Document:

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                                                                  EXHIBIT 10.19

                                   ESOFT, INC.
                             RESTRICTED STOCK AWARD
                                  GRANT NOTICE
     (ESOFT, INC. EQUITY COMPENSATION PLAN, AS AMENDED THROUGH MAY 20, 1999)

eSoft, Inc. (the "Company"), pursuant to its eSoft, Inc. Equity Compensation
Plan (the "Plan"), hereby grants to Participant the right to purchase the number
of shares of the Company's Common Stock set forth below ("Award"). This Award is
subject to all of the terms and conditions as set forth herein and in the
Restricted Stock Purchase Agreement, the Plan, the Promissory Note and Pledge
Agreement and the form of Joint Escrow Instructions, all of which are attached
hereto and incorporated herein in their entirety.

Participant:                             Amy Beth Hansman
                                                         -----------------------
Date of Grant:                           11/17/00
                                                 -------------------------------
Number of Shares Subject to Award:       10,000
                                               ---------------------------------
Purchase Price per Share:                $2.50
                                              ----------------------------------
Total Purchase Price:                    $25,000
                                                --------------------------------
Closing Date:                            11/17/00
                                                 -------------------------------

VESTING SCHEDULE:  Immediately vested on Date of Grant.

PAYMENT:           By deferred payment (described in the Restricted Stock
                   Purchase Agreement):

ADDITIONAL TERMS/ACKNOWLEDGEMENTS: The undersigned Participant acknowledges
receipt of, and understands and agrees to, this Grant Notice, the Restricted
Stock Purchase Agreement and the Plan. Participant further acknowledges that as
of the Date of Grant, this Grant Notice, the Restricted Stock Purchase Agreement
and the Plan set forth the entire understanding between Participant and the
Company regarding the acquisition of stock in the Company and supersede all
prior oral and written agreements on that subject with the exception of (i)
Awards previously granted and delivered to Participant under the Plan, and (ii)
the following agreements only:

     OTHER AGREEMENTS:
                                   ---------------------------------------------
                                   ---------------------------------------------

ESOFT, INC.                               PARTICIPANT:

By: /s/ JEFFREY J. FINN                   /s/ AMY BETH HANSMAN
  --------------------------------        --------------------------------------
            Signature                                   Signature

Title: CEO                                Date: 11-17-00
       ---------------------------              --------------------------------

Date: 11/17/00
     -----------------------------

ATTACHMENTS:   Restricted Stock Purchase Agreement, eSoft, Inc. Equity
               Compensation Plan, form of Joint Escrow Instructions, Promissory
               Note, and Pledge Agreement.

<PAGE>

                                  ATTACHMENT I

                                   ESOFT, INC.
                            EQUITY COMPENSATION PLAN

                            RESTRICTED STOCK PURCHASE
                                    AGREEMENT

     eSoft, Inc. (the "Company") wishes to sell to you, and you wish to
purchase, shares of Common Stock from the Company, pursuant to the provisions of
the Company's Equity Compensation Plan (the "Plan").

     Therefore, pursuant to the terms of the Restricted Stock Award Grant Notice
("Grant Notice") and this Restricted Stock Purchase Agreement ("Agreement")
(collectively, the "Award"), the Company grants you right to purchase the number
of shares of Common Stock indicated in the Grant Notice. Defined terms not
explicitly defined in this Agreement but defined in the Plan shall have the same
definitions as in the Plan.

     The details of your Award are as follows:

     1.   AGREEMENT TO PURCHASE. You hereby agree to purchase from the Company,
and the Company hereby agrees to sell to you, the aggregate number of shares of
Common Stock specified in your Grant Notice at the specified Purchase Price per
Share. You may not purchase less than the aggregate number of shares specified
in the Grant Notice.

     2.   CLOSING. The purchase and sale of the shares shall be consummated as
follows:

          (a)  You may purchase the shares by delivering the Total Purchase
Price specified in your Grant Notice to the Secretary of the Company, or to such
other person as the Company may designate, during regular business hours, on the
Closing Date specified in the Grant Notice (or at such other time and place as
you and the Company may mutually agree upon in writing) along with such
additional documents as the Company may then require.

          (b)  If payment is to be made in whole or in part by promissory note,
you agree to execute a Promissory Note in the form of Attachment IV to the Grant
Notice and to execute a pledge agreement in the form of Attachment V to the
Grant Notice (the "Pledge Agreement") and to deliver the same to the Company on
the Closing Date, along with the certificate or certificates evidencing the
shares, for use by the Escrow Agent pursuant to the terms of the Joint Escrow
Instructions.

     3.   METHOD OF PAYMENT. You may make payment of the Purchase Price pursuant
to the following deferred payment alternative:

<PAGE>

          (a)  Not less than one hundred percent (100%) of the aggregate
Purchase Price, plus accrued interest, shall be due four (4) years from date of
purchase or, at the Company's election, upon termination of your Continuous
Service.

          (b)  Interest shall be compounded at least annually and shall be
charged at the minimum rate of interest that is necessary to avoid the treatment
as interest, under any applicable provisions of the Code, of any portion of any
amounts other than amounts stated to be interest under the deferred payment
arrangement.

          (c)  Payment of the Common Stock's "par value," as defined in the
Delaware General Corporation Law, shall be made in cash and not by deferred
payment.

     4.   VESTING. Subject to the limitations contained herein, the shares you
purchase will vest as provided in the Grant Notice, provided that vesting will
cease upon the termination of your Continuous Service.

     5.   NUMBER OF SHARES AND PURCHASE PRICE. The number of shares subject to
your Award and your Purchase Price may be adjusted from time to time for
Capitalization Adjustments, as provided in the Plan.

     6.   SECURITIES LAW COMPLIANCE. You will not be issued any shares under
your Award unless the shares are either (a) then registered under the Securities
Act or (b) the Company has determined that such issuance would be exempt from
the registration requirements of the Securities Act. Your Award must also comply
with other applicable laws and regulations governing the Award, and you will not
receive such shares if the Company determines that such receipt would not be in
material compliance with such laws and regulations.

     7.   RESTRICTIONS ON TRANSFER. You agree that the Company (or a
representative of the underwriters) may, in connection with the first
underwritten registration of the offering of any securities of the Company under
the Securities Act, require that you not sell, dispose of, transfer, make any
short sale of, grant any option for the purchase of, or enter into any hedging
or similar transaction with the same economic effect as a sale, any shares of
Common Stock or other securities of the Company held by you under the Award, for
a period of time specified by the underwriter(s) (not to exceed one hundred
eighty (180) days) following the effective date of the registration statement of
the Company filed under the Securities Act. You further agree to execute and
deliver such other agreements as may be reasonably requested by the Company
and/or the underwriter(s) that are consistent with the foregoing or that are
necessary to give further effect thereto. In order to enforce the foregoing
covenant, the Company may impose stop-transfer instructions with respect to your
Common Stock until the end of such period.

     8.   RIGHT OF FIRST REFUSAL. Shares that are received under your Award are
subject to any right of first refusal that may be described in the Company's
bylaws in effect at such time the Company elects to exercise its right.

     9.   RESTRICTIVE LEGENDS. The shares issued under your Award shall be
endorsed with appropriate legends determined by the Company.

<PAGE>

     10.  AWARD NOT A SERVICE CONTRACT. Your Award is not an employment or
service contract, and nothing in your Award shall be deemed to create in any way
whatsoever any obligation on your part to continue in the employ of the Company
or an Affiliate, or on the part of the Company or an Affiliate to continue your
employment. In addition, nothing in your Award shall obligate the Company or an
Affiliate, their respective shareholders, boards of directors, Officers or
Employees to continue any relationship that you might have as a Director or
Consultant for the Company or an Affiliate.

     11.  WITHHOLDING OBLIGATIONS.

          (a)  At the time your Award is made, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any
other amounts payable to you, and otherwise agree to make adequate provision for
any sums required to satisfy the federal, state, local and foreign tax
withholding obligations of the Company or an Affiliate, if any, which arise in
connection with your Award.

          (b)  Unless the tax withholding obligations of the Company and/or any
Affiliate are satisfied, the Company shall have no obligation to issue a
certificate for such shares or release such shares from any escrow provided for
herein.

