COMPUTER HORIZONS CORP
8-K, 1998-07-20
COMPUTER INTEGRATED SYSTEMS DESIGN
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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 8-K


                                 CURRENT REPORT

     PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

                                  JULY 3, 1998

                             Date of Report (Date of
                            earliest event reported)
                             COMPUTER HORIZONS CORP.
             (exact name of registrant as specified in its charter)

          NEW YORK                          0-7282             13-2638902
    ---------------------      -----------------------  ------------------------
(State or other jurisdiction   Commission File Number       (I.R.S. Employer 
    of incorporation or                                   Identification Number)
       organization)

         49 OLD BLOOMFIELD AVENUE, MOUNTAIN LAKES, NEW JERSEY 07046-1495
         --------------------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)


                                 (973) 299-4000
         ---------------------------------------------------------------
              (Registrant's telephone number, including area code)


                                 NOT APPLICABLE
         ---------------------------------------------------------------
         (Former name or former address, if changed since last report.)






<PAGE>





ITEM 2.  ACQUISITION OR DISPOSITION OF ASSETS


     Pursuant to the terms of the Purchase  Agreement,  dated as of July 2, 1998
(the  "Purchase  Agreement")  among ISG  Careers  Inc.  and ISG  Contracts  Inc.
(collectively,  "Sellers"),  each a  corporation  organized  under  the  laws of
Ontario,  Canada,  Vincent  Michael Roti,  the sole  stockholder of Sellers (the
"Stockholder"),  Computer  Horizons  Corp.,  a  New  York  corporation  ("CHC"),
Computer  Horizons  (Canada)  Corp., a corporation  organized  under the laws of
Ontario,  Canada and a wholly-owned subsidiary of CHC ("CHC Canada"), CHC Canada
acquired  substantially  all of the  assets of Sellers  for a purchase  price of
$21,600,000  in cash  which was paid on July 3, 1998,  the date of closing  (the
"Closing Date"). The Purchase Agreement provides for additional payments payable
in cash and  shares of common  stock of CHC if the  acquired  business  achieves
specified   financial  targets.   The  purchase  price  was  determined  through
negotiation  with  Sellers  and was  financed  through  the CHC's  cash on hand.
$2,160,000 in cash (the "Escrow  Account") is held in escrow in the event CHC or
CHC Canada shall become entitled to indemnification  for breaches by Sellers and
the Stockholder of  representations,  warranties or obligations  made by them in
the Purchase Agreement.  Subject to any claims for  indemnification,  the Escrow
Account shall be delivered to the Stockholder upon the first  anniversary of the
Closing Date.

     Sellers provide both information  technology  staffing and career placement
services to Fortune 500 companies primarily in the Province of Ontario,  Canada.
Sellers'  current  clients  include Bell Sygma Telecom,  Toronto  Dominion Bank,
Citibank Canada, IBM Canada and Canadian Tire Corporation.

     CHC issued a press release on July 7, 1998 announcing the acquisition.

               





<PAGE>



ITEM 7.    FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
           AND EXHIBITS.
         
(a) & (b)  Upon  review  and  consultation  with  its  advisors the Company  has
           determined  that  the financial  statements of  the business acquired
 
           (ISG Careers Inc. and ISG Contracts Inc.)  and  the  related proforma
 
           financial  information  are not   required  pursuant to the rules and
 
           regulations of the Securities and Exchange  Commission.  Accordingly,
  
           the Company has elected not to provide such information.
         
(c)        The following  documents  are  furnished  as Exhibits to this Current
           Report on Form 8-K pursuant to Item 601 of Regulation S-K:
       
               2.   Purchase  Agreement among Computer Horizons Corp.,  Computer
                    Horizons  (Canada)  Corp.,  ISG Careers Inc.,  ISG Contracts
                    Inc., and Vincent Michael Roti, dated as of July 2, 1998.

               20.  Press release of Computer Horizons Corp., dated July 7, 1998






















                                       i

<PAGE>




                                   SIGNATURES


     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                                             COMPUTER HORIZONS CORP.

Date:    July 20, 1998

                                             By: /s/William J. Murphy

                                                 Name: William J. Murphy 
                                                 Title: Chief Financial Officer

















                                       ii

<PAGE>




                                  EXHIBIT INDEX


DOC. NO.  DOCUMENT DESCRIPTION

2.   Purchase  Agreement  among  Computer  Horizons  Corp.,   Computer  Horizons
     (Canada)  Corp.,  ISG Careers Inc., ISG Contracts Inc., and Vincent Michael
     Roti, dated as of July 2, 1998.

20.  Press release of Computer Horizons Corp., dated July 7, 1998










 










                                      iii



                               PURCHASE AGREEMENT
                                  by and among
                             COMPUTER HORIZONS CORP.
                        COMPUTER HORIZONS (CANADA) CORP.
                                       and
                               ISG CONTRACTS INC.
                                ISG CAREERS INC.
                                       and
                              Vincent Michael Roti

                              Dated July 2, 1998





<PAGE>




     PURCHASE  AGREEMENT dated July __, 1998,  among Computer  Horizons Corp., a
New York corporation ("Parent"), Computer Horizons (Canada) Corp., a corporation
formed under the laws of Ontario, Canada and a wholly-owned subsidiary of Parent
("Sub"),  ISG Contracts  Inc., a  corporation  formed under the laws of Ontario,
Canada  ("ISG-Con"),  ISG Careers Inc., a  corporation  formed under the laws of
Ontario, Canada ("ISG-Car",  and together with ISG-Con,  "Sellers"), and Vincent
Michael Roti, the sole stockholder of Sellers (the "Stockholder").

     WHEREAS,  Sellers are  engaged in the  business  of  providing  information
technology staffing and recruitment services (the "Business");

     WHEREAS,  the Stockholder  owns all of the issued and  outstanding  capital
stock of Sellers;

     WHEREAS,  based  upon  the  representations,   covenants,   agreements  and
warranties herein made by Sellers and the Stockholder, Sub wishes to acquire the
Business and certain of Sellers' assets and to continue to operate the Business;

     WHEREAS,  based  upon  the  representations,   covenants,   agreements  and
warranties  herein  made  by Sub  and  Parent,  Sellers  wish to sell to Sub the
Business and such assets, subject to certain of Sellers' liabilities;

     WHEREAS, the Stockholder, as owner of Sellers, will benefit from the above-
described sale and purchase;

     WHEREAS,  Sellers, the Stockholder,  Sub and Parent wish to provide for the
above-described sale and purchase.

     NOW,  THEREFORE,  in consideration of the foregoing and the mutual promises
and covenants set forth below, the parties hereto hereby agree as follows:


                                    ARTICLE I
                                SALE AND PURCHASE

     Section 1.1 Assets to be Purchased. Subject to the terms and conditions set
forth in this  Agreement,  at the  Closing  (as  defined in Section  1.8 hereof)
Sellers shall sell, transfer,  assign,  convey and deliver to Sub, and Sub shall
purchase and acquire from Sellers,  all of Sellers' right, title and interest in
and to  Sellers'  assets  (wherever  located,  tangible  and  intangible,  real,
personal  or mixed,  whether  known or unknown and whether or not carried on the
books and records of Sellers)  and the  Business  (and the  goodwill  associated
therewith)  as a  going  concern  (the  "Assets")  (excluding  only  the  assets
specified in Section 1.2 hereof), including but not limited to, the following:



<PAGE>



     (a) all of Sellers' rights under all contracts,  agreements,  arrangements,
commitments, instruments and understandings ("Contracts") to which either Seller
is a party or which  relate  to the  Business,  including,  without  limitation,
rights as  licensee  under  software  and other  intellectual  property  license
agreements;  provided,  however, that to the extent that an attempted assignment
of a Contract  without a required  consent of the other  party to such  Contract
would  constitute a breach thereof,  such assignment  shall not occur until such
time as the  consent  of such  other  party  to the  Contract  shall  have  been
obtained;  and  provided  further,  that  until  such  time as such  consent  is
obtained,  the Seller that is a party to such Contract shall  cooperate with Sub
in any  reasonable  arrangement  designed  to provide  Sub the  benefits of such
Contract and Sub shall cooperate with such Seller in any reasonable  arrangement
designed to relieve such Seller of its obligations under such Contract;

     (b) all of  Sellers'  records,  files,  books,  documents  and  other  data
relating to the Assets and the Business;

     (c)  all  of  Sellers'  copyrights  and  all  of  Sellers'  rights  in  the
trademarks,  service  marks,  trade  names and logos now or  previously  used by
Sellers  in  connection   with  the  Business   (including   registrations   and
applications for registration of any of them);

     (d) all of  Sellers'  inventions,  computer  software,  trade  secrets  and
confidential data;

     (e) all of Sellers'  rights to the name  "Informatics  Search  Group," "ISG
Careers Inc.," and "ISG Contracts Inc." and all names derivative therefrom;

     (f) all of Sellers'  leasehold  and other  interests  in all real  property
leases,  and any easements  and  rights-of-way  and any prepaid  rent,  security
deposits and options to renew or purchase in connection therewith;

     (g) good and marketable title to, or Sellers'  leasehold or other interests
in, all furnishings,  furniture,  leasehold  improvements,  supplies,  vehicles,
spare parts, signs, computers, machinery and equipment (the "Equipment");

     (h) good and marketable  title to, or Sellers'  leasehold or other interest
in, all fixed assets;

     (i) all  municipal,  provincial,  state and  federal  franchises,  permits,
licenses and authorizations held or used by Sellers;

     (j) all deposits, deferred and prepaid charges, and similar sums;

     (k) all other tangible assets owned by Sellers wherever located;

     (l) all of Sellers' accounts and fees receivable; and


                                       2

<PAGE>



     (m) all claims against third parties.

     Section 1.2  Excluded  Assets.  The  following  assets  (collectively,  the
"Excluded Assets") shall be retained by Sellers and no interest in them shall be
assigned, transferred conveyed or delivered to Sub:

     (a) the minute books and stock ledger of Sellers;

     (b) except as otherwise  provided in Section  1.6(b)  hereof,  all cash and
cash equivalents on hand or in banks and debt and equity securities; and

     (c) the assets listed on Schedule 1.2(c) hereto; and.

     (d) tax returns and corporate books of account.

     Section 1.3 Assumed  Liabilities.  Subject to the terms and  conditions set
forth in this  Agreement,  at the  Closing  Sub shall  assume  and agree to pay,
perform and  discharge  all of the  following  obligations  and  liabilities  of
Sellers  in   connection   with  the   Business   (collectively,   the  "Assumed
Liabilities"),  except those  liabilities  which are set forth in Section 1.4 or
listed on Schedule 1.4 hereto (the "Excluded Liabilities");

     (a) all  operating/trade  liabilities of Sellers as of the Interim  Balance
Sheet Date (as  defined in Section 2.7  hereof) to the extent  reflected  on the
Financial Statements (as defined in Section 2.7 hereof);

     (b) all  operating/trade  liabilities  of Sellers  arising in the  ordinary
course of business consistent with past practice after the Interim Balance Sheet
Date and reflected on the Closing Statement;

     (c) all liabilities  and obligations of Sellers under the Contracts  listed
as items 1 through 11 on Schedule 2.27 hereto,  and Contracts  which are entered
into  after the date  hereof in the  ordinary  course  of  business  or with the
written consent of Sub and listed on an amended Schedule 2.27 hereto,  which are
validly assigned to Sub (the "Assumed Contracts"), other than damages, penalties
or other like liabilities or obligations arising from or as a result of a breach
of any  Assumed  Contract by either  Seller or the  failure of either  Seller to
satisfy  any  requirement  which it was  required  to satisfy on or prior to the
Closing, and provided further, that with respect to any Assumed Contract that is
not consistent in all material respects with the  representations and warranties
of Sellers and the Stockholder  contained herein,  Sub shall have no liabilities
or  obligations  thereunder  except  to the  extent  of any  benefit  thereunder
provided to Sub; and

     (d) all liabilities  and obligations of Sellers to the Accepting  Employees
(as that term is defined in Section  5.11  hereof)  with  respect to accrued and
unpaid wages,  benefits,  entitlements,  vacation  pay,  severance and seniority
entitlements.


                                       3

<PAGE>



     Section  1.4  Excluded  Liabilities.  Except as  specifically  provided  in
Section 1.3 and Section 5.6 hereof, Sub shall not assume, and shall not have any
liability for, any liabilities or obligations of Sellers,  or any liabilities or
obligations  that arose or may arise out of the operations of the Business prior
to the date hereof or out of Sellers'  assets or  properties,  and Sellers shall
duly and timely pay,  perform and discharge all such liabilities and obligations
(the "Excluded Liabilities").  Without limiting the generality of the foregoing,
Sub shall not assume,  and shall not have any liability for, (a)  obligations in
respect  of  borrowed  money,  (b)  obligations  of  Sellers  in  respect of any
securities (equity or debt) issued by Sellers, (c) any income, franchise, sales,
payroll,  withholding or other taxes of Sellers, or arising out of the operation
of the  Business  with  respect to any period  ending on or prior to the Closing
Date, (d) any expenses related to the negotiation, preparation, and execution of
this Agreement or the consummation of the transactions  contemplated hereby, (e)
the  liabilities  and  obligations  listed on Schedule  1.4  hereto;  or (f) the
liabilities and obligations of Sellers to the  Non-Accepting  Employees (as that
term is defined in Section 5.11 hereof),  including  without  limitation,  those
with respect to accrued and unpaid wages, benefits, entitlements,  vacation pay,
severance and seniority entitlements.

