SETTLEMENT AGREEMENT

        This Settlement Agreement (the “Agreement”) is entered into by and
between the New York City Transit Authority (“Authority”), and AlphaNet
Solutions, Inc. (“AlphaNet”) (jointly referred to as the “Parties”) this 25th
day of March, 2003.

        WHEREAS, on December 16,1997 the Authority entered into Contract
D-337437R (“Contract”) with AlphaNet in the amount of $20,433,382.53, and

        WHEREAS, Modification No. 1 was issued on September 29, 1998 in the
amount of $171,055.60 making the total Contract amount $20,604,438.13.

        WHEREAS, on, or about May 5, 1999, AlphaNet submitted a request to the
Authority for change order in the amount of $1,215,891 along with a request for
thirteen month extension to the Contract’s duration, which was denied by the
Authority’s Project Manager (“Claim”) after which AlphaNet submitted a dispute
concerning the Claim to the Authority’s Dispute Resolution Officer which was
denied; and

        WHEREAS, AlphaNet then challenged the denial in an Article 78 proceeding
whose petition was captioned AlphaNet Solutions, Inc. v. New York City Transit
Authority; bearing Index No. 8172/02 in the Supreme Court of the State of New
York, Kings County, which petition was denied (“Article 78 proceeding”); and

        WHEREAS, AlphaNet filed a Notice of Appeal from the order denying the
petition in the Appellate Division, Second Judicial Department (“Appeal”)
bearing Docket No.: 2002-05198; and

        WHEREAS, the Authority has paid AlphaNet to date the sum of
$16,400,142.01 and

        WHEREAS, the Authority has approved invoices in the amount of
$1,646,014.74 for payment and which are identified on Schedule A annexed hereto
(“Approved Invoices”); and

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        WHEREAS, the Authority has approved additional invoices in the amount of
$96,821.45 for payment and which are identified on Schedule B annexed hereto
(“Accepted Invoices”); and

        WHEREAS, monies withheld for Warranties total $638,471.40 (“Warranty
Monies”); and

        WHEREAS, AlphaNet has submitted requests for payment to the Authority
through March 7, 2003, which have not yet been processed or approved for payment
(“Open Invoices”) and which are identified on Schedule C annexed hereto; and

        WHEREAS, AlphaNet intends to submit additional invoices (“Additional
Invoices”) to the Authority; and

        WHEREAS, the Authority is assessing liquidated damages in the amount of
$300,000.00; and

        WHEREAS, the parties desire to settle all past, present and future
claims or disputes between them.

        NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties agree as follows:

        1)     The Authority will issue payment, within 30 days of the execution
of this Agreement, for the Approved Invoices less a $150,000.00 deduction. That
deduction, one half of the Authority’s liquidated damages assessment, will
result in an Approved Invoice payment of $1,496,014.74. The parties agree that
the balance of the Authority’s liquidated damages assessment ($150,000) will be
deducted from AlphaNet’s invoice for monies withheld for warranty work which is
$638,471.40 (“Warranty Monies”) and will be paid pursuant to Paragraph 4.

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        2)     The Authority acknowledges its receipt of Open Invoices from
AlphaNet. The Authority shall process such invoices for payment in accordance
with the Contract. The Authority will use its best efforts to process the Open
Invoices expeditiously and the parties agree to use their efforts to meet weekly
to review the status of all Open Invoices. The parties agree that the sum of
$536,476.82, representing the balance of repayments owing by AlphaNet to the
Authority in respect of advance payments made by the Authority to AlphaNet under
the Contract, will be deducted from payments due for the Accepted Invoices and
Open Invoices at the time payments of the Accepted Invoices and Open Invoices
are made. The Authority will pay the full amount of the Accepted Invoices and
the approved Open Invoices less the deduction of $536,476.82. In the event any
portion of the Open Invoices is disputed by the Authority, such invoices will be
deemed to be Additional Invoices which shall not delay payment of the remaining
Open Invoices.

