwriter in Schedule I hereto, and (ii) the Selling Shareholder agrees
to sell to the several Underwriters, the Selling Shareholder Firm Shares
and each Underwriter, severally and not jointly, hereby agrees to purchase
from the Selling Shareholder, the number of Selling Shareholder Firm Shares
set forth opposite the name of the Underwriter in Schedule I hereto, at a
purchase price of $___ per Firm Share.

4. Delivery and Payment. (a) The Company shall deliver the Company
Firm Shares at the office of Janney Montgomery Scott Inc., 26 Broadway, New
York, New York, on ________, 1995, at 10:00 A.M., New York City time, or at
such other time, not more than ten (10) full business days thereafter, as
the Company and you shall determine, the date and time of such delivery
being hereinafter called the "Closing Date." On the Closing Date, delivery
of the Firm Shares shall be made to you, for the respective accounts of the
several Underwriters, against payment by the several Underwriters through
you of the purchase price for the Firm Shares. The purchase price for the
Company Firm Shares will be paid to or upon the order of the Company in a
bank check in New York Clearing House funds. Certificates for the Firm
Shares shall be made available to you for inspection, checking and
packaging at the office of Janney Montgomery Scott Inc., 26 Broadway, New
York, New York, not less than one full business day prior to the Closing
Date. Time shall be of the essence and delivery at the time

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<PAGE>

and place specified in this Agreement is a further condition to the
obligations of each Underwriter.

(b) Pursuant to the terms and conditions of an escrow agreement
(the "Escrow Agreement") dated the date hereof by and among the Selling
Shareholder, the Representatives and Proskauer, Rose, Goetz & Mendelsohn
LLP (the "Escrow Agent"), the Selling Shareholder has, on the date hereof,
delivered to the Escrow Agent certificates representing the Selling
Shareholder Firm Shares, together with stock transfer powers, duly endorsed
in blank. Pursuant to the Escrow Agreement, the Selling Shareholder has
authorized and directed the Escrow Agent to deliver the Selling Shareholder
Firm Shares to the Underwriters on the Closing Date in accordance with the
terms of Section 4(a). The purchase price for the Selling Shareholder Firm
Shares will be paid to or upon the order of the Selling Shareholder in a
bank check in New York Clearing House funds.

5. Option to Purchase Additional Shares. (a) For the purposes of
covering any over-allotments in connection with the distribution and sale
of the Firm Shares as contemplated by the Prospectus, the Company and the
Selling Shareholder hereby grant an option to the Underwriters to purchase
165,000 Additional Shares from the Company and the Selling Shareholder, in
each case at a price per Additional Share identical to the price per Firm
Share set forth in Section 3 of this Agreement, in accordance with the
following sentence. The Selling Shareholder shall have the right to sell
all of the Additional Shares to the Underwriters and, to the extent the
Selling Shareholder does not so elect, the Company shall sell the remaining
Additional Shares to the Underwriters in accordance with Section 5(b)
below. The option granted hereby may be exercised by the Underwriters as
to all or any part of the Additional Shares at any time, but only once,
prior to the end of the close of business on the thirtieth day following
the Closing Date. Subject to such adjustments to eliminate fractional
shares as you, as the Representatives of the Underwriters, may determine,
the number of Additional Shares to be purchased by each Underwriter shall
bear the same ratio to the total number of Additional Shares to be sold as
the total number of Firm Shares to be purchased by such Underwriter bears
to the total number of Firm Shares to be purchased by the Underwriters.

(b) The option granted hereby may be exercised by you, as the
Representatives of the Underwriters, by giving written notice (the
"Representatives's Notice") to the Company and the Selling Shareholder
setting forth the number of Additional Shares to be purchased, the date and
time for delivery of payment for the Additional Shares, and stating that
the Additional Shares being purchased are to be used for the purpose of
covering over-allotments in connection with the distribution and sale of
the Firm Shares. Within one (1) business day after such notice is given by
the Representatives, the Selling Shareholder shall notify the Company and
the Representatives of the amount, if any, of the Additional Shares that
shall be sold by him to the Underwriters (the "Selling Shareholder
Notice"). The Company shall sell to the Underwriters that amount of
Additional Shares, if any, which the Selling Shareholder has indicated in
the Selling Shareholder Notice that he will not sell to the Underwriters.
If the Representatives's Notice is given prior to the Closing Date, the
date for delivery and payment for the Additional

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<PAGE>

Shares shall not be earlier than the later of two (2) full business days
after the Representatives's Notice is given, or the Closing Date. If the
Representatives's Notice is given on or after the Closing Date, the date
for delivery of and payment for the Additional Shares shall not be earlier
than five full business days after the day on which the notice is given.
In either event, the date shall not be more than fifteen (15) full business
days after the day on which the notice is given. The date and time for
delivery and payment is called the "Option Closing Date." Upon exercise of
the option, the Company and the Selling Shareholder shall become obligated
to sell to the Underwriters and, subject to the terms and conditions set
forth in Section 5(c) of this Agreement, the Underwriters shall become
obligated to purchase the number of Additional Shares described in Section
5(a) above, on the terms described herein. On the Option Closing Date,
delivery of the Additional Shares shall be made against payment of the
purchase price to the Company or the Selling Shareholder in a bank check
payable in New York Clearing House funds.

(c) The obligation of the Underwriters to purchase and pay for
any of the Additional Shares is subject to the accuracy as of the date of
this Agreement, the Closing Date and the Option Closing Date of, and the
compliance by the Company and the Selling Shareholder in all material
respects with, their respective representations and warranties in this
Agreement, to the accuracy of the statements of the officers of the Company
made pursuant to this Agreement, to the performance in all material
respects by the Company and the Selling Shareholder of their respective
obligations under this Agreement, to the satisfaction by the Company and
the Selling Shareholder as of the Option Closing Date of the conditions set
forth in Section 11 of this Agreement, and to the delivery to you of
opinions, certificates, and letters addressed to you and dated the Option
Closing Date substantially similar in scope to those specified in Section
11 of this Agreement, but with each reference to "Firm Shares" to be to the
Additional Shares being sold, and "Closing Date" to be to the "Option
Closing Date."

6. Offering by Underwriters. After the Registration Statement
becomes effective, the Underwriters propose to offer for sale to the public
the Firm Shares and any Additional Shares which may be sold at the price
and upon the terms set forth in the Prospectus.

7. Expenses. (a) The Company agrees to pay all fees, taxes and
expenses incident to the performance of the obligations of the Company and
the Selling Shareholder under this Agreement and under any other agreement
in connection with the offer, sale and issuance of the Firm Shares and
Additional Shares, and any fees, taxes and expenses, including transfer
taxes incident to the issuance and delivery of the Firm Shares and
Additional Shares to the Underwriters as may be required by this Agreement,
including, without limitation: (i) accounting, legal (other than the fees
and disbursements of the Underwriters' counsel, except as provided below),
printing, any state or local transfer or other taxes (excluding any income
taxes assessed with respect to Shares sold by the Selling Shareholder),
Nasdaq listing fees, "road show" costs, advertising and other costs
incurred in connection with the preparation, printing, filing and delivery
to the Representatives of the Registration Statement, the Preliminary

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Prospectus, the Prospectus, and all amendments or supplements to them,
preliminary and final Blue Sky Memoranda, this Agreement, the Agreement
Among Underwriters and Selected Dealer Agreement, Underwriters'
Questionnaires, powers of attorney and any other agreements or similar
items reasonably used by you or reasonably required or desirable in
connection with the offering and sale of the Firm Shares and Additional
Shares; (ii) the costs of furnishing by messenger, by overnight delivery,
other expedited delivery service or by mail copies of the Preliminary
Prospectus, the Prospectus and all supplements and amendments thereto to
the several Underwriters, Selected Dealers and their respective customers;
(iii) all filing fees to the Commission and the National Association of
Securities Dealers, Inc. ("NASD") payable in connection with this offering;
(iv) the fees and expenses of the transfer agent; and (v) all legal fees,
disbursements, filing fees and other costs of compliance with or
registration and qualification under applicable state securities or Blue
Sky laws, and all reasonable expenses incident thereto (including fees of
Underwriter's counsel solely as it relates to the foregoing). In the event
that the proposed offering does not proceed and the Closing does not occur
for any reason, including the failure of the Company to satisfy any of the
conditions under this Agreement, the Company shall reimburse the
Representatives for their out-of-pocket expenses up to $25,000, and will,
in addition, reimburse the Representatives for fees and expenses of counsel
for the Underwriters based on actual time charges and disbursements, but
not to exceed $50,000 (exclusive of Blue Sky fees), for which expenses the
Representatives shall account to the Company.

(b) The Selling Shareholder shall pay all stock transfer taxes
payable with respect to the Shares sold by him.

8. Covenants of the Company. In further consideration of the
agreements of the Underwriters contained in this Agreement, the Company
covenants and agrees with each of the several Underwriters as follows:

(a) The Company will not at any time submit or make any
amendment or supplement to the Prospectus or Registration Statement which
shall not have been submitted to you within a reasonable time prior to the
proposed submission thereof, or to which you shall reasonably object in
writing, or which is not in compliance with the Acts.

(b) The Company will use its best efforts to cause the
Registration Statement and any post-effective amendments thereto to comply
with the requirements of the Securities Act and the Rules under the
Securities Act and to become effective, and will promptly advise you and
confirm in writing (i) when the Registration Statement shall become
effective; (ii) when any post-effective amendment to the Registration
Statement becomes effective; (iii) when the Commission shall request any
amendment to the Registration Statement or Prospectus, or request any
additional information; (iv) of the necessity of amending or supplementing
the Registration Statement or any post-effective amendment in order to then
meet the requirements of the Securities Act and the Rules under the
Securities Act; and (v) of the issuance by the Commission, any "Blue Sky"
authority or any other governmental agency with jurisdiction over

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<PAGE>

the Company or its securities, of any stop order or similar order with
regard to the Registration Statement or the Prospectus, or any order
preventing or suspending the use of any Preliminary Prospectus or the
Registration Statement or Prospectus, or of the suspension of the
qualification of the Firm Shares and Additional Shares for offer or sale in
any jurisdiction, or of the institution of any proceedings for any such
purpose. The Company will use its best efforts to prevent the issuance of
any stop order or of any order preventing or suspending such use and if
such an order shall be issued, the Company will use its beat efforts to
obtain its withdrawal as soon as possible.