     Section 1.5 Consideration. As the total consideration (the "Consideration")
for the Assets to be sold by Sellers to the Sub pursuant hereto:

     (a) At the  Closing,  Sub shall pay Sellers an  aggregate  amount  equal to
U.S.$21.6 million;

     (b) Within 90 days after the end of Parent's  fiscal  year ending  December
31,  1998,  Sub shall pay  Sellers an  aggregate  amount  (the  "First  Earn-Out
Payment") equal to two (2) times the increase, if any, of the Adjusted Operating
Income  (as  hereinafter  defined)  for the period  commencing  July 1, 1998 and
ending December 31, 1998 over that for the period  commencing on January 1, 1998
and ending on June 30, 1998;

     (c) Within 90 days after the end of Parent's  fiscal  year ending  December
31,  1999,  Sub shall pay  Sellers an  aggregate  amount (the  "Second  Earn-Out
Payment") equal to two (2) times the increase, if any, of the Adjusted Operating
Income for the fiscal year ending  December  31, 1999 over that for the calendar
year ending December 31, 1998; and

     (d) Within 90 days after the end of Parent's  fiscal  year ending  December
31,  2000,  Sub shall pay  Sellers an  aggregate  amount  (the  "Third  Earn-Out
Payment")  equal to (i) two (2)  times the  increase,  if any,  of the  Adjusted
Operating  Income for the fiscal year ending December 31, 2000 over that for the
fiscal year ending December 31, 1999; and (ii) the sum of the Adjusted Operating
Income for the fiscal  years ended  December 31, 1999 and December 31, 2000 less
the Adjusted Operating Income for the calendar year ending December 31, 1998.

     For purposes of this Agreement,  the term "Adjusted  Operating Income" mean
the  operating  income  of the  Business  determined  in  accordance  with  U.S.
generally  accepted  accounting  principles  ("GAAP")  applied,  to  the  extent
consistent  with  GAAP,  on a  basis  consistent  with  the  current  accounting
practices of Sellers and determined before any interest before any income taxes,
before  depreciation  and  amortization,  before any management  fees payable to

                                       4

<PAGE>



Parent,  or any other  payments  to or  charges  by Parent or any  associate  of
Parent. The determination of Adjusted Operating Income shall be made in Canadian
dollars and translated  into U.S.  dollars on the same basis as Parent shall use
in connection with the  consolidation  of the Sub's results with those of Parent
and its other consolidated subsidiaries for the relevant fiscal period. Adjusted
Operating  Income shall be determined by the  independent  accounting  firm then
acting as auditors for Parent for each  relevant  fiscal  period.  Within ninety
days of the end of the fiscal  period,  such firm shall  provide a report of its
determination  of Adjusted  Operating  Income,  accompanied by a  reconciliation
between such  determination  and the income of Sub as reported in its  financial
statements for such period, to both Sellers and Parent.

     If  Sellers  dispute  the  determinations  made  by such  firm of  Adjusted
Operating  Income,  they shall  deliver  written  notice of such dispute  within
thirty (30) days of receipt of the  determination  at issue,  setting  forth the
nature of their dispute and their  determination of a proper  calculation.  Such
notice  shall be given to Sub and to  Parent.  Within  thirty  (30)  days  after
receipt of such a notice of dispute, either Parent or Sub may notify the Sellers
in  writing  that it  challenges  the  calculation  in the  notice  of  dispute.
Otherwise,  Parent and Sub will be  conclusively  deemed to have  accepted  such
calculation  and the Earn-Out  payment will be adjusted in accordance  with such
determination.  If  Parent or Sub  shall  give  notice  that it  challenges  the
calculation  proposed by Sellers, the dispute shall be submitted within ten (10)
days of such notice to a nationally  recognized  public  accounting  firm, other
than the  auditor,  with  such firm to act as an  arbitrator  to  determine  the
correct  calculation  of  Adjusted  Operating  Income.  The costs  and  expenses
incurred in connection with a determination by the arbitrator shall be allocated
by the arbitrator in its discretion in proportion to the relative success of the
parties to the dispute.  Acceptance of payment shall not  constitute a waiver by
Sellers of any rights hereunder to dispute the related determination of Adjusted
Operating Income.

     Until after  December  31,  2000 Sub shall  deliver to Sellers on a monthly
basis,  simultaneously with the delivery by Sub to Parent,  copies of unaudited,
internally  prepared  statements  of the results of operations of Sub and of the
Business,  as  conducted  by Sub,  for  the  month  then  ended,  which  monthly
statements shall be prepared on an accrual basis in accordance with GAAP applied
consistently  in accordance  with Parent's  accounting  practices for all of its
districts.  Such monthly statements shall include a calculation of the operating
income of the Business for the month in question.

     Sellers and Sub shall jointly  prepare,  as soon as  practicable  after the
Closing (but in no event later than 60 days after the Closing), a calculation of
Adjusted  Operating  Income for the Business as conducted by Sellers  during the
period from January 1, 1998 to June 30, 1998. Such calculation  shall be treated
as a  determination  and any impasse  between Sellers and Sub in connection with
the preparation of such calculation  shall be subject to the dispute  resolution
process  provided  above by notice given by either  Sellers or Sub or Parent and
otherwise mutatis  mutandis.  Such  determination  shall constitute the Adjusted
Operating  Income  for such  period  for  purposes  of  Section  1.5(b)  hereof.
Notwithstanding   anything  to  the  contrary  contained  herein,  the  Adjusted
Operating  Income for the period from January 1, 1998 to June 30, 1998 shall not
give effect to any compensation  paid to, or accrued for, the  Stockholder,  and

                                       5

<PAGE>



shall give  proforma  effect to one half the annual  base  salary and  incentive
bonus contemplated by the Employment Agreement (as hereinafter defined).

     All payments  pursuant to the Section 1.5 shall be made in U.S.  dollars by
wire transfer to such account as Sellers may designate,  except that one-half of
the First Earn-Out  Payment and one-half of the Second Earn-Out Payment shall be
made by delivery of shares of Parent's  Common Stock,  $0.10 par value per share
("Parent  Common  Stock")  having an  aggregate  value equal to one-half of such
First Earn-Out Payment or such Second Earn-Out Payment,  as the case may be. For
purposes of the preceding sentence,  the value of a share of Parent Common Stock
shall be the average  closing  sale price for Parent  Common Stock on the Nasdaq
Stock Market for the 30 trading days ended five days prior to the date the First
Earn-Out Payment or the Second Earn-Out Payment, as the case may be, is actually
made.

     Parent hereby  guarantees the prompt payment of the  Consideration  payable
pursuant to this Section 1.5.

     Section 1.6 Post Closing Adjustment.

     (a) Schedule  1.6 hereto sets forth,  as of March 31, 1998 (i) the combined
current  assets of Sellers  (other  than  Excluded  Assets),  (ii) the  combined
current liabilities of Sellers (other than the Excluded Liabilities),  and (iii)
the positive  amount by which (i) exceeds (ii) (the "March  Adjusted Net Current
Assets").  As soon as  practicable  following the Closing,  Parent and Sub shall
prepare and deliver to Sellers a statement  (the  "Closing  Statement")  setting
forth,  as of June 30, 1998,  (i) the combined  current assets of Sellers (other
than Excluded  Assets) (ii) the combined  current  liabilities of Sellers (other
than the  Excluded  Liabilities),  and (iii) the  positive  or  negative  amount
obtained  by  subtracting  (ii)  from (i) (the  "Closing  Adjusted  Net  Current
Assets").  If the March Adjusted Net Current Assets exceeds the Closing Adjusted
Net Current  Assets,  Sellers shall pay to Parent or Sub, as directed by Parent,
an amount  equal to such  excess.  If the Closing  Adjusted  Net Current  Assets
exceeds  the March  Adjusted  Net  Current  Assets,  Sub shall pay to Sellers an
aggregate  amount equal to such excess.  Any such payment  shall be made in U.S.
dollars (using as a currency exchange rate the rate published by the Wall Street
Journal as of the Closing  Date) by wire  transfer to such  account as Parent or
Sellers, as the case may be, may designate.

     (b) The parties  hereto  intend that the Business be run for the account of
Sub from June 30, 1998 through the Closing Date. Without limiting the generality
of the foregoing,  any funds received by Sellers from and after June 30, 1998 in
respect of Sellers' accounts receivable shall be deemed held in trust by Sellers
for the  benefit of Sub pending the Closing and paid by Sellers to Sub on, or as
soon as practicable after, the Closing.

     Section 1.7 Escrow Deposit.  At the Closing,  an amount equal to U.S. $2.16
million  shall be deposited by Sellers with Tory Tory  DesLauriers & Binnington,
as  escrow  agent  (the  "Escrow  Agent"),  pursuant  to the  terms of an Escrow
Agreement  (the "Escrow  Agreement")  in  substantially  the form of Exhibit 1.7
hereto.

     Section 1.8 Closing.

                                       6

<PAGE>



     (a) The closing of the  transactions  contemplated  hereby (the  "Closing")
shall  take  place  at  10:00  a.m.  local  time at the  offices  of  Tory  Tory
DesLauriers & Binnington ("Tory"),  Suite 3000, Aetna Tower, Toronto, Canada, on
the first  business day following the  fulfillment  or waiver of the  conditions
precedent  set forth in Article VI hereof or at such other time and place as the
parties  hereto may  mutually  agree.  The date on which the  Closing  occurs is
hereinafter referred to as the "Closing Date." The following  transactions shall
take  place at the  Closing,  all of  which  shall be  deemed  to have  occurred
simultaneously  and none of which shall be deemed completed unless and until all
of them shall have been completed (or waived in writing by the parties  entitled
to performance):

     (b) At the Closing, Sellers shall deliver to Sub the following:

          (i) such bills of sale,  assignments or other  instruments of transfer
     and assignment, in form and substance reasonably satisfactory to Parent, as
     are effective to vest in Sub title to the Assets;

          (ii)  certificates  pursuant to Sections  6.2(a) and 6.2(b)  hereof in
     form  and  substance  reasonably  satisfactory  to Sub,  of (A)  the  chief
     executive officer of each Seller,  certifying such Seller's certificate and
     articles  of  incorporation  and  by-laws,  its  valid  existence  and good
     standing in Ontario, Canada, the incumbency of officers or others acting in
     a  representative  capacity,  the  due  authorization  of the  transactions
     contemplated  hereby,  the accuracy of such  Seller's  representations  and
     warranties,  the due  performance and compliance by such Seller of and with
     all of its  covenants and  agreements  hereunder  and  satisfaction  of the
     conditions to the Parent's and Sub's obligations  hereunder to be satisfied
     by such Seller and such other matters as Parent shall  reasonably  request;
     and (B) the Stockholder certifying the Stockholder's capacity, the accuracy
     of the Stockholder's  representations  and warranties,  the due performance
     and  compliance  by the  Stockholder  of and with all of its  covenants and
     agreements  hereunder and  satisfaction  of the  conditions to Parent's and
     Seller's obligations  hereunder to be satisfied by the Stockholder and such
     other matters as Parent shall reasonably request.

          (iii)a  certificate  of the chief  executive  officer  of each  Seller
     pursuant to Section  6.2(f)  hereof in form and substance  satisfactory  to
     Parent with respect to the absence of any material adverse change;

          (iv)  evidence  in form and  substance  satisfactory  to Parent of all
     consents  that  have  been  received  by such  Seller  and the  Stockholder
     pursuant to Section 6.1(c) hereof;

          (v) the Employment  Agreement,  the  Stockholder  Non-Competition  and
     Confidentiality  Agreement,  and the Escrow  Agreement  pursuant to Section
     6.2(c) hereof;

          (vi) the opinion of counsel for Sellers and the  Stockholder  pursuant
     to Section 6.2(e) hereof;

          (vii) the  evidence  of payment of taxes  pursuant  to Section  6.2(h)
     hereof;

                                       7

<PAGE>



          (viii) the articles of amendment pursuant to Section 6.2(i) hereof;

          (ix) the landlord consent pursuant to Section 6.2(j) hereof;

          (x) the written undertaking of The  Toronto-Dominion  Bank pursuant to
     Section 6.2 (k) hereof; and

          (xi) such  other  documents  as Sub shall  reasonably  request to give
     effect to the transactions contemplated by this Agreement.

          (c) At the Closing, Sub shall deliver to Sellers the following:

               (i) the payment provided for under Section 1.5(a) hereof;

               (ii) instruments,  in form and substance reasonably  satisfactory
          to Sellers,  pursuant to which Sub shall  assume the  obligations  and
          liabilities to be assumed by it pursuant to Section 1.3 hereof;

               (iii) certificates  pursuant to Sections 6.3(a) and 6.3(b) hereof
          in form and substance reasonably satisfactory to Sellers, of the chief
          executive  officer and chief  financial  officer of each of Parent and
          Sub,  certifying its  certificate  and articles of  incorporation  and
          by-laws,  its valid  existence and good  standing,  the  incumbency of
          officers  or  others  acting  in a  representative  capacity,  the due
          authorization of the transactions contemplated hereby, the accuracy of
          Parent's and Sub's representations and warranties, the due performance
          and  compliance  by each of  Parent  and  Sub of and  with  all of its
          covenants and agreements  hereunder and satisfaction of the conditions
          to the  Sellers'  and the  Stockholder's  obligations  hereunder to be
          satisfied by each of Parent and Sub and such other  matters as Sellers
          shall reasonably request;

               (iv) the opinions of Proskauer Rose LLP  ("Proskauer")  and Tory,
          counsel to Parent, pursuant to Section 6.3(c) hereof;

               (v) the Employment Agreement and the Escrow Agreement pursuant to
          Section 6.3(d) hereof; and

               (vi) such other documents as Sellers shall reasonably  request to
          give effect to the transactions contemplated by this Agreement.