        3)     All payments due under this Agreement are subject to claims
against monies due under the Contract arising under the Lien Law and Labor Law.
The Authority represents and warrants to AlphaNet that the Authority is not
aware, as of the day of the date of this Agreement, of any claims, liens or
lawsuits asserted against the Contract or monies due under the Contract.

        4)     After the $150,000.00 deduction for liquidated damages from the
Warranty Monies is made, monies withheld for the warranties shall be $488,471.00
which amount shall be invoiced by AlphaNet subject to any deductions made by the
Authority for warranty work. The parties agree that no additional monies will be
withheld for warranty retainage. After January 31, 2004, AlphaNet will invoice
the Authority for the Warranty Monies.

        5)     The parties agree that the Contract was completed as of January
31, 2003; that any work after that date shall be performed pursuant to mutually
agreed change orders; and that all warranties required by the Contract shall
expire on January 31, 2004 with the exception of warranties for change order
work identified on Schedule D attached hereto as mutually agreed by the
Authority and AlphaNet and any other work performed after January 31, 2003.

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        6)     Simultaneously with the execution of this Agreement, AlphaNet
will deliver to the Authority a stipulation discontinuing with prejudice its
appeal from the decision, order and judgment of the Supreme Court, Kings County,
in the form annexed hereto as Exhibit 1.

        7)     Except to the extent otherwise set forth herein, the terms of the
Contract remain in full force and effect and nothing in this Agreement shall be
deemed to be a waiver by the Authority of the provisions of the Contract,
including Article 211 pursuant to which any dispute concerning this Agreement
shall be adjudicated, except the Authority agrees to limit its assessment of
liquidated damages to $300,000.00 and agrees not to assess any additional sums
for liquidated damages. Without limiting the foregoing, AlphaNet hereby agrees
to defend, indemnify and hold harmless the Authority from and against any and
all claims and costs, regardless of nature or description (including counsel
fees), arising from, or relating to, (i) any failure of AlphaNet to provide to
the Authority the affidavits showing payment to AlphaNet’s employees,
subcontractors and suppliers and (ii) any failure, in fact, by AlphaNet to have
made all lawfully required payments to AlphaNet’s employees, subcontractors and
suppliers for work performed on the Project.

        8)     For, and in consideration of, the mutual agreements set forth
herein, AlphaNet does forever release, discharge and acquit the Authority and
its subsidiaries, parents and affiliated entities, divisions, assigns,
successors, officers, directors, employees, agents, and attorneys, and all other
persons, individuals, turns, corporations, government, units, quasi-governmental
units, companies, or associations of and from any and all past, present or
future actions, causes of action, claims, counterclaims, or demands for damages,
costs, loss of use, expenses, compensation, incidental or consequential damages
or any other thing whatsoever on account of, whether presently known or acquired
in the future or in any way arising out of or relating to the Contract to the
day of the date of this Agreement, including but not limited to the Article 78
proceeding and Appeal; provided, however, nothing contained in this Agreement
shall relieve the Authority from its obligation to pay AlphaNet any amounts
owing to AlphaNet for the Approved Invoices, Accepted Invoices, Open Invoices
and Additional Invoices.

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        9)     This Agreement is entered into for settlement purposes only, and
neither the fact of nor any provision contained in this Agreement nor any action
taken pursuant to this Agreement may constitute or be construed to be an
admission of any liability or an admission of any claim or fact alleged by
either party to this Agreement.

        10)     This Agreement may not be offered or admitted as evidence in any
action or proceeding brought by any person, whether bound by this Agreement or
not, except in a proceeding brought pursuant to Article 211 of the Contract to
enforce the terms of this Agreement.

        11)     The Parties represent and warrant that the persons signing this
Agreement have been authorized to do so by the Authority and AlphaNet
respectively.

        12)     This Agreement shall inure to the benefit of, and be binding
upon, any successor or assign of any Party.

