Document:

ASSET PURCHASE AGREEMENT

                           dated as of August 2, 2000

                                  by and among

                          DATA SYSTEMS & SOFTWARE INC,
                             a Delaware corporation,
                                 ("Stockholder")

                      INTERNATIONAL DATA OPERATIONS, INC.,
                             a Delaware corporation,
                                   ("Seller")

                                       and

                             ECLIPSE NETWORKS, INC.,
                             a Delaware corporation,
                                  ("Purchaser")

                     Covering the Purchase of Substantially
                              All of the Assets of

                                    CinNetic,
                a division of International Data Operations, Inc.

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

1.  GENERAL DEFINITIONS.......................................................1

2.  PURCHASE AND SALE OF THE ASSETS; CLOSING DATE.............................3
    2.1   Purchase and Sale...................................................3
    2.2   Delivery of Assets and Transfer Documents...........................3
    2.3   Closing; Closing Date...............................................4

3.  PURCHASE PRICE............................................................4
    3.1   Price and Payment...................................................4
    3.2   Purchase Price Adjustment...........................................4
    3.3   Excluded Assets.....................................................5
    3.4   Assumed Obligations.................................................5
    3.5   Excluded Liabilities and Obligations................................6
    3.6   Transfer Taxes......................................................6
    3.7   Allocation of Purchase Price........................................6
    3.8   Escrow Amount.......................................................6

4.  REPRESENTATIONS AND WARRANTIES OF SELLER..................................7
    4.1   Organization........................................................7
    4.2   Ownership...........................................................7
    4.3   Financial Statements................................................8
    4.4   Events Since the Balance Sheet Date.................................8
    4.5   Competing Interests.................................................9
    4.6   Notes and Accounts Receivable......................................10
    4.7   Employee Matters...................................................10
    4.8   Contracts and Agreements...........................................10
    4.9   Effect of Agreement................................................12
    4.10  Properties, Assets and Leasehold Estates...........................12
    4.11  Intellectual Property..............................................13
    4.12  Suits, Actions and Claims..........................................13
    4.13  Licenses and Permits; Compliance with Governmental Regulations.....14
    4.14  Authorization......................................................14

<PAGE>

    4.15  No Untrue Statements...............................................14
    4.16  Records............................................................15
    4.17  Work-In-Process....................................................15
    4.18  Brokers and Finders................................................15
    4.19  Adverse Facts......................................................15
    4.20  Deposits...........................................................15
    4.21  Workers' Compensation Data.........................................15
    4.22  Customer List......................................................15
    4.23  No Royalties.......................................................16
    4.24  Business...........................................................16
    4.25  Subsidiaries.......................................................16
    4.26  Non-Competes.......................................................16

5.  REPRESENTATIONS AND WARRANTIES OF PURCHASER..............................16
    5.1   Incorporation......................................................16
    5.2   Authorization......................................................16
    5.3   Brokers and Finders................................................17

6.  PRE-CLOSING COVENANTS....................................................17
    6.1   General............................................................17
    6.2   Notices and Consents...............................................17
    6.3   Operation of Business..............................................17
    6.4   Preservation of Business...........................................17
    6.5   Full Access........................................................18
    6.6   Notice of Developments.............................................18
    6.7   Exclusivity........................................................18

7.  CONDITIONS TO OBLIGATION TO CLOSE........................................18
    7.1   Conditions to Obligation of the Purchaser..........................18
    7.2   Conditions to Obligations of the Seller............................20

8.  TERMINATION..............................................................20
    8.1   Termination of Agreement...........................................20
    8.2   Effect of Termination..............................................21

9.  NATURE OF STATEMENTS AND SURVIVAL OF INDEMNIFICATIONS, GUARANTEES,
    REPRESENTATIONS AND WARRANTIES OF SELLER AND SHAREHOLDER ................21

                                      -iii-
<PAGE>

10. SPECIAL CLOSING AND POST-CLOSING COVENANTS...............................22
    10.1  Delivery of Funds and Other Assets Collected by Purchaser;
          Power of Attorney..................................................22
    10.2  Delivery of Funds and Other Assets Collected by Seller or
          Shareholder; Power of Attorney.....................................22
    10.3  Employment.........................................................22
    10.3  Office Space.......................................................23
    10.3  Further Assurances.................................................23

11. INDEMNITIES..............................................................23
    11.1  Indemnity by Seller................................................23
    11.2  Limitation of Certain Liability....................................24
    11.3  Notice of Claim....................................................25
    11.4  Right to Defend....................................................25
    11.5  Cooperation by Purchaser...........................................26
    11.6  Payment............................................................26
    11.7  Indemnity by Purchaser.............................................26

12. LEASE AGREEMENT..........................................................26

13. NON-COMPETITION..........................................................27
    13.1  Agreement not to Compete...........................................27
    13.2  Permitted Activities...............................................27

14. NONDISCLOSURE OF CONFIDENTIAL INFORMATION................................27

15. ASSIGNMENT OF CONTRACTS..................................................28

16. SPECIAL PROVISIONS REGARDING EMPLOYEES OF SELLER.........................29
    16.1  New Employees of Purchaser.........................................29
    16.2  Hiring of Employees................................................29
    16.3  Existing Employee Benefit Plans....................................29
    16.4  Indemnity Concerning Accrued Benefits..............................29

17. EXPENSES.................................................................29

                                      -iv-
<PAGE>

18. FURTHER ACTIONS..........................................................30

19. NOTICES..................................................................30

20. GENERAL PROVISIONS.......................................................32
    20.1  GOVERNING LAW; INTERPRETATION; SECTION HEADINGS....................32
    20.2  Severability.......................................................32
    20.3  Entire Agreement...................................................32
    20.5  Assignment.........................................................33
    20.6  Amendment; Waiver..................................................33
    20.7  Gender; Numbers....................................................33
    20.8  Counterparts.......................................................33
    20.9  Telecopy Execution and Delivery....................................33
    20.10 Arbitration........................................................34