                                   ARTICLE II
                    REPRESENTATIONS AND WARRANTIES OF SELLERS
                               AND THE STOCKHOLDER

     Sellers and the Stockholder,  jointly and severally,  represent and warrant
to Parent and Sub as follows:

                                       8

<PAGE>



     Section 2.1 Organization.  Each of Sellers is a corporation duly organized,
validly existing and in good standing under the laws of Ontario,  Canada and has
the  corporate  power to carry on its  business as it is now being  conducted or
presently  proposed to be conducted.  Neither  Seller carries on business in any
jurisdiction other than Ontario.

     Section 2.2 Capitalization.  The authorized, issued and outstanding capital
stock of Sellers is set forth on Schedule 2.2 hereof.  The holders of record and
each beneficial holder of such outstanding  shares,  and the number of shares so
held, is set forth on Schedule 2.2 hereto. All of such shares are owned free and
clear of any and all liens,  claims or  encumbrances  of any  nature  whatsoever
(whether  absolute,  accrued,  contingent  or otherwise)  ("Liens").  All of the
issued and outstanding shares of Sellers Common Stock are validly issued,  fully
paid and  nonassessable.  Schedule 2.2 hereto lists the individuals and entities
who were at any time holders of record or beneficially  of securities  issued by
Sellers.

     Section  2.3 No  Sellers'  Subsidiaries;  No  Affiliates.  Sellers  have no
Subsidiaries and no Affiliates,  as hereinafter  defined, and have conducted the
Business solely through Sellers at all times. All assets,  properties and rights
relating to Sellers'  business are held by, and all agreements,  obligations and
transactions  relating to Sellers' business have been entered into, incurred and
conducted by, Sellers rather than any of the Stockholder's  Affiliates.  As used
in this Agreement,  (i) the term "Subsidiary"  means, with respect to any party,
any corporation or other organization,  whether  incorporated or unincorporated,
of which  (x) such  party or any  other  Subsidiary  of such  party is a general
partner (excluding partnerships, the general partnership interests of which held
by such party or any  Subsidiary  of such  party do not have a  majority  of the
voting  interest  in  such  partnership)  or  (y) at  least  a  majority  of the
securities or other  interests  having by their terms  ordinary  voting power to
elect a  majority  of the  board  of  directors  or  others  performing  similar
functions with respect to such corporation or other  organization is directly or
indirectly  owned  or  controlled  by  such  party  and/or  one or  more  of its
Subsidiaries.  For purposes of this Agreement,  the term "Affiliate" means, with
respect to any party,  an individual or entity  controlled by, in control of, or
under common control with, such party.

     Section 2.4 Authority  Relative to this Agreement.  Each of Sellers has the
requisite  corporate power and authority,  and the Stockholder has the capacity,
to execute  and  deliver  this  Agreement  and to  consummate  the  transactions
contemplated hereby. The execution and delivery of this Agreement by Sellers and
the consummation by Sellers of the transactions  contemplated on its part hereby
have been duly  authorized by Sellers'  Board of Directors and the  Stockholder,
and no other  corporate  proceedings  on the part of Sellers  are  necessary  to
authorize  this  Agreement  or  for  Sellers  to  consummate  the   transactions
contemplated  hereby.  This  Agreement  has been duly and validly  executed  and
delivered by Sellers and the  Stockholder  and constitutes the valid and binding
agreement of Sellers and the  Stockholder,  enforceable  against each of them in
accordance with its terms.

     Section 2.5 Certificate of Incorporation  and By-laws.  Each of Sellers has
heretofore  furnished to Parent a complete  and correct copy of its  certificate
and articles of incorporation and by-laws, as amended to date. Such certificates

                                       9

<PAGE>



and articles of incorporation and by-laws are in full force and effect.  Neither
Seller is in violation of any of the provisions of its  certificate and articles
of incorporation or by-laws.

     Section 2.6 Consents and Approvals;  No Violations.  Neither the execution,
delivery and performance of this Agreement by Sellers,  nor the  consummation by
Sellers of the  transactions  contemplated  hereby,  will (i)  conflict  with or
result in any  breach of any  provisions  of the  certificate  and  articles  of
incorporation,  by-laws  or other  organizational  documents  of  Sellers,  (ii)
require a filing with, or a permit,  authorization,  consent or approval of, any
federal, provincial,  local or foreign court, arbitral tribunal,  administrative
agency or  commission or other  governmental  or other  regulatory  authority or
administrative  agency  or  commission  (a  "Governmental  Entity"),  except  in
connection  with or in order to comply  with the  applicable  provisions  of the
[Bulk Sales Act],  (iii) result in a violation or breach of, or constitute (with
or without  due notice or lapse of time or both) a default  (or give rise to any
right of  termination,  cancellation  or  acceleration)  under, or result in the
creation of a Lien on any  property or asset of Sellers  pursuant to, any of the
terms,  conditions or provisions of any Contract to which either of Sellers is a
party or by which  either of Sellers or any of their  respective  properties  or
assets may be bound or (iv) violate any law, order,  writ,  injunction,  decree,
statute,  rule or regulation of any Governmental  Entity applicable to either of
Sellers,  or any of their respective  properties or assets (each, an "Applicable
Law").

     Section 2.7 Financial  Statements.  Each of Sellers has delivered to Parent
(a) the  unaudited  financial  statements  for the fiscal year ended January 31,
1998, accompanied by the engagement report of Thomas Y. Ricketts, C.A., Sellers'
independent  accountant  and  (b) the  unaudited  financial  statements  for the
two-month  period ended,  and as at, March 31, 1998 (the "Interim  Balance Sheet
Date") (collectively,  the "Financial Statements").  The Financial Statements of
Sellers  have been  prepared in  accordance  with  Canadian  generally  accepted
accounting  principles  ("Canadian GAAP"),  consistently  applied throughout the
periods  indicated.  The  Financial  Statements  are set forth on  Schedule  2.7
hereto,  are true and  correct,  and fairly  present the  financial  position of
Sellers as at the dates thereof and the results of operations  and cash flows of
Sellers for the periods then ended.  Since the Interim  Balance Sheet Date there
has  been  no  change  in any  of  the  significant  accounting  (including  tax
accounting)  policies,  practices or procedures of Sellers. With respect to each
of the Financial  Statements,  there were no  adjustments  proposed by Thomas Y.
Ricketts,  C.A.  that were not accepted by Sellers and  appropriately  reflected
thereon.

     Section 2.8 Absence of Certain Changes or Events; Contracts.  Except as set
forth on Schedule 2.8 hereto,  since the Interim  Balance Sheet Date (i) neither
Seller has  conducted  its  business and  operations  other than in the ordinary
course of business and consistent with past practices, or taken any actions of a
type  prohibited by the  provisions of Section 4.1 hereof and (ii) there has not
been any fact,  event,  circumstance or change  affecting or relating to Sellers
which has had or is reasonably likely to have, individually or in the aggregate,
a material  adverse  effect on the financial  condition,  results of operations,
business, assets, liabilities,  prospects or properties of either of Sellers, or
the ability of either of Sellers to consummate the transactions  contemplated by
this Agreement  ("Seller  Material Adverse Effect") provided that such shall not
include  changes in national or  international  industry  conditions  generally.
Except as setforth on Schedule 2.8 hereto, the transactions contemplated by this

                                       10

<PAGE>



this  Agreement  will not  constitute  a change of control  under or require the
consent  from or the  giving  of  notice to any  party  pursuant  to the  terms,
conditions or provisions of any Contract to which either of Sellers is a party.

     Section  2.9  Litigation.   There  is  no  suit,   action,   proceeding  or
investigation  pending or threatened  against or affecting  either Seller or the
Stockholder.  There is no judgment, decree,  injunction,  ruling or order of any
Governmental Entity outstanding against either of Sellers or the Stockholder.

     Section 2.10 Absence of Undisclosed Liabilities.  Except for liabilities or
obligations  which are accrued or reserved  against on the Financial  Statements
(including the financial  statement  notes thereto) or which were incurred after
the Interim Balance Sheet Date in the ordinary course of business and consistent
with past practice or which were incurred in  connection  with the  transactions
contemplated  by  this   Agreement,   neither  Seller  has  any  liabilities  or
obligations (whether absolute, accrued, contingent or otherwise).

     Section 2.11 No Default.  Neither Seller is in default or violation (and no
event  has  occurred  which  with  notice  or the  lapse  of time or both  would
constitute a default or  violation)  of any term,  condition or provision of (i)
its articles of incorporation or by-laws,  or (ii) any order, writ,  injunction,
decree,  statute,  rule or regulation of any Governmental  Entity  applicable to
either of Sellers.

     Section 2.12 Taxes.  The Sellers have paid all taxes,  levies,  assessments
and other charges  together with all penalties,  interest and fines with respect
thereto,  payable  on or before  the date  hereof  to any  domestic  or  foreign
government (federal,  provincial or municipal or otherwise) or to any regulatory
authority, agency, commission or board of any domestic or foreign government, or
imposed by any court or any other law,  regulation or  rulemaking  entity having
jurisdiction in the relevant  circumstances  ("Governmental  Charges"),  and the
Sellers have paid all  Governmental  Charges in relation to the Business and the
Assets  which are capable of forming or  resulting in a lien on the Assets or of
becoming a liability  or  obligation  of Sub,  other than any such  Governmental
Charges as are  included in the Assumed  Liabilities.  There are no  proceedings
pending or made or, to the  knowledge  of the  Sellers,  threatened  against any
Seller in respect of  Governmental  Charges  attributable to the Business or the
Assets.  The  Sellers  have  withheld  from each  amount paid or credited to any
person,  and have  collected in  connection  with amounts paid or payable by any
person, the amount of any Governmental Charges required to be withheld therefrom
or collected therewith, and has remitted such Governmental Charges to the proper
tax or other  receiving  authorities  within the time required under  applicable
legislation.  Neither Seller is a  non-resident  of Canada within the meaning of
the Income Tax Act (Canada). The Sellers are registered for purpose of the Goods
and Services Tax ("GST")  legislation in the Excise Tax Act (Canada).  Following
completion of this Agreement, Sub will have ownership,  possession or use of all
or  substantially  all of the property that can  reasonably be regarded as being
necessary  for Sub to be able to  carry on the  Business.  Neither  Seller  is a
registered vendor under the Retail Sales Tax Act or required to pay retail sales
tax in connection with the operation of its business.

     Section 2.13 Assets. Except as described in the following sentence, each of
Sellers has good, valid and marketable  title to, or a valid leasehold  interest

                                       11

<PAGE>



in, all of the Assets,  including,  without  limitation,  all the properties and
assets  reflected in the balance  sheets of Sellers,  as of the Interim  Balance
Sheet Date, included in the Financial  Statements (the "Interim Balance Sheets")
(except for properties and assets disposed of in the ordinary course of business
and consistent with past practices  since the Interim Balance Sheet Date).  None
of the Assets are subject to any Liens,  except (i) the Liens listed on Schedule
2.13 hereto; (ii) Liens for taxes, assessments or other governmental charges not
delinquent or being  contested in good faith and by appropriate  proceedings and
with respect to which proper  reserves  have been taken by Sellers and have been
duly reflected on their books and records and, with respect to reserves taken on
or prior to the Interim Balance Sheet Date, the Financial  Statements of Sellers
("Proper  Reserves");  (iii)  deposits  or pledges to secure  obligations  under
workmen's  compensation,  social security or similar laws, or under unemployment
insurance as to which  Sellers are not in default;  (iv)  deposits or pledges to
secure bids, tenders, contracts (other than contracts for the payment of money),
leases, statutory obligations,  surety and appeal bonds and other obligations of
like  nature  arising  in the  ordinary  course  of  business  of  Sellers;  (v)
mechanics',  workmen's,  material  men's or other  like  liens  with  respect to
obligations  which  are not due or which are being  contested  in good  faith by
Sellers  and as to which  they  have  taken  Proper  Reserves;  and  (vi)  minor
imperfections  of title and  encumbrances,  if any, which are not substantial in
amount,  do not  materially  detract  from the  value of the  Assets  and do not
materially  impair the operations of either  Seller.  All of the Equipment is in
good operating condition and state of repair, ordinary wear and tear expected.
Neither Seller has any assets outside Canada.

     Section 2.14 Intellectual Property.

     (a)  Sellers are the sole and  exclusive  owners of all  material  patents,
patent applications,  patent rights, trademarks,  trademark rights, trade names,
trade  name  rights,  copyrights,   service  marks  and  registrations  for  and
applications for registration of trademarks,  service marks and copyrights,  and
are the sole and exclusive owners of, or have an irrevocable, royalty free right
to use, all material technology and know-how,  trade secrets, rights in computer
software and other proprietary rights and information and all technical and user
manuals and documentation  made or used in connection with any of the foregoing,
in each case used or held for use in connection with the Business (collectively,
the  "Intellectual  Property"),  free  and  clear  of  all  Liens  except  minor
imperfections  of title and  encumbrances,  if any, which are not substantial in
amount,  do not materially  detract from the value of the Intellectual  Property
subject  thereto and do not impair in any  material  respect the  operations  of
either of Sellers.  Notwithstanding the foregoing, the parties hereto understand
that  Sellers  are  licensees  only of all  off-the-shelf  software  used in the
Business and that Sellers  have no rights in and to, and  Intellectual  Property
shall not include,  software and documentation developed by Sellers on behalf of
customers of Sellers.