(c) The Company will prepare and file with the Commission, upon
your reasonable request, any amendments or supplements to the Registration
Statement or Prospectus, in form and substance reasonably satisfactory to
counsel for the Company, as in the opinion of Baer Marks & Upham, counsel
for the Underwriters, may be necessary or advisable in connection with the
distribution of the Firm Shares and Additional Shares, and will use its
best efforts to cause the same to become effective as promptly as possible.

(d) The Company consents to the use of any Preliminary
Prospectus by the several Underwriters and by dealers for the purposes
contemplated by this Agreement and in accordance with the Acts. The
Company will deliver to you, without charge, on or before the Closing Date,
three executed copies of the Registration Statement and all amendments
thereto (including all financial statements, exhibits thereto, and
documents incorporated by reference therein) and copies of all written
communications between the Company, its representatives and agents and the
Commission, and will deliver to you such number of copies of the
Registration Statement (including all financial statements and documents
incorporated by reference, but without exhibits), and all amendments
thereto as you may reasonably request. The Company will deliver or mail to
you and, upon your request, to the Underwriters, from time to time, during
the period when delivery of the Prospectus relating to the Firm Shares
and/or Additional Shares shall be required under the Acts, as many copies
of the Prospectus (as amended or supplemented) as you may reasonably
request.

(e) If, at the time that the Registration Statement becomes
effective, any information shall have been omitted therefrom in reliance
upon Rule 430A of the Rules under the Securities Act, then, immediately
thereafter, the Company will prepare and file or transmit for filing with
the Commission in accordance with such Rule 430A and Rule 424(b) of the
Rules under the Securities Act copies of the amended Prospectus or, if
required by such Rule 430A, a post-effective amendment to the Registration
Statement (including an amended Prospectus) containing all information so
omitted.

(f) The Company will comply with the requirements of the Acts
and any other applicable rules and regulations of any governmental
authority having jurisdiction over this offering so as to permit the
continuance of sales or dealing in the Shares. Subject to the provisions
of subsection (a) of this Section 8, if, at any time when a Prospectus is
required to be delivered under the Acts, (i) an event relating to or
affecting the Company shall have occurred which, in the judgment of the
Company and its counsel, or in the opinion of counsel

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<PAGE>

for the Underwriters, would cause the Registration Statement as then in
effect to include an untrue statement of a material fact or to omit to
state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or in order to make the Registration
Statement comply with the Acts, or (ii) in the opinion of Counsel to the
Company or counsel for the Underwriters, it is necessary to amend or
supplement the Registration Statement or Prospectus to comply with
applicable laws, the Company will promptly notify you of the foregoing and
will promptly prepare, file and deliver to you (or to the Underwriters and
such dealers as you shall direct) without charge, such number of copies of
the amended or supplemented Registration Statement or Prospectus as you
shall reasonably request, and will use its best efforts to cause the
Commission and appropriate "Blue Sky" authorities to take all required
action with regard to any such amendment as may be necessary to permit the
lawful use of the Registration Statement and Prospectus in connection with
the distribution of the Firm Shares and Additional Shares.

(g) The Company will supply all necessary documents, exhibits
and information and execute all applications, instruments and papers as may
be necessary or desirable in the opinion of Baer Marks & Upham, counsel for
the Underwriters, to qualify the Shares for sale under the Blue Sky or
other securities laws in such jurisdictions as the Underwriters may
reasonably request. The Company will take any reasonable measures
requested by you and such action, if any, which is necessary under such
laws in order to qualify the Firm Shares and Additional Shares for sale and
to continue such registration or qualification so long as necessary to
permit the continuance of sales or dealings therein with respect to the
Shares.

(h) The Company will make generally available to its security
holders as soon as practicable after the expiration of one year after the
date the Registration Statement becomes effective, and in all events not
later than _______, 1996, an earnings statement of the Company (which will
be in such detail and form as you may reasonably request and which need not
be audited) covering a period of at least 12 months beginning after the
date the Registration Statement becomes effective, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act.

(i) So long as the Company shall be subject to the reporting
requirements of the Exchange Act, the Company shall furnish to its
shareholders annual reports containing financial statements of the Company
audited by its independent certified public accountants and quarterly
reports for the first three quarters of its fiscal year containing
financial information which may be unaudited.

(j) The Company will, from time to time, after the date the
Registration Statement becomes effective, file with the Commission such
reports as are required by the Acts and with state securities commissions
in states where the Shares have been sold by the Representatives (as the
Representatives shall have advised the Company in writing) such reports as
are required to be filed by the securities acts and the regulations of
those states.

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<PAGE>

(k) The Company shall furnish to you as early as practicable
prior to the Closing Date, but no later than three (3) full business days
prior thereto, a copy of the latest available unaudited interim financial
statements of the Company which have been prepared by the Company's
independent certified public accountants, as stated in their letters to be
furnished pursuant to Section 11(h) of this Agreement.

(l) During the period of five (5) years from the date the
Registration Statement becomes effective, the Company will furnish to the
Representatives copies of all reports and other communications (financial
or other) furnished by the Company to its shareholders and, as soon as
reasonably practicable, copies of any reports or financial statements
furnished or filed by the Company to or with the Commission, NASDAQ, or any
national exchange on which any class of securities of the Company may be
listed.

(m) During the period of 180 days after the date the
Registration Statement becomes effective, the Company will not, directly or
indirectly, without the prior written consent of JMS, offer, sell, grant
any option to purchase or otherwise dispose of any Common Stock or any
securities convertible into or exchangeable for Common Stock except
pursuant (i) to this Agreement and (ii) upon the exercise of currently
outstanding options granted under the Company's stock option and
appreciation plans.

(n) The Company will reasonably enforce, for your benefit, the
written agreements (copies of which have been furnished to you) of all of
the officers, directors and certain shareholders of the Company as of the
date the Registration Statement becomes effective, not to, directly or
indirectly, sell, offer to sell or agree to sell or otherwise dispose of
any of their Common Stock for a period of 180 days from the date the
Registration Statement becomes effective without the prior written consent
of JMS and the Company agrees to cause the Common Stock held by such
shareholders to be legended accordingly.

9. Indemnification. (a) The Company agrees to indemnify and hold
harmless, and, subject to Section 9(c), the Selling Shareholder agrees,
severally and not jointly, to indemnify and hold harmless, each Underwriter
(including specifically each person who may be substituted for an
Underwriter as provided in Section 13 of this Agreement) and each person,
if any, who controls any Underwriter within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages, expenses or liabilities
(collectively, "Losses"), joint or several, to which they or any of them
may become subject under the Acts, state securities laws or under any other
statute or at common law or otherwise, and, except as hereinafter provided,
will reimburse each of the Underwriters and each such controlling person,
if any, for any legal or other expenses reasonably incurred by them or any
of them in connection with investigating or defending any claim or action
whether or not resulting in any liability, insofar as such Losses or
actions arise

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<PAGE>

out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, in any
Preliminary Prospectus or in the Prospectus (or the Registration Statement
or Prospectus as from time to time amended or supplemented by the Company)
or in any application or other document (hereinafter "Application")
executed by the Company or based upon written information furnished by or
on behalf of the Company, filed in any jurisdiction in order to qualify the
Shares under the securities laws of that jurisdiction, or which arise out
of or are based upon the omission or alleged omission to state in any of
the foregoing any material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the
-------- -------
indemnity agreement contained in this subsection shall not apply to any
Loss, to the extent arising out of any untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration
Statement, Preliminary Prospectus or Prospectus (or the Registration
Statement or Prospectus as from time to time amended or supplemented by the
Company) or Application in reliance upon and in conformity with information
furnished in writing to the Company in connection therewith by the
Representatives or any Underwriter directly or through you expressly for
use therein; provided, further that the indemnity agreement contained in
-----------------
this subsection is subject to the condition that, insofar as it relates to
any such untrue statement or alleged untrue statement or omission or
alleged omission in any Preliminary Prospectus but eliminated or remedied
in the Prospectus, such indemnity agreement shall not inure to the benefit
of any Underwriter or any person controlling such Underwriter from whom the
person asserting any such Loss or action purchased the Shares if (i) prior
to the time such Prospectus was required under the Securities Act to be
furnished to such person the Company had furnished copies of the Prospectus
to such Underwriter, (ii) a copy of such Prospectus, as then corrected or
supplemented, was not furnished to such person at or prior to the time
required under the Securities Act, and (iii) the delivery of such
Prospectus would have cured the defect giving rise to such Losses or
action. Promptly after receipt by any Underwriter or any person
controlling such Underwriter of notice of the commencement of any action in
respect of which indemnity may be sought against the Company or the Selling
Shareholder under this subsection (a), such Underwriter or controlling
person shall notify the Company and the Selling Shareholder in writing of
the commencement of the action and, subject to the provisions hereinafter
stated, the Company and/or the Selling Shareholder shall assume the defense
of that action (including the employment of counsel, who shall be
reasonably satisfactory to the Representatives, and the payment of
expenses) insofar as such action shall relate to any alleged liability in
respect of which indemnity may be sought against the Company and/or the
Selling Shareholder hereunder. Any Underwriter or any such controlling
person shall have the right to employ separate counsel in any such action
and participate in the defense, but the fees and expenses of such counsel
shall not be at the expense of the Company or the Selling Shareholder,
unless (i) the employment of such counsel has been specifically authorized
by the Company or the Selling Shareholder, as the case may be or, (ii) the
indemnified party or parties reasonably conclude there may be defenses
available to it or them which were not available to the Company or the
Selling Shareholder (in which case the Company or the Selling Shareholder,
as the case may be, will not have the right to direct the defense of the
action on behalf of the indemnified parties), in which event the reasonable
expenses of one additional counsel for the Underwriters will be borne by
the Company. Neither

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<PAGE>

the Company nor the Selling Shareholder shall be liable to indemnify any
person for any settlement of any such action effected without the written
consent of the Company and/or the Selling Shareholder, as the case may be.
The obligations of the Company and the Selling Shareholder under the
indemnity agreement set forth in this subsection (a) shall be in addition
to any liability the Company and the Selling Shareholder may otherwise have
under this Agreement.

