PROMISSORY  NOTE


$1,500,000.00                                                 February 26, 1997
-------------                                                 -----------------


        FOR VALUE RECEIVED, 'Computer Outsourcing Services, Inc.' (the 
"Borrower"), HEREBY PROMISES TO PAY to the order of THE CHASE MANHATTAN BANK
(the "Bank"), at its offices located at '1411 Broadway - Fifth Floor, N.Y.,
N.Y. 10018', or at such other place as the Bank or any holder hereof may from 
time to time designate, the principal sum of 'One Million Five Hundred Thousand
and 00/00 DOLLARS ($1,500,000.00)', or such lesser amount as may constitute the
outstanding balance hereof, in lawful money of the United States, on the
Maturity Date (as hereinafter defined) set forth on the Grid Schedule (or 
earlier as hereinafter referred to), and to pay interest in like money at such
office or place from the date hereof on the unpaid principal balance of each 
Loan (as hereinafter defined) made hereunder at a rate equal to the Applicable
Interest Rate (as hereinafter defined) for such Loan, which shall be payable on
the last day of the Interest Period relating to such Loan and, if such Interest
Period is greater than three (3) months, at three (3) month intervals after
such Loan is made, until such Loan shall be due and payable (whether at 
maturity, by acceleration or otherwise) and thereafter, on demand.  Interest 
after maturity shall be payable at a rate four percent (4%) per annum above the
Bank's Prime Rate which rate shall be computed for actual number of days 
elapsed on the basis of a 360-day year and shall be adjusted as of the date of
each such change, but in no event higher than the maximum permitted under 
applicable law.  "Prime Rate" shall mean the rate of interest as is publicly
announced at the Bank's principal office from time to time as its Prime Rate.

        Interest/Grid Schedule
        ----------------------

        The Bank is authorized to enter on the Grid Schedule attached hereto
(i) the amount of each Loan made from time to time hereunder, (ii) the date on
which each Loan is made, (iii) the date on which each Loan shall be due and 
payable to the Bank which in no event shall be later than 'April 30, 1998' (the
"Maturity Date"), (iv) the interest rate agreed between the Borrower and the
Bank as the interest rate to be paid to the Bank on each Loan (each such rate,
the "Applicable Interest Rate"), which rate, at the Borrower's option in 
accordance herewith, shall be at (a) the Prime Rate (the "Prime Rate Loan(s)"),
or (b) the Adjusted Eurodollar Rate (as hereafter defined) plus '2 1/4%' (the
"Eurodollar Loan"), (v) the amount of each payment made hereunder, and 
(vi) the outstanding principal balance of the Loans hereunder from time to 
time, all of which entries, in the absence of manifest error, shall be 
rebuttably presumed correct and binding on the Borrower; 'provided, however',
that the failure of the Bank to make any such entries shall not relieve the
Borrower from its obligation to pay any amount due hereunder.








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        Prepayment
        ----------

        The Borrower shall not have the right to prepay any Loan, other than
Loans based on the Prime Rate, prior to the Maturity Date of such Loan.  In the
event the Borrower does prepay a Eurodollar Loan prior to the Maturity Date, 
the Borrower shall reimburse the Bank on demand for any loss incurred or to be
incurred by it in the reemployment of the funds released by any prepayment.

        Discretionary Loans by the Bank
        -------------------------------

        The Bank my lend, in its sole discretion in each instance, such amounts
(each a "Loan" and collectively the "Loans") as may be requested by the 
Borrower hereunder, which Loans shall in no event exceed '$1,500,000.00' in
aggregate principal amount outstanding at any time.  Any Eurodollar Loan shall
be in a minimum principal amount of $500,000 and in increments of $100,000.
Each such request for a Loan shall be made by any officer of the Borrower or
any person designated in writing by any such officer, all of which are hereby
designated and authorized by the Borrower to request Loans and agree to the
terms thereof (including without limitation the Applicable Interest Rate and
Maturity Date with respect thereto).  The Borrower shall give the Bank notice
at least three (3) Business Days prior to the date hereof and the end of each 
Interest Period (as hereafter defined) specifying whether the Loan shall bear 
interest at the Prime Rate or the Eurodollar Rate and the Interest Period
applicable thereto.  In the event the Borrower shall fail to provide such 
notice, the Loan shall be deemed to bear interest at the applicable Prime Rate
and shall have an Interest Period of one month.  The principal amount of each
Loan shall be prepaid on the earlier to occur of the Maturity Date applicable
thereto, or the date upon which the entire unpaid balance hereof shall
otherwise become due and payable.