                                      -v-
<PAGE>

                         LIST OF SCHEDULES AND EXHIBITS

SCHEDULES

Schedule 2.1         List of Assets
Schedule 2.1(A)      Excluded Assets
Schedule 3.4         Assumed Liabilities
Schedule 3.7         Allocation of Purchase Price
Schedule 4.2         Ownership of Assets
Schedule 4.3(A)      Financial Statements
Schedule 4.3(B)      Exceptions to GAAP on Financial Statements
Schedule 4.4         Events Since the Balance Sheet Date
Schedule 4.5         Competing Interests
Schedule 4.7A        Employees
Schedule 4.7B        Employee Benefit Plans
Schedule 4.8         Contracts and Agreements
Schedule 4.8A        Non-assignable Contracts and Agreements
Schedule 4.9         Effect of Agreement
Schedule 4.11        Intangible Property
Schedule 4.12        Suits, Actions and Claims
Schedule 4.13        Licenses and Permits
Schedule 4.17        Work-in-Process
Schedule 4.21        Workers' Compensation Report
Schedule 4.22        Customer List
Schedule 4.22A       Non-continuing Customers
Schedule 7.1(c)      Third Party Consents
Schedule 7.1(h)      Personnel to Execute Compliance Agreement
Schedule 7.1(o)      Employees Covered by Transition Services Agreement
Schedule 13          Non-competition

EXHIBITS

Exhibit A            Form of General Warranty Bill of Sale
Exhibit B            Form of Escrow Agreement
Exhibit C            Form of Compliance Agreement
Exhibit D            Opinion of Seller's Counsel
Exhibit E            Form of Transition Services Agreement

                                      -vi-
<PAGE>

                            ASSET PURCHASE AGREEMENT

     THIS ASSET PURCHASE  AGREEMENT (this  "Agreement") is made and entered into
this 2nd day of August,  2000,  by and among DATA  SYSTEMS &  SOFTWARE  INC.,  a
Delaware  corporation  ("Stockholder"),  INTERNATIONAL DATA OPERATIONS,  INC., a
Delaware  corporation   ("Seller")  and  ECLIPSE  NETWORKS,   INC.,  a  Maryland
corporation ("Purchaser").

                               W I T N E S S E T H

     WHEREAS, Seller is the owner of all right, title and interest in and to the
assets  described on Schedule 2.1 hereto (the "Assets"),  with such assets being
substantially all of the assets currently used in the CinNetic division operated
by Seller (the "Business");

     WHEREAS,  Stockholder is the owner of all of the outstanding  capital stock
of  Seller  and  is  reasonably   expected  to  benefit  from  the  transactions
contemplated by this Agreement;

     WHEREAS,  Seller  desires to sell the  Assets to  Purchaser  and  Purchaser
desires to acquire the Assets from  Seller,  all  pursuant to this  Agreement as
hereinafter provided; and

     WHEREAS,  the parties  hereto desire to set forth certain  representations,
warranties  and  covenants  made by each to the  other as an  inducement  to the
execution and delivery of this  Agreement,  and to set forth certain  additional
agreements related to the transactions contemplated hereby;

                                    Agreement

     NOW,  THEREFORE,  for and in  consideration  of the  premises,  the  mutual
representations,  warranties and covenants  herein  contained and other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, the parties hereby agree as follows:

     1. GENERAL DEFINITIONS. For purposes of this Agreement, the following terms
shall have the respective meanings set forth below:

          1.1  Affiliate  of any  Person  shall  mean  any  Person  Controlling,
     Controlled by or under common Control with such Person.

          1.2 Best  Knowledge of Seller means actual  knowledge of either Seller
     or Stockholder after reasonable inquiry and investigation.

<PAGE>

          1.3 Control and all  derivations  thereof  shall mean the  possession,
     direct or indirect, of either (i) the ownership of or ability to direct the
     voting  of,  as the case  may be,  fifty-one  percent  (51%) or more of the
     equity interests,  value or voting power in any Person or (ii) the power to
     direct or cause the direction of the  management  and policies of a Person,
     whether  through  the  ownership  of  voting  securities,  by  contract  or
     otherwise.

          1.4 Court  Order  means any  judgment,  order,  award or decree of any
     foreign,  federal, state, local or other court or tribunal and any award in
     any arbitration proceeding.

          1.5  GAAP  shall  mean  generally  accepted   accounting   principles,
     consistently applied.

          1.6  Governmental  Authority shall mean any and all foreign,  federal,
     state or local governments,  governmental institutions,  public authorities
     and governmental entities and courts.

          1.7 Governmental  Requirement  shall mean any and all laws (including,
     but  not  limited  to,   applicable   common  law  principles),   statutes,
     ordinances,   codes,  rules,   regulations,   orders,   judgments,   writs,
     injunctions,  decrees,  decisions or pronouncements,  promulgated,  issued,
     passed or set forth by any Governmental Authority.

          1.8 Intellectual  Property shall mean all of the following as they are
     related primarily to the Business: (i) patents, patent applications, patent
     disclosures  and  inventions  (whether or not patentable and whether or not
     reduced to practice);  (ii) trademarks,  service marks,  trade dress, trade
     names,  corporate or company  names,  logos,  slogans and  Internet  domain
     names,  together with all goodwill  associated  with each of the foregoing;
     (iii) copyrights and copyrightable works; (iv) registrations,  applications
     and  renewals for any of the  foregoing;  (v) trade  secrets,  confidential
     information  and know-how  (including  but not limited to ideas,  formulae,
     compositions,   manufacturing  and  production  processes  and  techniques,
     research and development information,  drawings,  specifications,  designs,
     business and marketing  plans,  and customer and supplier lists and related
     information);  and (vi)  computer  software  (including  but not limited to
     data, data bases and documentation).

          1.9 License  Agreements  shall mean (i) the  Sun-Netscape  Alliance PS
     Subcontracting Agreement (which incorporates and/or supercedes the Netscape
     Professional  Services  Subcontract  Agreement)  and (ii)  the Sun  Channel
     Agreement  #43503-3   (Authorized   Software   Enterprise  Partner)  (which
     incorporates  and/or  supercedes  the  Netscape  Level 3  Business  Partner
     Agreement).  The  principal  terms of each of the  License  Agreements  are
     summarized on Schedule 1.9 hereto.

                                       2
<PAGE>

          1.10 Material (whether or not capitalized) shall, where appropriate in
     context of its use in making the  representations  and warranties set forth
     in Article  III, be deemed to mean an amount of money  greater than $20,000
     individually or $50,000 in the aggregate.

          1.11 Net Working Capital of Business shall mean the sum of all current
     Assets  transferred  pursuant to this Agreement,  excluding  cash,  related
     party accounts,  notes receivable,  accounts  receivables more than 60 days
     past due,  and  income  tax  related  accounts,  less all  current  assumed
     liabilities of the Business as of Closing,  including,  without limitation,
     accrued  Taxes  through the Closing Date and any payments due to employees,
     subcontractors,  vendors  or  customers  as a  result  of the  transactions
     contemplated  hereby,  in each case as determined  in accordance  with past
     practices of Seller (which past practices are in accordance with GAAP).