     (b)  Sellers  have  no  registrations  and  applications  for  Intellectual
Property.

     (c) To the knowledge of Sellers and the Stockholder, there are no conflicts
with or  infringements  of any  Intellectual  Property by any third  party.  The
conduct  of the  Business  does not  conflict  with or  infringe  in any way any
proprietary  right of any third party,  and there is no claim,  suit,  action or
proceeding  pending  or, to the  knowledge  of any  Seller  or the  Stockholder,
threatened  against any Seller (x)  alleging any such  conflict or  infringement
with any third party's  proprietary  rights,  or (y)  challenging the ownership,
use, validity or enforceability of the Intellectual Property.

                                       12

<PAGE>



     Section 2.15  Compliance with Applicable Law. (a) Each of Sellers hold, and
are in compliance with the terms of, all material permits, licenses, exemptions,
orders and approvals of all Governmental  Entities necessary for the current and
presently  proposed conduct of the Business  ("Permits"),  (b) no fact exists or
event has occurred,  and no action or proceeding is pending or, to the knowledge
of any Seller or the Stockholder,  threatened, that has a reasonable possibility
of resulting  in a  revocation,  nonrenewal,  termination,  suspension  or other
material  impairment  of any  material  Permits,  (c) the  Business is not being
conducted  in  violation,  in any material  respect,  of any law,  order,  writ,
injunction,  decree,  statute,  rule or  regulation of any  Governmental  Entity
("Applicable  Laws"),  where the violation would have a Material Adverse Effect,
and (d)(i) no investigation or review by any Governmental Entity with respect to
either  Seller  is  pending  or,  to  the  knowledge  of  either  Seller  or the
Stockholder,  threatened,  or has been undertaken within the past six years, and
(ii) no Governmental Entity has indicated an intention to conduct the same.

     Section 2.16 Employee Matters.

     (a) Employees.

     (i) Schedule  2.16(a)(i) contains a complete and accurate list of the names
of all individuals (other than the Stockholder) who, as of the date hereof, were
full-time,   part-time  or  casual   employees  or  sales  or  other  agents  or
representatives  of the Sellers as of the date of this Agreement  (collectively,
the "Employees") including employees who have been laid off on a temporary basis
or who are on maternity,  disability or other leave of absence,  specifying  the
length of hire, the title or  classification,  the rate of salary or hourly pay,
the commission or bonus  entitlements (if any), any other benefits  extended to,
or  circumstances  unique to each such Employee and the details of any notice of
resignation received from any such Employee.

     (ii)  Schedule  2.16(a)(i)  contains a complete and  accurate  list of each
employee  of  Sellers  who  is  a  party  to  a  written  Contract  (other  than
confidentiality  agreements)  between  either  Seller  and  such  Employee  (the
"Employment  Contracts"),  all of which contracts are  substantially in the form
attached to Schedule  2.16(a)(i).  Except for Vincent Michael Roti,  there is no
employment relationship or employment, consulting or engagement contract between
Sellers  and any of its  officers  or  directors.  No Seller  has  incurred  any
liability or made any agreement to make any payment for breach or termination of
any Employment  Contract and all persons who have been  terminated by any Seller
were terminated in accordance with applicable law.

     (iii) There are no  complaints,  claims or charges  outstanding,  or to the
best of the knowledge of the  Stockholder or the Sellers,  anticipated,  nor are
there any orders,  decisions,  directions or convictions currently registered or
outstanding  by any  tribunal  or agency  against  or in  respect  of any of the
Sellers  under  or  in  respect  of  any  Applicable  Laws  relating  to  labor,
employment, occupational health and safety matters, human rights and pay equity.

     (iv) Each Seller is in compliance  with and there are no outstanding  legal
proceedings  under the  Employment  Standards Act  (Ontario),  the  Occupational
Health  and  Safety Act  (Ontario),  the  Workplace  Safety  and  Insurance  Act
(Ontario), or its predecessor,  the Workers' Compensation Act (Ontario), the Pay
Equity Act (Ontario), the Labour Relations Act (Ontario), the  Pension  Benefits


                                       13

<PAGE>



Act (Ontario) and the Human Rights Code  (Ontario),  and other  Applicable  Laws
and, without limiting the generality of the foregoing:  (A) there are no appeals
pending before a Workers'  Compensation  Tribunal  involving any Seller; (B) all
levies,  assessments  and  penalties  made  against  any Seller  pursuant to the
Workplace Safety and Insurance Act (Ontario),  or its predecessor,  the Workers'
Compensation  Act (Ontario) or similar  Applicable Laws have been paid; (C) each
Seller has opted out of the Workplace Safety and Insurance Act (Ontario) and its
predecessor,  the Workers' Compensation Act; and (D) all payments required to be
made in trust to the Director of Employment  Standards in respect of termination
and/or  severance  pay under the  Employment  Standards Act (Ontario) or similar
Applicable  Laws in  respect of  Employees  have been made.  The  Sellers  carry
private  insurance  coverage  for all  risks of  workplace  injury  or  employee
compensation claims.

     (b) Labor Matters.

     Neither  Seller  is a party  to or bound by any  collective  bargaining  or
similar  agreement  with any labor  organization  applicable to employees of any
Seller. There is no labor strike,  dispute,  slowdown,  lockout,  work stoppage,
unresolved  material labor union grievance or labor  arbitration  proceedings or
unfair labor practice,  successor rights or common employer  proceedings pending
or,  to the  knowledge  of the  Stockholder  or the  Sellers  (or any of  them),
threatened  against  either Seller.  To the knowledge of the  Stockholder or the
Sellers (or any of them), there are no current union organizing activities among
employees of any Seller.  Neither Seller has been affected by any transaction or
engaged in layoffs or  employment  terminations  sufficient in number to trigger
application of subsection 57(2) of the Employment  Standards Act (Ontario) or of
the Regulation made in connection  therewith (R.R.O. 1990, Reg. 327, as amended)
or any similar Applicable Laws.

     (c) Employee Plans.

     Neither Seller has any retirement,  pension, bonus, stock purchase,  profit
sharing,  stock option,  deferred  compensation,  severance or termination  pay,
insurance, educational assistance, dependent care assistance, medical, hospital,
dental, vision care, drug, sick leave,  disability,  salary continuation,  legal
benefits,  unemployment  benefits,  incentives or other  benefit plan  generally
provided to employees of either Seller.

     (d) Employee Accruals.

     All accruals for unpaid vacation pay, premiums for unemployment  insurance,
employee  health  tax,  accrued  wages,   Canada  Pension  Plan,   salaries  and
commissions  and Employee  Plan  payments  have been  reflected in the books and
records of the Sellers in accordance with Canadian GAAP.

     Section 2.17 Environmental Laws and Regulations.

     (a) To the  knowledge of Sellers and the  Stockholder,  each of Sellers and
all properties currently and formerly owned, leased, or operated by Sellers (the
"Properties"), are and have been, in all material respects, in compliance with,

                                       14

<PAGE>



all applicable laws, rules,  regulations,  common law, decrees, orders, permits,
and other binding legal requirements  relating to health, safety or pollution or
protection  of  the  environment   ("Environmental   Laws")  and  there  are  no
outstanding allegations or claims by an person or Governmental Entity concerning
either of Sellers'  compliance with Environmental Laws. Sellers are not required
to hold any material permits, licenses, approvals,  certifications registrations
and other governmental  authorizations required under the Environmental  Laws
for the operation of the Business.

     (b) To the knowledge of Sellers and the  Stockholder,  there are no friable
asbestos-  containing  materials in or on any of the currently owned,  leased or
operated  properties  of either  Seller.  There are not and, to the knowledge of
Sellers and the Stockholder, have not been any underground storage tanks, dumps,
landfills, lagoons, surface impoundments, injection wells or other land disposal
units in or on any of the Properties.

     (c)  Neither  Seller  has  received  any  communication  from any person or
governmental  entity  stating  or  alleging  that  any  of  them  is or may be a
potentially  responsible  party under any  Environmental Law with respect to any
actual or alleged  environmental  contamination or condition and none of Sellers
or any Governmental  Entity is conducting or has conducted (or, to the knowledge
of  either of  Sellers  or the  Stockholder,  is  threatening  to  conduct)  any
environmental remediation or investigation at any of the Properties.

     Section  2.18  Affiliate  Transactions.  Except  with  respect to  Excluded
Assets,  there  are  no  agreements,   obligations,  contracts,  commitments  or
understandings, whether written or oral, or other transactions between either of
Sellers on the one hand,  and any (i)  current or former  officer or director of
either of Sellers,  (ii) current or former record or beneficial  owner of voting
securities  of Sellers or (iii)  Affiliate or family member of any such officer,
director or record or beneficial owner, on the other hand.

     Section 2.19 Accounts Receivable.  All of the accounts and notes receivable
of Sellers  set forth on the books and  records of Sellers  (in each case net of
the applicable reserves reflected on the books and records of Sellers and in the
financial  statements of Sellers) other than accounts receivable included in the
Excluded  Assets:  (i) represent  sales actually made in the ordinary  course of
business for goods or services  delivered or rendered to unaffiliated  customers
in bona fide arm's length transactions,  (ii) constitute valid claims, and (iii)
are good and collectible, in each case at the aggregate recorded amounts thereof
without right of recourse, defense, deduction, return of goods, counterclaim, or
offset and have been or will be collected in the ordinary course of business and
consistent with past experience.

     Section 2.20 Customers.

     (a) Schedule 2.20 hereto sets forth a list of Sellers' 50 largest customers
in order for each of its last two fiscal  years and for the period  from the end
of the last fiscal year through May 31, 1998 showing the approximate total sales
in dollars (Canadian) by Sellers to each such customer during each such period.


                                       15

<PAGE>



     (b) Neither  Seller is engaged in any disputes  with  customers  except for
minor bill  adjustments and similar  disputes in the ordinary course of business
not exceeding $5,000 (CAN) with respect to any single bill adjustment or similar
dispute and which  individually or in the aggregate do not exceed $50,000 (CAN),
and there has not been any adverse  change,  and there are no facts known to any
Seller or the Stockholder  which may reasonably be expected to indicate that any
adverse change may occur, in the business relationship of either of Sellers with
any customer named on Schedule 2.20 hereto.  To the knowledge of Sellers and the
Stockholders  none of the customers named on Schedule 2.20 hereto is considering
termination,  non-renewal or any adverse  modification of its arrangements  with
either Seller, and the transactions  contemplated by this Agreement will not, to
the knowledge of Sellers and the Stockholder,  have any adverse effect on either
Seller's relationship with any of such suppliers.

     Section  2.21  Restrictions  on  Business   Activities.   Except  for  this
Agreement, there is no agreement,  judgment, injunction, order or decree binding
upon any Seller or the Stockholder  which has or could reasonably be expected to
have (after giving effect to the consummation of the  transactions  contemplated
hereby) the effect of prohibiting or impairing the business  practices of either
Seller,  the  acquisition  of property by either  Seller,  or the conduct of the
Business as currently conducted or as proposed to be conducted by either Seller.

     Section 2.22 Brokers. Except for Updata Capital, Inc., whose fees and other
compensation  and expenses  are to be paid by Sellers,  no broker is entitled to
any  brokerage,  finder's  or other fee or  commission  in  connection  with the
transactions  contemplated by this Agreement based upon  arrangements made by or
on behalf of any Seller or the Stockholder.

     Section  2.23 Real and  Personal  Property.  Neither  Seller  owns any real
property other than the Excluded  Assets.  Schedule 2.23 contains a complete and
correct list of all real property (including buildings and structures) leased by
either Seller and all interests  therein  (including a brief  description of the
property,  the lessor,  the location  and the  improvements  thereon).  All such
leased premises,  and the equipment therein,  and the operations and maintenance
thereof,  comply with any applicable  agreements and  restrictive  covenants and
conform to all applicable  legal  requirements  including  those relating to the
environment, health and safety, land use and zoning, and all work required to be
done by either  Seller as tenant has been duly  performed.  No  condemnation  or
other proceeding is pending or threatened which would affect the use of any such
property by Sellers.  Schedule  2.23(a) contains a complete and correct list and
brief description of all equipment,  machinery,  computers, furniture, leasehold
improvements,  vehicles and other personal  property having a value of more than
$2,500 and that is owned or leased by either Seller and all  interests  therein,
other than Excluded Assets.  Sellers' buildings and other structures,  equipment
and other assets (whether  leased or owned) are in good operating  condition and
repair, subject to ordinary wear and tear.

     Section 2.24 Insurance.  Schedule 2.24 contains a complete and correct copy
of all  policies of  insurance  of any kind or nature in effect with  respect to
Sellers,  the Business or the Assets,  indicating the type of coverage,  name of
insured,  the insurer,  the premium,  the expiration date of each policy and the
amount  of  coverage.  Since  January  1,  1995,  neither  Seller  has  been all




                                       16

<PAGE>



applicable laws, rules,  regulations,denied  any insurance coverage which it has
requested or made any material reduction in the scope or change in the nature of
its insurance coverage.

