October 23, 1996



Mr. James J. Mosher
112 Watson Road
North Syracuse, NY 13212

Dear Mr. Mosher:

               This  letter  sets  forth  the  agreement   between   Continental
Information  Systems  Corporation (the "Company") and James J. Mosher ("Mosher")
with respect to certain severance and compensation matters.

               In partial  consideration  of  Mosher's  serving in the office of
Vice  President and  Controller  in addition to and aside from whatever  salary,
bonuses,  participations  or  other  benefits  the  Board  or  the  Compensation
Committee may decide on, the Company agrees as follows:


1.  Severance.

               (a) Mosher shall be entitled to receive the  following  severance
benefits upon the occurrence of a Severance Event (as defined in Exhibit A): (1)
a severance payment equal to six (6) months base salary as in effect on the date
of the Severance Event,  payable,  at Mosher's option in a lump sum or in twelve
(6) equal monthly installments; (2) Continued Benefits (as defined in Exhibit A)
until the earlier of six (6) months from the date of the Severance  Event or the
commencement by Mosher of full time employment by another employer;

               (b) Mosher  shall not be required  to mitigate  the amount of any
payment provided for in this Agreement by seeking other employment,  nor, except
as provided in Section 1(a)(2) above, shall the amount or term of any payment or
benefits  provided  for in this  Agreement  be  reduced by any  compensation  or
benefits earned by Mosher as the result of employment by another  employer after
the Date of Termination (as defined in Exhibit A), or otherwise.


2.  General Provisions.

               (a) Binding  Effect.  This  Agreement  shall be binding upon, and
inure to the benefit of, the parties hereto, any successors to or assigns of the
Company and Mosher's heirs and the personal representatives of Mosher's estate.

               (b) Arbitration. Any disputes,  controversies,  or claims arising
out of or related to this  Agreement  ("Disputes")  shall be resolved by binding
arbitration in accordance with the provisions of Exhibit B.

               (c)  Amendment;  Waiver.  This  Agreement  may  not be  modified,
amended or waived in any manner  except by an  instrument  in writing  signed by
both parties hereto; provided, however, that any such modification, amendment or
waiver on the part of the  Company  shall have been  previously  approved by the
Board.  The waiver by either  party of  compliance  with any  provision  of this
Agreement  by the other party shall not operate or be  construed  as a waiver of
any other provision of this Agreement or of any subsequent  breach by such party
of a provision of this Agreement.
<PAGE>
               (d) Tax  Withholding.  Payments  to  Mosher  of all  compensation
contemplated  under this  Agreement  shall be subject  to all  applicable  legal
requirements  with  respect  to the  withholding  of taxes and  social  security
contributions.

               (e)  Governing  Law.  All  matters   affecting  this   Agreement,
including  the  validity  thereof,  are to be governed by, and  interpreted  and
construed in accordance  with,  the laws of the State of New York  applicable to
contracts executed in and to be performed in that State.

               (f)  Notices.  Any notice  hereunder by either party to the other
shall be given in writing by personal delivery or certified mail, return receipt
requested.  If addressed  to Mosher,  the notice shall be delivered or mailed to
Mosher at the address first set forth above, or if addressed to the Company, the
notice  shall  be  delivered  or  mailed  to  Continental   Information  Systems
Corporation,  One Northern Concourse, North Syracuse, New York 13212, Attention:
Secretary,  or such other  address as the  Company  or Mosher may  designate  by
written  notice at any time or from time to time to the  other  party.  A notice
shall be deemed given, if by personal delivery, on the date of such delivery or,
if by certified mail, on the date shown on the applicable return receipt.

               (g) Effect on Previous Agreements.  This agreement supersedes the
"change-in-control"  agreement  dated  January 4, 1995,  between  Mosher and the
Company, all prior oral or written employment  agreements between Mosher and the
Company, and all prior or contemporaneous negotiations, commitments, agreements,
and  writings  with  respect  to the  subject  matter  hereof;  all  such  other
negotiations,  commitments,  agreements, and writings will have no further force
or effect; and the parties to any such other negotiation, commitment, agreement,
or writing will have no further rights or obligations thereunder.