          1.12 Person shall mean any natural person, any Governmental  Authority
     and any  entity  the  separate  existence  of  which is  recognized  by any
     Governmental  Authority or  Governmental  Requirement,  including,  but not
     limited  to,  corporations,   partnerships,  joint  ventures,  joint  stock
     companies,  trusts, estates, companies and associations,  whether organized
     for profit or otherwise.

          1.13 Taxes shall mean any and all income,  excise,  franchise or other
     taxes  and  all  other   charges  or  fees  imposed  or  collected  by  any
     Governmental  Authority or pursuant to any  Governmental  Requirement,  and
     shall  also  include  any  and  all  penalties,   interest,   deficiencies,
     assessments and other charges with respect thereto.

          1.14 Transfer  Period shall mean the period  commencing on the Closing
     Date and expiring 90 days after the Closing Date.

     2. PURCHASE AND SALE OF THE ASSETS; CLOSING DATE.

          2.1 Purchase and Sale. Seller hereby agrees to sell, assign,  transfer
     and deliver to Purchaser all right, title and interest in and to the Assets
     (as more fully  described on Schedule  2.1  hereto),  free and clear of any
     liens or  encumbrances  of any  nature  whatsoever  (except  for any liens,
     encumbrances  or  obligations,  if  any,  expressly  assumed  by  Purchaser
     hereunder).  Purchaser  hereby agrees to purchase from Seller the Assets in
     consideration  for the Purchase Price (as hereinafter  defined)  payable as
     set forth in Section 3 below.

          2.2  Delivery  of  Assets  and  Transfer  Documents.  At  the  Closing
     (hereinafter  defined in Section  2.3),  Seller  shall have taken all steps
     necessary to put Purchaser in  possession of the Assets,  free and clear of
     any liens or  encumbrances  of any  nature  whatsoever  (except  for liens,
     encumbrances  or  obligations,  if  any,  expressly  assumed  by  Purchaser
     hereunder), and have

                                       3
<PAGE>

     delivered to Purchaser  (i) a duly executed  general  warranty bill of sale
     covering  the  Assets,  in the form of and  containing  the same  terms and
     provisions as the General  Warranty Bill of Sale attached hereto as Exhibit
     A, (ii) duly executed  assignments  for all accounts  receivable,  patents,
     trademarks,  trade names and similar  intangible  property  included in the
     Assets,  in form and  substance  acceptable  to Purchaser and in recordable
     form as  appropriate,  and (iii)  such  other duly  executed  transfer  and
     release documents which Purchaser has reasonably  requested to evidence the
     transfer  of the  Assets  to  Purchaser  free  and  clear  of any  liens or
     encumbrances of any nature  whatsoever  (except for liens,  encumbrances or
     obligations, if any, expressly assumed by Purchaser hereunder).

          2.3 Closing;  Closing Date. Subject to the terms and conditions herein
     contained,  the  consummation of the  transactions  referred to above shall
     take place (the  "Closing") at the offices of Hogan & Hartson  L.L.P.,  555
     13th Street,  N.W.,  Washington,  D.C., on a date and time mutually  agreed
     upon by the  parties,  but in no event  later  than  August  7,  2000  (the
     "Closing Date").

     3. PURCHASE PRICE.

          3.1 Price and Payment.

               (a)  The   aggregate   consideration   for  the  Assets  and  the
          Non-Competition Agreements (set forth in Section 13 below) shall be an
          amount equal to  $1,300,000  (the  "Purchase  Price"),  subject to the
          working capital and contract  adjustments  provided in Sections 3.2(a)
          and (b) below.

               (b) At the Closing,  Purchaser  shall cause the Purchase Price to
          be paid to Seller or its  designee  by wire  transfer  of  immediately
          available funds.

          3.2 Purchase Price Adjustments.

               (a)  Working  Capital  Adjustment.  The  Purchase  Price shall be
          increased or decreased on a  dollar-for-dollar  basis by the amount by
          which the Net  Working  Capital of the  Business  is more or less than
          $250,000 on the Closing Date (the "Net Working  Capital  Adjustment").
          The Net Working Capital of the Business shall be initially  determined
          at the time of Closing by an  estimate of Seller in good faith and any
          adjustment  as a result  thereof shall reduce or increase the Purchase
          Price payable pursuant to Section 3.1 above;  provided,  however, that
          any  increase  in the  Purchase  Price  payable  at  Closing  shall be
          initially  limited to 75% of such  increase  (with the full  amount of
          such increase to be deferred until such time as the E&Y  Determination
          (as defined  below) or the Final  Computation  (as defined  below) has
          been made.  Following  the  Closing,  the Net  Working  Capital of the
          Business shall be subsequently determined within sixty

                                       4
<PAGE>

          (60) days after the Closing Date by Ernst & Young,  LLP, in accordance
          with the terms of this Agreement (at the expense of Purchaser),  which
          determination (the "E&Y Determination")  shall be submitted in writing
          to Seller  and  Purchaser  no later  than  sixty  (60) days  after the
          Closing.   If  within  ten  (10)  days   after   receipt  of  the  E&Y
          Determination, Seller delivers written notice to Purchaser that Seller
          disagrees with the E&Y Determination (the "Disagreement Notice"), then
          Seller and Purchaser shall attempt in good faith to mutually determine
          the  correct  amount of the Net Working  Capital of Seller  within ten
          (10) days after Seller delivers the Disagreement  Notice to Purchaser.
          If Seller and Purchaser  cannot in good faith  mutually  determine the
          correct  amount of the Net Working  Capital of Seller  within such ten
          (10) day  period,  then  Seller and  Purchaser  will  mutually  select
          another accounting firm, to be considered a "Big Six" accounting firm,
          to compute the Net Working Capital of Seller,  which  computation (the
          "Final  Computation")  shall be final,  conclusive  and binding on the
          parties.  In the event of a Final  Computation,  Purchaser  and Seller
          shall jointly pay the expense of the Final Computation. If Seller does
          not deliver the  Disagreement  Notice on a timely basis to  Purchaser,
          Seller shall be deemed to agree with and accept the E&Y Determination,
          which shall be final and conclusive  against Purchaser and Seller. Any
          required  payment by Seller or  Purchaser  by virtue of a Net  Working
          Capital Adjustment (net of any preliminary adjustment made at Closing)
          shall be made by Seller or  Purchaser,  as the case may be, within ten
          (10)  days  of the  receipt  of the  E&Y  Determination  or the  Final
          Computation.