(b) Each Underwriter (including specifically each person who may
be substituted for any Underwriter as provided in Section 13 of this
Agreement), severally and not jointly, agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers and each
person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, and the
Selling Shareholder, from and against any and all Losses, joint or several,
to which they or any of them may become subject under the Acts, state
securities laws or under any other statute or at common law or otherwise,
and, except as hereinafter provided, will reimburse the Company and each
such director, officer or controlling person and the Selling Shareholder
for any legal or other expenses reasonably incurred by them or any of them
in connection with investigating or defending any claim or action whether
or not resulting in any liability, insofar as such Losses, or actions arise
out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, in any
Preliminary Prospectus or in the Prospectus (or the Registration Statement
or Prospectus as from time to time amended or supplemented) or in any
Application, or arise out of or are based upon the omission or alleged
omission to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, but only insofar
as any such statement or omission was made in reliance upon and in
conformity with information furnished in writing to the Company in
connection therewith by the Representatives or such Underwriter directly or
through the Representatives expressly for use therein. For all purposes of
this Agreement, the information contained in the section entitled
"Underwriting", set forth in the Prospectus constitutes the only
information furnished in writing by or on behalf of the Underwriters
expressly for inclusion in any Preliminary Prospectus, any Rule 430A
Prospectus, the Registration Statement or the Prospectus (as from time to
time amended or supplemented), or any amendment or supplement thereto, or
in any application, as the case may be. Promptly after receipt of notice
of the commencement of any action in respect of which indemnity may be
sought against one or more Underwriters under this subsection (b), the
indemnified party shall notify all Underwriters in writing of the
commencement of the action and the Underwriter or Underwriters against whom
indemnity may be sought shall, subject to the provisions hereinafter
stated, assume the defense of such action (including the employment of
counsel who shall be reasonably satisfactory to the Company and the Selling
Shareholder, and the payment of expenses) insofar as such action shall
relate to an alleged liability in respect of which indemnity may be sought
against such Underwriter or Underwriters. The Company and each such
director, officer or controlling person and the Selling Shareholder shall
have the right to employ separate counsel in any such action and
participate in the defense, but the fees and expenses of such counsel shall
not be at the expense of any Underwriter unless (i) the employment of such
counsel has been specifically authorized by the Underwriters obligated to

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defend such action or (ii) the indemnified party or parties reasonably
conclude there may be defenses available to it or them which are not
available to the Underwriters against whom indemnification is sought (in
which case those Underwriters will not have the right to direct the defense
of the action an behalf of the indemnified party or parties), in which
event the reasonable expenses of one additional counsel for all the
indemnified parties will be borne by the indemnifying Underwriters. The
Underwriters against whom indemnity may be sought shall not be liable to
indemnify any person for any settlement of any action effected without such
Underwriter's written consent. The obligations of each Underwriter under
the indemnity agreement set forth in this subsection (b) shall be in
addition to any liability each of them may otherwise have under this
Agreement.

(c) In the event of a claim for indemnity pursuant to the
provisions of this Section 9, each Underwriter severally agrees to seek
such indemnity in full from the Company. If, after seeking such indemnity,
any Underwriter is unable, for any reason, to obtain such indemnity from
the Company, such Underwriter may seek indemnity from the Selling
Shareholder in accordance with the provisions of subsection (a) of this
Section; provided, however, that the Selling Shareholder's aggregate
liability under this Section shall be limited to an amount equal to the net
proceeds (after deducting the Underwriter's discount but before deducting
expenses) received by the Selling Shareholder from the sale of Shares
pursuant to this Agreement.

10. Contribution. To the extent the indemnification provided for in
Section 9 is unavailable to an indemnified party or insufficient in respect
of any Losses referred to therein, then each indemnifying party under
Section 9, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a
result of such Losses (i) in such proportion as is appropriate to reflect
the relative benefits received by the indemnifying party or parties, on the
one hand, and the indemnified party or parties, on the other hand, from the
offering of the Shares or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above, but also the relative fault of the indemnifying party or parties
on the one hand and of the indemnified party or parties on the other hand
in connection with the statements or omissions that resulted in such
Losses, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Shareholder on
the one hand and the Underwriters on the other hand in connection with the
offering of the Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Shares (before
deducting expenses) received by the Company and the Selling Shareholder and
the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the tables on the cover of the
Prospectus, bear to the aggregate Public Offering Price of the Shares. The
relative fault of the Company and the Selling Shareholder on the one hand
and the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company and the Selling Shareholder
or by the

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<PAGE>

Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute pursuant
to this Section 10 are several in proportion to the respective number of
Shares they have purchased hereunder, and not joint.

The Company, the Selling Shareholder and the Underwriters agree that
it would not be just or equitable if contribution pursuant to this Section
10 were determined by pro rata allocation (even if the Underwriters were
--- ----
treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or
payable by an indemnified party as a result of the Losses referred to in
the immediately preceding paragraph shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 10, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The remedies provided for in this
Section 10 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in
equity.

The indemnity and contribution provisions contained in Section 9 and
this Section 10 and the representations and other statements of the Company
and the Selling Shareholder contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter, the Selling
Shareholder, or the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Shares.

11. Conditions of Obligations of Underwriters. The obligations of
the Underwriters to purchase and pay for the Shares are subject (as of the
date hereof and the Closing Date, and with respect to the Additional
Shares, the Option Closing Date) to the accuracy of and the compliance
with the representations and warranties of the Company and the Selling
Shareholder, the accuracy of the statements of officers and directors of
the Company made pursuant to the provisions of this Agreement, the
performance by the Company and the Selling Shareholder of their respective
obligations under this Agreement and to the following additional
conditions:

(a) The Registration Statement shall become effective with the
Commission no later than 10:00 A.M., New York City time, on the day
following the date of this Agreement, or such later time and date as shall
have been consented to by the Underwriters (including you) who are
obligated to purchase the Firm Shares to be purchased by the

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<PAGE>

Underwriters pursuant to this Agreement; the Commission shall have taken
all required action, if any, with regard to the Registration Statement,
and, prior to the Closing Date, no stop order or similar order with regard
to the Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or shall be pending or, to the
knowledge of the Underwriters, the Company or the Selling Shareholder,
shall be contemplated by the Commission or by any securities, Blue Sky or
other regulatory authority of any jurisdiction, and any request on the part
of the Commission or such other securities, Blue Sky or regulatory
authorities for additional information shall have been complied with to the
satisfaction of Baer Marks & Upham, counsel for the Underwriters.

(b) Prior to the date of this Agreement, the issuance and sale
of the Firm Shares to be sold by the Company, and the Additional Shares
which may be sold by the Company hereunder shall have been approved by all
requisite corporate action of the Company.

(c) The NASD shall have indicated that it had no objection to
the underwriting arrangements pertaining to the sale of the Shares and the
participation by the Underwriters in the sale of the Shares.

(d) No action shall have been taken by the Commission or the
NASD, the effect of which would make it improper, at any time prior to the
Closing Date, for members of the NASD to execute transactions (as principal
or agent) in any of the Shares, and no proceedings for the taking of such
action shall have been instituted or shall be pending or, to the knowledge
of the Underwriters or the Company, shall be contemplated by the Commission
or the NASD. The Company represents that at the date hereof it has no
knowledge that any such action is in fact contemplated by the Commission or
the NASD.

(e) Between the date of this Agreement and the Closing Date (and
the Option Closing Date, if any), the Company (i) shall not have sustained
any material loss outside the ordinary course of its business or of such
character as would materially adversely affect its business or property,
whether or not that loss is covered by insurance; and (ii) shall have
conducted its business in the usual and ordinary manner and, except as
disclosed in the Prospectus or except in the ordinary course of its
business, there shall not have occurred any change, or any development
including a prospective change, in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and the
Subsidiaries, taken as a whole, which, in the reasonable judgment of the
Representatives, is material and adverse and that makes it, in the
reasonable judgment of the Representatives, impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus.

(f) At the Closing Date, there shall have been delivered to you
a signed opinion of Proskauer, Rose, Goetz & Mendelsohn LLP addressed to
the Underwriters, dated as of the Closing Date, in form and substance
reasonably satisfactory to Baer Marks & Upham, counsel for the
Underwriters, together with a signed or photostatic copy of that opinion
for each of the other Underwriters, substantially to the effect that:

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<PAGE>

(i) Each of the Company and the Subsidiaries have been duly
incorporated and are validly existing and in good standing under the laws
of their respective jurisdictions of incorporation, has full corporate
power and authority to own and lease its properties and to conduct its
business as described in the Registration Statement and Prospectus, and is
duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where it owns or leases properties, except
where the failure to so qualify would not have a material adverse effect on
the earnings, business affairs or business prospects of the Company and the
Subsidiaries, taken as a whole.

(ii) All of the outstanding shares of Common Stock of the
Company have been duly authorized and validly issued, are fully paid and
non-assessable. All of the outstanding shares of capital stock of the
Subsidiaries are on the date hereof, and will be on the Closing Date, owned
beneficially by the Company, free and clear of any liens, encumbrances,
security interests or other restrictions, and no one has the right, upon
the passage of time or otherwise, to acquire any of the stock of the
Subsidiaries owned by the Company.

(iii) The Shares to be sold by the Company as contemplated by
this Agreement have been duly authorized, and, when issued as provided in
this Agreement will be, validly issued, fully paid and non-assessable, and
to the best of such counsel's knowledge, no preemptive rights will be
applicable to any of the Shares to be sold by the Company under this
Agreement when issued and sold as contemplated in this Agreement, and in
the Registration Statement and the Prospectus.

(iv) This Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except to the extent enforceability may be limited by bankruptcy or other
laws relating to or affecting creditors' rights generally or equitable
principles and by limitations on the enforceability of the indemnification
and contribution provisions under federal or state securities laws or
public policy. All corporate action required to be taken by the Board of
Directors of the Company and all action required to be taken by the
shareholders of the Company in connection with the authorization, issuance
and sale of the Shares to be sold by the Company as contemplated in this
Agreement, the Registration Statement and the Prospectus have been duly
taken.

(v) The issuance by the Company of the Shares to be sold by
it under this Agreement, the execution and delivery of this Agreement, or
the undertakings contained in the Registration Statement or the Prospectus,
or the consummation of the transactions contemplated in this Agreement or
the compliance with the terms of this Agreement, will not conflict with or
result in a breach of any of the terms or provisions of the Certificate of
Incorporation, as amended, or the By-laws of the Company or the
Subsidiaries, or any indenture, mortgage, deed of trust, note, bank loan or
credit agreement or any other agreement or instrument of which such counsel
is aware to which the Company or the Subsidiaries is a party or by which
any of its properties or assets are bound or any applicable law (other than
Blue Sky laws), rule or regulation, or (without search of any court
dockets) any judgment, order or decree

-22-

<PAGE>

of any government, governmental agency or instrumentality or court,
domestic or foreign, having jurisdiction over the Company or its properties
or assets, of which such counsel is aware.

(vi) Except as described in the Prospectus, each of the
Company and the Subsidiaries holds all material licenses, certificates,
permits and other evidence of regulatory compliance issued by appropriate
federal, state or local governmental agencies or bodies necessary for the
conduct of its business as described in the Prospectus.