        13)     No modification, amendment or waiver of any provisions of this
Agreement shall be effective unless approved in writing by the Parties. The
failure of a Party hereto any time to require performance by the other Party of
any responsibility or obligation hereunder shall in no way affect the full right
to require such performance at any time thereafter. A waiver by a Party of a
breach of any provision hereof does not constitute a waiver of any succeeding
breach of the same or any such provision nor constitute a waiver of the
responsibility or obligation itself. If any provision of this Agreement is
declared void, invalid, or unenforceable, it shall have no effect on the
validity or enforceability of any other provision hereof.

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        14)     This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York.

        15)     This Agreement is the entire agreement between the Parties with
respect to the subject matter hereof and merges and supersedes all prior
discussions, correspondence, proposals, agreements and understandings.

        16)     The Parties further state that they jointly drafted this
Agreement, consulted with their attorneys and carefully read each and every
provision of the foregoing Agreement and understand the contents thereof, and
execute the same freely and voluntarily.

        17)     The Parties agree to cooperate fully and execute any and all
supplementary documents and to take all additional actions that may be necessary
or appropriate to give full force and effect to the basic terms and intent of
this Agreement.

        18)     The Parties represent and warrant that they have not transferred
or assigned any of their rights of recovery against the released Parties.

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        19)        This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same agreement.

New York City Transit Authority

By:  PETER GILLESPIE
——————————————
PETER GILLESPIE
Assistant Chief Procurement Officer

AlphaNet Solutions, Inc.

By:  RICHARD G. ERICKSON
——————————————
RICHARD G. ERICKSON
President and Chief Executive Officer
Corporate Seal

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ALPHANET SETTLEMENT AGREEMENT

SCHEDULE A

Invoice No. Invoice No. Invoice No. Invoice No.   47540 47572 47516 47489 47538
47571 47515 47488 47535 47569 47514 47484 47531 47568 47511 47483 47529 47567
47510 47482 47528 47566 47509 44617 47526 47565 47508 44614 47524 47564 47507
44594 47520 47563 47506 44593 47517 47562 47505 44588 48630 47561 47504 44583
48629 47560 47503 44562 48623 47559 47502 44561 47826 47558 47501 42503 47825
47557 47499 42500 47578 47555 47498 39254 47577 47544 47497 35406 47575 47543
47496 35364 47574 47542 47493 34295 47573 47541 47490

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ALPHANET SETTLEMENT AGREEMENT

SCHEDULE B

Site Name Category Invoice No.   Rockaway Blvd Networking INV0044587 Queensboro
Plaza SCR Cabling INV0047485 20th Ave. SCR Cabling INV0047486 38th St. Yard (CO#
030502-2) Cabling INV0047492 20th Ave. SCR Networking INV0047513 71st St.
Continental (CO# 071602-2) Cabling INV0048868

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ALPHANET SETTLEMENT AGREEMENT

SCHEDULE C

Site Name Category Invoice No.   Dekalb SCR Cabling INV0035400 145th St. SCR
Networking INV0044558 179th St. SCR Networking INV0044579 148th St. Station PC
INV0044606 Jay St. (10th Invoice) PC INV0044615 Rockaway Park PC INV0044616
Broadway/Lafayette Cabling INV0047480 Prospect Park (CO# 030502-5) Cabling
INV0047487 Linden Shop (Includes Aerial Cabling) Cabling INV0047491 14th St. &
Union Square Networking INV0047512 Jay St. (Mar. 02) PC INV0047518   Networking
INV0047521 207th St. (CO# 011502-01) 96th St. SCR Networking INV0047525 145th
St. SCR Networking INV0047527 168th St. Station Networking INV0047530 Linden
Shop (Includes Aerial Cabling) Networking INV0047539 Roosevelt Ave Station
Networking INV0047545   Networking INV0047546 CO# 011402-01 (Design and Testing)
CO# 011402-01 (Labor for 1st SCR site (Dekalb Ave)) Networking INV0047547
CO#011402-01 (Labor Cost for Project Management) Networking INV0047548 CO#
011402-01 (Labor cost for SCR - Grand Concourse) Networking INV0047549 CO#
011402-01 (Labor cost for SCR - Grand Central Networking INV0047550 Station) CO#
011402-01 (Labor cost for SCR - Zerega) Networking INV0047551 CO# 011402-01
(Labor cost for SCR - 225th) Networking INV0047552 CO# 011402-01 (Labor cost for
SCR - 145th) Networking INV0047553 Jay St. (May 02) Networking INV0047554 38th
Street Yard Networking INV0047556 59th St. & Columbus Circle PC INV0047570 Canal
St. Station PC INV0047576   Cabling INV0048869 Westchester Yard (CO# 042202-1)  
Cabling INV0048871 Nevins St