     Section  2.25 Books and  Records.  The books and  records  of  Sellers  are
complete  and  correct in all  material  respects  and have been  maintained  in
accordance  with good business  practices and Canadian GAAP. The minute books of
Sellers,  as previously made available to Parent,  contain complete and accurate
records of all meetings and accurately reflect all other corporate action of the
Stockholder and board of directors of Sellers.

     Section 2.26 Improper  Payments.  Neither Seller nor any officers or agents
has made any  illegal  or  improper  payments  to, or  provided  any  illegal or
improper  benefit  or  inducement  for,  any  governmental  official,  supplier,
customer or other person,  in an attempt to influence any such person to take or
to refrain from taking any action relating to Sellers.

     Section  2.27  Contracts  and  Commitments.  (a) The  contracts  listed  on
Schedule  2.27 hereto are all of the legally  binding  Contracts to which either
Seller is a party or as to which either of them or their  respective  properties
may be bound or which otherwise  relate to the Business  (excluding any Contract
that  involves a commitment  by either Seller of less than $2,500 (CAN) over the
next 12 months and less than  $5,000  (CAN) over the balance of the term of such
Contract).

     (b) Neither Seller is in breach or default,  nor is there any basis for any
valid claim of breach or default by either Seller under any Contract.  Except as
set forth on Schedule 2.27 hereto, all Contracts are valid and in full force and
effect, and consummation of the transactions contemplated by this Agreement will
not  cause any  Contract  to cease to be valid  and in full  force  and  effect.
Accurate and complete copies of all Contracts, including all amendments thereto,
have been heretofore delivered to Parent.

     Section 2.28  Competition  Act. The aggregate  value of the Assets or gross
revenues  from sales in or from  Canada  generated  from the Assets is less than
$35,000,000.00(CAN),  determined in accordance  with the Notifiable  Transaction
Regulations promulgated under the Competition Act (Canada).

     Section 2.29 Disclosure. Neither Seller nor the Stockholder is aware of any
matter that could  reasonably be expected to have a material  adverse  effect on
the Business or its prospects that has not been disclosed in writing to Parent.


                                   ARTICLE III
                    REPRESENTATIONS AND WARRANTIES OF PARENT

     Parent and Sub  represent  and  warrant to Sellers and the  Stockholder  as
follows:

     Section 3.1 Organization.  Parent is a corporation duly organized,  validly
existing  and in good  standing  under the laws of the State of New York and has


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<PAGE>



the  corporate  power to carry on its  business as it is now being  conducted or
presently proposed to be conducted. Sub is a corporation duly organized, validly
existing and in good standing under the laws of Ontario, Canada.

     Section 3.2 Capitalization. The authorized capital stock of Parent consists
of 100,200,000 shares,  100,000,000 of which are Parent Common Stock and 200,000
of which are classified as Preferred  Stock, par value $.10 per share. As of May
11,  1998,  (i)  28,942,078  shares of  Parent  Common  Stock  were  issued  and
outstanding,  (ii) no shares of  Preferred  Stock  were  outstanding,  and (iii)
options to acquire  2,164,000  shares of Parent  Common Stock (the "Parent Stock
Options") are outstanding.  The shares of Parent Common Stock , if any, issuable
to Sellers in  accordance  with this  Agreement  will be,  when so issued,  duly
authorized, validly issued, fully paid and nonassessable. The authorized capital
stock of Sub  consists of an unlimited  number of common  shares of Sub of which
100  shares,  as of the date  hereof,  are issued and  outstanding.  All of such
outstanding shares are owned by Parent,  and are validly issued,  fully paid and
nonassessable.

     Section 3.3 Authority  Relative to this  Agreement.  Each of Parent and Sub
has the  requisite  corporate  power and  authority  to execute and deliver this
Agreement and to consummate the transactions  contemplated hereby. The execution
and  delivery  of  this  Agreement  by Sub and  the  consummation  by Sub of the
transactions  contemplated  on its part hereby have been duly  authorized by its
Board of Directors,  and no other  corporate  proceedings on the part of Sub are
necessary to authorize  this  Agreement or for Parent and Sub to consummate  the
transactions  contemplated  hereby. The execution and delivery of this Agreement
by  Parent  has  been  duly  authorized  by  Parent's  Board of  Directors.  The
consummation of the transactions  contemplated hereby is subject to the approval
of the Board of Directors of Parent.  This  Agreement  has been duly and validly
executed  and  delivered by each of Parent and Sub and  constitutes  a valid and
binding agreement of each of Parent and Sub,  enforceable against Parent and Sub
in accordance with its terms. Upon issuance,  if any, of shares of Parent Common
Stock,  such shares shall not be subject to  restriction  on transfer other than
those imposed by the Securities Act of 1933, as amended.

     Section 3.4 Consents and Approvals;  No Violations.  Neither the execution,
delivery  and   performance  of  this  Agreement  by  Parent  or  Sub,  nor  the
consummation by Parent or Sub of the transactions  contemplated  hereby will (i)
conflict with or result in any breach of any  provisions of the  Certificate  of
Incorporation  or By-Laws of Parent or of Sub,  (ii) require a filing with, or a
permit, authorization, consent or approval of, any Governmental Entity except in
connection  with or in order to comply  with the  applicable  provisions  of the
Investment  Canada  Act,  or (iii)  violate any law,  order,  writ,  injunction,
decree,  statute,  rule or regulation of any Governmental  Entity  applicable to
Parent, Sub or any of their properties or assets.

     Section 3.5 Reports and Financial  Statements.  Parent has timely filed all
reports  required to be filed with the United  States  Securities  and  Exchange
Commission  ("SEC") pursuant to the Securities  Exchange Act of 1934, as amended
(the "Exchange Act") or the Securities Act of 1933, as amended (the  "Securities
Act")  (collectively,  the  "Parent  SEC  Reports"),  and  has  previously  made
available to Sellers  true and  complete  copies of all such Parent SEC Reports.
Such Parent SEC Reports, as of their respective dates,  complied in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act,  as the case may be,  and none of such SEC  Reports  contained  any  untrue
statement of a material fact or omitted to state a material fact required to be

                                       18

<PAGE>



to be stated  therein or necessary to make the statements  therein,  in light of
the circumstances under which they were made, not misleading.

                  Section 3.6 Brokers. No broker, finder or financial advisor is
entitled to any brokerage finder's or other fee or commission in connection with
the transactions  contemplated by this Agreement based upon arrangements made by
or on behalf of Parent or Sub.


                                   ARTICLE IV
                     CONDUCT OF BUSINESS PENDING THE CLOSING

     Section 4.1 Conduct of Business by Sellers  Pending the  Closing.  Prior to
the Closing,  unless Parent shall  otherwise  agree in writing,  or as otherwise
expressly contemplated by this Agreement:

     (a) Each of Sellers shall conduct their  respective  businesses only in the
ordinary and usual course  consistent  with past practice and in compliance with
all Applicable Laws, and each of Sellers shall use their  reasonable  efforts to
preserve intact the present business  organization,  keep available the services
of their present officers and key employees,  and preserve the goodwill of those
having business relationships with them;

     (b)  Neither  Seller  shall (i)  amend  its  certificate  and  articles  of
incorporation  or by-laws,  (ii) split,  combine or reclassify any shares of its
outstanding capital stock, (iii) declare, set aside or pay any dividend or other
distribution payable in cash, stock or property,  or (iv) directly or indirectly
redeem or otherwise acquire any shares of its capital stock;

     (c) Neither  Seller shall (i)  authorize  for  issuance,  issue or sell, or
pledge or otherwise  encumber,  or agree to issue or sell or pledge or otherwise
encumber, any shares of, or Rights to acquire or convertible into any shares of,
its  capital  stock  (whether  through  the  issuance  or  granting  of options,
warrants,  commitments,  subscriptions,  rights to purchase or otherwise);  (ii)
modify the terms,  or  accelerate  the  vesting or  exercisability  of, any such
Rights; (iii) merge or consolidate with another entity; (iv) acquire or purchase
an  equity  interest  in or a  substantial  portion  of the  assets  of  another
corporation, partnership or other business organization or otherwise acquire any
assets  outside the ordinary and usual  course of business and  consistent  with
past practice or otherwise  enter into any contract,  commitment or  transaction
outside the ordinary and usual course of business consistent with past practice,
or issue or sell any debt  securities or warrants or other rights to acquire any
debt securities; (v) sell, lease, license, waive, release, transfer, encumber or
otherwise  dispose of any of its assets outside the ordinary and usual course of
business and  consistent  with past practice;  (vi) incur,  assume or prepay any
indebtedness  or any other  liabilities  other  than in the  ordinary  course of
business and consistent with past practice; (vii) assume, guarantee,  endorse or
otherwise  become  liable or  responsible  (whether  directly,  contingently  or
otherwise)  for the  obligations  of any other  person;  (viii)  make any loans,
advances or capital  contributions to, or investments in, any other person; (ix)
authorize  or make  capital  expenditures  in  excess of the  amounts  currently
budgeted therefor and made available to Parent;  (x) permit any insurance policy
naming  either  Seller  as a  beneficiary  or a loss  payee  to be  canceled  or



                                       19

<PAGE>



terminated  other than in the  ordinary  course of  business;  (xi) make any tax
election not required by law or settle or compromise any federal, state or local
income tax liability; (xii) settle or compromise any suit, action, proceeding or
investigation  pending or threatened against or affecting either Seller;  (xiii)
grant  any  stock-related  or  performance  awards;  (xiv)  enter  into  any new
employment,  severance,  consulting or salary  continuation  agreements with any
officers, directors or employees; (xv) forgive any loans to employees,  officers
or directors; (xvi) consummate any transaction with any Affiliate,  associate or
relative of either Seller or the Stockholder,  or make any payment to or for the
benefit of, directly or indirectly, any of the foregoing;  (xvii) enter into any
contract,  agreement,  commitment  or  arrangement  with  respect  to any of the
foregoing; (xviii) take any action to accelerate the collection of, or discount,
any accounts receivable; or (xix) delay the payment of any account payable;

     (d) Neither Seller shall (i) adopt, enter into,  terminate or amend (except
as may be required by Applicable Law) any employee benefit or other  arrangement
for the current or future benefit or welfare of any director, officer or current
or former employee or change any actuarial or other assumption used to calculate
funding obligations with respect to any such plans or change the manner in which
contributions to any such plan are made or the basis on which such contributions
are determined,  (ii) increase in any manner the compensation or fringe benefits
of, or pay any bonus or severance to, any director,  officer or employee (except
for normal increases in salaried compensation in the ordinary course of business
consistent with past practice), or pay any benefit or amount not required by any
employee plan,  agreement,  contract arrangement or other similar plan, or (iii)
take  any  action  to fund or in any  other  way  secure,  or to  accelerate  or
otherwise  remove  restrictions  with respect to, the payment of compensation or
benefits  under any employee  plan,  agreement,  contract,  arrangement or other
similar plan;

     (e)  Neither  Seller  shall take any action  with  respect  to, or make any
change in, its accounting or tax policies or  procedures,  except as required by
law or to comply with Canadian GAAP; and

     (f) Neither Seller shall authorize,  or commit or agree to take, any of the
foregoing actions.


                                    ARTICLE V
                              ADDITIONAL AGREEMENTS

     Section 5.1 Access and  Information.  Each of Sellers and Parent shall (and
shall cause its officers,  directors,  employees, auditors and agents to) afford
to the other and to the other's officers,  employees,  financial advisors, legal
counsel,  accountants,  consultants and other representatives  reasonable access
during normal  business hours  throughout the period prior to the Closing to all
of its books and records (other than  privileged  documents) and its properties,
plants and personnel,  provided that no  investigation  pursuant to this Section
5.1 shall affect any representations or warranties made herein or the conditions
to the  obligations  of the respective  parties to consummate  the  transactions
contemplated hereby. Unless otherwise required by law, each party agrees that it
(and its representatives) shall hold in confidence all non-public information so
acquired.

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<PAGE>



     Section 5.2  Reasonable  Best Efforts.  Subject to the terms and conditions
herein  provided,  each of the parties hereto agrees to use its reasonable  best
efforts  to take,  or cause to be taken,  all  action  and to do, or cause to be
done,  all things  necessary,  proper or  advisable  under  applicable  laws and
regulations to consummate and make effective the  transactions  contemplated  by
this  Agreement,  and the  obtaining  of all  necessary  waivers,  consents  and
approvals and the effecting of all necessary registrations and filings.  Without
limiting the generality of the foregoing,  as promptly as practicable,  Sellers,
Parent and Sub shall make all filings and submissions  under [the Bulk Sales Act
and the Ontario Business  Corporations Act] as may be reasonably  required to be
made in connection with this Agreement and the transactions contemplated hereby.
Sellers  will  furnish  to Parent and Sub,  and  Parent and Sub will  furnish to
Sellers,  such information and assistance as the other may reasonably request in
connection with the preparation of any such filings or submissions.

     Section 5.3 Expenses.  Whether or not the transactions  contemplated hereby
are  consummated,  all costs  and  expenses  incurred  in  connection  with this
Agreement  (including  the Exhibits  hereto) and the  transactions  contemplated
hereby  (and  thereby)  shall  be paid by the  party  incurring  such  expenses;
provided,  however,  that Sub or  Parent  shall be  solely  responsible  for any
expenses payable to Parent's  counsel and Parent's  registrar and transfer agent
in  connection  with the sale or transfer by Sellers of shares of Parent  Common
Stock, if any, issued to Sellers as part of the Consideration.