               (h)  Counterparts.  Either of the parties hereto may execute this
Agreement in counterparts,  each of which shall be deemed to be an original, but
all such counterparts shall together constitute one and the same instrument.

               (i) Headings. The headings of sections herein are included solely
for convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this Agreement.

               (j)  Term.  This  agreement  will  expire  one year from the date
hereto, unless extended in writing by both parties hereto.

               If you are in agreement with the foregoing, please execute in the
space  provided  below  for  your  signature,  whereupon  this  Agreement  shall
constitute a binding Agreement between Mosher and the Company.


                                    CONTINENTAL INFORMATION SYSTEMS CORPORATION

                                    By:   /s/  JAMES P. HASSETT
                                          ---------------------
                                  Name:        James P. Hassett
                                           Authorized Signatory

ACCEPTED AND AGREED:

/s/ JAMES J. MOSHER
    ---------------
    James J. Mosher
Date:  11/4/96
<PAGE>
                                    EXHIBIT A

                   Definitions of Terms Relating to Severance


               1.  Severance  Event:  Termination  by the  Company  of  Mosher's
employment  other than for Cause,  or resignation by Mosher from the Company for
Good Reason.

               2. Cause:  Termination by the Company of Mosher's employment upon
(a) Mosher's willful and continued  failure to substantially  perform his duties
with the Company (other than any such failure  resulting from his incapacity due
to physical or mental illness), or (b) Mosher's willfully engaging in misconduct
that is  materially  injurious  to the Company,  monetarily  or  otherwise.  For
purposes of this paragraph, no act, or failure to act, on Mosher's part shall be
considered  "willful"  unless  done,  or omitted to be done,  by him not in good
faith and without  reasonable belief that his action or omission was in the best
interest of the  Company.  Notwithstanding  the  foregoing,  Mosher shall not be
deemed to have been  terminated for Cause unless and until there shall have been
delivered  to Mosher a copy of a Notice of  Termination  from the  Board,  after
reasonable  notice to Mosher and an  opportunity  for him and his  counsel to be
heard before the Board,  finding that in the good faith  opinion of the Board he
has engaged in conduct  warranting  termination  for cause under clauses (a) and
(b) above.

               3. Good Reason:  Mosher's  resignation of his employment with the
Company within 120 days following the occurrence of any of the following events:

                   (a)      Reduction  of  Mosher's  annual  base  salary  below
                            $95,000;

                   (b)      Without   Mosher's   written  consent  and  measured
                            against  his  status  as  of  July  11,  1996,   the
                            assignment to him of any duties at a level below his
                            positions, duties, responsibilities,  and status, or
                            a  reduction  in  his  reporting   responsibilities,
                            titles,  or  offices,  or any removal of him from or
                            any failure to re-elect  him to any such  positions,
                            except in  connection  with the  termination  of his
                            employment for Cause,  disability,  or retirement or
                            as a result of his  death,  or by him other than for
                            Good Reason; or

                   (c)      The Company (i) does not allow Mosher to participate
                            in any  employee  benefit plan on the same terms and
                            conditions made available to other senior  executive
                            personnel,  or (ii) unilaterally  makes a materially
                            adverse   change  in  the  economic   terms  of  any
                            incentive  or bonus plan in which Mosher is entitled
                            to participate;  provided,  that the foregoing shall
                            not  restrict  the  Board's   discretion   to  award
                            bonuses,   stock   options,   or   other   incentive
                            compensation in such amounts as it determines;

In the event that Mosher does not resign  within 120 days of the  occurrence  of
any of the foregoing  events,  his rights with respect to such Good Reason shall
be deemed waived by Mosher.
<PAGE>
               4. Notice of  Termination:  A written notice which shall indicate
the specific termination  provision in this Agreement that is relied upon by the
party  terminating  Mosher's  employment and which shall summarize the basis for
termination of Mosher's employment. Any purported termination by the Company for
Cause,  or Mosher's  resignation for Good Reason shall be communicated by Notice
of Termination to the other party hereto.