     12.  TAX CONSEQUENCES. The acquisition and vesting of the shares may have
adverse tax consequences to you that may avoided or mitigated by filing an
election under Section 83(b) of the Code. Such election must be filed within
thirty (30) days after the date your purchase the shares pursuant to your Award.
YOU ACKNOWLEDGE THAT IT IS YOUR OWN RESPONSIBILITY, AND NOT THE COMPANY'S, TO
FILE A TIMELY ELECTION UNDER CODE SECTION 83(B), EVEN IF YOU REQUEST THE COMPANY
TO MAKE THE FILING ON YOUR BEHALF.

     13.  NOTICES. Any notices provided for in your Award or the Plan shall be
given in writing and shall be deemed effectively given upon receipt or, in the
case of notices delivered by the Company to you, five (5) days after deposit in
the United States mail, postage prepaid, addressed to you at the last address
you provided to the Company.

     14.  MISCELLANEOUS.

          (a)  The rights and obligations of the Company under your Award shall
be transferable to any one or more persons or entities, and all covenants and
agreements hereunder shall inure to the benefit of, and be enforceable by the
Company's successors and assigns. Your rights and obligations under your Award
may only be assigned with the prior written consent of the Company.

          (b)  You agree upon request to execute any further documents or
instruments necessary or desirable in the sole determination of the Company to
carry out the purposes or intent of your Award.

<PAGE>

          (c)  You acknowledge and agree that you have reviewed your Award in
its entirety, have had an opportunity to obtain the advice of counsel prior to
executing and accepting your Award and fully understand all provisions of your
Award.

     15.  GOVERNING PLAN DOCUMENT. Your Award is subject to all the provisions
of the Plan, the provisions of which are hereby made a part of your Award, and
is further subject to all interpretations, amendments, rules and regulations
which may from time to time be promulgated and adopted pursuant to the Plan. In
the event of any conflict between the provisions of your Award and those of the
Plan, the provisions of the Plan shall control.

<PAGE>

                                 ATTACHMENT III

                            JOINT ESCROW INSTRUCTIONS

November 17, 2000

Corporate Secretary
eSoft, Inc.
5335 Sterling Drive, Suite 3000
Boulder Colorado 80302

Dear Sir/Madam:

         As Escrow Agent for both eSoft, Inc., a Delaware corporation (the
"Company"), and the undersigned recipient of stock of the Company ("Recipient"),
you are hereby authorized and directed to hold the documents delivered to you
pursuant to the terms of that certain Restricted Stock Award Grant Notice (the
"Grant Notice"), dated November 17, 2000 to which a copy of these Joint Escrow
Instructions is attached as Attachment IV, and pursuant to the terms of that
certain Restricted Stock Purchase Agreement ("Agreement"), which is Attachment I
to the Grant Notice, in accordance with the following instructions:

         1. In the event Recipient ceases to render services to the Company or
an affiliate of the Company during the vesting period set forth in the Grant
Notice, the Company or its assignee will give to Recipient and you a written
notice specifying that the shares of stock shall be transferred to the Company.
Recipient and the Company hereby irrevocably authorize and direct you to close
the transaction contemplated by such notice in accordance with the terms of said
notice.

         2. At the closing you are directed (a) to date any stock assignments
necessary for the transfer in question, (b) to fill in the number of shares
being transferred, and (c) to deliver same, together with the certificate
evidencing the shares of stock to be transferred, to the Company.

         3. Recipient irrevocably authorizes the Company to deposit with you any
certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as specified in the Grant Notice.
Recipient does hereby irrevocably constitute and appoint you as Recipient's
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities and other property all documents of assignment and/or
transfer and all stock certificates necessary or appropriate to make all
securities negotiable and complete any transaction herein contemplated.

         4. This escrow shall terminate upon repayment of the promissory note
between the Company and Recipient dated November 17, 2000, or upon the earlier
return of the shares to the Company.

                                       2
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         5. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to Recipient,
you shall deliver all of same to any pledgee entitled thereto or, if none, to
Recipient and shall be discharged of all further obligations hereunder.

         6. Your duties hereunder may be altered, amended, modified or revoked
only by a writing signed by all of the parties hereto.

         7. You shall be obligated only for the performance of such duties as
are specifically set forth herein and may rely and shall be protected in relying
or refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties or
their assignees. You shall not be personally liable for any act you may do or
omit to do hereunder as Escrow Agent or as attorney-in-fact for Recipient while
acting in good faith and any act done or omitted by you pursuant to the advice
of your own attorneys shall be conclusive evidence of such good faith.

         8. You are hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law, and are hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case you obey or comply with any such order, judgment or decree of any
court, you shall not be liable to any of the parties hereto or to any other
person, firm or corporation by reason of such compliance, notwithstanding any
such order, judgment or decree being subsequently reversed, modified, annulled,
set aside, vacated or found to have been entered without jurisdiction.

         9. You shall not be liable in any respect on account of the identity,
authority or rights of the parties executing or delivering or purporting to
execute or deliver the Grant Notice or any documents or papers deposited or
called for hereunder.

         10. You shall not be liable for the outlawing of any rights under any
statute of limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.

         11. You shall be entitled to employ such legal counsel, including but
not limited to Cooley Godward LLP, and other experts as you may deem necessary
properly to advise you in connection with your obligations hereunder, may rely
upon the advice of such counsel, and may pay such counsel reasonable
compensation therefor.

         12. Your responsibilities as Escrow Agent hereunder shall terminate if
you shall cease to be Secretary of the Company or if you shall resign by written
notice to each party. In the event of any such termination, the Company may
appoint any officer or assistant officer of the Company as successor Escrow
Agent and Recipient hereby confirms the appointment of such successor or
successors as his attorney-in-fact and agent to the full extent of your
appointment.

         13. If you reasonably require other or further instruments in
connection with these Joint Escrow Instructions or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.

                                       3
<PAGE>

         14. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities, you may (but are not obligated to) retain in your possession without
liability to anyone all or any part of said securities until such dispute shall
have been settled either by mutual written agreement of the parties concerned or
by a final order, decree or judgment of a court of competent jurisdiction after
the time for appeal has expired and no appeal has been perfected, but you shall
be under no duty whatsoever to institute or defend any such proceedings.

         15. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in any United States Post Box, by registered or certified mail with
postage and fees prepaid, addressed to each of the other parties hereunto
entitled at the following addresses, or at such other addresses as a party may
designate by ten (10) days' written notice to each of the other parties hereto:

      COMPANY:                  eSoft, Inc.
                                5335 Sterling Drive, Suite 3000
                                Boulder, CO 80302

                                Attn: Chief Accounting Officer

      RECIPIENT:                Amy Beth Hansman
                                2010 Garland Street
                                Lakewood, CO 80215

      ESCROW AGENT:             eSoft, Inc.
                                5335 Sterling Drive, Suite 3000

                                Attn: Corporate Secretary

         16. By signing these Joint Escrow Instructions you become a party
hereto only for the purpose of said Joint Escrow Instructions; you do not become
a party to the Grant Notice.

         17. This instrument shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors and permitted assigns. It is
understood and agreed that references to "you" or "your" herein refer to the
original Escrow Agent and to any and all successor Escrow Agents. It is
understood and agreed that the Company may at any time or from time to time
assign its rights under the Grant Notice and these Joint Escrow Instructions in
whole or in part.

                                       4
<PAGE>

                                        Very truly yours,

                                        ESOFT, INC.

                                        /s/ JEFFREY J. FINN
                                        ----------------------------------------

                                        RECIPIENT

                                        By: /s/ AMY BETH HANSMAN
                                            ------------------------------------
                                            Amy Beth Hansman

ESCROW AGENT:

/s/ JEFFREY J. FINN
-----------------------------------

                                       5
<PAGE>

                                  ATTACHMENT IV

                            RECOURSE PROMISSORY NOTE

$24,900
                                                               NOVEMBER 17, 2000

         FOR VALUE RECEIVED, the undersigned hereby unconditionally promises to
pay to the order of eSoft, Inc., a Delaware corporation (the "Company"), at 5335
Sterling Drive, Suite 3000, Boulder, Colorado, or at such other place as the
holder hereof may designate in writing, in lawful money of the United States of
America and in immediately available funds, the principal sum of Twenty Four
thousand and Nine hundred Dollars ($24,900) together with interest accrued from
the date hereof on the unpaid principal at the rate of 11.125% per annum, or the
maximum rate permissible by law (which under the laws of the State of Delaware
shall be deemed to be the laws relating to permissible rates of interest on
commercial loans), whichever is less, as follows:

          PRINCIPAL REPAYMENT. The outstanding principal amount hereunder shall
     be due and payable in full on November 17, 2004.