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Site Name Category Invoice No.       Broadway/Junction Cabling INV0048872 212
Jay St Cabling INV0048873 14th & 8th Ave Cabling INV0048874 34th & 8th Ave
Cabling INV0048875 57th & 7th Ave Cabling INV0048876 207th St. Yard (CO Hub 11)
Networking INV0048877 212 Jay St Networking INV0048878   Networking INV0048882
Nevins St Broadway/Junction Networking INV0048883 14th & 8th Ave Networking
INV0048884   Networking INV0048885 Jay St. (Sep. 02)   Networking INV0048886
Westchester Yard (CO# 051002-01)   Networking INV0048887 34th & 8th Ave Jay St.
(Oct. 02) Networking INV0048888   Networking INV0048889 Labor for CO# 011402-01
- Router Upgrade 14th & 6th Ave PC INV0048890 Jay St. (Oct.02) PC INV0048894 4th
& 9th Ave Cabling INV0049091 Staten Island Cabling INV0049092 CO# 121002-1
(Grand Central Station) Cabling INV0049093   Networking INV0049094 57th & 7th
Ave 4th & 9th Ave Networking INV0049095 Tiffany Shop Networking INV0049096 14th
& 8th Ave PC INV0049097 212 Jay St PC INV0049098 57th & 7th Ave PC INV0049100
Nevins St PC INV0049102 Roosevelt Ave PC INV0049103 Jay St. (Jan. 03) Networking
INV0049348 Staten Island Networking INV0049349 4th & 9th PC INV0049350 Jay St.
(Jan. 03) PC INV0049351 Staten Island PC INV0049352 Tiffany Shop Cabling
INV0049486

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ALPHANET SETTLEMENT AGREEMENT

SCHEDULE D

        Grounding of cabinets (Change Order 071602-1 and Change Order
010903-01).

        Upgrading Software Image on BCN, BLN, ASN, ANH Routers and BH5000
switches (Change Order 011402-01).

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NEW YORK SUPREME COURT
APPELLATE DIVISION - SECOND DEPARTMENT

-------------------------------------x
ALPHANET SOLUTIONS, INC.,                  STIPULATION OF DISCONTINUANCE
               Petitioner-Appellant,              WITH PREJUDICE

         -against-                         Docket No. 2002-05198

NEW YORK CITY TRANSIT AUTHORITY,           Kings County Clerk's
                                           Index No. 8172/01
               Respondent-Respondent.
-------------------------------------x

        IT IS HEREBY STIPULATED AND AGREED, by and between the undersigned
attorneys of record for all the parties to the above entitled proceeding that
the above captioned proceeding be discontinued with prejudice without costs to
either party against the other. This stipulation may be filed without further
notice with the Clerk of the Court.

Dated:   Brooklyn, New York
             March __, 2003

ROSS AND COHEN

By:  
——————————————
Mark Canizio, Esq.
711 Third Avenue
New York, New York 10017
Chairman of the Board
(212) 370-1200

MARTIN B. SCHNABEL

By:  
——————————————
Carol Noymer, Esq.
New York City Transit Authority
130 Livingston Street, 12th Floor
Brookly, New York 11201
(718) 694-3887

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