Amendment  and  Extension  Agreement

Borrower:     Pilot  Network  Services,  Inc.
Address:      1030  Marina  Village  Parkway
              Alameda,  California  94501
Date:         October  26,  2000


     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 January 31. 2001, and
the provisions for automatic extension of the Maturity Date set forth in Section
6.1 of the Loan Agreement are deleted, 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 January
      31.  2001  (the  'Maturity  Date')."

     2.     Note  Extension.  The date "October 31, 2000" in the first paragraph
of  the  Note  is  amended  to  read  "January  31,2001".

     3.     Additional Covenants. The following new Section 8 is hereby added to
the  Schedule  to  the  Loan  Agreement.

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

             (1)     Net  Income.  Borrower  shall  have  net  income  or  loss
                     -----------
                     (computed on the basis  of  generally  accepted  accounting
                     principles)   in  each  of  the  following  months  in  the
                     following  amounts:


                         October  2000           Maximum net loss of $2,750,000


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          Greyrock Capital         Amendment and Extension Agreement
          __________________________________________________________

                         November 2000           Maximum net loss of $2,750,000

                         December 2000           Maximum net loss of $1,750,000

                         January  2001           Maximum net loss of $1,500,000


             (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  10/31/00:     $4,250,000

                        at  11/17/00:     $4,500,000

                        at  11/30/00:     $4,500,000

                        at  12/15/00:     $4,500,000

                        at  12/31/00:     $3,750,000

                        at  01/12/01:     $4,000,000

                        at  01/31/01:     $3,500,000.

             (3)      Audits. Without limiting  any of the provisions of Section
                      ------
                      5.3  of  the  Loan  Agreement,  Greyrock  shall  have  the
                      right,  once  every  30 days,  to conduct inspections  and
                      audits on Borrower's premises, to  inspect  the Collateral
                      and to audit  and  copy  Borrower's books and records, and
                      the  charge  therefor shall be $600  per  person  per  day
                      (or such  higher  amount  as  shall  represent  Greyrock's
                      then   current   standard   charge  for  the  same),  plus
                      reasonable out of pocket expenses.  The limitations on the
                      cost and number of such audits in Section 5.3 of  the Loan
                      Agreement  shall  not  apply  to  audits  hereunder.

             (4)     Lockbox Agreements. Borrower shall  enter into,  and  shall
                     ------------------
                     cause its banks to enter  into,  lockbox  and/or restricted
                     account agreements, on terms acceptable to  Greyrock in its
                     good  faith business judgment, no later than  November  15,
                      2000.

      Any  breach of any of the foregoing covenants  in  this  Section  8  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.


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<PAGE>
          Greyrock Capital         Amendment and Extension Agreement
          __________________________________________________________

     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
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:  /S/  Marketta  Silvera       Greyrock:

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



      President  or  Vice  President
By  /S/
  ---------------------------------
                                        By  /S/  Stephanie Wail
                                          ---------------------------------

                                        Title  VP
                                             -----------------------------

By
    ---------------------------------
      Secretary  or  Ass't  Secretary


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