        Increased Cost
        --------------

        If at any time after the date hereof, the Board of Governors of the
Federal Reserve System or any political subdivision of the United States of
America or any other government, governmental agency or central bank shall
impose or modify any reserve or capital requirement on or in respect of loans
made by or deposits with the Bank or shall impose on the Bank or the Eurodollar
market any other conditions affecting Eurodollar Loans, and the result of the
foregoing is to increase the cost to (or, in the case of Regulation D, to
impose a cost on) the Bank of making or maintaining any Eurodollar Loans or to
reduce the amount of any sum receivable by the Bank in respect thereof, by an
amount deemed by the Bank to be material, then, within 30 days after notice and
demand by the Bank, the Borrower shall pay to the Bank such additional amounts
as will compensate the Bank for such increased cost or reduction; 'provided',
that the Borrower shall not be obligated to compensate the Bank for any
increased cost resulting from the application of Regulation D as required by
the definition of Adjusted Eurodollar Rate.  Any such obligation by the
Borrower to the Bank shall not be due and owing until the Bank has delivered





<PAGE>



written notice to the Borrower.  Failure by the Bank to provide such notice
shall not be deemed a waiver of any of its rights hereunder.  A certificate of
the Bank claiming compensation hereunder and setting forth the additional
amounts to be paid to it hereunder and the method by which such amounts were
calculated shall be conclusive in the absence of manifest error.

        Capital Adequacy
        ----------------

        If the Bank shall have determined that the applicability of any law, 
rule, regulation or guideline adopted pursuant to or arising out of the July
1988 report of the Basle Committee on Banking Regulations and Supervisory 
Practices entitled "International Convergence of Capital Measurement and
Capital Standards", or the adoption after the date hereof of any other law, 
rule regulation or guideline regarding capital adequacy, or any change in any
of the foregoing or in the interpretation or administration of any of the
foregoing by any governmental authority, central bank or comparable agency 
charged with the interpretation or administration thereof, or compliance by
the Bank (or any lending office of the Bank) or the Bank's holding company
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on the Bank's capital
or on the capital of the Bank's holding company, if any, as a consequence of
its obligations hereunder to a level below that which the Bank or the Bank's
holding company could have achieved but for such adoption, change or compliance
(taking into consideration the Bank's policies and the policies of such Bank's
holding company with respect to capital adequacy) by an amount deemed by the 
Bank to be material, then from time to time the Borrower shall pay to the Bank
such additional amount or amounts as will compensate the Bank or the Bank's
holding company for any such reduction suffered.

        Indemnity
        ---------

        The Borrower shall indemnify the Bank against any loss or expense which
the Bank may sustain or incur as a consequence of the occurrence of any Event
of Default or any loss or reasonable expense sustained or incurred in 
liquidating or employing deposits from third parties acquired to effect or
maintain any Eurodollar Loan or any part thereof which the Bank may sustain or
incur as a consequence of any default in payment of the principal amount of the
Loan or any part thereof or interest accrued thereon.  The Bank shall provide
to the Borrower a statement, supported where applicable by documentary 
evidence, explaining the amount of any such loss or expense, which statement
shall be conclusive absent manifest error.

        change In Legality
        ------------------

        (a)     Notwithstanding anything to the contrary contained elsewhere in
in this Note, if any change after the date hereof in any law or regulation or






<PAGE>



in the interpretation thereof by any governmental authority charged with the
administration thereof shall make it unlawful (based on the opinion of any
counsel, whether in-house, special or general, for the Bank) for the Bank to
make or maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written
notice to the Borrower by the Bank, the Bank may require that all outstanding
Eurodollar Loans made hereunder be converted to Prime Loans, whereupon all such
Eurodollar Loans shall be automatically converted to Prime Loans as of the
effective date of such notice as provided in paragraph (b) below.
        