               (b) Contract  Adjustment.  The  Purchase  Price shall be adjusted
          upward by Five Hundred  Thousand  Dollars  ($500,000) (the "Adjustment
          Amount") in the event that  Seller  shall have  provided to  Purchaser
          within  the  Transfer  Period  evidence  reasonably   satisfactory  to
          Purchaser that (i) each of the License Agreements is in full force and
          effect in  accordance  with the terms and  provisions  represented  by
          Seller to Purchaser  on the Closing Date on Schedule 1.9 hereto,  (ii)
          each of the License  Agreements has been  transferred into the name of
          Purchaser  and each such  transfer has been  consented to by the other
          party  to  such  agreement  or  Purchaser   shall  have  entered  into
          substantially  similar agreements on substantially  similar terms, and
          (iii) Purchaser shall be entitled to enjoy all the rights and benefits
          currently enjoyed by the Business under each of the License Agreements
          as  described  by Seller to  Purchaser  on Schedule  1.9  hereto.  Any
          required  payment by  Purchaser  to Seller  pursuant  to this  Section
          3.2(b)  shall  be  made in  cash  within  ten  (10)  days of  Seller's
          satisfaction in full of the  requirements  of this Section 3.2(b).  At
          Closing,  Purchaser shall deliver the Adjustment  Amount to the Escrow
          Agent pursuant to Section 3.8 below.

          3.3  Excluded  Assets.  The Assets shall not include any of the assets
     listed on Schedule 2.1A hereto (collectively, the "Excluded Assets").

          3.4 Assumed  Obligations.  Purchaser hereby assumes the obligations of
     Seller  under  all  contracts  and  agreements  transferred  by  Seller  to
     Purchaser  under this  Agreement  that are listed and described on Schedule
     3.4 hereto (the  "Assumed  Liabilities  and  Obligations");

                                       5
<PAGE>

     provided that  Purchaser  specifically  does not assume any  liabilities of
     Seller under such  contracts or agreements  with respect to any breaches of
     such contracts or agreements occurring on or before the Closing Date or any
     damages to third parties resulting from acts, events or omissions occurring
     on or before the Closing Date.

          3.5 Excluded Liabilities and Obligations.

               (a) Except as expressly set forth in Section 3.4 above, Purchaser
          shall not assume and shall not be liable or responsible  for any debt,
          obligation or liability of the Business,  Seller,  Stockholder  or any
          other  Affiliate of Seller,  or any claim against any of the foregoing
          parties, of any kind, whether known or unknown,  contingent,  absolute
          or otherwise arising out of or relating to the conduct of the Business
          prior to the Closing Date (the "Excluded Liabilities").

               (b) Except for the Assumed Liabilities and Obligations  expressly
          provided  for in Section  3.4  hereof,  Seller and  Stockholder  shall
          jointly and  severally  forever  defend,  indemnify  and hold harmless
          Purchaser  from  and  against  any and all  liabilities,  obligations,
          losses,  claims,  damages  (including  incidentals  and  consequential
          damages),  costs and expenses  (including  court costs and  reasonable
          attorney's  fees) related to or arising from the Business prior to the
          Closing Date.

          3.6 Transfer  Taxes.  Purchaser and Seller  acknowledge and agree that
     the consideration (including, without limitation the Purchase Price and any
     adjustments  thereto)  is  deemed to have  been  paid for any  sales,  use,
     transfer or other  similar tax purposes by Purchaser to Seller  pursuant to
     this  Agreement,  and includes and is inclusive of any and all sales,  use,
     transfer or other  similar tax imposed as a result of the  consummation  of
     the  transactions  contemplated by this  Agreement.  Seller and Stockholder
     hereby agree to pay and discharge,  and to indemnify Purchaser against, and
     protect, save and hold Purchaser harmless from, any liability,  obligation,
     claim,  assessment or deficiency (whether or not ultimately successful) for
     any and all sales,  use,  transfer or other  similar taxes (and any and all
     interest, penalties, additions to tax and fines thereon or related thereto)
     resulting or arising from or incurred in connection  with the  consummation
     of the sale of the Assets pursuant to this Agreement.

          3.7  Allocation  of  Purchase  Price.  The  Purchase  Price  shall  be
     allocated  as set forth in Schedule 3.7  attached  hereto,  and made a part
     hereof.

          3.8 Escrow Amount. Pursuant to the Escrow Agreement to be entered into
     among  Purchaser,  Seller and First Union National Bank,  N.A. (the "Escrow
     Agent"),  substantially  in the form of  Exhibit B hereto,  the  Adjustment
     Amount  shall be  delivered  to the Escrow  Agent at Closing.  All fees and
     expenses of the Escrow Agent shall be paid by Purchaser.

                                       6
<PAGE>

     The  Adjustment  Amount  shall be held  pursuant to the terms of the Escrow
     Agreement  and shall be available for payment to Seller in the event Seller
     satisfies the  requirements  of Section  3.2(b) above.  In the event Seller
     satisfies  its  obligations  under  Section  3.2(b)  in full  prior  to the
     expiration of the Transfer Period,  Purchaser agrees to instruct the Escrow
     Agent to  disburse  to Seller  the  Adjustment  Amount  (together  with any
     interest on the Adjustment Amount) within 10 days of Seller's  satisfaction
     of Section 3.2(b),  but in no event later than the last day of the Transfer
     Period.  In the event Seller fails to satisfy its obligations under Section
     3.2(b)  in  full  prior  to the  expiration  of the  Transfer  Period,  the
     Adjustment  Amount  (together with any interest on the  Adjustment  Amount)
     shall be returned to  Purchaser.  Purchaser and Seller agree that each will
     execute  and deliver  such  reasonable  instruments  and  documents  as are
     furnished  by any other  party to enable such  furnishing  Party to receive
     those  portions of the Adjustment  Amount to which the furnishing  Party is
     entitled under the provisions of the Escrow Agreement and this Agreement

     4. REPRESENTATIONS AND WARRANTIES OF SELLER.  Seller and Stockholder hereby
jointly and severally represent and warrant to Purchaser as follows:

          4.1 Organization. Stockholder is a corporation duly organized, validly
     existing and in good standing under the laws of the State of Delaware,  and
     is  duly   authorized,   qualified  and  licensed   under  all   applicable
     Governmental Requirements to carry on its business in the places and in the
     manner as now conducted  except where any such failure would not reasonably
     be expected to have a material  adverse effect on the financial  condition,
     operating results, assets, or business prospects of the Business. Seller is
     a corporation  duly organized,  validly existing and in good standing under
     the laws of the State of Delaware,  and is duly  authorized,  qualified and
     licensed under all  applicable  Governmental  Requirements  to carry on its
     business in the places and in the manner as now conducted  except where any
     such failure would not  reasonably  be expected to have a material  adverse
     effect on the financial condition,  operating results,  assets, or business
     prospects  of the  Business.  Seller is  qualified  to do business in every
     jurisdiction  in which  the  failure  to so  qualify  might  reasonably  be
     expected  to have a material  adverse  effect on the  financial  condition,
     operating results, assets, or business prospects of the Business.