     Section 5.4 Public Announcements.  Each of the parties hereof agree that it
will not issue any press  release or otherwise  make any public  statement  with
respect to this Agreement (including the Exhibits hereto) or the terms hereof or
the transactions  contemplated  hereby (or thereby) without the prior consent of
each other party hereto,  which consent  shall not be  unreasonably  withheld or
delayed;  provided,  however, that such disclosure can be made without obtaining
such prior  consent if (i) the  disclosure is required by law and (ii) the party
making such  disclosure  has first used its  reasonable  best efforts to consult
with (but not obtain the consent of) each other party  hereto about the form and
substance of such disclosure.

     Section 5.5  Supplemental  Disclosure.  Sellers shall give prompt notice to
Parent,  and Parent shall give prompt notice to Sellers,  of (i) the occurrence,
or  non-occurrence,  of any event the occurrence,  or  non-occurrence,  of which
would be likely to cause (x) any  representation  or warranty  contained in this
Agreement to be untrue or inaccurate or (y) any covenant, condition or agreement
contained in this  Agreement  not to be complied  with or satisfied and (ii) any
failure of Sellers or Parent,  as the case may be, to comply with or satisfy any
covenant,  condition  or  agreement  to be  complied  with  or  satisfied  by it
hereunder;  provided,  however, that the delivery of any notice pursuant to this
Section  5.5  shall not have any  effect  for the  purpose  of  determining  the
satisfaction  of the  conditions  set forth in Article VI of this  Agreement  or
otherwise limit or affect the remedies available hereunder to any party.

     Section 5.6 Sales Tax.  Sellers shall pay any federal,  provincial or local
sales,   transfer  or  usage  taxes  payable  by  reason  of  the   transactions
contemplated by this  Agreement.  The Sellers and Sub agree to elect that no tax
be payable pursuant to the GST legislation in the Excise Tax Act (Canada) with

                                       21

<PAGE>



respect to the sale under this Agreement.  Sub will file an election pursuant to
the GST legislation, made jointly by the Sellers and Sub, in compliance with the
GST legislation.

     Section 5.7 Ontario Employer Health Tax. The Sellers  acknowledge and agree
that,  notwithstanding  completion  of  the  transaction  contemplated  by  this
Agreement,  the Sellers shall continue to have sole responsibility and liability
for the payment of tax pursuant to the Employer  Health Tax Act (Ontario) or any
similar  legislation  in respect of all  remuneration  paid to  employees of the
Sellers in the Business in respect of services  provided during the period up to
the Closing Date, (the  "pre-closing  remuneration")  whether or not the same is
paid by the Sellers or Sub and whether  before or after the Closing Date. At the
request of the Sellers,  Sub shall provide the Sellers with  particulars  of any
payments  made by Sub to  employees of the Sellers in the Business in respect of
pre-closing remuneration.

     Section 5.8 Allocation of Consideration.  Sub and Sellers,  in filing their
respective  tax returns,  shall use the  allocation of the payments  provided in
Section 1.5 hereof set out in Schedule 5.8.

     Section 5.9 Accounts Receivable.  As soon as practicable after December 31,
1998,  Sub shall advise  Sellers in writing of the aggregate  amount of Sellers'
accounts  receivable  as of the  Closing  Date (net of the  applicable  reserves
reflected on the Closing  Statement)  that had not been collected as of December
31, 1998 (the  "Uncollected  AR's").  Sellers and the  Stockholder,  jointly and
severally,  shall  thereafter  promptly  pay  to  Sub  an  amount  equal  to the
Uncollected AR's. Such payment,  if any, shall be made in U.S. dollars (using as
a currency exchange rate the rate published by the Wall Street Journal as of the
Closing Date) by wire transfer to such account as Sub shall  designate.  Nothing
herein  contained  shall  obligate  Sub to take any action,  other than  routine
collection  efforts,  not  including  litigation,  to collect  any such  account
receivable.  Upon payment by Sellers for the Uncollected  AR's, Sub shall assign
the Uncollected AR's to Sellers.

     Section 5.10 Books and Records.  Following the Closing,  Sellers shall have
such access to the books and records of Sellers  that are included in the Assets
as  Sellers  may from time to time  reasonably  request in  connection  with the
preparation  of tax  returns,  any audit of any tax return,  or any other proper
purpose.  Following  the  Closing,  Sub shall  have such  access to the books of
account of Sellers that are included in the Excluded Assets as Sub may from time
to time reasonably request.

     Section 5.11 Offers of Employment. On or before the Closing, Sub shall make
an offer of employment to each of the persons named on Schedule  2.16(a)(i) such
employment to commence  immediately  following the Closing.  Such offer shall be
made for such  compensation  and on such other terms as are no less favorable to
the employees than those reflected on Schedule  2.16(a)(i) hereto.  Sellers will
cooperate  with Sub with respect to such offer.  The  employees  who accept such
offer are referred to in this  Agreement as the  "Accepting  Employees"  and the
employees  who  decline  to  accept  such  offer or who  accept  such  offer and
thereafter  voluntarily terminate their employment with Sub within 15 days after
the Closing are referred to in this Agreement as the "Non- Accepting Employees".


                                       22

<PAGE>



     Section 5.12 Sellers'  Parent Common Stock.  In connection with the sale by
Sellers  pursuant to Rule 144 promulgated  under the Securities Act of shares of
Parent Common  Stock,  if any,  issued to Sellers as part of the  Consideration,
Parent shall use reasonable efforts to facilitate such sale.

     Section 5.13 Bulk Sales Act.  Sellers and Sub hereby waive  compliance with
the provisions of the Bulk Sales Act.


     Section 5.14 Further Assurances. Sellers and Sub each shall
execute and deliver such instruments and documents  following the Closing as the
other may from time to time  reasonably  request in order to give  effect to the
transactions contemplated hereby.


                                   ARTICLE VI
                           CONDITIONS TO CONSUMMATION

     Section  6.1   Conditions  to  Each  Party's   Obligations   to  Consummate
Transactions.  The  respective  obligations  of each  party  to  consummate  the
transactions  contemplated  hereby  shall be subject to the  satisfaction  at or
prior to the Closing of the following conditions:

     (a) Governmental  Approval.  Any governmental  waiting period applicable to
the consummation of the transactions  contemplated  hereby shall have expired or
been  terminated,  and no action shall have been instituted by any  Governmental
Entity  challenging or seeking to enjoin the  consummation of this  transaction,
which action shall have not been withdrawn or terminated; and

     (b) No Order.  No  Governmental  Entity  (including a federal or provincial
court) of  competent  jurisdiction  shall  have  enacted,  issued,  promulgated,
enforced or entered any statute,  rule,  regulation,  executive  order,  decree,
injunction or other order (whether temporary, preliminary or permanent) which is
in effect and which materially restricts,  prevents or prohibits consummation of
the transactions contemplated hereby; provided,  however, that the parties shall
use their reasonable best efforts to cause any such decree, judgment, injunction
or other order to be vacated or lifted.

     Section  6.2  Conditions  to  Obligations  of Parent and Sub to  Consummate
Transactions.  The obligations of Parent and Sub to consummate the  transactions
contemplated  hereby  shall be  subject to the  satisfaction  at or prior to the
Closing of the  following  additional  conditions,  unless  waived in writing by
Parent:

     (a) Representations  and Warranties.  The representations and warranties of
Sellers  and the  Stockholder  set  forth  in this  Agreement  shall be true and
correct, as of the date hereof,  and, except to the extent such  representations
and  warranties  speak as of an earlier  date,  as of the Closing Date as though
made at and as of the Closing  Date,  and Sub shall have  received a certificate



                                       23

<PAGE>



signed by the Stockholder and, on behalf of each Seller,  by the chief executive
officer or the chief financial officer of such Seller to such effect.

     (b) Performance of Obligations of Sellers and the Stockholder.  Each of the
Sellers and the Stockholder shall have performed all obligations  required to be
performed by it under this  Agreement at or prior to the Closing,  and Sub shall
have received a  certificate  signed by the  Stockholder  and, on behalf of each
Seller,  by the chief executive  officer or the chief financial  officer of such
Seller to such effect.

     (c)  Agreements.  The  Stockholder  shall have entered into the  Employment
Agreement (the  "Employment  Agreement")  and  Stockholder  Non-Competition  and
Confidentiality  Agreement,  in the form of Exhibits  6.2(c)(i)  and  6.2(c)(ii)
hereto, respectively, and Sellers shall have entered into the Escrow Agreement.

     (d) Due Diligence.  Parent shall have completed its due diligence review of
Sellers  and  determined  that the results of such  review are  satisfactory  to
Parent.

     (e) Counsel  Opinion.  Sub shall have received from counsel for Sellers and
the Stockholder, Jones, Rogers, an opinion in form and substance satisfactory to
Sub.

     (f) Absence of Material  Adverse Change.  There shall have been no material
adverse change in the Business or the Assets.

     (g) Board of  Directors  Approval.  The Board of  Directors of Parent shall
have approved the transactions contemplated hereby.

     (h)  Sales  Tax.  The  Sellers   shall  have   delivered  to  Sub  evidence
satisfactory to Sub that all taxes required to be paid by the Sellers in respect
of the Business under the Retail Sales Tax Act (Ontario) have been paid.

     (i)  Change of Names.  Sellers  shall have  delivered  to Sub  articles  of
amendment,  in form and  substance  satisfactory  to Sub  pursuant to which each
Seller shall change its corporate name to a name which does not include any name
referred to in Section 1.1(e) hereof or any derivative of any such name.

     (j)  Consent of  Landlord.  Sellers  shall  have  obtained  the  consent of
Sellers' landlord to the assignment to Sub of the real property leases listed on
Schedule 2.23 hereto.

     (k)  Release  of Lien.  Sellers  shall have  obtained  the  undertaking  of
Toronto- Dominion Bank to release its lien in respect of the Assets.

     (l)  Other  Documents.  Sellers  shall  have  delivered  to Sub such  other
documents  as  Sub  shall  have  reasonably  requested  to  give  effect  to the
transactions contemplated by this Agreement.

                                       24

<PAGE>



     Section 6.3 Conditions to Obligation of Sellers to Consummate Transactions.
The obligation of Sellers to consummate  the  transactions  contemplated  hereby
shall be subject to the satisfaction at or prior to the Closing of the following
additional conditions:

     (a) Representations and Warranties.  (i) The representations and warranties
of Parent and Sub set forth in this  Agreement  shall be true and  correct as of
the date hereof,  and, except to the extent such  representations and warranties
speak as of an earlier  date, as of the Closing Date as though made on and as of
the Closing Date, and Sellers shall have received a certificate signed on behalf
of Parent and Sub by the chief executive  officer or the chief financial officer
of Parent and Sub to such effect.

     (b)  Performance  of  Obligations of Parent and Sub. Each of Parent and Sub
shall have performed all  obligations  required to be performed by it under this
Agreement at or prior to the Closing  Date,  and Sellers  shall have  received a
certificate signed on behalf of Parent and Sub by the chief executive officer or
the chief financial officer of Parent and Sub to such effect.

     (c) Counsel  Opinion.  Sellers' shall have received from counsel for Parent
and Sub,  Proskauer  and Tory,  opinions in form and substance  satisfactory  to
Sellers.

     (d) Escrow  Agreement.  Parent and Sub shall have  entered  into the Escrow
Agreement and the Employment Agreement.

     (e) Other  Documents.  Sub shall  have  delivered  to  Sellers  such  other
documents  as Sellers  shall have  reasonably  requested  to give  effect to the
transactions contemplated by this Agreement.


                                   ARTICLE VII
                                   TERMINATION

     Section 7.1 Termination. This Agreement may be terminated at any time prior
to the Closing:

     (a) by mutual consent of Parent and Sellers;

     (b) by either Parent or Sellers,  if the transactions  contemplated  hereby
shall not have been  consummated  before August 1, 1998 (unless,  in the case of
any  such  termination  pursuant  to this  Section  7.1(b),  the  failure  to so
consummate  the  transactions  contemplated  hereby by such date shall have been
caused by the action or failure to act of the party  seeking to  terminate  this
Agreement,  which  action  or  failure  to act  constitutes  a  breach  of  this
Agreement);

     (c) by Parent,  if (i) there has been a breach in any  material  respect of
any  representations  or warranties of Sellers,  (ii) there has been a breach in
any material  respect of any of the  covenants or  agreements  set forth in this
Agreement on the part of Sellers, which breach is not curable or, if curable, is
not cured within 10 days after written notice of such breach is given by

                                       25

<PAGE>



Parent to Sellers,  (iii) Parent shall have  determined  that the results of its
due diligence review of Sellers are not satisfactory to Parent, (iv) there shall
have been a material  adverse  change in the Business or the Assets,  or (v) the
Board of  Directors of Parent  shall have  declined to approve the  transactions
contemplated hereby;

     (d) by Sellers,  if (i) there has been a breach in any material  respect of
any  representations  or warranties of Parent or (ii) there has been a breach in
any material  respect of any of the  covenants or  agreements  set forth in this
Agreement on the part of Parent,  which breach is not curable or, if curable, is
not cured within 10 days after written notice of such breach is given by Sellers
to Parent;

     Section  7.2 Effect of  Termination.  In the event of  termination  of this
Agreement  pursuant to this Article VII, the  transactions  contemplated  hereby
shall be deemed  abandoned  and this  Agreement  shall  forthwith  become  void,
without  liability on the part of any party hereto,  except that nothing  herein
shall relieve any party from liability for any breach of this Agreement.