        (b)     For purposes of this Section, a notice to the Borrower by the 
Bank pursuant to paragraph (a) above shall be effective, if lawful and if any
Eurodollar Loans shall then be outstanding, on the last day of the then current
Interest Period; otherwise, such notice shall be effective on the date of
receipt by the Borrower.

        Events of Default
        ----------------

        If the Borrower shall default in the punctual payment of any sum
payable with respect to, or in the observance or performance of any of the
terms and conditions of, this Note, or any other agreement with or in favor of
the Bank, or if a default or event of default that is accelerated shall occur
for any reason under any such agreement, or in the event of default in any
other indebtedness of the Borrower, or if the Bank shall, in its sole
discretion, consider any of the obligations of the Borrower hereunder insecure,
or if any warranty, representation or statement of fact made in writing to the
Bank at any time by an officer, agent or employee of the Borrower is false or
misleading in any material respect when made, or if the Borrower shall be
dissolved or shall fail to maintain its existence in good standing, or if the
usual business of the Borrower shall be suspended or terminated, or if any
levy, execution, seizure, attachment or garnishment shall be issued, made or
filed on or against any material portion of the property of the Borrower, or if
the Borrower shall become insolvent (however defined or evidenced), make an
assignment for the benefit of creditors or make or send a notice of intended
bulk transfer, or if a committee of creditors is appointed for, or any petition
or proceeding for any relief under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, receivership, liquidation or dissolution law
or statute now or hereafter in affect (whether at law or in equity) is filed or
commenced by or against the Borrower or any material portion of its property,
or if any trustee or receiver is appointed for the Borrower or any such
property - then and in any such event, in addition to all rights and remedies
of the Bank under applicable law and otherwise, all such rights and remedies
cumulative, not exclusive and enforceable alternatively, successively and
concurrently, the Bank may, at its option, declare any and all of the amounts
owing under this Note to be due and payable, whereupon the maturity of the then
unpaid balance hereof shall be accelerated and the same, together with all
interest accrued hereon, shall forthwith become due and payable.

        
        
        
        
        
        
        
<PAGE>        


        
        Definitions
        -----------

        A.      Adjusted Eurodollar Rate
                ------------------------
                "Adjusted Eurodollar Rate" shall mean, with respect to any
                Eurodollar Loan for any Interest Period, an interest rate per
                annum (rounded upwards, if necessary, to the next 1/8 of 1%)
                equal to the product of (i) the Eurodollar Rate in effect for
                such Interest Period and (ii) Statutory Reserves.

                "Eurodollar Rate" shall mean, with respect to any Eurodollar
                Loan for any Interest Period, the rate (rounded upwards, if 
                necessary, to the next 1/8 of 1% at which dollar deposits 
                approximately equal in principal amount to the Bank's 
                Eurodollar Loan and for the maturity equal to the applicable
                Interest Period are offered by the Bank in immediately
                available funds in an Interbank Market for Eurodollars at
                approximately 11:00 a.m., New York City time, two Business Days
                prior to the commencement of such Interest Period.

        B.      Business Day
                ------------
                A Business Day shall mean any day other than a Saturday, Sunday
                or other day on which the Bank is authorized or required by law
                or regulation to close, and which is a day on which
                transactions in dollar deposits are being carried out in 
                London, England for Eurodollar Loans and New York City for
                Prime Loans.

        C.      Interest Period
                ---------------
                (i)   For Eurodollar Loans, Interest Period shall mean the
                period commencing on the date of such Loan and ending 1, 2, 3
                or 6 months (as selected by the Borrower and recorded on the
                grid attached hereto) after the date of such Loan.

                (ii)  For Prime Loans, Interest Period shall mean the period
                agreed to by the parties hereto, however, the Interest Period
                shall not extend past the Maturity Date.

                If any Interest Period would end on a day which shall not be a
                Business Day, such Interest Period shall be extended to the
                next succeeding Business Day.