          4.2  Ownership.  Seller  owns  all  of  the  Assets  constituting  the
     Business.  Except as listed on Schedule  4.2 hereto,  there are no options,
     rights  or  other  grants  currently  outstanding  for the  acquisition  or
     purchase of any of the Assets.  All of the properties and assets  necessary
     for  the  continued  operation  of  the  Business  as  currently  conducted
     (including,  without limitation, all books, records, computers and computer
     software  and data  processing  systems)  are  included in the Assets being
     purchased by Purchaser pursuant to this Agreement and are owned,  leased or
     licensed by the Business and are  reasonably  suitable for the purposes for
     which they are currently being used. All of the  outstanding  capital stock
     of Seller is owned by the Stockholder.

                                       7
<PAGE>

          4.3 Financial Statements.  Seller has delivered to Purchaser copies of
     the following financial statements for the Business, all of which financial
     statements are included in Schedule 4.3(A) hereto:

               (a)  Unaudited   Summary  Balance  Sheet  of  the  Business  (the
          "Reference  Balance  Sheet") as of June 30, 2000 (the  "Balance  Sheet
          Date") and Unaudited  Summary  Statement of Operations of the Business
          for the six-month period ended June 30, 2000;

               (b)  Unaudited  Summary  Balance  Sheet  of  the  Business  as of
          December 31, 1999; and

               (c) Unaudited Summary Statement of Operations of the Business for
          the year ended December 31, 1999.

Except as set forth on Schedule 4.3(B) hereto, the financial statements supplied
to Purchaser by Seller,  whether or not included in Schedule 4.3(A) hereto, have
been  prepared  in  accordance  with GAAP and  present  fairly the  consolidated
financial  condition of the Business as of the dates thereof and for the periods
indicated thereon. The Reference Balance Sheet reflects, as of the Balance Sheet
Date, all liabilities,  debts and obligations of any nature of Seller related to
the Business and the Assets, whether accrued, absolute, contingent or otherwise,
and whether due, or to become due,  including,  but not limited to, liabilities,
debts or  obligations  on account  of taxes or other  governmental  charges,  or
penalties,  interest or fines thereon or in respect thereof,  to the extent such
items are required to be reflected on such balance sheet under GAAP.

          4.4  Events  Since  the  Balance  Sheet  Date.  Except as set forth on
     Schedule 4.4 hereto, since the Balance Sheet Date, there has not been:

               (a) any change in the  condition  (financial  or otherwise) or in
          the  properties,  assets,  liabilities,  business or  prospects of the
          Business,  except normal and usual  changes in the ordinary  course of
          business, none of which,  individually or in the aggregate,  has had a
          material  adverse  effect on the condition  (financial or  otherwise),
          properties,   assets,  liabilities,   business  or  prospects  of  the
          Business;

               (b) any labor trouble,  strike or any other occurrence,  event or
          condition  affecting  the  employees  of the Business  that  adversely
          affects the  condition  (financial  or otherwise) of the Assets or the
          Business.

                                       8
<PAGE>

               (c) any material  breach or default by Seller or Stockholder  or,
          to the Best  Knowledge  of  Seller,  by any  other  party,  under  any
          agreement or obligation  included in the Assets or by which any of the
          Assets are bound;

               (d) any damage,  destruction  or loss  (whether or not covered by
          insurance),  which  materially  adversely  affects  the  Assets or the
          Business;

               (e) any  material  change in the types,  nature,  composition  or
          quality of the services of the Business,  any material  adverse change
          in the  contributions  of any of the service  lines of the Business to
          the revenues or gross income of such Business, or any material adverse
          change in the sales, revenue or net income of the Business;

               (f) any  transaction  related to or  affecting  the Assets or the
          Business other than transactions in the ordinary course of business of
          Seller; or

               (g) any other occurrence,  event or condition that has materially
          adversely  affected (or can  reasonably be expected to have a material
          adverse effect on) the Assets or the Business.

          4.5 Competing  Interests.  Except as set forth on Schedule 4.5 hereto,
     neither Seller or  Stockholder,  nor, to the Best Knowledge of Seller,  any
     stockholder or officer of Seller, and no Associate (as hereinafter defined)
     of Seller:

               (a) owns, directly or indirectly,  any equity interests in, or is
          a director, officer or employee of, or consultant to, any entity which
          is a competitor, supplier or customer of the Business, or, to the Best
          Knowledge of Seller,  a competitor,  supplier or customer of Purchaser
          or an Associate of Purchaser  (except for  ownership,  if any, of less
          than one percent (1%) by value of the outstanding capital stock of any
          corporation  the  capital  stock of which is  traded  on a  nationally
          recognized securities exchange); or,

               (b)  owns,  directly  or  indirectly,  in whole  or in part,  any
          property,  asset or right which is  associated  with the Assets or the
          Business,   or  which  Seller  is  presently  operating  or  using  in
          connection  with or the use of which is  necessary  for or material to
          the operation of the Business.

          For purposes of this Agreement,  the term "Associate"  shall mean with
     respect to a Person  (other than an  individual),  any Person  Controlling,
     Controlled by or under common Control with such Person, and any director or
     officer of such Person and any Associate of any such Person.

                                       9
<PAGE>

          4.6 Notes and Accounts  Receivable.  All notes and accounts receivable
     of Seller  which  are part of the  Assets  are  reflected  properly  on the
     Business's books and records,  are valid receivables  subject to no setoffs
     or  counterclaims,  are  presently  current  and  collectible,  and will be
     collected in accordance with their terms at their recorded amounts, subject
     only to a reserve  for bad  debts  set  forth on the face of the  Reference
     Balance  Sheet  (rather  than in any notes  thereto)  as  adjusted  for the
     passage of time  through  the date of Closing in  accordance  with the past
     customs and practices of the Business.

