FIFTH AMENDMENT dated as of March 20, 1997 to the STANDBY CREDIT AND
TERM LOAN AGREEMENT dated as of April 5, 1994, as amended ("Credit Agreement")
COMPUTER OUTSOURCING SERVICES, INC., a New York corporation (the "Borrower"),   
NEDS, INC., a New York corporation, DATON PAY USA, INC., a California corpora-
tion, PAY USA OF NEW JERSEY, INC., a New York corporation, ACA ACQUISITION
CORP., a New York corporation and MCC CORPORATION, a New York Corporation, 
(each, a "Guarantor" and collectively, the "Guarantors") and THE CHASE MANHATTAN
BANK (formerly Chemical Bank"), a New York banking corporation (the "Bank").

        The Borrow desires to amend the Credit Agreement in order to revise cer-
tain financial covenants as herein set forth.  Subject to the terms and condi- 
tions hereof, the Borrower, the Guarantors, and the Bank are prepared to agree
to such amendment.  Unless otherwise defined herein, all capitalized term used
herein which are defined in the Credit Agreement shall have the same meanings
herein as therein defined.

        Therefore, the Borrower, the Guarantors, and the Bank agree as follows:

        1.      The Credit Agreement shall be amended accordingly:

                (a)     Section 1.0 "Definitions" shall be amended by deleting
                        the current definition of Cash Flow Coverage Ratio and 
                        replacing it with the following:

                        "Cash Flow Coverage Ratio" shall mean, with respect to
                        the Borrower, the ratio of (i) the sum of Excess Cash
                        Flow (as hereinafter defined) for the four most recent
                        consecutive quarters ending on or prior to the date of
                        determination to (ii) (x) the aggregate interest expense
                        of such Person for such four quarter period plus (y) the
                        current portion of long term Indebtedness outstanding on
                        the date of determination plus (z) the current portion 
                        of Contingent Earnouts on the date of determination.

                (b)     Section 7.08 "Consolidated Current Assets to Consolida-
                        ted Current Liabilities" shall be amended by deleting it
                        in its entirety and substituting therefor:

                        SECTION 7.08 "Consolidated Current Assets to Consolida-
                        ted Current Liabilities"  With respect to the Borrower,
                        permit the ratio of Consolidated Current Assets to Con-
                        solidated Current Liabilities to be less than 1.15:1.00
                        until 10/30/97 and 1.25:1.00 thereafter.

                (c)     Section 7.10 "Cash Flow Coverage Ratio" shall be amended
                        by deleting it in its entirety and substituting there-
                        for:

                        
                        








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                        SECTION 7.10 "Cash Flow Coverage Ratio"  Permit the Cash
                        Flow Coverage Ratio on a consolidated basis for each 
                        period specified below to be less than the ratio speci-
                        fied below for such period:

                                        Period                  Ratio
                                        ______                  _____

                        For the four previous consecutive
                        quarters  (taken as a whole) 
                        ending on each quarterly date
                        until 10/30/97                          1.25:1.00

                        For the four previous consecutive
                        quarters (taken as a whole)
                        ending on each quarterly date
                        on or after 10/31/97                    1.50:1.00

        2.  The Borrower and each Guarantor jointly and severally represent and
warrant that the Credit Agreement together with this Fifth Amendment, when de-
livered hereunder, will be legal, valid and binding obligations of each of them,
as appropriate, and enforceable against each of them, as appropriate, in accor-
dance with their respective terms.  The Borrower and each Guarantor further rep-
resent and warrant that the representations and warranties set forth in Article
III of the Credit Agreement shall be deemed restated and are true and correct,
all as of the date hereof and that no Event of Default, as set forth in Article
VIII of the Credit Agreement, and that no event which upon notice or lapse of 
time or both, would constitute an Event of Default has occurred and is continu-
ing.

        3.  On or prior to the effectiveness of this Fifth Amendment, the Bank
shall have received the following in form and substance satisfactory to it:

                        (i) the amendment fee of $1,000.

        4.  Upon the effectiveness of this Fifth Amendment, each reference in
the Credit Agreement to "this Agreement", "hereunder", "herein" or words of   
like import shall mean and be a reference to the Credit Agreement, as affected
and amended hereby.

        5.  The Credit Agreement, as amended by this Fifth Amendment, and each
other document executed in connection therewith shall remain in full force and
effect and are hereby ratified and confirmed, except as specifically amended
hereby.

        6.  This Amendment shall be governed by and construed in accordance with
the laws of the State of New York and shall be binding on the Borrower, each
Guarantor, the Bank and their respective successors and assigns.

IN WITNESS WHEREOF, the Borrower, each Guarantor and the Bank have caused this
Fifth Amendment to be duly executed by their duly authorized officers, all as of
the day and year first above written.


                                        COMPUTER OUTSOURCING SERVICES, INC.

                                        By            /s/
                                                Zach Lonstein
                                                Title: CEO
<PAGE>                                        
                                        
                                        
                                        
                                        NEDS, INC.
                                        
                                        By            /s/
                                                Zach Lonstein
                                                Title: CEO


                                        DATON PAY USA, INC.

                                        By            /s/
                                                Zach Lonstein
                                                Title: CEO
                                        
                                        
                                        PAY USA OF NEW JERSEY, INC.

                                        By            /s/
                                                Zach Lonstein
                                                Title: CEO

                                        
                                        ACA ACQUISITION CORP.

                                        By            /s/
                                                Zach Lonstein
                                                Title: CEO

                                        
                                        MCC CORPORATION

                                        By            /s/
                                                Zach Lonstein
                                                Title: CEO

                                        
                                        THE CHASE MANHATTAN BANK

                                        By            /s/
                                                Denise G. Thomas
                                                Vice President



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