        D.      Statutory Reserves
                ------------------
                Statutory Reserves shall mean a fraction (expressed as a 
                decimal, the numerator of which is the number one and the 
                denominator of which is the number one minus the aggregate of
                the maximum reserve percentages (including, without limitation,
                
                
                
                
                
<PAGE>                
                
                
                
                any marginal, special emergency or supplemental reserves)
                expressed as a decimal established by the Board of Governors of
                the Federal Reserve System and any other banking authority to
                which the Bank is subject, (a) with respect to the Adjusted
                Certificate of Deposit Rate, for new negotiable time deposits
                in dollars of over $100,000 with maturities approximately equal
                to the applicable Interest Period, and (b) with respect to the
                Adjusted Eurodollar Rate, for Eurocurrency Liabilities as
                defined in Regulation D.  Eurodollar Loans shall be deemed to 
                constitute Eurocurrency Liabilities and as such shall be deemed
                to be subject to such reserve requirements without benefit of 
                or credit for proration, exceptions or offsets which may be
                available from time to time to the Bank under such Regulation 
                D.  Statutory Reserves shall be adjusted automatically on and
                as of the effective date of any change in any reserve
                percentage.

        Set-Off
        -------

        The Borrower hereby gives to the Bank a lien on, security interest in 
and right of set-off against all moneys, securities and other property of the 
Borrower and the proceeds thereof, now or hereafter delivered to, remaining
with or in transit in any manner to the Bank, its correspondents, affiliates
(including Chemical Securities Inc.) or its agents from or for the Borrower,
whether for safekeeping, custody, pledge, transmission, collection or otherwise
or coming into possession, control or custody of the Bank in any way, and also,
any balance of any deposit accounts and credits of the Borrower with, and any
and all claims of the Borrower against the Bank at any time existing, as
collateral security for the payment of this Note and of all other liabilities
and obligations now or hereafter owed by the Borrower to the Bank, contracted
with or acquired by the Bank, whether joint, several, absolute, contingent,
secured, unsecured, matured or unmatured (all of which are hereafter 
collectively called "Liabilities"), hereby authorizing the Bank at any time or
times, without prior notice, to apply such balances, credits or claims, or any 
part thereof, to such Liabilities in such amounts as it may select, whether 
contingent, unmatured or otherwise and whether any collateral security therefor
is deemed adequate or not.  The collateral security described herein shall be
in addition to any collateral security described in any separate agreement 
executed by the Borrower in favor of the Bank.
















<PAGE>



        Miscellaneous
        -------------

        The Borrower hereby waives diligence, demand, presentment, protest and
notice of any kind, and assents to extensions of the time of payment, release,
surrender or substitution of security, or forbearance or other indulgence,
without notice.

        This Note may not be changed, modified or terminated orally, but only
by an agreement in writing signed by the party to be charged and consented to
in writing by the party hereof.

        In the event the Bank or any holder hereof shall refer this Note to an
attorney for collection, the Borrower agrees to pay, in addition to unpaid
principal and interest, all the costs and expenses incurred in attempting or
affecting collection hereunder, including reasonable attorney's fees, whether
or not suit is instituted.

        The Bank reserves the right to sell participations in the Loans or the
Note and to provide any participant or prospective participant with information
of the Borrower previously received by the Bank.

        In the event of any litigation with respect to this Note, THE BORROWER
WAIVES THE RIGHT TO A TRIAL BY JURY and all rights of setoff and rights to
interpose counter-claims and cross-claims.  The Borrower hereby irrevocably
consents to the jurisdiction of the courts of the State of New York and of any
Federal court located in such State in connection with any action or proceeding
arising out of or relating to this Note.  The execution and delivery of this
Note has been authorized by the Board of Directors and by any necessary vote or
consent of the stockholders of the Borrower.  The Borrower hereby authorizes 
the Bank to complete this Note in any particulars according to the terms of the
loan evidenced hereby.  This Note shall be governed by and construed in 
accordance with the laws of the State of New York applicable to contract made
and to be performed in such State, and shall be binding upon the successors and
assigns of the Borrower and inure to the benefit of the Bank, its successors,
endorsees and assigns.

        If any term or provision of this Note shall be held invalid, illegal or
unenforceable the validity of all other terms and provisions hereof shall in no 
way be affected thereby.

                                     Computer Outsourcing Services, Inc.



                                     /s/--------------------------------










<PAGE>



                                GRID  SCHEDULE
                                --------------

                                      APPLICABLE       AMOUNT OF      
            TYPE         AMOUNT        INTEREST        PRINCIPAL       MATURITY
DATE       OF LOAN       OF LOAN         RATE            REPAID          DATE
----       -------       -------      ----------       ---------       --------






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