          4.7 Employee  Matters.  Schedule 4.7(A) hereto,  sets forth a true and
     complete  list of the  names of and  current  annual  compensation  paid by
     Seller to each  corporate  or  administrative  (non-temporary)  employee of
     Seller utilized in connection with the operation of the Business. Except as
     specifically  described  on  Schedule  4.7(B)  hereto,  neither  Seller nor
     Stockholder have any employee benefit plans (including, but not limited to,
     pension plans and health or welfare plans), arrangements or understandings,
     whether  formal or informal  relating  to any  employees  of the  Business.
     Purchaser will have no liability with respect to any such plans as a result
     of the transactions contemplated by this Agreement. Seller does not now and
     has never  contributed  to a  "multi-employer  plan" as  defined in section
     4001(a)(3)  of the Employee  Retirement  Income  Security  Act of 1974,  as
     amended  ("ERISA").  Seller is not a party to any collective  bargaining or
     other union agreements. Seller has not, within the last five (5) years, had
     or been threatened with any union activities, work stoppages or other labor
     trouble with respect to its employees  engaged in the Business which had or
     might have had a material  adverse effect on the Business.  Other than wage
     increases in the ordinary course of business, since the Balance Sheet Date,
     Seller has not made any  commitment  or  agreement to increase the wages or
     modify the  conditions  or terms of  employment  of any of the corporate or
     administrative  (non-temporary) employees of Seller used in connection with
     the Business.

          4.8 Contracts and Agreements.  Schedule 4.8 hereto,  sets forth a true
     and complete list of and briefly describes (including termination date) all
     of  the  following  contracts,   agreements,   leases,   licenses,   plans,
     arrangements or commitments,  written or oral, that relate to the Assets or
     the  Business  and  are  currently  in  force  (including  all  amendments,
     supplements and modifications thereto):

               (a) all contracts,  agreements,  or commitments in respect of the
          sale of services;

               (b) all offers,  tenders or the like  outstanding  and capable of
          being converted into an obligation of Seller by the passage of time or
          by an acceptance or other act of some other person or entity or both;

                                       10
<PAGE>

               (c) all sales or  agency  agreements  or  franchises  or  legally
          enforceable commitments or obligations with respect thereto;

               (d)  all  collective  bargaining  agreements,  union  agreements,
          employment  agreements,  consulting agreements or agreements providing
          for the services of an independent contractor;

               (e) all  profit-sharing,  pension,  stock option,  severance pay,
          retirement,  bonus,  deferred  compensation,  group  life  and  health
          insurance or other employee benefit plans, agreements, arrangements or
          commitments of any nature whatsoever,  whether or not legally binding,
          and all  agreements  with any present or former officer or stockholder
          of Seller;

               (f) all loan or credit agreements,  indentures, guarantees (other
          than   endorsements   made  for   collection),   mortgages,   pledges,
          conditional  sales  or  other  title  retention  agreements,  and  all
          equipment financing obligations,  lease and lease-purchase  agreements
          relating to or affecting the Assets or the Business;

               (g) all leases  related to the  Assets or the  Business,  and all
          other  contracts,   agreements  or  legally  enforceable   commitments
          relating to or affecting the Assets or the Business;

               (h)  all  performance  bonds,  surety  bonds  and the  like,  all
          contracts  and bids  covered by such bonds,  and all letters of credit
          and guaranties;

               (i) all consent decrees and other  judgments,  decrees or orders,
          settlement   agreements   and   agreements   relating  to  competitive
          activities, requiring or prohibiting any future action;

               (j) all accounts,  notes and other receivables,  and all security
          therefor, and all documents and agreements related thereto;

               (k) all  contracts  or  agreements  of any nature  with any 5% or
          greater stockholder of Seller, or any Associate (as defined in Section
          4.5 above) of such stockholders; and

               (l)  all  contracts,  commitments  and  agreements  entered  into
          outside the ordinary course of the operation of the Business.

All of such contracts,  agreements,  leases, licenses, plans, arrangements,  and
commitments  and  all  other  such  items  included  in  the  Assets,   but  not
specifically described above, (collectively, the "Contracts") are valid, binding
and in full force and effect in accordance with their terms and

                                       11
<PAGE>

conditions  and there is no existing  default  thereunder  or breach  thereof by
Seller,  or,  to the  Best  Knowledge  of  Seller,  by any  other  party  to the
Contracts,  or any conditions  which,  with the passage of time or the giving of
notice or both,  will  constitute  such a  default  by  Seller,  or, to the Best
Knowledge of Seller, by any other party to the Contracts, and the Contracts will
not be breached by or give any other party a right of termination as a result of
the  transactions  contemplated  by this  Agreement.  Seller is not aware of any
reason why any of such  Contracts  which relate to the sale of goods or services
(i) will result in a loss to  Purchaser on  completion  by  performance  or (ii)
cannot  readily be fulfilled  or performed by Purchaser  with the Assets on time
without undue or unusual  expenditure  of money or effort.  Copies of all of the
documents  (or in the case of oral  commitments,  descriptions  of the  material
terms  thereof)  relevant to the Contracts  listed in Schedule 4.8 hereto,  have
been  delivered by Seller to  Purchaser,  and such copies and  descriptions  are
true,  complete  and  accurate  and  include  all  amendments,   supplements  or
modifications  thereto.  To the Best  Knowledge of Seller,  other than under the
provisions of any Contract with a stated  termination  date prior to the Closing
Date, no purchaser of services under any Contract will stop or decrease its rate
of buying  services  (on an  annualized  basis) from Seller prior to the Closing
Date.  No one has advised  Seller that any  Contract  assigned to  Purchaser  by
Seller  pursuant to the  transactions  contemplated  by this  Agreement  will be
terminated  by any  customer  prior  to,  on or after  the  Closing  or that any
existing  relationship  with any customer  will expire upon  termination  of any
existing  Contract.  Except as set forth on  Schedule  4.8A  hereto,  all of the
Contracts  may be assigned to  Purchaser  without the approval or consent of any
Person.

          4.9 Effect of  Agreement.  Except as set forth on  Schedule  4.9,  the
     execution  and  delivery  of this  Agreement  and the  consummation  of the
     transactions  contemplated  hereby will not (i) result in any breach of any
     of the  terms  or  conditions  of,  or  constitute  a  default  under,  the
     Certificate of  Incorporation  or Bylaws of Seller or  Stockholder,  or any
     commitment,  mortgage,  note,  bond,  debenture,  deed of trust,  contract,
     agreement, license or other instrument or obligation to which either Seller
     or  Stockholder  is now a party or by which Seller or Stockholder or any of
     their  properties  or assets may be bound or  affected;  (ii) result in any
     violation of any  Governmental  Requirement;  (iii) cause Purchaser to lose
     the benefit of any right or privilege included in the Assets;  (iv) relieve
     any Person of any obligation  (whether  contractual or otherwise) or enable
     any Person to terminate any such obligation or any right or benefit enjoyed
     by Seller or to exercise  any right under any  agreement  in respect of the
     Assets  or  the  Business;  or  (v)  require  notice  to  or  the  consent,
     authorization,   approval  or  order  of  any  Person  (except  as  may  be
     contemplated  by the last  sentence  of Section  4.8  hereof).  To the Best
     Knowledge of Seller, the business  relationships of clients,  customers and
     suppliers of the Business  will not be adversely  affected by the execution
     and delivery of this  Agreement  or the  consummation  of the  transactions
     contemplated hereby.