                                  ARTICLE VIII
                                 INDEMNIFICATION

     Section 8.1 Survival of Representations and Warranties. All representations
and warranties  contained in Article III of this Agreement and all covenants and
obligations of Sellers and the  Stockholder  contained in this  Agreement  shall
survive the Closing.  No investigation by Parent,  heretofore or hereafter made,
shall  affect  the  survival  of  any  representation,   warranty,  covenant  or
obligation in this Agreement.

     Section 8.2 Indemnification by the Stockholder. From and after the Closing,
Sellers and the  Stockholder,  jointly and severally,  shall  indemnify and save
Parent, Sub and their respective  Affiliates,  directors,  officers,  employees,
agents and representatives and all of their successors and assigns (collectively
"Parent Claimants" and individually  "Parent Claimant") harmless from and defend
each of them from and against any and all demands, claims, actions, liabilities,
losses,  costs, damages or expenses whatsoever  (including reasonable attorneys'
fees) (collectively, "Losses") asserted against, imposed upon or incurred by the
Parent  Claimants  resulting from or arising out of (a) any inaccuracy or breach
of any  representation  or warranty of the  Stockholder or Sellers  contained in
this  Agreement;  or  (b)  any  breach  of any  covenant  or  obligation  of the
Stockholder  or  Sellers  contained  in this  Agreement.  Without  limiting  the
generality of the foregoing,  Sellers and the  Stockholder  shall pay any Parent
Claimant asserting any claim for indemnification hereunder, an amount sufficient
to put the Parent  Claimant in the same  position it would have been in had such
representation  or warranty been accurate or had such covenant or obligation not
been breached, as the case may be.

     Section 8.3 Indemnification Procedures.

     (a) The rights and  obligations of each Parent  Claimant  asserting a claim
for indemnification hereunder shall be governed by the following rules:

                                       26

<PAGE>



          (i) The Parent  Claimant  shall give prompt written notice to Sellers,
     the Stockholder and the Escrow Agent of any state of facts which the Parent
     Claimant determines will give rise to a claim by it against Sellers and the
     Stockholder based on the indemnity  agreements  contained herein,  stating,
     with  particularity,  the  nature  and basis of said  claims and the amount
     thereof,  to the extent known.  No failure to give such notice shall affect
     the indemnification  obligations of Sellers and the Stockholder  hereunder,
     except to the extent such failure  materially  prejudices  Sellers' and the
     Stockholder's  ability successfully to defend the matter giving rise to the
     indemnification claim.

          (ii) In the event any action,  suit or proceeding  is brought  against
     the Parent Claimant,  with respect to which Sellers and the Stockholder may
     have liability under the indemnity  agreements  contained herein, then upon
     the written  acknowledgment  by Sellers and the  Stockholder  within thirty
     days of the  bringing  of such  action,  suit or  proceeding  that they are
     undertaking  and  will  prosecute  the  defense  of the  claim  under  such
     indemnity  agreements and confirming  that the claim is one with respect to
     which Sellers and the  Stockholder are obligated to indemnify and that they
     will be able to pay the full amount of potential  liability  in  connection
     with  any  such  claim,  the  action,  suit or  proceeding  (including  all
     proceedings  on appeal or for review which counsel for the Parent  Claimant
     shall deem  appropriate)  may be defended  by Sellers and the  Stockholder.
     However,  in  the  event  Sellers  and  the  Stockholder  shall  not  offer
     reasonable  assurances as to their financial  capacity to satisfy any final
     judgment  or  settlement,  the Parent  Claimant  may assume the defense and
     dispose  of  the  claim,  after  10  days'  prior  written  notice  to  the
     Stockholder.  The  Parent  Claimant  shall have the right to employ its own
     counsel in any such case,  but the fees and expenses of such counsel  shall
     be at the Parent  Claimant's  own expense unless (a) the employment of such
     counsel  and the  payment  of such fees and  expenses  both shall have been
     specifically  authorized by Sellers and the  Stockholder in connection with
     the defense of such action,  suit or proceeding or (b) the Parent  Claimant
     shall have reasonably  concluded and specifically  notified Sellers and the
     Stockholder that there may be specific  defenses  available to it which are
     different  from  or  additional  to  those  available  to  Sellers  and the
     Stockholder, or that such action, suit or proceeding involves or could have
     an  effect  upon  matters  beyond  the  scope  of the  indemnity  agreement
     contained herein.

          (iii) In addition,  in any event  specified in clause (b) of the third
     sentence of Section 8.3(a)(ii) hereof, Sellers and the Stockholder,  to the
     extent made necessary by such different or additional  defenses,  shall not
     have the right to direct the defense of such action,  suit or proceeding on
     behalf of the Parent  Claimant.  If Sellers and the  Stockholder and Parent
     Claimant  cannot  agree on a mechanism  to separate  the defense of matters
     extending  beyond  the  scope of  indemnification,  such  matters  shall be
     defended on the basis of joint consultation.

          (iv) The Parent  Claimant  shall be kept fully informed by Sellers and
     the  Stockholder of such action,  suit or proceeding at all stages thereof,
     whether or not it is  represented by counsel.  Sellers and the  Stockholder
     shall,  at Sellers' and the  Stockholder's  expense,  make available to the
     Parent  Claimant and its attorneys and accountants all books and records of
     Sellers and the Stockholder relating to such proceedings or litigation, and
     the

                                       27

<PAGE>



     parties  hereto agree to render to each other such  assistance  as they may
     reasonably require of each other in order to ensure the proper and adequate
     defense of any such action, suit or proceeding.

     (b)  Sellers and the  Stockholder  shall make no  settlement  of any claims
which Sellers and the  Stockholder  have  undertaken to defend,  without  Parent
Claimant's  consent,  unless  Sellers and the  Stockholder  fully  indemnify the
Parent Claimant for all losses, there is no finding or admission of violation of
law by, or  effect on any other  claims  that may be made  against,  the  Parent
Claimant and the relief  granted in connection  therewith  requires no action on
the part of and has no effect on the Parent Claimant.

     Section  8.4 Escrow  Account.  The cash held by the Escrow  Agent  shall be
available to satisfy the indemnification  claims of Parent Claimants pursuant to
this Article VIII, and Parent and Sellers shall,  from time to time,  direct the
Escrow  Agent to deliver to each Parent  Claimant the cash in an amount equal to
the  Losses as to which such  Parent  Claimant  is  entitled  to be  indemnified
pursuant to this Article  VIII.  On the first  anniversary  of the Closing Date,
Parent and Sellers shall direct the Escrow Agent to deliver all of the cash then
held by it to  Sellers,  except for any amount as to which any Parent  Claimant,
pursuant to this Article VIII, has asserted a claim which is then pending. After
such  anniversary of the Closing Date, upon the  satisfaction in full of any and
all claims by Parent Claimants under this Article VIII, Parent and Sellers shall
direct the Escrow Agent to deliver all of the cash then held by it to Sellers.

     Section 8.5 Set-Off.  Sub, Parent and any Parent Claimant shall be entitled
to set-off,  against any amount otherwise due and payable to Sellers pursuant to
Section  1.5 hereof,  any amount due from  Sellers  pursuant to this  Agreement,
including Article VIII, Section 1.6 and Section 5.9 hereof.

     Section 8.6 Limitation on Indemnification.  Notwithstanding anything to the
contrary  contained in this Agreement,  (i) no Parent Claimant shall be entitled
to  indemnification  under this Article VIII for breach of any representation or
warranty of the Stockholder or the Sellers unless and until the aggregate amount
claimed by all Parent  Claimants  pursuant to this  Article  VIII  exceeds  U.S.
$100,000;  (ii) no Parent  Claimant shall be entitled to  indemnification  under
this  Article  VIII  for  breach  of  any  representation  or  warranty  of  the
Stockholder  or the Sellers  unless the claim  therefor  has been  asserted  (A)
within  three  years  after the  Closing  Date,  if such  claim is based upon an
alleged breach of the  representations or warranties  contained in Sections 2.1,
2.3,  2.4, 2.6, 2.9,  2.12,  2.15(c) and (d), or 2.21 hereof,  or (B) within one
year after the Closing  Date,  if such claim is based upon an alleged  breach of
any other representation or warranty contained herein; and (iii) the sole remedy
of any Parent  Claimant  with  respect to any breach of any  representation  and
warranty of the Stockholder or the Sellers  referred to in the preceding  clause
(B) shall be a claim against the amounts held by the Escrow Agent.



                                       28

<PAGE>

 

                                   ARTICLE IX
                              RESTRICTIVE COVENANTS

     Section 9.1  Non-Competition.  Neither  Seller shall,  for a period of five
years after the Effective Date, directly or indirectly,  engage, anywhere in the
United  States and  Canada,  in the  business  currently  conducted  by Sellers,
including  providing  contract  staffing and  permanent  placement  services for
information technology personnel.

     Section 9.2 Non-Solicitation of Employees. Neither Seller shall directly or
indirectly,  for itself or on behalf of any other individual or entity,  solicit
or,  without the prior  consent of Parent (such  consent not to be  unreasonably
withheld),  hire any person known by it to be, or which  reasonably  should have
been known by it to be, an  employee  of Parent or any of its  Subsidiaries,  or
induce or  attempt to induce any such  employee  to leave his or her  employment
with Parent or any of its  Subsidiaries,  at any time within five years from the
Closing Date.

     Section 9.3  Non-Solicitation or Interference with Customers and Suppliers.
Neither Seller shall,  directly or  indirectly,  for himself or on behalf of any
other individual or entity,  solicit,  divert, take away or attempt to take away
any of Parent's,  Sellers' or any of their respective  Subsidiaries customers or
suppliers or the business or patronage of any such  customers or suppliers or in
any way  interfere  with,  disrupt  or  attempt  to  disrupt  any then  existing
relationships  between  Parent  or any of its  Subsidiaries,  and  any of  their
respective customers or suppliers or other individuals or entities with whom any
of them deals or contact or enter into any  business  transaction  with any such
customers or suppliers or other  individuals  or entities for any purpose at any
time within five years from the Closing Date.

     Section  9.4  Acknowledgments.  Sellers  acknowledge  that,  in view of the
nature of Sellers'  business and the business  objectives of Parent in acquiring
the  Assets  and  the  Business,   and  the  consideration  paid  therefor,  the
restrictions  contained in this Article IX are  reasonably  necessary to protect
the  legitimate  business  interests  of Parent and that any  violation  of such
restrictions will result in irreparable injury to Parent and the business Parent
has acquired hereunder for which damages will not be an adequate remedy. Sellers
therefore  acknowledge that if any such restrictions are violated,  Parent shall
be entitled to  preliminary  and  injunctive  relief as well as to an  equitable
accounting of earnings, profits and other benefits arising from such violation.


                                    ARTICLE X
                               GENERAL PROVISIONS

     Section 10.1 Amendment and Modification.  At any time prior to the Closing,
this  Agreement  may be  amended,  modified  or  supplemented  only  by  written
agreement (referring specifically to this Agreement) of Parent, Sub, Sellers and
the Stockholder with respect to any of the terms contained herein.

     Section 10.2 Waiver.  At any time prior to the Closing,  Parent and Sub, on
the one hand, and Sellers and the Stockholder, on the other hand, may (i) extend
the time for the performance

                                       29

<PAGE>



of  any  of  the  obligations  or  other  acts  of the  other,  (ii)  waive  any
inaccuracies in the representations and warranties of the other contained herein
or in any documents  delivered pursuant hereto and (iii) waive compliance by the
other  with any of the  agreements  or  conditions  contained  herein  which may
legally be waived. Any such extension or waiver shall be valid only if set forth
in an instrument in writing specifically  referring to this Agreement and signed
on behalf of such party.

     Section 10.3 Investigations.  The respective representations and warranties
of Parent,  Sellers and the Stockholder  contained herein or in any certificates
or other  documents  delivered  prior to or as of the Closing  Date shall not be
deemed  waived or  otherwise  affected  by any  investigation  made by any party
hereto.

     Section 10.4 Notices. All notices and other communications  hereunder shall
be in  writing  and shall be  delivered  personally  or by  next-day  courier or
telecopied  with  confirmation  of  receipt,  to the  parties  at the  addresses
specified  below (or at such other  address for a party as shall be specified by
like notice;  provided  that  notices of a change of address  shall be effective
only upon receipt thereof).  Any such notice shall be effective upon receipt, if
personally  delivered or telecopied,  or one day after delivery to a courier for
next-day delivery.

(a)   If to Parent or Sub, to:

             Computer Horizons Corp.
             49 Old Bloomfield Avenue
             Mountain Lakes, NJ  07046-1495
             Fax: 973.299.6293

             Attention:  Mr. John J. Cassese, Chairman, CEO and President

with copies to:

             Computer Horizons Corp.
             49 Old Bloomfield Avenue
             Mountain Lakes, NJ  07046-1495
             Fax:973.402.8659

             Attention:  Dennis DiVenuta, Esq., General Counsel

and:

             Proskauer Rose LLP
             1585 Broadway
             New York, New York 10036
             Fax:  (212) 969-2900
             Attention:  Robert A. Cantone, Esq.