(vii) This Agreement has been executed and delivered by or on
behalf of the Selling Shareholder and constitutes a valid and legally
binding agreement of the Selling Shareholder in accordance with its terms.

(viii) All authorizations, approvals and consents necessary
for the execution and delivery by the Selling Shareholder of this
Agreement, and the sale and delivery of Shares which may be sold by the
Selling Shareholder hereunder (other than, at the time of the execution
thereof, the issuance of the order of the Commission declaring the
Registration Statement effective and such authorizations, approvals or
consents as may be necessary under state securities or Blue Sky laws), have
been obtained and are in full force and effect.

(ix) To the best of such counsel's knowledge and belief, the
delivery of certificates for Shares being sold by the Selling Shareholder
hereunder against payment therefor as provided herein will transfer to the
Underwriters good and marketable title to such Shares, free and clear of
all liens, encumbrances, security interests and claims, assuming the
Underwriters purchased such Shares in good faith without notice of any
adverse claim.

(x) Except for registration or qualification under the
Securities Act or under state securities or Blue sky laws, no
authorization, approval, consent or license of any regulatory body or
authority is required for the valid authorization, issuance, sale and
delivery of the Firm Shares and Additional Shares, or, if required, all
such authorizations, approvals, consents and licenses have been obtained
and are in force and effect.

(xi) The Registration Statement has become effective, and,
to such counsel's knowledge, no stop order or similar order has been issued
with regard to the Registration Statement or the Prospectus, and no
proceedings for that purpose have been instituted or are pending and such
counsel has not been notified that any such proceedings are contemplated
under the Acts or under any Blue Sky or other securities laws of any
jurisdiction.

(xii) The Registration Statement, the Prospectus and each
post-effective amendment or supplement thereto, and each document filed
pursuant to the Exchange Act and incorporated by reference into the
Registration Statement and the Prospectus, complies (or, with respect to
documents incorporated by reference, complied when so filed) as to form in
all material respects with the requirements of the Acts (except that no
opinion shall be expressed as to the financial statements, notes related
thereto, and other financial statistical data included therein and
information supplied by you), and, to such counsel's knowledge, all
contracts or

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<PAGE>

other documents of a character required by the Securities Act and the Rules
under the Securities Act to be summarized or disclosed in the Prospectus or
filed as exhibits to the Registration Statement have been so summarized,
disclosed or filed, and the statements incorporated by reference from the
Company's Annual Report on Form 10-K for the year ended December 31, 1994,
in each case insofar as such statements constitute summaries of the legal
matters, documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents and
proceedings and fairly summarizes the matters referred to therein.

(xiii) Such counsel has acted as counsel for the Company and
has participated in the preparation of the Registration Statement and
Prospectus and any post effective amendments or supplements thereto to the
date of such opinion, and no facts have come to the attention of such
counsel which would lead such counsel to believe that either the
Registration Statement or the Prospectus or any post-effective amendment
thereto contains any untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (except no opinions need be expressed as to the
financial statements and other financial or statistical data included
therein and information supplied by you).

(xiv) To such counsel's knowledge, all statutes or
regulations or legal or governmental proceedings required to be described
in the Registration Statement or Prospectus are described therein as
required, and all such descriptions in the Registration Statement or
Prospectus are accurate in all material respects and present fairly the
information purported to be shown.

(xv) To such counsel's knowledge, there are no outstanding
options, warrants or other rights to purchase or acquire any shares of
capital stock of the Company, except as set forth in the Registration
Statement or the Prospectus.

(xvi) The authorized capital stock of the Company conform as
to legal matters in all material respects with the statements concerning
them made in the Registration Statement and the Prospectus under the
section entitled "Description of Capital Stock," and such statements
present fairly the matters respecting the authorized capital stock of the
Company required to be set forth in the Registration Statement or the
Prospectus.

(xvii) Except as set forth in the Registration Statement and
Prospectus, to such counsel's knowledge, there is no pending or threatened
action, suit or proceeding before any court or before or by any
governmental agency or body to which the Company is a party, or of which
any of its properties or assets are the subject, which is required to be
disclosed in the Registration Statement or Prospectus or which would have a
material adverse effect on the Company.

-24-

<PAGE>

(xviii) The Company is not an "investment company" or an entity
"controlled" by and "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.

In rendering such opinion, such counsel may rely (a) as to matters
involving the application of laws other than the laws of the United States
and jurisdictions in which they are admitted, to the extent such counsel
deems proper and to the extent specified in such opinion, if at all, upon
an opinion or opinions (in form and substance reasonably satisfactory to
counsel for Underwriters) of other counsel reasonably acceptable to counsel
for the Underwriters, familiar with the applicable laws; and (b) as to
matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and certificates or other written
statements of officers of departments of various jurisdictions having
custody of documents respecting the corporate existence or good standing of
the Company, provided that copies of any such statements or certificates
shall be delivered to counsel for the Underwriters, and on the
representations and warranties of the Company and the Selling Shareholder
contained in this Agreement. The opinion of such counsel for the Company
shall state that the opinion of any such other counsel is in form
satisfactory to such counsel, and, in their opinion, you and they are
justified in relying thereon.

(g) At the Closing Date, you shall have received a Certificate
signed by the Chairman of the Board, the President and the Vice President-
Finance of the Company, dated as of the Closing Date, to the effect that:

(i) Each officer signing the Certificate has carefully
examined the Registration Statement and the Prospectus and, in his or her
opinion, as of the date of the Prospectus, and as of the date of the
Certificate, neither the Registration Statement nor the Prospectus, nor any
amendment or supplement, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading, and, since the date
of the Prospectus, no event has occurred which should have been set forth
in an amendment or a supplement to the Registration Statement or Prospectus
which has not been so set forth, and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been any material adverse change in the condition
of the Company, financial or otherwise, or, as compared with the comparable
period in the prior fiscal year, in the earnings of the Company from that
set forth in the Registration Statement, whether or not arising in the
ordinary course of business.

(ii) No stop order or similar order with regard to the
Registration Statement or Prospectus has been issued and no proceedings for
that purpose have been taken or are, to the knowledge of such officer,
contemplated by the Commission or any other agency having jurisdiction with
respect to the issuance, sale or distribution of the Shares.

(iii) The Company has complied in all material respects with
its obligations under this Agreement, and the representations and
warranties set forth in Section 1

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<PAGE>

of this Agreement are true and correct as of the date of the Certificate
with the same force and effect as though made on that date.

(h) On the date of this Agreement, you shall have received a
letter addressed to the Underwriters, with a signed or photostatic copy for
each of the several Underwriters, dated the date it is delivered, in form
and substance satisfactory to you and Baer Marks & Upham, from Grant
Thornton LLP, independent certified public accountants, concerning their
examination and review of financial statements and various other data
contained in the Registration Statement, containing the following:

(i) confirming that they are, and during the periods
covered by their report(s) included in the Registration Statement and the
Prospectus were, independent certified public accountants with respect to
the Company and the Subsidiaries within the meaning of the Act and the
Rules under the Act and stating that the answer to Item 13 of the
Registration Statement is correct insofar as it relates to them;

(ii) stating that, in their opinion, the consolidated
statements and schedules of the Company and the Subsidiaries included in
the Registration Statement and Prospectus and covered by their opinion
therein comply in form in all material respects with the applicable
accounting requirements of the Act and the Rules under the Act;

(iii) stating that, on the basis of procedures (but not an
examination made in accordance with generally accepted auditing standards)
consisting of a reading of the latest available unaudited interim financial
statements of the Company and the Subsidiaries (with an indication of the
date of the latest available unaudited interim financial statements), a
reading of the latest available minutes (and consents) of the stockholders
and Boards of Directors of the Company and the Subsidiaries and committees
of such Boards of Directors, inquiries to certain officers and other
employees of the Company and the Subsidiaries responsible for financial and
accounting matters, and other specified procedures and inquiries to a date
not more than five (5) business days prior to the date of such letter,
nothing has come to their attention that caused them to believe that:
(A) the unaudited consolidated financial statements and schedules of the
Company and the Subsidiaries included in the Registration Statement and
Prospectus do not comply in form in all material respects with the
applicable accounting requirements of the Acts or are not fairly presented
in conformity with generally accepted accounting principles (except to the
extent that certain footnote disclosures regarding any stub period may have
been omitted in accordance with the applicable rules of the Commission
under the Exchange Act) applied on a basis consistent with that of the
audited financial statements appearing therein; (B) the unaudited pro forma
adjustments, if any, have not been properly applied; (C) there was any
change in the capital stock or long-term debt of the Company or any
decrease in the net current assets or stockholders' equity of the Company
as of the date of the latest available monthly financial statements of the
Company and the Subsidiaries or as of a specified date not more than five
business days prior to the date of such letter, each as compared with the
amounts shown in the most recent balance sheet included in the Registration
Statement and Prospectus, other than as described in the Registration
Statement and Prospectus or any change or decrease (which shall

-26-

<PAGE>

be set forth therein) which you, in your sole discretion, shall accept; or
(D) there was any decrease in combined net sales, net earnings, or net
earnings per share of Common Stock of the Company and the Subsidiaries,
during the period from __________________ to the date of the latest
available combined monthly financial statements of the Company and the
Subsidiaries or to a specified date not more than five business days prior
to the date of such letter, each as compared with the corresponding period
in 1993, other than as described in the Registration Statement and
Prospectus or any decrease (which shall be set forth therein) which the
Underwriters in the Underwriters sole discretion shall accept; and

(iv) stating that they have compared specific numerical data
and financial information pertaining to the Company and the Subsidiaries
set forth in the Registration Statement, which have been specified by you
prior to the date of this Agreement, to the extent that such data and
information may be derived from the general accounting records of the
Company, and excluding any questions requiring an interpretation by legal
counsel, with the results obtained from the application of specified
readings, inquiries and other appropriate procedures (which procedures do
not constitute an examination in accordance with generally accepted
auditing standards) set forth in the letter, and found them to be in
agreement.

At the Closing Date, you shall have received a letter addressed to
you, dated as of the Closing Date, with a signed or photostatic copy for
each of the several Underwriters from Grant Thornton LLP, confirming, as of
the Closing Date, the statements made in the letter furnished by them at
the date of this Agreement and advising that as of a date no earlier than
three business days prior to the Closing Date, they have no reason to
believe that there has been any change in the matters described in the
prior letter.