          4.10  Properties,  Assets and Leasehold  Estates.  Seller has good and
     marketable title to all the Assets, free and clear of all mortgages, liens,
     pledges,  conditional  sales  agreements,  charges,  easements,  covenants,
     assessments,   options,   restrictions   and  encumbrances  of  any  nature

                                       12
<PAGE>

     whatsoever.  All  leases  pursuant  to which  real  property  is  leased in
     connection  with the Business are in good standing,  valid and  enforceable
     with respect to their terms.

          4.11 Intellectual Property.  Schedule 4.11 lists and briefly describes
     all material  Intellectual  Property owned or utilized by the Business that
     is being  conveyed  to  Purchaser  pursuant to this  Agreement.  Seller has
     furnished   Purchaser  with  copies  of  all  material  license  agreements
     (including software licensing agreements) to which the Business is a party,
     either as licensor or licensee,  with respect to any Intellectual Property.
     Subject to the terms of such  license  agreements,  the  Business has legal
     title  to or the  right  to use  all  the  Intellectual  Property  and  all
     inventions,  processes,  designs,  formulae,  trade  secrets  and  know-how
     utilized  in the  conduct of the  Business as  presently  conducted  and as
     currently planned by the Business without material impediment,  without the
     payment  of any  royalty or similar  payment.  Seller has not  transferred,
     encumbered  or  licensed to any Person any rights to own or use any portion
     of the  items  listed on  Schedule  4.11  hereto  or any  other  intangible
     property included in the Assets.  To the Best Knowledge of Seller,  none of
     the items listed on Schedule 4.11 hereto or any other  intangible  property
     included in the Assets is being  infringed  upon by any Person.  The Seller
     has not received notice of any charge,  claim, demand,  complaint,  action,
     suit, hearing,  proceeding or investigation which challenges the Business's
     ownership or licensing of any Intellectual Property, the Business's current
     uses of its  Intellectual  Property  or its  compliance  with the terms and
     conditions of any contracts, licenses, agreements or Court Orders involving
     the Intellectual Property. The Business owns and possesses all right, title
     and  interest  in and  to,  or has the  right  to use  pursuant  to a valid
     license,  all the Intellectual  Property necessary for the operation of the
     Business as presently  conducted and all such Intellectual  Property is set
     forth  on  Schedule  4.11.  Except  as set  forth  on  Schedule  4.11,  the
     Business's use of each item of the Intellectual  Property owned or licensed
     by the  Business (i) will not be  terminated  or  materially  modified as a
     result of the sale of the Assets and the  assignment  thereof  contemplated
     hereby; (ii) does not infringe upon the rights of any other Person based on
     the Business's  current use of such items or its currently  proposed use of
     such items without  material  impediment;  (iii) is in compliance  with the
     material terms and conditions of all license or other  agreements  relating
     to such  items;  and  (iv)  does  not  violate  any  material  Governmental
     Requirement  or Courts  Orders  applicable  to the Business or, to the Best
     Knowledge  of  Seller,  any other  party to any  material  license or other
     agreement  relating to such  Intellectual  Property.  The Company is not in
     default  (whether or not after the giving of notice or the lapse of time or
     both) under any material license,  contract or other agreement  relating to
     any Intellectual Property.

          4.12 Suits,  Actions and Claims.  Except as set forth in Schedule 4.12
     hereto,   (i)  there  are  no  suits,   actions,   claims,   inquiries   or
     investigations by any Person,  or any legal,  administrative or arbitration
     proceedings  in which the  Business  is engaged or which are pending or, to
     the Best Knowledge of Seller,  threatened against or affecting the Business
     or Assets or any of its  properties,  or which  question  the  validity  or
     legality  of  the  transactions  contemplated  hereby,  (ii)  to

                                       13
<PAGE>

     the Best  Knowledge  of  Seller,  no basis or  grounds  for any such  suit,
     action, claim, inquiry, investigation or proceeding exists, and (iii) there
     is no outstanding  order,  writ,  injunction or decree of any  Governmental
     Authority  against or  affecting  Seller  with  respect to the  Business or
     Assets.  Without  limiting  the  foregoing,  Seller has no knowledge of any
     state of facts or the  occurrence  of any  event  forming  the basis of any
     present or potential  claim against Seller or  Stockholder  with respect to
     the Business or the Assets.

          4.13 Licenses and Permits;  Compliance with Governmental  Regulations.
     Schedule  4.13 hereto,  sets forth a true and complete list of all licenses
     and permits necessary for the conduct of the Business.  Seller has all such
     licenses  and permits  validly  issued to it and in its name,  and all such
     licenses  and permits are in full force and effect.  No  violations  are or
     have been recorded in respect of such licenses or permits and no proceeding
     is pending  or, to the Best  Knowledge  of Seller,  threatened  seeking the
     revocation  or  limitation  of any of such  licenses or  permits.  All such
     licenses and permits that are necessary for the conduct of the Business are
     included  in the  Assets.  To the Best  Knowledge  of  Seller,  Seller  has
     complied with all Governmental Requirements applicable to the Business, and
     all Governmental  Requirements with respect to the distribution and sale of
     products and services by the Business.

          4.14  Authorization.  Each of Seller  and  Stockholder  has full legal
     right,  power and authority to enter into and deliver this Agreement and to
     consummate the  transactions  set forth herein and to perform all the terms
     and conditions  hereto to be performed by it. The execution and delivery of
     this  Agreement by each of Seller and  Stockholder  and the  performance by
     them of the  transactions  contemplated  herein  has been duly and  validly
     authorized by all requisite corporate action of Seller and Stockholder, and
     this  Agreement has been duly and validly  executed and delivered by Seller
     and Stockholder and is the legal,  valid and binding  obligation of each of
     Seller and Stockholder, enforceable against each of them in accordance with
     its  terms,  except  as  limited  by  applicable  bankruptcy,   moratorium,
     insolvency  or  other  similar  laws  affecting  generally  the  rights  of
     creditors or by principles of equity.