                                       30

<PAGE>



(b) if to Sellers or the Stockholder, to:

             Vincent Michael Roti
             Unit 1501
             2287 Lakeshore Boulevard West
             Toronto, Ontario, Canada
             MBV 3Y1
             Fax:  (905)602-7613

with a copy to:

             Jones, Rogers
             Suite 1600, 155 University Avenue
             Toronto, Ontario, Canada M5H3B6
             Fax:  (416)361-6303

             Attention:  Richard B. Jones, Esq.

     Section 10.5 Descriptive Headings;  Interpretation.  The headings contained
in this  Agreement are for  reference  purposes only and shall not affect in any
way  the  meaning  or  interpretation  of  this  Agreement.  References  in this
Agreement to Sections, Schedules, Exhibits or Articles mean a Section, Schedule,
Exhibit or Article of this Agreement unless otherwise  indicated.  References to
this  Agreement  shall be deemed to include the Exhibits and  Schedules  hereto,
unless the context otherwise requires.  The term "person" shall mean and include
an  individual,  a  partnership,  a joint  venture,  a  corporation,  a trust, a
Governmental Entity or an unincorporated organization.

     Section 10.6 Entire Agreement;  Assignment.  This Agreement  (including the
Schedules and other  documents and instruments  referred to herein)  constitutes
the  entire   agreement  and   supersedes   all  other  prior   agreements   and
understandings,  both written and oral,  among the parties or any of them,  with
respect to the subject matter  hereof.  This Agreement is not intended to confer
upon any  person  not a party  hereto any  rights or  remedies  hereunder.  This
Agreement shall not be assigned by operation of law or otherwise;  provided that
Parent or Sub may assign its rights  and  obligations  hereunder  to a direct or
indirect  subsidiary of Parent,  but no such assignment  shall relieve Parent or
Sub, as the case may be, of its obligations hereunder.

     Section  10.7  Governing  Law.  This  Agreement  shall be  governed  by and
construed in  accordance  with the laws of the State of New York without  giving
effect to the provisions thereof relating to conflicts of law.

     Section  10.8  Severability.  In case  any  one or  more of the  provisions
contained in this Agreement  should be invalid,  illegal or unenforceable in any
respect against a party hereto, the validity, legality and enforceability of the
remaining  provisions  contained  herein  shall  not in any way be  affected  or
impaired thereby and such invalidity,  illegality or unenforceability shall only
apply as to such party in the specific jurisdiction where such judgment shall be
made.

                                       31

<PAGE>



     Section 10.9  Counterparts.  This  Agreement may be executed in two or more
counterparts,  each of which shall be deemed to be an original  but all of which
shall constitute one and the same agreement.

     Section 10.10 Merger.  The terms and provisions of this Agreement shall not
merge upon the consummation of the transactions  contemplated  herein, but shall
continue in full force and effect.

     IN  WITNESS  WHEREOF,  each of Parent,  Sub and  Sellers  has  caused  this
Agreement  to  be  executed  on  its  behalf  by  its  officers  thereunto  duly
authorized,  and each of the Stockholder have executed this Agreement, all as of
the date first above written.



                                  COMPUTER HORIZONS CORP.


                                  By:______________________________
                                     Name:
                                     Title:


                                  COMPUTER HORIZONS (CANADA) CORP.


                                  By:______________________________
                                      Name:
                                      Title:

     
                                  ISG CONTRACTS INC.


                                  By:______________________________
                                      Name:
                                      Title:


                                  ISG CAREERS INC.


                                  By:______________________________
                                     Name:
                                     Title:


  
                                       32

<PAGE>



                                   The Stockholder:


                                   _________________________________
                                   Name:  Vincent Michael Roti



                                       33

<PAGE>



                                TABLE OF CONTENTS

                                                                            Page

ARTICLE I    SALE AND PURCHASE ................................................1
         Section 1.1  Assets to be Purchased...................................1
         Section 1.2  Excluded Assets..........................................3
         Section 1.3  Assumed Liabilities......................................3
         Section 1.4  Excluded Liabilities.....................................3
         Section 1.5  Consideration............................................4
         Section 1.6  Post Closing Adjustment..................................5
         Section 1.7  Escrow Deposit...........................................6
         Section 1.8  Closing..................................................6

ARTICLE II        REPRESENTATIONS AND WARRANTIES OF SELLERS
                  AND THE STOCKHOLDER..........................................8
         Section 2.1  Organization.............................................8
         Section 2.2  Capitalization...........................................8
         Section 2.3  No Sellers' Subsidiaries; No Affiliates..................8
         Section 2.4  Authority Relative to this Agreement.....................8
         Section 2.5  Certificate of Incorporation and By-laws.................9
         Section 2.6  Consents and Approvals; No Violations....................9
         Section 2.7  Financial Statements.....................................9
         Section 2.8  Absence of Certain Changes or Events; Contracts.........10
         Section 2.9  Litigation..............................................10
         Section 2.10  Absence of Undisclosed Liabilities.....................10
         Section 2.11  No Default.............................................10
         Section 2.12  Taxes..................................................10
         Section 2.13  Assets.................................................11
         Section 2.14  Intellectual Property..................................11
         Section 2.15  Compliance with Applicable Law.........................12
         Section 2.16  Employee Matters.......................................12
         Section 2.17  Environmental Laws and Regulations.....................15
         Section 2.18  Affiliate Transactions.................................16
         Section 2.19  Accounts Receivable....................................16
         Section 2.20  Customers..............................................16
         Section 2.21  Restrictions on Business Activities....................16
         Section 2.22  Brokers................................................17
         Section 2.23  Real and Personal Property.............................17
         Section 2.24  Insurance..............................................17
         Section 2.25  Books and Records......................................17
         Section 2.26  Improper Payments......................................17
         Section 2.27  Contracts and Commitments..............................17
         Section 2.28  Competition Act........................................18
         Section 2.29  Disclosure.............................................18

                                       i

<PAGE>




ARTICLE III       REPRESENTATIONS AND WARRANTIES OF PARENT....................18
         Section 3.1  Organization............................................18
         Section 3.2  Capitalization..........................................18
         Section 3.3  Authority Relative to this Agreement....................18
         Section 3.4  Consents and Approvals; No Violations...................19
         Section 3.5  Reports and Financial Statements........................19
         Section 3.6  Brokers.................................................19

ARTICLE IV        CONDUCT OF BUSINESS PENDING THE CLOSING.....................19
         Section 4.1  Conduct of Business by Sellers Pending the Closing......19

ARTICLE V         ADDITIONAL AGREEMENTS.......................................21
         Section 5.1  Access and Information..................................21
         Section 5.2  Reasonable Best Efforts.................................21
         Section 5.3  Expenses................................................21
         Section 5.4  Public Announcements....................................21
         Section 5.5  Supplemental Disclosure.................................22
         Section 5.6  Sales Tax...............................................22
         Section 5.7  Ontario Employer Health Tax.............................22
         Section 5.8  Allocation of Considerati...............................22
         Section 5.9  Accounts Receivable.....................................22

ARTICLE VI        CONDITIONS TO CONSUMMAT ....................................23
         Section 6.1  Conditions to Each Party's Obligations to Consummate 
                      Transactions............................................23
         Section 6.2  Conditions to Obligations of Parent and Sub to
                      Consummate Transactions.................................23
         Section 6.3  Conditions to Obligation of Sellers to Consummate
                      Transactions............................................24

ARTICLE VII    TERMINATION....................................................25
         Section 7.1  Termination.............................................25
         Section 7.2  Effect of Termination...................................25

ARTICLE VIII  INDEMNIFICATION.................................................26
         Section 8.1  Survival of Representations and Warranties..............26
         Section 8.2  Indemnification by the Stockholder......................26
         Section 8.3  Indemnification Procedures..............................26
         Section 8.4  Escrow Account..........................................27
         Section 8.5  Set-Off.................................................28
         Section 8.6 Limitation on Indemnification............................28
ARTICLE IX     RESTRICTIVE COVENANTS..........................................28
         Section 9.1  Non-Competition.........................................28
         Section 9.2  Non-Solicitation of Employees...........................28
         Section 9.3  Non-Solicitation or Interference with Customers 
                      and Suppliers...........................................28

                                       ii

<PAGE>


         Section 9.4  Acknowledgments.........................................29

ARTICLE X    GENERAL PROVISIONS...............................................29
         Section 10.1  Amendment and Modification.............................29
         Section 10.2  Waiver.................................................29
         Section 10.3  Investigations.........................................29
         Section 10.4  Notices................................................29
         Section 10.5  Descriptive Headings; Interpretation...................31
         Section 10.6  Entire Agreement; Assignment...........................31
         Section 10.7  Governing Law..........................................31
         Section 10.8  Severability...........................................31
         Section 10.9  Counterparts...........................................31


EXHIBITS   2.2(b)      Form of Escrow Agreement


SCHEDULES

         A           -     List of Stockholder Parties to Agreement
         3.1         -     Sellers Foreign Qualifications
         3.2(a)(i)   -     Record and Beneficial Holders
         3.2(a)(ii)  -     Former Record and Beneficial Holders
         3.2(b)      -     Rights, Subscription, Warrants, Calls, Options, Etc.
         3.3(a)      -     Subsidiaries
         3.3(b)      -     Sellers Affiliates
         3.3(c)      -     Subsidiaries' Foreign Qualifications
         3.7         -     Financial Statements
         3.8         -     Absence of Certain Changes or Events
         3.12        -     Taxes
         3.13        -     Liens
         3.16        -     Employee Benefit Plans
         3.19        -     Affiliate Transactions
         3.21        -     Customers
         3.24        -     Brokers
         3.26(a)     -     Real Property
         3.26(b)     -     Personal Property
         3.27        -     Insurance
         3.30        -     Officers and Directors; Bank Accounts
         3.31        -     Contracts

                                      iii

<PAGE>



 


Business Wire - July 07, 1998 08:10

MOUNTAIN LAKES, N.J.--(BUSINESS WIRE)-- July 7, 1998--

- --Continues Its International Expansion With

Acquisition Of Canadian IT Firm --

Computer  Horizons  Corp.  (Nasdaq:CHRZ)  today  announced  the  acquisition  of
Informatics  Search  Group  ("ISG") of  Toronto,  Canada.  The  assets  purchase
transaction  was for a combination of cash and Computer  Horizons stock with the
potential for additional  payments,  providing ISG achieves certain  pre-defined
growth  and  revenue  targets.  The  acquisition  is  expected  to be  accretive
immediately in 1998 and is expected to continue approximately $0.04 per share in
calendar 1999.

ISG is an  information  technology  services  firm  offering  both  professional
staffing  and career  placement  services.  Current  clients  include Bell Sygma
Telecom,  Toronto Dominion Bank,  Citibank Canada,  IBM Canada and Canadian Tire
Corporation.  Over the past three years, ISG has been one of the fastest growing
IT services  companies  in Canada.  Revenues for the last six months of 1998 are
expected to  approximate  $15 million and for calendar  1999  approximately  $43
million.

Vincent  Michael  Roti,  current  owner and  President of ISG,  will now oversee
Computer  Horizons'  staffing services in Canada.  Under his supervision will be
approximately  35  experienced  information  technology  recruiters and over 325
billable consultants.

"We are very  pleased with the  acquisition  of  Informatics  Search Group as it
enhances our competitive  position in several ways. By operating a sophisticated
and fast growing information  technology staffing business in Canada, we will be
better able to serve our existing and potential  customers who are  increasingly
demanding  global  service,"  commented John Cassese,  President and Chairman of
Computer  Horizons.  "Additionally,  the  acquisition of ISG,  combined with our
recently announced acquisition of UK-based Spargo Consulting,  will enable us to
significantly  increase  our  internationally   generated  revenue  stream,"  he
concluded.

Vincent  Michael  Roti added,  "Since its  inception,  ISG has prided  itself in
providing the highest quality of services in the IT staffing industry.  Computer
Horizons  now  has  the  capability  to  leverage  ISG's  strength  in  Canadian
recruitment to help fulfill its U.S. staffing needs.  Simultaneously,  ISG gains
access to a new talent pool."

Mr. Roti  continued,  "We are also  very  pleased  to  now  be  part of Computer
Horizons' wide breadth of value-added  information  technology  services that we
could not previously provide to our customers."


<PAGE>


Computer  Horizons  Corp.,  founded  in  1969,  is  a  diversified   information
technology  services  company  with  4,000  employees  worldwide.   Through  its
international  network of 50 offices in the US,  UK,  and  Canada,  it  provides
clients with resource augmentation and advanced technology solutions to business
problems through  applications  development,  client/server  migration,  network
management, emerging technologies, and legacy systems maintenance, including its
industry-leading solution to the millennium date-change problem, Signature 2000.
Please visit our Web site at http://www.computerhorizons.com. E-mail address for
more information is: [email protected].

This press release includes certain "forward-looking statements" for purposes of
the "safe harbor" provisions of the Private Securities  Litigation Reform Act of
1995 that involves  risks and  uncertainties  that could cause actual results to
differ  materially.   Such  statements  are  based  upon,  among  other  things,
assumptions  made  by,  and  information  currently  available  to,  management,
including  management's  own  knowledge  and  assessment  of Computer  Horizons'
industry and competition.

         CONTACT:          Computer Horizons
                           David Reingold/William Murphy
                           (973) 299-4105
                           [email protected]
                           [email protected]
                                    or
                           Ruder Finn
                           Stacy Lipschitz (Investors)
                           Laura Hupprich (Media)
                           (212) 583-2757/(212) 593-6387
                           [email protected]
                           [email protected]


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