          INTEREST PAYMENTS. Interest shall be payable annually in arrears and
     shall be calculated on the basis of a 360-day year for the actual number of
     days elapsed;

In the event that the undersigned's employment by or association with the
Company is terminated for any reason prior to payment in full of this Note, this
Note shall be accelerated and all remaining unpaid principal and interest shall
become due and payable 90 days after the date of such termination; PROVIDED,
HOWEVER that in the event that during such 90-day period the undersigned would
violate the provisions of any law, regulation, or agreement restricting the
disposition of the Company's common stock purchased with this Note, then such
90-day period shall be extended, and all remaining unpaid principal and interest
shall become due and payable on the first day that such restrictions lapse.
Notwithstanding the foregoing, in the event that the undersigned is terminated
by the Company without "Cause," as defined in the undersigned's employment
agreement with the Company, then the 90-day period shall be extended, and all
remaining unpaid principal and interest shall become due and payable one year
from the date of such termination without "Cause."

         If the undersigned fails to pay any of the principal and accrued
interest when due, the Company, at its sole option, shall have the right to
accelerate this Note, in which event the entire principal balance and all
accrued interest shall become immediately due and payable, and immediately
collectible by the Company pursuant to applicable law.

         This Note may be prepaid at any time without penalty. All money paid
toward the satisfaction of this Note shall be applied first to the payment of
interest as required hereunder and then to the retirement of the principal.

                                       6
<PAGE>

         This Note is a full recourse promissory note. In addition, the full
amount of this Note is secured by a pledge of shares of Common Stock of the
Company and is subject to all of the terms and provisions of the Stock Purchase
Agreement and the Pledge Agreement, each of even date herewith between the
undersigned and the Company.

         The undersigned hereby represents and agrees that the amounts due under
this Note are not consumer debt, and are not incurred primarily for personal,
family or household purposes, but are for business and commercial purposes only.

         The undersigned hereby waives presentment, protest and notice of
protest, demand for payment, notice of dishonor and all other notices or demands
in connection with the delivery, acceptance, performance, default or endorsement
of this Note.

         The holder hereof shall be entitled to recover, and the undersigned
agrees to pay when incurred, all costs and expenses of collection of this Note,
including without limitation, reasonable attorneys' fees.

         This Note shall be governed by, and construed, enforced and interpreted
in accordance with, the laws of the State of Delaware, excluding conflict of
laws principles that would cause the application of laws of any other
jurisdiction.

                                         Signed /s/ AMY BETH HANSMAN
                                                --------------------------------

                                       7
<PAGE>

                                  ATTACHMENT V

                                PLEDGE AGREEMENT

     1.   As collateral security for the payment of that certain $24,900
promissory note issued this date to Jeff Finn ("Pledgee") by the undersigned
(hereinafter called "indebtedness"), the undersigned hereby assigns, transfers
to and pledges with the Pledgee the securities listed on Schedule 1 hereto which
were this day delivered to be deposited with Pledgee, together with any stock
rights, rights to subscribe, dividends paid in cash or other property in
connection with the complete or partial liquidation of Pledgee, stock dividends,
dividends paid in stock, new securities or other property except cash dividends
other than liquidating dividends to which the undersigned is or may hereafter
become entitled to receive on account of such property, and in the event that
the undersigned receives any such, the undersigned will immediately deliver it
to Pledgee to be held by Pledgee hereunder in the same manner as the property
originally pledged hereunder. All property assigned, transferred to and pledged
with Pledgee under this paragraph is hereinafter called "collateral."

     2.   At any time, without notice, and at the expense of the undersigned,
Pledgee in its name or in the name of its nominee or of the undersigned may, but
shall not be obligated to: (a) collect by legal proceedings or otherwise all
dividends (except cash dividends other than liquidating dividends), interest,
principal payments and other sums now or hereafter payable upon or on account of
said collateral; (b) enter into any extension, reorganization, deposit, merger,
or consolidation agreement, or any agreement in any way relating to or affecting
the collateral, and in connection therewith may deposit or surrender control of
such collateral thereunder, accept other property in exchange for such
collateral and do and perform such acts and things as it may deem proper, and
any money or property received in exchange for such collateral shall be applied
to the indebtedness or thereafter held by it pursuant to the provisions hereof;
(c) insure, process and preserve the collateral; (d) cause the collateral to be
transferred to its name or to the name of its nominee; (e) exercise as to such
collateral all the rights, powers, and remedies of an owner, except that so long
as the indebtedness is not in default the undersigned shall retain all voting
rights as to the collateral.

     3.   The undersigned agrees to pay prior to delinquency all taxes, charges,
liens and assessments against the collateral, and upon the failure of the
undersigned to do so Pledgee at its option may pay any of them and shall be the
sole judge of the legality or validity thereof and the amount necessary to
discharge the same.

     4.   All advances, charges, costs and expenses, including reasonable
attorneys' fees, incurred or paid by Pledgee in exercising any right, power or
remedy conferred by this agreement, or in the enforcement thereof, shall become
a part of the indebtedness secured hereunder and shall be paid to Pledgee by the
undersigned immediately and without demand.

     5.   At the option of Pledgee and without necessity of demand or notice,
all or any part of the indebtedness of the undersigned shall immediately become
due and payable irrespective of any agreed maturity, upon the happening of any
of the following events: (a) failure to keep or perform any of the terms or
provisions of this agreement; (b) default in the payment of principal or
interest when due; (c) the levy of any attachment, execution or other

                                       8
<PAGE>

process against the collateral; or (d) the insolvency, commission of an act of
bankruptcy, general assignment for the benefit of creditors, filing of any
petition in bankruptcy or for relief under the provisions of Title 11, United
States Code, Bankruptcy, of, by, or against the undersigned.

     6.   In the event of the nonpayment of any indebtedness when due, whether
by acceleration or otherwise, or upon the happening of any of the events
specified in the last preceding paragraph, Pledgee may then, or at any time
thereafter, at its election, apply, set off, collect or sell in one or more
sales, or take such steps as may be necessary to liquidate and reduce to cash in
the hands of Pledgee in whole or in part, with or without any previous demands
or demand of performance or notice or advertisement, the whole or any part of
the collateral in such order as Pledgee may elect, and any such sale may be made
either at public or private sale at its place of business or elsewhere, or at
any broker's board or securities exchange, either for cash or upon credit or for
future delivery; PROVIDED, HOWEVER, that if such disposition is at private sale,
then the purchase price of the collateral shall be equal to the public market
price then in effect, or, if at the time of sale no public market for the
collateral exists, then, in recognition of the fact that the sale of the
collateral would have to be registered under the Securities Act of 1933 and that
the expenses of such registration are commercially unreasonable for the type and
amount of collateral pledged hereunder, Pledgee and the undersigned hereby agree
that such private sale shall be at a purchase price mutually agreed to by
Pledgee and the undersigned or, if the parties cannot agree upon a purchase
price, then at a purchase price established by a majority of three independent
appraisers knowledgeable of the value of such collateral, one named by the
undersigned within 10 days after written request by the Pledgee to do so, one
named by Pledgee within such 10 day period, and the third named by the two
appraisers so selected, with the appraisal to be rendered by such body within 30
days of the appointment of the third appraiser. The cost of such appraisal,
including all appraiser's fees, shall be charged against the proceeds of sale as
an expense of such sale. Pledgee may be the purchaser of any or all collateral
so sold and hold the same thereafter in its own right free from any claim of the
undersigned or right of redemption. Demands of performance, notices of sale,
advertisements and presence of property at sale are hereby waived, and Pledgee
is hereby authorized to sell hereunder any evidence of debt pledged to it. Any
sale hereunder may be conducted by any officer or agent of Pledgee.

     7.   The proceeds of the sale of any of the collateral and all sums
received or collected by Pledgee from or on account of such collateral shall be
applied by Pledgee to the payment of expenses incurred or paid by Pledgee in
connection with any sale, transfer or delivery of the collateral, to the payment
of any other costs, charges, attorneys' fees or expenses mentioned herein, and
to the payment of the indebtedness or any part hereof, all in such order and
manner as Pledgee in its discretion may determine. Pledgee shall pay any balance
to the undersigned.