(i) At the Closing Date there shall have been delivered to you,
with a photostatic copy for each of the several Underwriters, a signed
opinion of Baer Marks & Upham, counsel for the Underwriters, dated as of
the Closing Date, with respect to the sufficiency of corporate proceedings
and other legal matters in connection with this Agreement, the Shares,
Registration Statement, Prospectus and related matters as the
Representatives may request, and the Company and the Selling Shareholder
shall have furnished to such counsel all documents as such counsel may have
requested for the purpose of enabling them to pass upon those matters. In
rendering such opinion, such counsel may rely, as to all matters of law
governed by the laws of states other than _______, New York and Delaware,
and as to factual matters, upon the opinion referred to in (f) above.

(j) All proceedings in connection with the authorization,
issuance and sale of the Shares shall be reasonably satisfactory in form
and substance to you and to your counsel, and your counsel shall have been
furnished with all documents, certificates and opinions, including
resolutions of the Board of Directors of the Company and minutes of any
shareholders' meetings, as may have been reasonably requested in order to
evidence the accuracy and completeness of any of the representations,
warranties or statements of the Company or the Selling Shareholder, and the
performance of any of the covenants of the company or the Selling
Shareholder or the compliance with any of the conditions contained in this
Agreement.

-27-

<PAGE>

(k) The "lock up" agreements between you and certain
shareholders, officers and directors of the Company relating to the sales
and certain other dispositions of shares of Common Stock or other
securities, delivered to you on or before the date hereof, shall be in full
force and effect on the Closing Date.

(l) The Shares shall have been approved for listing on the
Nasdaq National Market.

12. Conditions of Obligations of Company and Selling Shareholder.
The obligations of the Company and the Selling Shareholder to sell and
deliver the Shares to the several Underwriters is subject to the condition
that the Registration Statement shall become effective with the Commission
not later than 10: 00 A.M., New York City time, on the day following the
date of this Agreement, or such later date as shall have been consented to
by the Underwriters (including you) who are obligated to purchase a
majority of the Shares to be purchased by all of the Underwriters pursuant
to this Agreement, and prior to the Closing Date (and, with respect to the
Additional Shares, prior to the Option Closing Date), no stop order or
similar order with regard to the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or
shall be pending or, to your knowledge or to the knowledge of the Company,
shall be contemplated by the Commission or any other regulatory agency
having jurisdiction with respect to the offer and sales of the Shares.

13. Substitution of Underwriters. (a) If one or more Underwriters
default in its or their obligations to purchase and pay for Firm Shares
under this Agreement and if the aggregate amount of the Firm Shares which
all Underwriters so defaulting shall have agreed to purchase does not
exceed 10% of the Firm Shares, each nondefaulting Underwriter shall have
the right and is obligated, severally, to purchase and pay for (in addition
to the number of Firm Shares set forth opposite its name in Schedule I)
that proportion of the Firm Shares agreed to be purchased by all the
defaulting Underwriters which the percentage of Firm Shares set forth
opposite its name in Schedule I bears to the aggregate of the percentage of
Firm Shares set forth opposite the names of all the nondefaulting
Underwriters. In that event, the Representatives, for the accounts of the
several nondefaulting Underwriters, may take up and pay for all or any part
of the Firm Shares to be purchased by each nondefaulting Underwriter under
this subsection (a), and may postpone the Closing Date to a time not
exceeding three full business days after the Closing Date determined as
provided in Section 4 of this Agreement; and

(b) If one or more Underwriters default in its or their
obligations to purchase and pay for Firm Shares under this Agreement and if
the aggregate amount of the Firm Shares which all Underwriters so
defaulting shall have agreed to purchase exceeds 10% of the Firm Shares, or
if one or more Underwriters for any reason permitted under this Agreement
cancel its or their obligations to purchase and pay for Firm Shares under
this Agreement, the noncancelling and nondefaulting Underwriters
(hereinafter called the "Remaining Underwriters") shall have the right to
purchase such Firm Shares on the Closing Date in the proportion as may

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<PAGE>

be agreed among them. If the Remaining Underwriters do not purchase and
pay for all such Firm Shares at the Closing Date, the Closing Date shall be
postponed by two business days and the Remaining Underwriters shall have
the right to purchase the Firm Shares, or to substitute another person or
persons to purchase them, or both, at the postponed Closing Date. If
purchasers are not found for such Firm Shares by the postponed Closing
Date, the Closing Date shall be postponed for a further five business days
and the Company shall have the right to substitute another person or
persons, satisfactory to the Representatives, to purchase those Firm Shares
at the second postponed Closing Date. If the Company does not find the
purchasers for those Firm Shares by the second postponed Closing Date, then
this Agreement shall automatically terminate and neither the Company nor
the Remaining Underwriters shall be under any obligation under this
Agreement (except that the Company shall remain liable to the extent
provided in Sections 7 and 9(a) and 10 and the Underwriters shall remain
liable to the extent provided in Sections 9(b) and 10). As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 13. Nothing in this Section will relieve a
defaulting Underwriter from liability for its default or obligate any
Underwriter to purchase or find purchasers for any Firm Shares in excess of
those agreed to be purchased by the Underwriter in Section 3 and Section
13(a) of this Agreement.

14. Effective Date of Agreement. This Agreement shall become
effective at whichever of the following times shall first occur: (i) at
9:30 A.M., New York City time, on the next full business day following the
date on which the Registration Statement becomes effective or (ii) at such
time after the Registration Statement has become effective and the
Underwriters shall release the Firm Shares for sale to the public;
provided, however, that the provisions of Sections 7, 9, 10, 14 and 18
hereof shall at all times be effective. For purposes of this Section 14,
the Firm Shares shall be deemed to have been so released upon the release
by the Underwriters for publication, at any time after the Registration
Statement has become effective, of any newspaper advertisement relating to
the Firm Shares or upon the release by the Underwriters of telegrams
offering the Firm Shares for sale to securities dealers, whichever may
occur first.

15. Termination of Agreement. (a) This Agreement may be
terminated at any time prior to the Closing Date by you by giving written
notice to the Company and the Selling Shareholder upon the occurrence of
any of the following events:

(i) the Company shall have sustained a loss, by reason of
fire, flood, accident or other calamity which, in your reasonable judgment,
materially affects the aggregate value of the property owned or leased by
the Company or which materially interferes with the operation of the
business of the Company, regardless of whether or not that loss shall have
been insured;

(ii) the Company has encountered or been threatened with a
strike or other labor dispute or been subjected to governmental action or
fluctuations in currency or major political upheaval which materially
affects the aggregate value of the property owned or leased

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<PAGE>

or which materially interferes with the operation of its business or which
in your reasonable judgment makes it impracticable or inadvisable to offer
for sale or to enforce contracts made by the Underwriters for the resale of
the Firm Shares;

(iii) except as set forth in the Prospectus, there shall be
pending or threatened against the Company or notification has been received
by the Company, of the threat of any material legal or governmental
proceeding or action relating generally to the business or prospects of the
Company, as the case may be, which could materially adversely affect the
Company (including action with respect to credit or interest rates) or
which in your reasonable opinion makes it impracticable or inadvisable to
proceed with the offering;

(iv) any of the certificates, opinions or other documents to
be delivered on the date of this Agreement or at the Closing Date are not
in form reasonably satisfactory to counsel to the Underwriters;

(v) any conditions set forth in Section 11 of this
Agreement shall not have been satisfied;

(vi) the Company is merged or consolidated or all or
substantially all of the capital stock or assets of the Company are
acquired by another company or group, or there exists a binding legal
commitment for the foregoing or any other material change of ownership or
control occurs;

(vii) there has occurred any outbreak of hostilities or
escalation of any existing hostilities or other calamity or crisis, the
effect of which on the financial markets of the United States is such as to
make it impracticable, in the reasonable exercise of judgment of the
Underwriters, to market the Shares or to enforce contracts for the sale of
the Shares;

(viii) a banking moratorium shall have been declared by either
federal or New York state authorities;

(ix) if trading generally on either the American Stock
Exchange, the New York Stock Exchange, or Nasdaq has been suspended, or
minimum or maximum prices for trading have been fixed, or maximum ranges
for prices for securities have been required, by either of said Exchanges
or Nasdaq or by order of the Commission or any other governmental
authority;

(x) trading of any securities of the Company shall have
been suspended on any exchange or in the over-the-counter market; or

(xi) any law shall be enacted or any regulation promulgated
relating to the business of the Company which could materially adversely
affect the Company.

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<PAGE>

(b) This Agreement may be terminated at any time prior to the
Closing Date by the Company by giving written notice to you (i) at any time
before this Agreement becomes effective in accordance with section 14
hereof, or (ii) if the conditions set forth in Section 12 shall not have
been satisfied at or prior to the Closing Date.

16. Notices. All communications under this Agreement shall be in
writing and, except as otherwise provided shall be delivered at or mailed,
registered or certified, return receipt requested, or telecopied to the
following addresses:

If to you or any other Underwriter:

Janney Montgomery Scott Inc.
26 Broadway
New York, New York 10004
Attention: William J. Barrett

Copy to:

Janney Montgomery Scott Inc.
As Representatives of the Several Underwriters
1801 Market Street
20th Floor
Philadelphia, Pennsylvania 19103
Attention: ________________________________________

and

Robert W. Baird & Co. Incorporated
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: ________________________________________

and

Baer Marks & Upham
805 Third Avenue
New York, New York 10022
Attention: Eric D. Martins, Esq.

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<PAGE>

If to the Company:

Computer Horizons Corp.
49 Old Bloomfield Avenue
Mountain Lakes, New Jersey 07064-1495
Attention: John J. Cassese, President

Copy to:

Proskauer, Rose, Goetz & Mendelsohn
1585 Broadway
New York, New York 10036
Attention: Robert Cantone, Esq.

If to the Selling Shareholder:

John J. Cassese, President
49 Old Bloomfield Avenue
Mountain Lakes, New Jersey 07064-1495

Any party may change its address by giving notice in accordance with
this Section.

17. Parties in Interest. This Agreement is made solely for the
benefit of the Underwriters, the Company, directors and officers of the
Company, the Selling Shareholder and their respective executors,
administrators, successors and assigns, and no other person shall acquire
or have any right under or by virtue of this Agreement. The term
"successor" and "successor and assigns" shall not include any purchaser, as
such purchaser, from the Company, the Selling Shareholder or any of the
several Underwriters of the Shares. All of the obligations of the
Underwriters under this Agreement are several and not joint.

18. Survival Clause. The representations, warranties, indemnities,
agreements and other statements of the Underwriters and the Company and its
officers and the Selling Shareholders set forth in this Agreement and made
pursuant to this Agreement will remain operative and in full force and
effect regardless of (i) any investigation made by or on behalf of any
Underwriter or controlling person thereof or by or on behalf of the
Company, any of its officers and directors the Selling Shareholders, an
Underwriter or any controlling person thereof, (ii) any termination of this
Agreement and (iii) delivery of and payment for the Shares.