               5. Date of Termination:  (a) if Mosher's employment is terminated
for Cause,  the date specified by the Company in the Notice of Termination,  and
(b) if Mosher's  employment is terminated by Mosher for Good Reason, the date on
which the Notice of Termination is given.

               6. Continued  Benefits:  The following  benefits,  which shall be
maintained in full force and effect by the Company for the benefit of Mosher and
his surviving dependents for the applicable period: all life insurance, medical,
health and accident,  and disability  plans,  programs or  arrangements in which
Mosher was entitled to  participate  immediately  prior to the Severance  Event,
provided that Mosher's  continued  participation  is possible  under the general
terms and  provisions  of such plans and  programs.  In the event that  Mosher's
participation  in any such plan or  program is barred,  the  Company  shall make
reasonable  efforts to obtain  insurance  for Mosher that would provide him with
benefits  substantially  similar to those  which  Mosher is  entitled to receive
under such plans and programs,  but the Company shall not provide those benefits
directly if they cannot be obtained through insurance and shall not be obligated
to pay premiums in excess of two (2) times the group rate previously paid on his
behalf.  Mosher agrees that any such coverage will reduce the applicable  period
for which  coverage might have to be offered under  applicable  federal or state
laws. Nothing in this provision shall provide eligibility for bonuses, vacation,
or pension or  profit-sharing  programs  after the  Severance  Event,  except as
otherwise required by the generally-applicable terms of those programs.
<PAGE>
                                    EXHIBIT B

                             Arbitration Provisions

               1. Any arbitration  required under Section 2(b) of this Agreement
shall be administered by the American Arbitration Association ("AAA"), and shall
be conducted in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the "Rules"), as such Rules may be amended from time to
time,  with the  hearing  locale to be  Syracuse,  New York,  unless  some other
location  and/or  arbitrator  are chosen by mutual  consent of the  Company  and
Mosher.

               2. A single neutral arbitrator shall preside over the arbitration
and decide the Dispute (the "Decision"). The AAA shall use its normal procedures
pursuant to the Rules for selection of an arbitrator.

               3. The Decision shall be binding,  and the  prevailing  party may
enforce such decision in any court of competent jurisdiction.

               4. The  parties  shall  cooperate  with each other in causing the
arbitration  to be held in as efficient and  expeditious a manner as practicable
and in this connection to furnish such documents and make available such persons
as the Arbitrator may request.

               5. The parties have selected arbitration in order to expedite the
resolution  of  Disputes  and to reduce the costs and  burdens  associated  with
litigation.  The parties agree that the  Arbitrator  should take these  concerns
into account when  determining  whether to authorize  discovery  and, if so, the
scope of permissible discovery and other hearing and pre-hearing procedures.

               6.  Without  limiting  any other  remedies  that may be available
under  applicable law, the Arbitrator  shall have no authority to award punitive
damages.

               7. The Arbitrator shall render a Decision within ninety (90) days
after  accepting  an  appointment  to serve as  Arbitrator  unless  the  parties
otherwise  agree or the Arbitrator  makes a finding that a party has carried the
burden of showing good cause for a longer period.

               8. All  proceedings  and  decisions  of the  Arbitrator  shall be
maintained in confidence,  to the extent legally  permissible,  and shall not be
made public by any party or any Arbitrator  without the prior written consent of
all parties to the arbitration, except as may be required by law.

               9. Each party shall bear its own costs and  attorneys'  fees, and
the parties shall equally bear the fees,  costs,  and expenses of the Arbitrator
and the  arbitration  proceedings;  provided,  however,  that the Arbitrator may
exercise  discretion to award costs,  but not attorneys' fees, to the prevailing
party.