     8.   Pledgee shall be under no duty or obligation whatsoever to make or
give any presentments, demands for performance, notices of non-performance,
protests, notices of protest or notices of dishonor in connection with any
obligations or evidences of indebtedness held by Pledgee as collateral, or in
connection with any obligations or evidences of indebtedness which constitute in
whole or in part the indebtedness secured hereunder.

     9.   Pledgee may at any time deliver the collateral or any part thereof to
the undersigned and the receipt of the undersigned shall be a complete and full
acquittance for the

                                       9
<PAGE>

collateral so delivered, and Pledgee shall thereafter be discharged from any
liability or responsibility therefor.

     10.  Upon the transfer of all or any part of the indebtedness Pledgee may
transfer all or any part of the collateral and shall be fully discharged
thereafter from all liability and responsibility with respect to such collateral
so transferred, and the transferee shall be vested with all the rights and
powers of Pledgee hereunder with respect to such collateral so transferred; but
with respect to any collateral not so transferred Pledgee shall retain all
rights and powers hereby given.

     11.  Until all indebtedness shall have been paid in full the power of sale
and all other rights, powers and remedies granted to Pledgee hereunder shall
continue to exist and may be exercised by Pledgee at any time and from time to
time irrespective of the fact that the indebtedness or any part thereof may have
become barred by any statute of limitations, or that the personal liability of
the undersigned may have ceased.

     12.  Pledgee agrees that so long as the indebtedness is not in default,
shares of eSoft, Inc. common stock held hereunder as collateral for the
indebtedness shall be released from pledge as the indebtedness is paid. Such
releases shall be at the rate of one share for each $2.50 of principal amount of
indebtedness paid. Release from pledge, however, shall not result in release
from the provisions of those certain Joint Escrow Instructions, if any, of even
date herewith among the parties to this Pledge Agreement and the Escrow Agent
named therein.

     13.  The rights, powers and remedies given to Pledgee by this agreement
shall be in addition to all rights, powers and remedies given to Pledgee by
virtue of any statute or rule of law. Pledgee may exercise its Pledgee's lien or
right of setoff with respect to the indebtedness in the same manner as if the
indebtedness were unsecured. Any forbearance or failure or delay by Pledgee in
exercising any right, power or remedy hereunder shall not be deemed to be a
waiver of such right, power or remedy, and any single or partial exercise of any
right, power or remedy hereunder shall not preclude the further exercise
thereof; and every right, power and remedy of Pledgee shall continue in full
force and effect until such right, power or remedy is specifically waived by an
instrument in writing executed by Pledgee.

         Dated:  November 17, 2000

                                            /s/ AMY BETH HANSMAN
                                            ------------------------------------

ATTACHMENT:

  Schedule 1

                                       10
<PAGE>

                                   Schedule 1
                                       To
                                PLEDGE AGREEMENT

CERTIFICATE NUMBER                         # OF SHARES
------------------                         -----------
02401                                      10,000<PAGE>

                                                                  EXHIBIT 10.21

                               FIRST AMENDMENT TO
            STOCK AND WARRANT PURCHASE AND INVESTOR RIGHTS AGREEMENT

         This FIRST AMENDMENT TO STOCK AND WARRANT PURCHASE AND INVESTOR RIGHTS
AGREEMENT (this "Amendment") is made and entered into as of September 15, 2000,
by and between ESOFT, INC., a Delaware corporation (the "Company"), GATEWAY
COMPANIES, INC., a Delaware corporation (the "Investor"), and GATEWAY, INC., a
Delaware corporation and the parent company of the Investor ("Gateway"), and is
made with reference to the following facts:

         A.       On April 26, 2000, the Company and the Investor entered into
that certain Stock and Warrant Purchase and Investor Rights Agreement (the
"Agreement"), pursuant to which the Company sold to the Investor, and the
Investor purchased from the Company, 1,281,591 shares of common stock, par value
$.01 per share, of the Company ("Common Stock") at a purchase price of $19.507
per share, and five-year warrants to purchase 600,000 shares of Common Stock,
exercisable at a price of $19.507 per share (the "Initial Warrants").

         B.       On or about April 27, 2000, the Investor paid to the Company
the sum of $12,500,000, representing one-half of the purchase price of the
1,281,591 shares of Common Stock purchased by the Investor.

         C.       On or about April 27, 2000, the Company delivered a
certificate representing 640,796 shares of Common Stock to the Investor, and
deposited a certificate for 640,795 shares (the "Escrowed Shares") into escrow
with Norwest Bank Colorado National Association (the "Escrow Agent").

         D.       Terms used herein but not defined have the same meanings
ascribed to such terms in the Agreement.

         NOW THEREFORE, in consideration of the forgoing recitals, the mutual
promises hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

                                   ARTICLE
                           AMENDMENT OF THE AGREEMENT

         SECTION 1.01. AMENDMENT OF SECTION 1 OF THE AGREEMENT. Section 1 of the
Agreement is hereby amended and restated in its entirety to read as follows:

         1.       AGREEMENT TO PURCHASE AND SELL STOCK AND WARRANTS.

                  (a)      AUTHORIZATION. The Company's Board of Directors (the
         "Board") will, prior to the Closing (as defined in Section 2(a)),
         authorize the issuance, pursuant to the terms and conditions of this
         Agreement, of (i) 640,796 shares of Common Stock (the "Shares"), (ii)
         the Initial Warrants, and (iii) the shares of Common Stock underlying
         the Warrants (the "Initial Warrant Shares"). The Board will, prior to
         the Escrow Closing (as

                                       1

<PAGE>

         defined in Section 2(b)), authorize the issuance, pursuant to the terms
         and conditions of this Agreement, of (i) a convertible subordinated
         note, in the form attached hereto as EXHIBIT F, in the principal amount
         of $12,500,000 (the "Note"), (ii)five-year warrants to purchase 600,000
         shares of Common Stock, in the form attached hereto as EXHIBIT G (the
         "Substituted Warrants"), and (iii) the shares of Common Stock
         underlying the Substituted Warrants (the "Substituted Warrant Shares").

                  (b)      AGREEMENT TO PURCHASE AND SELL SECURITIES. The
         Company hereby agrees to issue to the Investor, and the Investor hereby
         agrees to acquire from the Company, at the times set forth in Section
         2, (i) the Shares, (ii) the Initial Warrants, (iii) the Note, and (iv)
         the Substituted Warrants. The (x) Shares, (y) the shares of Common
         Stock issuable upon conversion of the Note at an assumed conversion
         price of $19.507 per share, and (z) the shares of Common Stock actually
         issued upon conversion of the outstanding principal balance of the Note
         (based on the actual conversion price) shall collectively be referred
         to herein as the "Purchased Shares."

                  (c)      PURCHASE PRICE. The purchase price for the Shares
         shall be $12,500,000 (the "Share Purchase Price"), and the purchase
         price for the Note shall be $12,500,000 (the "Note Purchase Price").
         The Share Purchase Price and the Note Purchase Price shall be payable
         as set forth in Section 2.

                  (d)      ADJUSTMENTS TO THE SHARES DELIVERABLE. If, within
         nine months following the Closing Date (as defined in Section 2(a)),
         the Company consummates an underwritten public offering of Common Stock
         at a public offering price less than or equal to $20.862, the number of
         shares of Common Stock deliverable by the Company in consideration of
         the Share Purchase Price shall be increased by a number determined by
         (x) dividing $12,500,000, by (y) a 6.5 percent discount to the public
         offering price of such underwritten public offering, and (z)
         subtracting 640,796 from the resulting number. If an adjustment is to
         be made pursuant to this subsection (d), such adjustment shall be made
         by the Company by delivering to the Investor additional shares of the
         Common Stock within five business days of such adjustment.

                  (e)      USE OF PROCEEDS. The Company intends to apply the net
         proceeds from the sale of the Shares and the Note for general working
         capital purposes, which may include acquisition of other entities or
         technologies.