19. Authority of Representatives. You will act for the several
Underwriters in connection with this offering, and any action under or in
respect of this Agreement taken by you

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<PAGE>

as Representatives on behalf of the Underwriters will be binding upon all
of the Underwriters. In addition, any provision herein requiring the
decision or consent of the Representatives shall be deemed to have been
validly decided or given if decided or given by Janney Montgomery Scott
Inc.

20. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.

21. Counterparts. This Agreement may be signed in one or more
counterparts and shall be deemed effective when each party hereto has
signed a counterpart.

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<PAGE>

If the foregoing is in accordance with your understanding of our
Agreement, kindly sign and return to the Company the enclosed duplicate
hereof, whereupon it will become a binding Agreement among the Company and
the Underwriters in accordance with its terms.

Very truly yours,

COMPUTER HORIZONS CORP.

By:
------------------------------------------
Name:
Title:

----------------------------------------------
John J. Cassese, Selling Shareholder

The foregoing Agreement is hereby confirmed and
delivered as of the date first above written

JANNEY MONTGOMERY SCOTT INC.

By:
--------------------------------
(Authorized Signature)

ROBERT W. BAIRD & CO. INCORPORATED

By:
--------------------------------
(Authorized Signature)

Acting on their own behalf and as Representatives
of the several Underwriters named in Schedule I
attached hereto.

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<PAGE>

SCHEDULE I
----------

LIST OF UNDERWRITERS

Underwriters Number of
Firm Shares
-----------
Janney Montgomery Scott Inc.
Robert W. Baird & Co. Incorporated

Total . . . . . . . . . . . . . . . . 1,265,000

-35-

Exhibit 1.2

1,265,000 Shares of Common Stock
COMPUTER HORIZONS CORP.

AGREEMENT AMONG UNDERWRITERS

_____________, 1995

To each of the Underwriters named in Schedule I
to the attached Underwriting Agreement:

1. Underwriting Agreement. Computer Horizons Corp., a New York
corporation (the "Company"), and a selling shareholder of the Company (the
"Selling Shareholder") propose to enter into an underwriting agreement in
the form attached hereto as Exhibit A (the "Underwriting Agreement") with
Janney Montgomery Scott Inc., as a representative ("Representative") of the
underwriters named in Schedule I thereto (the "Underwriters"), acting
severally and not jointly, with respect to the purchase by the Underwriters
of an aggregate of 1,100,000 shares of Common Stock (the "Firm Shares") of
the Company. In addition, in order to cover over-allotments in the sale of
the Firm Shares, the Underwriters may purchase an aggregate of not more
than 165,000 additional shares of Common Stock of the Company (the
"Additional Shares") from the Selling Shareholder or the Company pursuant
to, and in accordance with the terms of, the over-allotment option granted
to the Underwriters under Section 5 of the Underwriting Agreement. The
Firm Shares and the Additional Shares are collectively referred to herein
as the "Shares." The Firm Shares and the Additional Shares purchased by
the several Underwriters pursuant to the Underwriting Agreement are
sometimes collectively referred to herein as the "Purchased Shares."

2. Registration Statement and Prospectus. The Shares are described
in a registration statement and related preliminary prospectus, copies of
which, as filed with the Securities and Exchange Commission (the
"Commission"), have heretofore been delivered to you. The registration
statement as amended at the time it becomes effective is herein called the
"Registration Statement." The prospectus relating to the Shares included
in the Registration Statement is herein called the "Prospectus," except
that if any revised prospectus shall be provided to the Underwriters by the
Company under the Underwriting Agreement for use in connection with the
sale of the Shares which differs from the Prospectus on file at the
Commission at the time the Registration Statement becomes effective
(whether or not such revised prospectus is required to be filed by the
Company pursuant to Rule 424(b) of the rules and regulations of the
Commission under the Securities Act of 1933, as amended (the "Securities
Act")), the term "Prospectus" shall refer to such revised prospectus from
and after the time it is first provided to the Underwriters for such use.

You hereby confirm that you (i) are familiar with Rule 15c2-8
promulgated by the Commission under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"),

<PAGE>

relating to the distribution of preliminary and final prospectuses for
securities registered under the Securities Act and have previously complied
and will continue to comply therewith, (ii) have examined each preliminary
prospectus, the Registration Statement and the form of Prospectus (and any
amendments or supplements thereto), (iii) are willing to accept the
responsibilities of an underwriter under the Securities Act with respect to
the Registration Statement and Prospectus, and (iv) are willing to proceed
with a public offering of the Shares in the manner contemplated. Each of
you individually also confirms that all statements made in the Registration
Statement and Prospectus insofar as they apply to you are correct and not
misleading, and that you understand that the Registration Statement and
Prospectus are subject to further amendment, but that no such amendment
shall relieve or affect your obligations hereunder or under the
Underwriting Agreement. You authorize us, with the approval of counsel for
the Underwriters, to approve on behalf of each Underwriter any further
amendments or supplements to any preliminary prospectuses, the Registration
Statement or the Prospectus.

We hereby confirm that we will make available to you and to each of
the other Underwriters such number of copies of the Prospectus (as amended
or supplemented) as you may reasonably request for the purposes
contemplated by the Securities Act or the Exchange Act, or the applicable
rules and regulations of the Commission thereunder.

3. Authority and Compensation

(a) You authorize us as your Representative to execute the
Underwriting Agreement in substantially the form attached hereto as Exhibit
A, to fix from time to time the public offering price of the Firm Shares
and the Additional Shares, and to establish the concessions, if any, to
Selected Dealers (as defined in Section 4(b) hereof) and the reallowances,
if any, to other dealers.

(b) You also authorize us to exercise in our absolute discretion
all the authority and discretion vested in us by the provisions of the
Underwriting Agreement and to take all such action as may in our judgment
be desirable in order to carry out the Underwriting Agreement, this
Agreement, and the purchase, carrying, sale and distribution of any of the
Shares, including the authority to agree to any extension of the period or
periods in which any action may or is to be taken by the Company or the
Selling Shareholder or by us as Representative, and to agree to any
modification of the terms of the Underwriting Agreement which in our
judgment does not extend the several liabilities of the Underwriters except
as provided herein and in Section 13 of the Underwriting Agreement.

(c) Without in any way limiting the general authorization
recited herein, you also authorize us, until termination of this Agreement,
to act for you to arrange for or agree to the purchase by other persons
(among which the Representative may be included) of any Shares not taken up
by any withdrawing or defaulting Underwriter, in the manner set forth in
Section 13 of the Underwriting Agreement, and you will at our request
increase, pro rata with the other nondefaulting Underwriters, the number of
Shares which you are to

-2-

<PAGE>

purchase pursuant to the Underwriting Agreement by an amount not exceeding
ten percent (10%) of your original underwriting obligation.

As compensation for our services, each of you will pay to us an amount
equal to $___ for each Firm Share and Additional Share included in the
Purchased Shares. You authorize us to debit your account for this amount
as an expense under this Agreement.

4. Offering. You authorize us, in our discretion, at any time and
from time to time during the life of this Agreement:

(a) To determine the time and the manner of the public offering
and the concessions and reallowances to dealers, to change the public
offering price and such concessions and reallowances, to furnish the
Company with the information to be included in the Registration Statement
and the Prospectus and any amendment or supplement thereto with respect to
the terms of offering, and to determine the names of the Underwriters to
appear on the cover page of the Prospectus and all matters relating to the
public advertisement, including selection of Underwriters whose names
appear in such advertisement, and any communications with dealers or
others;

(b) To reserve all or any part of your Purchased Shares for sale
(i) to retail purchasers including institutions and (ii) to dealers
selected by us (the "Selected Dealers") among which may be included any
Underwriter (including ourselves) and each of which shall be a member of
the National Association of Securities Dealers, Inc. (the "NASD") (or, if a
foreign dealer, which shall agree not to reoffer, resell or deliver the
Shares in the United States or to persons which it has reasons to believe
are citizens or residents of the United States), such reservations for
sales to retail purchasers to be as nearly as practicable in proportion to
the respective underwriting obligations of the Underwriters and such
reservations for sales to Selected Dealers to be in such proportion as we
determine, and from time to time to add to the reserved Purchased Shares,
any Purchased Shares retained by you remaining unsold, and to release to
you any of your Purchased Shares reserved but not sold;

(c) To sell reserved Purchased Shares, as nearly as practicable
in proportion to the respective reservations, to retail purchasers at the
public offering price and to Selected Dealers at the public offering price
less the Selected Dealers' concession pursuant to the Selected Dealer
Agreement in substantially the form attached hereto as Exhibit B; and

(d) To buy Purchased Shares for your account from Selected
Dealers at the public offering price less such amount, not in excess of the
Selected Dealers' concession, as we may determine.

After advice from us that the Purchased Shares are released for public
offering, you will offer to the public in conformity with the terms of
offering set forth in the Prospectus or any amendment or supplement thereto
such of your Purchased Shares as we advise you are not reserved.

-3-

<PAGE>

5. Additional Provisions Regarding Sales. Any Purchased Shares sold
by you (otherwise than through us) which we contract for or purchase in the
open market or otherwise for the account of any Underwriter shall be
repurchased by you on demand at the cost of such purchase plus commissions
and taxes on redelivery. Shares delivered on such repurchase need not be
the identical Purchased Shares sold by you. In lieu of demanding
repurchase by you, we may in our discretion (a) sell for your account the
Shares so purchased by us, at such prices and upon such terms as we may
determine, and debit or credit your account with the loss and expense or
net profit resulting from such sale, or (b) charge your account with an
amount not in excess of the Selected Dealers' concession with respect to
such Shares.

6. Payment and Delivery. At our request from time to time, you will
furnish us within twenty-four (24) hours the funds needed to make payment
for your Purchased Shares at the public offering price less the Selected
Dealers' concession, by certified or bank cashier's check or checks payable
in New York Clearing House funds to the order of Janney Montgomery Scott
Inc., and you authorize us to make such payment against delivery of your
Purchased Shares. In the event you fail to timely deliver your check as
herein provided, you authorize us to make payment for you at the full price
of the Purchased Shares you have agreed to purchase against delivery of
your Purchased Shares and you shall be obligated to repay on demand, plus
the current interest rate, for the amount so advanced for you. You
authorize us (i) to take delivery of your Purchased Shares, (ii) to hold
for your account such of your Purchased Shares as we have reserved for sale
to retail purchasers and to Selected Dealers, and (iii) to deliver your
reserved Purchased Shares against such sales. We will deliver your
unreserved Purchased Shares to you promptly, and after we receive payment
for reserved Purchased Shares sold by us for your account, we will remit to
you an amount equal to the price paid by you for such Purchased Shares. As
soon as practicable after termination of Sections 4, 5 and 9 and the first
sentence of Section 8 (the "Offering Provisions") of this Agreement, we
will deliver to you any of your Purchased Shares reserved but not sold.

