Amendment  and  Extension  Agreement

Borrower:     Pilot  Network  Services,  Inc.
Address:      1030  Marina  Village  Parkway
              Alameda,  California  94501

Date:         February  14,  2001


     THIS  AMENDMENT  AND  EXTENSION  AGREEMENT is entered into between GREYROCK
CAPITAL,  a  Division  of  Banc  of  America  Commercial   Finance   Corporation
("Greyrock"), whose address is 10880 Wilshire Blvd., Suite 1850, Los Angeles. CA
90024  and  the  borrower  named  above  ("Borrower").

     The  Parties  agree  to amend the Loan and Security Agreement between them,
dated  November  9,  1999 (the "Loan Agreement") and the Secured Promissory Note
made by Borrower to the order of Greyrock dated November 9, 1999 in the original
principal  amount  of $3,000,000 (the "Note"), as follows.  (This Amendment, the
Loan  Agreement,  the Note any prior written amendments to the foregoing, signed
by  Greyrock  and  the  Borrower, and all other written documents and agreements
between  Greyrock  and  the  borrower are referred to herein collectively as the
"Loan  Documents".  Capitalized  terms  used  but not defined in this Amendment,
shall  have  the  meanings  set  forth  in  the  Loan  Agreement.)

     1.     Extension, The  Maturity  Date is extended to April 30. 2001 so that
Section 6.1 of the Loan Agreement will  read  in  its  entirety  as  follows:

     "6.1  Maturity Date.  This  Agreement shall continue in  effect until April
      30.  2001  (the  'Maturity  Date')."

     2.     Note  Extension.  The date "January 31, 2001" in the first paragraph
of  the  Note  is  amended  to  read  "April  30, 2001".

     3.     Additional Covenants. The following new Section 9 is hereby added to
the  Schedule  to  the  Loan  Agreement.

        "9.  Additional  Covenants.  The  Borrower  covenants  as  follows:
             ---------------------

             (1)     Maximum Net  Loss.  Borrower's net  loss (computed on the
                     -----------------
                     basis   of   generally   accepted  accounting  principles)
                     for  each  of  the  following months  shall not exceed the
                     following  amounts:


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          Greyrock Capital         Amendment and Extension Agreement
          __________________________________________________________

                         February 2001           Maximum net loss of $2,500,000

                         March    2001           Maximum net loss of $2,500,000

                         April    2001           Maximum net loss of $2,500,000


             (2)     Cash  on Hand, Borrower shall maintain cash on hand of not
                     -------------
                     less than the following amounts at the following dates, and
                     shall provide evidence of the same to  Greyrock, reasonably
                     satisfactory  to  Greyrock,  by  the said  dates:


                        at   2/16/01:     $1,750,000

                        at   2/28/01:     $1,750,000

                        at   3/16/01:     $1,750,000

                        at   3/31/01      $2,500,000

                        at   4/13/01:     $1,750,000

                        at   4/30/01:     $5,500,000

             (3)     Payments on Note.  In addition to  any  other  payments due
                     ----------------
                     under  loan  documents,  Borrower  shall make the following
                     dates  and  shall   provide  evidence  of   the   same   to
                     Greyrock,  reasonably satisfactory to Greyrock, by the said
                     dates:

                        at   2/28/01:     $  250,000

                        at   3/16/01:     $  150,000

                        at   3/31/01:     $  600,000

                        at   4/13/01      $  500,000

                        at   4/31/01:     $1,500,000


             (3)     Transaction Progress.  There shall be continued progress,
                     -------------------
                     satisfactory to Greyrock  in its reasonable discretion,  in
                     the transactions outlined in the February 14,  2001  letter
                     of intent, a copy of which was provided to Greyrock.

      Any  breach  of any of the foregoing covenants in  this  Section  9  shall
      Constitute an  immediate  Event  of  Default, and the same  shall  not  be
      subject to any cure period provided in Section 7.1 of the Loan Agreement."

     4.     Representations  True.  Borrower represents and warrants to Greyrock
that  all  representations  and  warranties  set forth in the Loan Agreement, as
amended  hereby,  are  true  and  correct.

     5.     General  Provisions.  This  Amendment, the Loan Agreement, the Note,
and  the  other  Loan Documents set forth in full all of the representations and
agreements  of  the  parties  with  respect  to  the  subject  matter hereof and
supersede  all prior discussions, representations. agreements and understandings
between  the  parties  with  respect  to  the  subject  hereof.  Nothing  herein
constitutes  a waiver of any default or Event of Default, known or unknown which


                                      -2-
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          Greyrock Capital         Amendment and Extension Agreement
          __________________________________________________________

may  exist.  Except as herein expressly amended, all of the terms and provisions
of  the  Loan Agreement, the Note and the other Loan Documents shall continue in
full  force  and  effect  and  the  same  are  hereby  ratified  and  confirmed.

Borrower:                              Greyrock:

PILOT  NETWORK  SERVICES,  INC.         GREYROCK  CAPITAL,
                                        a Division of Banc of America Commercial
                                        Finance Corporation


By    /S/  Marketta  Silvera
  ---------------------------------
      President or Vice President


                                        By  /S/  Stephanie Wail
                                          ---------------------------------
By  /S/                                 Title  VP
    ---------------------------------     ---------------------------------
      Secretary or Ass't Secretary


                                      -3-
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