         SECTION 1.02. AMENDMENT OF SECTION 2 OF THE AGREEMENT. Section 2 of the
Agreement is hereby amended and restated in its entirety to read as follows:

         2.       CLOSING AND SECOND CLOSING.

                  (a)      CLOSING. The purchase and sale of the Shares shall
         take place at the offices of Kaye, Scholer, Fierman, Hays & Handler,
         1999 Avenue of the Stars, Los Angeles, California, at 10:00 a.m.,
         California time, on the date that is two business days after all of the
         conditions set forth in Section 5 have been satisfied or waived (which
         time and place are referred to in this Agreement as the "Closing");
         provided, however, that if all of such conditions have not been
         satisfied or waived by May 15, 2000 (or such later

                                       2

<PAGE>

         date as may be agreed to by the Company and the Investor), the
         obligations of the Company and the Investor shall terminate
         without further effect or liability. At the Closing, the Company will
         deliver to the Investor certificates representing the Shares against
         delivery to the Company by the Investor of the Share Purchase Price in
         cash paid by wire transfer of same-day funds to the Company. Closing
         documents may be delivered by facsimile with original signature pages
         sent by overnight courier. The date of the Closing sometimes is
         referred to herein as the "Closing Date."

                  (b)      ESCROW CLOSING. On or before September 15, 2000 (the
         "Escrow Closing Date"), the Company will deliver to the Investor the
         Note against delivery to the Company by the Investor of the Note
         Purchase Price in cash by wire transfer of same-day funds to the
         Company (the "Escrow Closing").

                  (c)      THE INITIAL WARRANTS. At the Closing, the Company
         will issue to the Investor the Initial Warrants. The Initial Warrants
         shall be in the form attached hereto as EXHIBIT A.

                  (d)      THE SUBSTITUTED WARRANTS. At the Escrow Closing, the
         Company will issue to the Investor the Substituted Warrants upon the
         Company's receipt from the Investor of the original copy of the Initial
         Warrants, marked by the Investor as "Terminated."

         SECTION 1.03. AMENDMENT OF SECTION 3 OF THE AGREEMENT. The following
amendments are hereby made to Section 3 of the Agreement:

         (a)      SECTION 3(b). The definition of "Securities" contained in
Section 3(b) is hereby amended to refer to the Shares, the Note, the shares
issuable upon conversion of the Note (the "Note Shares"), the Initial Warrants,
the Initial Warrant Shares, the Substituted Warrants and the Substituted Warrant
Shares.

         (b)      SECTION 3(d)(i). Section 3(d)(i) of the Agreement is hereby
amended and restated in its entirety to read as follows:

                  (i)      VALID ISSUANCE. The Shares, the Note, the Initial
                  Warrants and the Substituted Warrants to be issued pursuant to
                  this Agreement and the Note Shares, the Initial Warrant Shares
                  and the Substituted Warrant Shares to be issued upon
                  conversion or exercise of the Note, the Initial Warrants and
                  the Substituted Warrants, respectively, are duly authorized
                  and, upon payment of the Share Purchase Price and the Note
                  Purchase Price by the Investor in accordance with this
                  Agreement, will be validly issued, fully paid and
                  non-assessable.

         (c)      SECTION 3(e). Section 3(e) of the Agreement is hereby amended
and restated in its entirety to read as follows:

                  (e)      GOVERNMENTAL CONSENTS. Except for required filings
                  under the Hart-Scott-Rodino Antitrust Improvements Act of
                  1976, (the "HSR Act"), no consent, approval, order or
                  authorization of, or registration, qualification, designation,

                                       3

<PAGE>

                  declaration or filing with, or notice to, any federal, state
                  or local governmental authority on the part of the Company or
                  any of its subsidiaries is required in connection with the
                  issuance of the Securities to the Investor, or the
                  consummation of the other transactions contemplated by this
                  Agreement, except for (i) the listing of the Shares, the
                  Initial Warrant Shares, the Note Shares and the Substituted
                  Warrant Shares on Nasdaq, (ii) the filing of a Form D with the
                  Securities and Exchange Commission (the "SEC"), and (iii) the
                  filing of a Notice of Transaction and a Form U-2 with the
                  California Department of Corporations.

         SECTION 1.04. AMENDMENT OF SECTION 5 OF THE AGREEMENT. The following
amendments are hereby made to Section 5 of the Agreement:

         (a)      SECTION 5(b)(iii). The second sentence of Section 5(b)(iii) of
the Agreement is hereby amended to read as follows:

                  The Shares and the Initial Warrant Shares shall have been
                  approved for quotation on Nasdaq.

         (b)      SECTION 5(c). Section 5(c) of the Agreement is hereby amended
and restated in its entirety to read as follows:

                  (c)      The obligations of the Investor under this Agreement
                  are subject to the fulfillment or waiver, on or before the
                  Escrow Closing, of each of the following additional
                  conditions:

                           (i)      OPINION OF COMPANY COUNSEL. The Investor
                  will have received an opinion on behalf of the Company, dated
                  the Closing Date, from Davis, Graham & Stubbs LLP, counsel to
                  the Company, in the form attached hereto as EXHIBIT G.

                           (ii)     DELIVERY OF NOTE AND SUBSTITUTED WARRANT.
                  The Company shall have executed and delivered to the Investor
                  the Note and the Substituted Warrant.

         SECTION 1.05. AMENDMENT OF SECTION 6 OF THE AGREEMENT. The following
amendments are hereby made to Section 6 of the Agreement:

         (a)      SECTION 6(a)(iii). Section 6(a)(iii) of the Agreement is
hereby amended and restated in its entirety to read as follows:

                  (iii)    PAYMENT OF PURCHASE PRICE. The Investor shall have
                  delivered to the Company the Share Purchase Price at the
                  Closing and the Note Purchase Price at the Escrow Closing.

         (b)      SECTION 6(b)(iii). Section 6(b)(iii) of the Agreement is
hereby deleted and replaced with the phrase "Intentionally Omitted."

         SECTION 1.06. AMENDMENT OF SECTION 7 OF THE AGREEMENT. The following
amendments are hereby made to Section 7 of the Agreement:

                                       4

<PAGE>

         (a)      SECTION 7(c)(i)(B)(x). Section 7(c)(i)(B)(x) of the Agreement
is hereby amended to read "(x) the Shares, the Initial Warrant Shares, the Note
Shares and the Substituted Warrant Shares."

         (b)      SECTION 7(c)(i)(C). Section 7(c)(i)(C) is hereby amended and
restated in its entirety to read as follows:

                  (C)      REGISTRABLE SECURITIES THEN OUTSTANDING. The number
         of shares of "Registrable Securities then outstanding" shall mean the
         number of Shares, Note Shares, Initial Warrant Shares, Substituted
         Warrant Shares, other shares of Common Stock and other securities that
         are Registrable Securities and are then issued and outstanding.

         (c)      SECTION 7(c)(ii)(A). The phrase "Warrants" contained in
Section 7(c)(ii)(A) is hereby amended to refer to "Substituted Warrants."

         (d)      SECTION 7(c)(ix). The phrase "Warrant Shares" contained in
Section 7(c)(ix) is hereby amended to refer to "Substituted Warrant Shares," and
the phrase "Warrants" contained in Section 7(c)(ix) is hereby amended to refer
to "Substituted Warrants." The phrase "being held pursuant to the Escrow
Agreement" contained in Section 7(c)(ix) is hereby deleted.

         (e)      SECTION 7(e)(i). The phrase "Warrant Shares" contained in
Section 7(e)(i) is hereby amended to refer to "Substituted Warrant Shares" and
the phrase "Warrants" contained in Section 7(e)(i) is hereby amended to refer to
"Substituted Warrants." The phrase "being held pursuant to the Escrow Agreement"
contained in Section 7(e)(i) is hereby deleted.

         (f)      SECTION 7(e)(iii)(C). Section 7(e)(iii)(C) is hereby amended
and restated in its entirety to read as follows:

                  (C)      the Shares, the Note Shares, the Initial Warrant
         Shares or the Substituted Warrant Shares issued under this Agreement;

         (g)      SECTION 7(e)(iii)(E)(2). The phrase "Warrants" contained in
Section 7(e)(iii)(E)(2) is hereby amended to refer to "Initial Warrants or
Substituted Warrants."

         (h)      SECTION 7(e)(iv)(A). The phrase "Purchased Shares" contained
in Section 7(e)(iv) is hereby amended to refer to "Shares."