7. Authority to Borrow. In connection with the purchase or carrying
of your Purchased Shares and other securities purchased hereunder for your
account, you authorize Janney Montgomery Scott Inc., in its discretion, to
advance its funds for your account, charging current interest rates, or to
arrange loans for your account, and in connection therewith to execute and
deliver any notes or other instruments and hold or pledge as security any
of your Purchased Shares or such other securities. Any lender may rely on
the instructions of Janney Montgomery Scott Inc. in all matters relating to
any such loan. Any of your Purchased Shares or such other securities held
by us for your account may be delivered to you for carrying purposes only,
and subject to your further direction.

8. Stabilization and Over-allotment. To facilitate the distribution
of the Shares, you authorize us in our discretion after the execution of
this Agreement to make purchases and sales of Shares for your account in
the open market or otherwise, for long and short account, on such terms as
we deem advisable and, in arranging sales, to over-allot. All such

-4-

<PAGE>

purchases and sales and over-allotments shall be made for the account of
the several Underwriters as nearly as practicable in proportion to their
respective underwriting obligations. Your net commitment for long or short
account under this Section 8 shall not, at the end of any business day,
exceed 15% of your maximum underwriting obligation exclusive of your pro-
rata share of short account attributable to the Underwriters' over-
allotment option to purchase Additional Shares. You will on our demand
take up at cost or deliver against payment any Shares so purchased or sold
or over-allotted for your account. Upon request, you will advise us of the
Purchased Shares retained by you and unsold and will sell to us for the
account of one or more of the Underwriters such of your unsold Purchased
Shares as we may designate, at the public offering price less such amount
as we may determine, but not in excess of the Selected Dealers' concession.
We agree to notify you if we engage in any stabilization transaction
requiring reports to be filed pursuant to Rule 17a-2 under the Exchange Act
and to notify you of the date of termination of stabilization. You agree
to file with us any reports required of us pursuant to such Rule 17a-2 not
later than five business days following the day upon which stabilization
was terminated, and you authorize us as the Representative to file on your
behalf with the Commission any reports required by such Rule. You have and
assume for yourself the responsibility of making the reports required by
the rules of the Commission with respect to your own transactions which are
subject thereto. The foregoing provisions are not an assurance that the
price of the Shares will be stabilized or that stabilization, if commenced,
will not be discontinued at any time.

9. Open Market Transactions. We and you agree not to bid for,
purchase, attempt to induce others to purchase or sell, directly or
indirectly, the Shares or any other securities of the Company, except as
brokers pursuant to unsolicited orders and as otherwise provided in this
Agreement or in the Underwriting Agreement.

10. Expenses and Settlement. We may charge your account with
Selected Dealers' concessions and all transfer taxes on sales made by us
for your account and with your proportionate share (based upon your
underwriting obligation) of all other expenses incurred by us under the
terms of this Agreement or in connection with the purchase, carrying, sale
or distribution of the Shares. Our determination of the amount and
allocation of expenses shall be conclusive. As soon as practicable after
termination of the offering, the accounts hereunder will be settled, but we
may reserve from distribution such amount as we deem advisable to cover
possible additional expenses. We may at any time make partial
distributions of credit balances or call for payment of debit balances and
call for advance deposit of funds with which to meet your obligations. Any
of your funds in our hands may be held with our general funds without
accountability for interest. Notwithstanding any settlement, you will pay
(a) your proportionate share (based on your underwriting obligation) of any
liability which may be incurred by the Underwriters, or any of them, based
on the claim that the Underwriters constitute an association, partnership,
unincorporated business or other separate entity, and of any expenses
incurred by us or any other Underwriter with our approval in contesting any
such liability, and (b) any transfer taxes which may be assessed and paid
after such settlement on account of any sale or transfer or your account.

-5-

<PAGE>

11. Termination. The Offering Provisions of this Agreement shall
terminate 45 days after the Registration Statement becomes effective;
notwithstanding, said provisions may be terminated in part or in whole, by
notice from us to the effect that the Offering Provisions (or specific
provisions thereof) have been terminated. Such termination, however, shall
not relieve any Underwriter from its proportionate share of any charges,
liabilities or expenses incurred prior thereto.

12. Default by Underwriters. Default by one or more Underwriters
hereunder or under the Underwriting Agreement shall not release or relieve
the other Underwriters from their obligations or affect the liability of
any defaulting Underwriter to the other Underwriters for damages resulting
from such default. In the event that, pursuant to Section 13 of the
Underwriting Agreement, the amount of Shares which you are to purchase is
increased or arrangements are made for the purchase by others, including
nondefaulting Underwriters, of Shares not taken by defaulting Underwriters,
the respective amounts of Shares to be purchased by the nondefaulting
Underwriters and by such others shall be taken as the basis for the
underwriting rights and obligations under this Agreement. In case of such
default for an aggregate amount exceeding 10% of the total number of
Shares, the Representative is authorized, but shall not be obligated, to
arrange for the purchase by other persons, which may include themselves, of
that defaulted portion in excess of such 10%.

In the event of default by one or more Underwriters in respect of
their obligations under this Agreement, each nondefaulting Underwriter
shall assume its proportionate share of the obligations under this
Agreement of each such defaulting Underwriter (other than the underwriting
obligation of such defaulting Underwriter).

13. Position of Representative. In taking action under this
Agreement, we shall, except as otherwise provided herein, act only as
agents of the several Underwriters. Except as herein otherwise expressly
provided, we shall have full authority to take such action as we may deem
necessary or advisable in respect to all matters pertaining to the
Underwriting Agreement, this Agreement and the purchase, sale and
distribution of the Shares, but neither individually nor as Representative
shall the Representative be under any liability whatsoever to any of the
Underwriters for or in respect to the issue, form, genuineness, validity,
value of or title to the Shares or the validity of, or the representations
contained in, the order forms for any such Shares, or the Registration
Statement, Prospectus or any preliminary prospectus or the Underwriting
Agreement, or the Selected Dealer Agreement, or for the performance by the
Company, the Selling Shareholders or others of any agreement on their
respective parts, or for any matter connected with any of the foregoing
except for our own want of good faith.

Nothing herein contained shall constitute the several Underwriters
partners or an association or other separate entity, and the rights and
liabilities of ourselves and each of the other Underwriters are several and
not joint.

-6-

<PAGE>

14. Indemnification and Contribution. Each Underwriter, including
yourself, agrees to indemnify and hold harmless each Underwriter and each
person, if any, who controls any other Underwriter within the meaning of
Section 15 of the Securities Act, and each and all of them, and to
reimburse each such other Underwriter and each such controlling person, for
expenses, all to the extent that such Underwriter will be obligated in the
Underwriting Agreement to indemnify and hold harmless and reimburse the
Company and any controlling person, director or officer thereof and the
Selling Shareholder. The indemnification and reimbursement agreement of
each Underwriter contained in this Section 14 shall remain operative and in
full force and effect regardless of (i) any termination of this Agreement
or (ii) any investigation made by or on behalf of any Underwriter or
controlling person, and any successor of any Underwriter or controlling
person shall be entitled to the benefits contained in this Section 14.

Notwithstanding any settlement or the termination of this Agreement,
in the event that at any time any claim or claims shall be asserted against
us, as Representative or otherwise, involving the Underwriters generally
relating to any preliminary prospectus, the Prospectus, the Registration
Statement, any amendments or supplements thereto, the public offering of
the Shares or any of the transactions contemplated by this Agreement, you
authorize us to make such investigation, to retain such counsel and take
such action as we may deem necessary or desirable under the circumstances,
including settlement of any such claim or claims if such course of action
shall be recommended by counsel retained by us. You agree to pay us, on
request, your proportionate share (based on your underwriting obligation)
of all expenses incurred by us (including, without limitation, the
disbursements and fees of counsel retained by us) in investigating and
defending against such claim or claims, and your proportionate share (based
on your underwriting obligation) of any liabilities incurred by us in
respect of such claim or claims, whether such liabilities shall be the
result of a Judgment against us or as a result of any such settlement.

15. Blue Sky Matters. We shall not have any responsibility with
respect to the right of any Underwriter or other person to sell the Shares
in any jurisdiction, notwithstanding any information we may furnish in that
connection. You authorize us to file a New York Further State Notice with
the Department of State of New York, if required.

16. Title to Shares. The Shares purchased by the respective
Underwriters and any other securities purchased by us hereunder for their
respective accounts shall remain the property of such Underwriters until
sold and no title to any such Shares or other securities shall in any event
pass to us, as Representative, by virtue of any of the provisions of this
Agreement.

17. Capital Requirements. You confirm that you now satisfy, and
after giving effect to the commitment contemplated herein you will continue
to satisfy, the net capital requirements established pursuant to the
Exchange Act.

-7-

<PAGE>

18. Notice and Governing Law. Any notice from us to you shall be
mailed, telephoned or telecopied to you at your address as set forth in
your Underwriters' Questionnaire. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.

19. Compliance with Applicable Statutes and Rules. We represent that
we are members in good standing of the NASD. You agree to comply with all
applicable provisions of the Securities Act, the Exchange Act and the rules
and regulations of the Commission in connection with the purchase and
public offering of the Shares. If your business involves offers or sales
to purchasers of securities in the United States of America, you represent
that you are registered under the Exchange Act and are a member in good
standing of the NASD and you agree to comply with the fixed price offering
rules set forth in Sections 8, 24, and 36 of Article III of the NASD Rules
of Fair Practice. If you are not registered under the Exchange Act, you
agree not to offer, sell or deliver any of the Shares in the United States
of America or to any person unless you have reason to believe that such
person is not a citizen, resident or national of the United States of
America.

-8-

<PAGE>

20. Counterparts. This Agreement may be signed in any number of
counterparts which taken together shall constitute one and the same
instrument.

Please confirm that the foregoing correctly states the understanding
between you, as one of the Underwriters, and us, as the Representative, by
signing and returning to us a counterpart hereof. Upon our confirmation
hereof and the execution and delivery of an identical agreement by us with
each of the other Underwriters, this Agreement and all such other identical
agreements shall constitute the Agreement Among Underwriters.

Very truly yours.

JANNEY MONTGOMERY SCOTT INC.