         (i)      SECTION 7(f)(ii)(A). Section 7(f)(ii)(A) is hereby amended and
restated in its entirety to read as follows:

                  (A)      the Shares, the Note Shares, the Initial Warrant
         Shares or the Substituted Warrant Shares issued under this Agreement;

         (j)      SECTION 7(f)(ii)(F). The phrase "Warrants" contained in
Section 7(f)(ii)(F) is hereby amended to refer to "Initial Warrants or
Substituted Warrants."

                                       5

<PAGE>

         (k)      SECTION 7(g)(iv). The phrase "Purchased Shares, Warrant Shares
and all New Securities and Maintenance Securities then owned by the Investor" is
hereby amended to read "Shares, Note Shares, Initial Warrant Shares, Substituted
Warrant Shares and all New Securities and Maintenance Securities then owned by
the Investor."

         (l)      SECTION 7(g)(iv)(A). Section 7(g)(iv)(A) of the Agreement is
hereby amended and restated in its entirety to read as follows:

                           (A)      The price per share at which such shares are
to be sold to Company shall be equal to: (1) in the case of the Shares or the
Initial Warrant Shares, the greater of (w) $4.8767 (taking into account any
adjustments for any stock split or dividend or other event of a similar nature
or any adjustment made pursuant to Section 1(d)), and (x) either the highest
price per share of capital stock (or equivalent) paid in connection with the
Corporate Event or, if the transaction involves the sale of a Significant
Subsidiary or assets or the licensing of Intellectual Property, the Investor's
pro rata share of the consideration received, directly or indirectly, by the
Company in such transaction based on its then fully-diluted ownership of the
Company's capital stock., and (2) in the case of the Note Shares or the
Substituted Warrant Shares, the greater of (y) $2.75 (taking into account any
adjustments for any stock split or dividend or other event of a similar nature),
and (z) either the highest price per share of capital stock (or equivalent) paid
in connection with the Corporate Event or, if the transaction involves the sale
of a Significant Subsidiary or assets or the licensing of Intellectual Property,
the Investor's pro rata share of the consideration received, directly or
indirectly, by the Company in such transaction based on its then fully-diluted
ownership of the Company's capital stock

         (m)      SECTION 7(h). The phrase "any shares held in escrow pursuant
to the Escrow Agreement" contained in Section 7(h) is hereby amended to refer to
"the Note Shares."

         SECTION 1.07. AMENDMENT OF SECTION 9 OF THE AGREEMENT. The phrase
"issued on the Closing Date" is hereby deleted.

         SECTION 1.08. AMENDMENT OF SECTION 11 OF THE AGREEMENT. The phrase
"Purchased Shares and the Warrant Shares" contained in Section 11(m) of the
Agreement is hereby amended to refer to "Shares, Initial Warrant Shares, Note
Shares and Substituted Warrant Shares."

                                   ARTICLE II
                                RELEASE OF ESCROW

         SECTION 2.01. RELEASE OF ESCROWED SHARES. Concurrently with the closing
of the transactions contemplated by this Amendment, the Company and the Investor
will transmit to Norwest Bank Colorado National Association instructions, in the
form attached hereto as EXHIBIT H, regarding the release of the Escrowed Shares
to the Company. Following the consummation of the transactions contemplated by
this Amendment, the Investor shall have no further right or claim to the
Escrowed Shares.

         SECTION 2.02. CANCELLATION OF PROXY. Concurrently with the closing of
the transactions contemplated by this Amendment, the Company shall deliver to
the Investor the executed proxy

                                       6

<PAGE>

delivered by the Investor to the Company at the Closing, which proxy is
attached hereto as EXHIBIT I.

                                   ARTICLE III
                              INVESTMENT IN GATEWAY

         SECTION 3.01.  AGREEMENT TO PURCHASE AND SELL STOCK.

         (a)      AUTHORIZATION. Gateway's Board of Directors (the "Gateway
Board") will, prior to the Escrow Closing, authorize the issuance, pursuant to
the terms and conditions of this Amendment, of 30,000 shares (the "Gateway
Shares") of Gateway's common stock, $.01 par value (the "Gateway Common Stock"),
to the Company.

         (b)      AGREEMENT TO PURCHASE AND SELL SECURITIES. Gateway hereby
agrees to issue to the Company, and the Company hereby agrees to acquire from
Gateway, at the Escrow Closing, the Gateway Shares.

         (c)      PURCHASE PRICE. The purchase price for the Gateway Shares
shall be $3,000,000 (the "Gateway Share Purchase Price"). The Gateway Share
Purchase Price shall be payable as set forth in Section 3.02.

         SECTION 3.02. CLOSING. The purchase and sale of the Gateway Shares
shall take place at the offices of Kaye, Scholer, Fierman, Hays & Handler, 1999
Avenue of the Stars, Los Angeles, California, at 10:00 a.m., California time, on
the Escrow Closing Date (or such later date as may be agreed to by the Company
and Gateway). At the Escrow Closing, Gateway will deliver to the Company
certificates representing the Gateway Purchased Shares against delivery to
Gateway by the Company of the Gateway Share Purchase Price in cash paid by wire
transfer of same-day funds to Gateway. Closing documents may be delivered by
facsimile with original signature pages sent by overnight courier.

         SECTION 3.03 REGISTRATION OF GATEWAY SHARES. Gateway's issuance of the
Gateway Shares to the Company shall be registered pursuant to an effective
Registration Statement on Form S-3.

         SECTION 3.04. LISTING ON NYSE. Within thirty days following the Escrow
Closing, Gateway will list the Gateway Shares on The New York Stock Exchange.

         SECTION 3.05. OPINION OF GATEWAY COUNSEL. At the Escrow Closing,
Gateway will deliver an opinion on behalf of Gateway, dated the Closing Date,
from the general counsel of Gateway, in the form attached hereto as EXHIBIT J.

                                       7

<PAGE>

                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES

         SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF GATEWAY. Gateway hereby
represents and warrants to the Company that the statements in this Section 4.01
are true and correct on the date hereof and will be true and correct on the
Escrow Closing Date:

         (a)      ORGANIZATION, GOOD STANDING AND QUALIFICATION. Gateway is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all corporate power and authority required to
(i) own or lease its properties and assets and carry on its business as
presently conducted, and (ii) enter into this Amendment and the other
agreements, instruments and documents contemplated hereby, and to consummate the
transactions contemplated hereby and thereby. Each of Gateway's subsidiaries is
a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has all corporate power and
authority required to own or lease its properties and assets and carry on its
business as presently conducted. Each of Gateway and its subsidiaries is
qualified to do business and is in good standing in each jurisdiction in which
the failure to so qualify or be in good standing, either individually or in the
aggregate, would have a Material Adverse Effect on Gateway. As used in this
Agreement, "Material Adverse Effect" means a material adverse effect on, or a
material adverse change in, or a group of such effects on or changes in, the
business, operations, financial condition, results of operations, prospects,
assets or liabilities of the applicable party and its subsidiaries, taken as a
whole.

         (b)      CAPITALIZATION. The capitalization of Gateway, without giving
effect to the transactions contemplated by this Agreement, is as follows. The
authorized capital stock of the Company consists only of 1,000,000,000 shares of
Gateway Common Stock, 1,000,000 shares of Class A Common Stock, $.01 par value
("Gateway Class A Common Stock"), and 5,000,000 shares of preferred stock, $.01
par value ("Gateway Preferred Stock"), of which 323,017,280 shares of Gateway
Common Stock and no shares of Gateway Class A Common Stock or Gateway Preferred
Stock were issued and outstanding as of September 11, 2000. All such shares of
Gateway Common Stock have been duly authorized, and all such issued and
outstanding shares of Gateway Common Stock have been validly issued, are fully
paid and nonassessable and are free and clear of all liens, claims and
encumbrances, other than any liens, claims or encumbrances created by or imposed
upon the holders thereof. The issuance of the Gateway Shares to the Company will
not (i) trigger any rights of first refusal, maintenance rights, preemptive
rights or any other rights of any stockholder of Gateway, or (ii) trigger any
change in control provisions in any of Gateway's equity incentive plans or stock
option plans.

         (c)      DUE AUTHORIZATION. All corporate actions on the part of
Gateway, its officers, directors and stockholders necessary for the
authorization, execution, delivery of, and the performance of all obligations of
the Company under, this Amendment, and the authorization, issuance, reservation
for issuance and delivery of the Gateway Shares being sold under this Amendment,
have been taken, and this Amendment constitutes the legal, valid and binding
obligation of Gateway, enforceable against Gateway in accordance with its terms.

         (d)      VALID ISSUANCE OF STOCK.

                                       8

<PAGE>

                  (i)      VALID ISSUANCE. The Gateway Shares are duly
authorized and, upon payment of the Gateway Share Purchase Price by the Company
in accordance with this Amendment, will be validly issued, fully paid and
non-assessable.

                  (ii)     COMPLIANCE WITH SECURITIES LAWS. Assuming the
correctness of the representations made by the Company in Section 4.03, the
Gateway Shares will be issued to the Company in compliance with applicable
exemptions from (A) the registration and prospectus delivery requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and (B) the
registration and qualification requirements of all applicable securities laws of
the states of the United States.

         (e)      GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, or notice to, any federal, state or local governmental authority on
the part of Gateway or any of its subsidiaries is required in connection with
the issuance of the Gateway Shares to the Company, or the consummation of the
other transactions contemplated by this Amendment, except for (i) the listing of
the Gateway Shares on The New York Stock Exchange, and (ii) the filing of a Form
D with the Securities and Exchange Commission (the "SEC").

         (f)      NON-CONTRAVENTION. The execution, delivery and performance of
this Amendment by Gateway, and the consummation by Gateway of the transactions
contemplated hereby (including the issuance of the Gateway Shares), do not (i)
contravene or conflict with Gateway's Certificate of Incorporation or Bylaws, in
each case as amended; (ii) constitute a violation of any provision of any
federal, state, local or foreign law binding upon or applicable to Gateway or
any of its subsidiaries; or (iii) constitute a default or require any consent
under, give rise to any right of termination, cancellation or acceleration of,
or to a loss of any benefit to which Gateway or any of its subsidiaries is
entitled under, or result in the creation or imposition of any lien, claim or
encumbrance on any assets of Gateway or any of its subsidiaries under, any
contract to which Gateway or such subsidiary is a party or any permit, license
or similar right relating to Gateway or such subsidiary or by which Gateway or
such subsidiary may be bound or affected.

         (g)      LITIGATION. There is no action, suit, proceeding, claim,
arbitration or investigation (each an "Action") pending or, to the best of
Gateway's knowledge, threatened: (i) against Gateway or any of its subsidiaries,
or any of their respective activities, properties or assets, or any of their
respective officers, directors or employees of Gateway or any of its
subsidiaries in connection with such officer's, director's or employee's
relationship with, or actions taken on behalf of, Gateway or such subsidiary
that is expected to have a Material Adverse Effect on Gateway, or (ii) that
seeks to prevent, enjoin, alter or delay the transactions contemplated by this
Amendment (including the issuance of the Gateway Shares). Neither Gateway nor
any of its subsidiaries is a party to or subject to the provisions of any order,
writ, injunction, judgment or decree of any court or government agency or
instrumentality that is expected to have a Material Adverse Effect on Gateway.

         (h)      COMPLIANCE WITH LAW AND CHARTER DOCUMENTS. Gateway is not in
violation or default of any provisions of its Certificate of Incorporation or
Bylaws, in each case as amended. Gateway and its subsidiaries have complied and
are in compliance with all applicable statutes,

                                       9

<PAGE>

laws, rules, regulations and orders of the United States of America and all
states thereof, foreign countries and other governmental bodies and agencies
having jurisdiction over their respective businesses or properties, except
where such failure to comply would not reasonably be likely to have a
Material Adverse Effect on Gateway.

         (i)      SEC DOCUMENTS.

                  (1)      REPORTS. Gateway has made available to the Company
prior to the date hereof copies of its Annual Report on Form 10-K for the fiscal
year ended December 31, 1999 ("Form 10-K"), its Quarterly Reports on Form 10-Q
for the fiscal quarters ended March 31, 2000 and June 30, 2000 (the "Form
10-Q's"), and all other registration statements, reports and proxy statements
filed by the Company with the SEC on or after December 31, 1999 (the Form 10-K,
the Form 10-Q's and such registration statements, reports and proxy statements
are collectively referred to herein as the "SEC Documents"). Except to the
extent that information contained in any SEC Document has been revised or
superseded by a later SEC Document filed and publicly available prior to the
date of this Amendment, each of the SEC Documents, as of the respective date
thereof (or if amended or superseded by a filing prior to the Escrow Closing
Date, then on the date of such filing), did not, and each of the registration
statements, reports and proxy statements filed by the Company with the SEC after
the date hereof and prior to the Escrow Closing will not, as of the date thereof
(or if amended or superseded by a filing after the date of this Amendment, then
on the date of such filing), contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. Neither Gateway nor any of its subsidiaries is a party to any
material contract, agreement or other arrangement that was required to have been
filed as an exhibit to the SEC Documents that was not so filed.

                  (2)      FINANCIAL STATEMENTS. Gateway has made available to
the Company copies of its audited financial statements for the fiscal year ended
December 31, 1999 (the "Balance Sheet Date"). Since the Balance Sheet Date,
Gateway has duly filed with the SEC all registration statements, reports and
proxy statements required to be filed by it under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the Securities Act. The audited and
unaudited consolidated financial statements of Gateway included in the SEC
Documents filed prior to the date hereof fairly present, in conformity with
generally accepted accounting principles (except, in the case of the Forms 10-Q
and 8-K, as may otherwise be permitted by Form 10-Q and Form 8-K) applied on a
consistent basis (except as otherwise may be stated in the notes thereto), the
consolidated financial position of Gateway as at the dates thereof and the
consolidated results of its operations and cash flows for the periods then ended
(subject to normal year-end audit adjustments in the case of unaudited interim
financial statements).

         SECTION 4.02. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. The
Investor hereby represents and warrants to the Company that the statements in
this Section 4.02 are true and correct on the date hereof and will be true and
correct on the Escrow Closing Date:

         (a)      ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Investor is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all corporate power and authority required
to own or lease its properties and assets and

                                       10

<PAGE>

carry on its business as presently conducted. The Investor is qualified to do
business and is in good standing in each jurisdiction in which the failure to
so qualify or be in good standing, either individually or in the aggregate,
would have a Material Adverse Effect on the Company.

         (b)      DUE AUTHORIZATION. The execution of this Amendment has been
duly authorized by all necessary corporate action on the part of the Investor.
This Amendment constitutes the Investor's legal, valid and binding obligation,
enforceable against the Investor in accordance with its terms, except (i) as may
be limited by (A) applicable bankruptcy, insolvency, reorganization or other
laws of general application relating to or affecting the enforcement of
creditors' rights generally and (B) the effect of rules of law governing the
availability of equitable remedies and (ii) as rights to indemnity or
contribution may be limited under federal or state securities laws or by
principles of public policy hereunder.

         (c)      NON-CONTRAVENTION. The execution, delivery and performance of
this Amendment by the Investor, and the consummation by the Investor of the
transactions contemplated hereby, do not (i) contravene or conflict with the
Certificate of Incorporation or Bylaws of the Investor, in each case as amended;
(ii) constitute a violation of any provision of any federal, state, local or
foreign law binding upon or applicable to the Investor; or (iii) constitute a
default or require any consent under, give rise to any right of termination,
cancellation or acceleration of, or to a loss of any benefit to which the
Investor is entitled under, or result in the creation or imposition of any lien,
claim or encumbrance on any assets of the Investor under, any contract to which
the Investor is a party or any permit, license or similar right relating to the
Investor or by which the Investor may be bound or affected.

         (d)      LITIGATION. There is no Action pending that seeks to prevent,
enjoin, alter or delay the transactions contemplated by this Amendment.

         SECTION 4.03. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents and warrants to Gateway and the Investor that the
statements in this Section 4.03 are true and correct on the date hereof and will
be true and correct on the Escrow Closing Date:

         (a)      ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all corporate power and authority required
to own or lease its properties and assets and carry on its business as presently
conducted. The Company is qualified to do business and is in good standing in
each jurisdiction in which the failure to so qualify or be in good standing,
either individually or in the aggregate, would have a Material Adverse Effect on
the Company.