By:
-----------------------------------------------
(Authorized Signature)

Confirmed and accepted as of the date
first above written:

The Underwriters named in Schedule I
to the attached Underwriting Agreement

- -----------------------------------------
Name of Underwriter

By:
--------------------------------------
(Official Signature)
______________, Attorney-in-Fact

-9-

Exhibit 1.3

1,265,000 Shares of Common Stock

COMPUTER HORIZONS CORP.

SELECTED DEALER AGREEMENT

Dear Sirs:

The underwriters (the "Underwriters") named in the enclosed Prospectus
have severally agreed, subject to the terms and conditions of the
underwriting agreement dated ________________, 1995 (the "Underwriting
Agreement"), to purchase the above shares of Common Shares (the "Shares")
from Computer Horizons Corp. (the "Company") and a shareholder of the
Company (the "Selling Shareholder"). The Shares are described in the en-
closed Prospectus, the receipt of which you hereby acknowledge.

We are acting as Representative of each of the Underwriters in all
matters connected herewith and with their respective purchases of the
Shares from the Company and the Selling Shareholder.

1. Offering to Selected Dealers
----------------------------

The Underwriters, acting through us, are severally, and not jointly,
offering part of the Shares for sale to certain dealers (the "Selected
Dealers") as principals, at the public offering price, less a concession of
not more than $________ per Share (the "Selected Dealer's Concession"),
subject to the terms and conditions stated herein and in the Prospectus.
Sales of Shares to you pursuant to such offering will be evidenced by our
written confirmation and will be on the terms and conditions contained
herein. In purchasing Shares, you will rely upon no statement whatsoever,
written or oral, other than statements in the Prospectus. The public
offering price and Selected Dealer's Concession may be changed at any time
or from time to time in our discretion without notice.

We will advise you by telecopier or telegram of the method and terms
of the offering, including the time the Shares are released by us for
public offering, the amount of Shares being offered and the initial public
offering.

The offering is made subject to the issuance and delivery of the
Shares and their acceptance by the Underwriters, to the approval of certain
legal matters by counsel, and to the terms and conditions herein set forth
and may be made on the basis of the reservation of Shares or an allotment
against subscriptions, and is not joint but several.

<PAGE>

All orders will be strictly subject to confirmation and we reserve the
right in our sole discretion to reject an order in whole or in part, to
accept or reject orders in the order of their receipt or otherwise, and to
allot.

2. Reoffering by Selected Dealers
------------------------------

Shares purchased by you may be reoffered in conformity with the terms
of offering set forth in the Prospectus. You may reallow a concession from
the public offering price of not more than $________ per Share with respect
to Shares sold by you to any member of the National Association of
Securities Dealers. Inc., or to any foreign dealer not eligible for
membership in said Association who agrees not to reoffer, resell or deliver
Shares sold to him within the United States or to persons whom he has
reason to believe are citizens or residents of the United States. Any
concession reallowed by you to such dealers must be retained by such
dealers and not allowed in whole or in part.

It is assumed that Shares sold by you will be effectively placed for
investment. If we contract for or purchase in the open market for the
account of any Underwriter any Shares sold to you and not effectively
placed for investment, we may charge you the Selected Dealer's Concession
originally allowed you on the Shares so repurchased, and you agree to pay
such amount to us on demand. Shares so delivered need not be the identical
Shares originally purchased by you.

You will advise us upon request of Shares purchased by you remaining
unsold, and we shall have the right to repurchase such unsold Shares on
demand at the public offering price less all or part of the Selected
Dealer's Concession. After the books in respect of the offering to dealers
have been closed, dealers who are parties to a Selected Dealer Agreement
and Underwriters may deal in the Shares with each other at the public
offering price less an amount not exceeding the concession to dealers as
set forth in this Section 2.

3. Payment and Delivery
--------------------

Payment for Shares purchased by you shall be made by you on such dates
and at such places as we advise you, by certified check or bank cashier's
check payable to the order of Janney Montgomery Scott Inc. in such clearing
house funds as we advise, against delivery of the Shares. Delivery
instructions must be in our hands at the office of Janney Montgomery Scott
Inc., 26 Broadway, New York, New York 10004, at such time as we request.

The above payment shall be made by you at the public offering price,
as determined by us from time to time, or, if we so advise you, at a net
price equal to such public offering price less the Selected Dealer's
Concession. If payment is made by you at such public offering price, the
Selected Dealer's Concession payable to you hereunder shall be paid
promptly after the termination of this Agreement (or on such earlier date
as we may determine), except that such

<PAGE>

concession may be withheld and canceled, at our discretion, as to Shares
which we have repurchased as set forth in the second paragraph of Section 2
hereof.

4. Position of Selected Dealers and Underwriters
---------------------------------------------

(a) You represent that you are a member in good standing of the
National Association of Securities Dealers, Inc., or, if a foreign dealer
not eligible for membership in said Association, that you will not reoffer,
resell or redeliver Shares sold to you in the United States or to any
person unless you have reason to believe that such person is not a
resident, citizen or national of the United States. You represent that you
shall comply with Sections 8, 24, 25 and 36 of Article 3 of the NASD Rules
of Fair Practice. You are not authorized to give any information or make
any representations other than as contained in the Prospectus, or to act as
agent for any Underwriter or us. Nothing shall constitute the Selected
Dealers an association, unincorporated business or other separate entity or
partners with the several Underwriters, with us, or with each other, but
you shall be liable for your proportionate share of any tax, liability or
expense based on any claim to the contrary.

(b) Neither we, acting as Representative, nor any of the Underwriters
shall be under any obligations to you, except for obligations expressly
assumed by us in this Agreement.

(c) For the purpose of stabilizing the market in the Shares, we have
been authorized to make purchases in accordance with Rule 10b-7 and sales
to the extent permitted by Rule 10b-8 in the open market or otherwise and,
in arranging for sales, to over-allot Shares.

(d) You agree, until the termination of this Agreement, not to bid
for, purchase, attempt to induce others to purchase, to sell, directly or
indirectly, any Shares otherwise than (i) as provided for in this Agreement
and (ii) as a broker executing unsolicited orders, except as expressly
authorized by us. In acting as a dealer under this Agreement and in
offering and selling Shares hereunder, you agree to comply with applicable
requirements of the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, and all applicable state securities laws.

5. Reports
-------

You agree to furnish us, for statistical purposes and with the
understanding that we will not make the same public, a report, in such form
as we may request, showing the number of Shares sold by you in each state
and showing the distribution of the purchasers classified by number of
Shares purchased, but no such report shall require you to inform us of the
names of any purchasers of any of the Shares from you.

<PAGE>

6. Notices
-------

All communications from you to us shall be addressed to us in care of
Janney Montgomery Scott Inc., 1801 Market Street, 20th Floor, Philadelphia,
Pennsylvania 19103. Attention: Syndicate Department. Any notice from us to
you shall be deemed to have been duly given if delivered, mailed or
telecopied to you at the address to which this letter is mailed.

7. Termination
-----------

This Agreement shall terminate 45 days after the date hereof and may
be terminated by us at any time. Such termination shall not affect your
obligation to pay for any Shares purchased by you or any of the provisions
of Section 2 and 4 hereof.

Please confirm the foregoing by signing the duplicate copy of this
Agreement enclosed herewith and returning it to us at the address in
Section 6 above.

Very truly yours,

JANNEY MONTGOMERY SCOTT INC.

By:
----------------------------
(Authorized Signature)

Confirmed as of the date first
above written

The Underwriters named in Schedule I
to the attached Underwriting Agreement

- ---------------------------------------------
By: Attorney-in-Fact
---------------

<TABLE>
<CAPTION>
Exhibit 11

Computer Horizons Corp. and Subsidiaries
EARNINGS PER COMMON AND COMMON SHARE EQUIVALENT

Year Ended December 31, Three Months Ended March 30,
1992 1993 1994 1994 1995
---- ---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C> <C>
Primary
Average shares outstanding 9,018,000 9,738,000 8,882,000 8,863,000 8,936,000
Stock options 65,000 258,000 624,000 657,000 566,000
--------- --------- ---------- ---------- ----------

Primary weighted average of
common and common
equivalent shares
outstanding 9,083,000 9,996,000 9,506,000 9,520,000 9,502,000
========= ========= ========= ========= =========

Fully diluted
Average shares outstanding 9,018,000 9,738,000 8,882,000 8,863,000 8,936,000
Stock options 212,000 593,000 652,000 695,000 626,000
--------- --------- --------- --------- ---------

Fully diluted weighted
average number of common
and common equivalent
shares outstanding 9,230,000 10,331,000 9,534,000 9,558,000 9,562,000
========= ========== ========= ========= =========

Net income $ 2,026,000 $ 3,704,000 $ 5,686,000 $ 1,114,000 $ 1,682,000
========== ========== ========== ========== ==========

Earnings per share
Primary $ .22 $ .37 $ .60 $ .12 $ .18
=========== =========== =========== =========== ============

Fully diluted $ .22 $ .37 $ .60 $ .12 $ .18
=========== =========== =========== =========== ============
</TABLE>

Exhibit 23.1

Consent of Independent Certified Public Accountants
---------------------------------------------------

We have issued our report dated January 31, 1995, accompanying the
consolidated financial statements and schedule of Computer Horizons Corp. and
Subsidiaries contained in the Registration Statement and Prospectus. We consent
to the use of the aforementioned report in the Registration Statement and
Prospectus, and to the use of our name as it appears under the caption
"Experts."

GRANT THORNTON LLP

Parsippany, New Jersey
May 3, 1995

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-30-1995
<CASH> 234,000
<SECURITIES> 0
<RECEIVABLES> 35,067,000
<ALLOWANCES> 542,000
<INVENTORY> 0
<CURRENT-ASSETS> 36,655,000
<PP&E> 6,268,000
<DEPRECIATION> 3,577,000
<TOTAL-ASSETS> 51,461,000
<CURRENT-LIABILITIES> 14,829,000
<BONDS> 4,288,000
<COMMON> 1,076,000
0
0
<OTHER-SE> 30,647,000
<TOTAL-LIABILITY-AND-EQUITY> 51,461,000
<SALES> 0
<TOTAL-REVENUES> 43,867,000
<CGS> 0
<TOTAL-COSTS> 31,366,000
<OTHER-EXPENSES> 9,294,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 175,000
<INCOME-PRETAX> 3,032,000
<INCOME-TAX> 1,350,000
<INCOME-CONTINUING> 1,682,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,682,000
<EPS-PRIMARY> 0.18
<EPS-DILUTED> 0.18

</TABLE>