         (b)      DUE AUTHORIZATION. The execution of this Amendment has been
duly authorized by all necessary corporate action on the part of the Company.
This Amendment constitutes the Company's legal, valid and binding obligation,
enforceable against the Company in accordance with its terms, except (i) as may
be limited by (A) applicable bankruptcy, insolvency, reorganization or other
laws of general application relating to or affecting the enforcement of
creditors' rights generally and (B) the effect of rules of law governing the
availability of equitable remedies and (ii) as rights to indemnity or
contribution may be limited under federal or state securities laws or by
principles of public policy hereunder.

                                       11

<PAGE>

         (c)      NON-CONTRAVENTION. The execution, delivery and performance of
this Amendment by the Company, and the consummation by the Company of the
transactions contemplated hereby, do not (i) contravene or conflict with the
Certificate of Incorporation or Bylaws of the Company, in each case as amended;
(ii) constitute a violation of any provision of any federal, state, local or
foreign law binding upon or applicable to the Company; or (iii) constitute a
default or require any consent under, give rise to any right of termination,
cancellation or acceleration of, or to a loss of any benefit to which the
Company is entitled under, or result in the creation or imposition of any lien,
claim or encumbrance on any assets of the Company under, any contract to which
the Company is a party or any permit, license or similar right relating to the
Company or by which the Company may be bound or affected.

         (d)      LITIGATION. There is no Action pending that seeks to prevent,
enjoin, alter or delay the transactions contemplated by this Amendment.

         (e)      GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the purchase of the Gateway Shares by
the Company pursuant to this Amendment.

         (f)      PURCHASE FOR OWN ACCOUNT. The Gateway Shares are being
acquired for investment for the Investor's own account, not as a nominee or
agent, and not with a view to the public resale or distribution thereof within
the meaning of the Securities Act, and the Company has no present intention of
selling, granting any participation in, or otherwise distributing the same. The
Company also represents that it has not been formed for the specific purpose of
acquiring the Gateway Shares.

         (g)      INVESTMENT EXPERIENCE. The Company understands that the
purchase of the Gateway Shares involves substantial risk. The Company has
experience as an investor in securities of companies and acknowledges that it is
able to fend for itself, can bear the economic risk of its investment in the
Gateway Shares and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of this investment
in the Gateway Shares and protecting its own interests in connection with this
investment.

                                   ARTICLE IV
                                  MISCELLANEOUS

         SECTION 5.01. HARDWARE PROVIDER. During the Initial Rights Period,
Gateway will be the Company's exclusive hardware provider (including personal
computers and servers) for the Company's internal corporate uses as long as
Gateway can offer the products required by the Company at competitive prices and
within competitive timeframes.

         SECTION 5.02. NASDAQ LISTING. The Company shall list the Note Shares
and the Warrant Shares on the Nasdaq National Market within 30 days following
the Escrow Closing.

                                       12

<PAGE>

         SECTION 5.03. CONTINUATION OF THE AGREEMENT. Except as modified hereby,
the Agreement shall continue in full force and effect. The provisions of Section
8 of the Agreement shall govern any claims of indemnification that arise
pursuant to this Amendment.

         SECTION 5.04. SUCCESSORS AND ASSIGNS. The terms and conditions of this
Amendment will inure to the benefit of and be binding upon the respective
successors and assigns of the parties.

         SECTION 5.05. GOVERNING LAW. This Amendment will be governed by and
construed under the internal laws of the State of Delaware.

         SECTION 5.06. COUNTERPARTS. This Amendment may be executed in two or
more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.

         SECTION 5.07. HEADINGS. The headings and captions used in this
Amendment are used for convenience only and are not to be considered in
construing or interpreting this Amendment.

         SECTION 5.08. NOTICES. Any notice required or permitted under this
Amendment shall be given in writing, shall be effective when received, and shall
in any event be deemed received and effectively given upon personal delivery to
the party to be notified or three business days after deposit with the United
States Post Office, by registered or certified mail, postage prepaid, or one (1)
business day after deposit with a nationally recognized courier service such as
FedEx for next business day delivery under circumstances in which such service
guarantees next business day delivery, or one (1) business day after facsimile
with copy delivered by registered or certified mail, in any case, postage
prepaid and addressed to the party to be notified at the address indicated for
such party on the signature page hereof or at such other address as the parties
may designate by giving at least ten days advance written notice pursuant to
this Section 5.05.

         SECTION 5.09. AMENDMENTS AND WAIVERS. This Amendment may be amended and
the observance of any term of this Amendment may be waived (either generally or
in a particular instance and either retroactively or prospectively), only with
the written consent of the Company, the Investor and Gateway. Any amendment or
waiver effected in accordance with this Section 5.06 will be binding upon
Gateway, the Investor, the Company and their respective successors and assigns.

         SECTION 5.10. SEVERABILITY. If any provision of this Amendment is held
to be unenforceable under applicable law, such provision will be excluded from
this Amendment and the balance of the Amendment will be interpreted as if such
provision were so excluded and will be enforceable in accordance with its terms.

         SECTION 5.11. ENTIRE AGREEMENT. This Amendment and the Agreement, and
all exhibits and schedules hereto and thereto, which are hereby incorporated by
reference into and made an integral part of this Amendment, constitute the
entire agreement and understanding of the parties with respect to the subject
matter hereof and supersedes any and all prior negotiations, correspondence,
agreements, understandings duties or obligations between the parties with
respect to the subject matter hereof.

                                       13

<PAGE>

         SECTION 5.12. FURTHER ASSURANCES. From and after the date of this
Amendment upon the request of the Company or the Investor or Gateway, the
Company and the Investor and Gateway will execute and deliver such instruments,
documents or other writings, and take such other actions, as may be reasonably
necessary or desirable to confirm and carry out and to effectuate fully the
intent and purposes of this Amendment.

         SECTION 5.13. MEANING OF INCLUDE AND INCLUDING; ARTICLE AND SECTION
REFERENCES. Whenever in this Amendment the word "include" or "including" is
used, it shall be deemed to mean "include, without limitation" or "including,
without limitation," as the case may be, and the language following "include" or
"including" shall not be deemed to set forth an exhaustive list. All "Article",
"Section", "subsection", "paragraph" and "Clause" references herein are
references to Articles, Sections, subsections, paragraphs and clauses,
respectively, of this Amendment unless otherwise specified.

         SECTION 5.14. FEES, COSTS AND EXPENSES. All fees, costs and expenses
(including attorney's fees and expenses) incurred by any party hereto in
connection with the preparation, negotiation and execution of this Amendment and
the consummation of the transactions contemplated hereby (including the costs
associated with any filings with, or compliance with any of the requirements of,
any governmental authorities), shall be the sole and exclusive responsibility of
such party.

                             SIGNATURE PAGE FOLLOWS

                                       14

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date and year first written above.

eSOFT, INC.                                    GATEWAY COMPANIES, INC.

By: /s/ Jeffrey Finn                           By: /s/ John Todd
    ---------------------------                   -----------------------
    Name: Jeffrey Finn                            Name: John Todd
    Title: CEO                                    Title: CFO

                                               GATEWAY, INC.

                                               By: /s/ John Todd
                                                   ------------------------
                                                   Name: John Todd
                                                   Title: CFO

                                       15

<PAGE>

ADDRESS FOR eSOFT, INC.:             ADDRESS FOR GATEWAY COMPANIES, INC. AND
                                     GATEWAY, INC.:

295 Interlocken Blvd., #500          4545 Towne Centre Court
Broomfield, Colorado 80021           San Diego, California 92121
Telephone No: (303) 444-1600         Telephone No.: (858) 799-3401
Facsimile No: (303) 444-1640         Facsimile No.: (858) 799-3413
Attn: Chief Executive Officer        Attn: General Counsel

with copies to:                   and

Davis Graham & Stubbs LLP            Kaye, Scholer, Fierman, Hays & Handler, LLP
1550 17th Street                     1999 Avenue of the Stars
Suite 500                            Suite 1600
Denver, Colorado 80202               Los Angeles, CA 90067
Attention: Lester R.  Woodward       Attn: Barry L.  Dastin, Esq.
Telephone No.: (303) 892-7392        Telephone No.: (310) 788-1000
Facsimile No.: (303) 893-1379        Facsimile No.: (310) 788-1200

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