          4.15  No  Untrue  Statements.  The  statements,   representations  and
     warranties of Seller set forth in this  Agreement and the Schedules  hereto
     and in all other documents and  information  furnished to Purchaser and its
     representatives in connection  herewith do not include any untrue statement
     of a material fact or omit to state any material fact necessary to make the
     statements,  representations and warranties made herein and therein,  taken
     as a whole,  not  misleading.  There is no fact  that is not  disclosed  to
     Purchaser in this Agreement or the Schedules hereto that adversely  affects
     or, so far as Seller can now reasonably foresee, could adversely affect the
     condition  (financial or otherwise) of any of the Assets or the Business or
     the ability of Seller or Stockholder to perform their obligations under the
     Agreement.

                                       14
<PAGE>

          4.16  Records.  The books,  records  and  minutes  kept by Seller with
     respect to the Assets and the Business,  including, but not limited to, all
     customer files, service agreements quotations,  correspondence and historic
     revenue data of the Business since January 1, 1998, have been kept properly
     and contain records of all matters  required to be included  therein by any
     Governmental  Requirement,  and such  books,  records and minutes are true,
     accurate  and  complete  and (except for  corporate  minute books and stock
     records) are included in the Assets. Seller agrees to store for a period of
     at least  three (3) years from the  Closing  Date all of  Seller's  tax and
     accounting  records  (other than those  solely with respect to the Business
     which are  included in the  Assets) for the three (3) year period  prior to
     the Closing Date.  Such records shall be made  available for inspection and
     copying by Purchaser upon reasonable  advance notice and during  reasonable
     business hours. Seller further agrees that if Seller intends to destroy any
     of such tax or  accounting  records  during the period ending six (6) years
     after the Closing  Date,  Seller will first  notify  Purchaser  and provide
     Purchaser with an  opportunity to take  possession of such records within a
     period of not less than thirty (30) days following such notice.

          4.17  Work-In-Process.  Except as set forth on Schedule  4.17  hereto,
     Seller has not received any  payments  with respect to any  work-in-process
     with respect to the Business.

          4.18 Brokers and Finders.  No broker or finder has acted for Seller or
     Stockholder  in  connection   with  this  Agreement  or  the   transactions
     contemplated  by this  Agreement and no broker or finder is entitled to any
     brokerage or finder's fee or to any commission in respect  thereof based in
     any way on agreements,  arrangements or understandings made by or on behalf
     of Seller or Stockholder.

          4.19  Adverse  Facts.  Seller  is not  aware  (after  having  made all
     reasonable inquiries) of any fact or matter not disclosed in this Agreement
     or in the  Schedules  hereto,  other than  generally  known facts about the
     industry  or  economy,  which might be  reasonably  expected to  materially
     adversely affect the Assets or the Business after Closing.

          4.20  Deposits.  Neither  Seller nor  Stockholder  now hold,  nor does
     either Seller or Stockholder  expect to receive between the date hereof and
     the Closing Date, any deposits or prepayments by third parties with respect
     to any of the Assets or the Business which are not reflected as liabilities
     on the Reference Balance Sheet.

          4.21 Workers'  Compensation  Data.  All data set forth in the workers'
     compensation  report of Seller  attached  hereto as Schedule  4.21 is true,
     correct and complete as of the date thereof.

          4.22 Customer  List.  Schedule 4.22 hereto sets forth a true,  correct
     and complete list of all customers of the Business to which Seller has sold
     or provided  services  in excess of

                                       15
<PAGE>

     $50,000 per annum during the three (3) years immediately preceding the date
     hereof.  This list  provides an accurate  statement  of the gross  revenues
     received  from each such  customer by the Business  during the fifteen (15)
     month period ended June 30, 2000 and an estimate of those for the two month
     period ended July 31,  2000.  To the Best  Knowledge of Seller,  no current
     customer of the Business  listed on Schedule 4.22 hereto,  which has agreed
     to a continuing  relationship with the Business,  will stop or decrease its
     rate of buying  services (on an annualized  basis) from Seller prior to the
     Closing  Date,  or to the extent any such  customer  becomes a customer  of
     Purchaser pursuant to the transactions contemplated by this Agreement, from
     Purchaser  after the Closing Date.  Schedule 4.22A hereto sets forth a list
     of all the  customers of the Business  known to the Seller that will not be
     continuing customers of the business.

          4.23 No Royalties.  No royalty or similar item or amount is being paid
     or is owing by Seller,  nor is any such item accruing,  with respect to the
     operation, ownership or use of the Business or the Assets.

          4.24  Business.  All of the  revenues  generated  by  Seller  from the
     Business have been earned and received by Seller, and not through or in any
     Subsidiary (as hereinafter defined).

          4.25  Subsidiaries.  Seller does not own any Subsidiaries.  As used in
     this  Agreement,  the word  "Subsidiary"  means  any  corporation  or other
     organization,  whether incorporated or unincorporated,  of which such party
     or any other Subsidiary of such party is a general  partner,  or at least a
     majority  of the  securities  or other  interests  having  by  their  terms
     ordinary  voting  power to elect a majority  of the Board of  Directors  or
     others  performing  similar  functions with respect to such  corporation or
     other  organization  is directly or indirectly  owned or controlled by such
     party or by any one or more of its  Subsidiaries,  or by such party and one
     or more of its Subsidiaries.

          4.26  Non-Competes.  None of the employees of the Business are parties
     to    any    confidentiality,    non-disclosure,    non-solicitation    and
     non-competition agreements with Seller or Stockholder.

     5.  REPRESENTATIONS AND WARRANTIES OF PURCHASER.  Purchaser  represents and
warrants to Seller as follows:

          5.1 Incorporation.  Purchaser is a corporation duly organized, validly
     existing and in good standing under the laws of the State of Delaware.

          5.2 Authorization.  Purchaser has full legal right and corporate power
     to enter into and deliver this Agreement and to consummate the transactions
     set forth herein and to perform all the terms and  conditions  hereof to be
     performed by it. This Agreement has been duly executed

                                       16
<PAGE>

     and delivered by Purchaser and is a legal,  valid and binding obligation of
     Purchaser  enforceable in accordance  with its terms,  except as limited by
     applicable  bankruptcy,  moratorium,  insolvency,  or other laws  affecting
     generally  the rights of the  creditors  or by  principals  of equity.  The
     execution and delivery of this  Agreement by Purchaser and the  performance
     by Purchaser  of the  transactions  contemplated  herein have been duly and
     validly authorized by all requisite corporate action of Purchaser.

          5.3 Brokers and Finders.  No broker or finder has acted for  Purchaser
     in connection with this Agreement or the transactions  contemplated by this
     Agreement and, no broker or finder is entitled to any brokerage or finder's
     fee or to any commission in respect thereof based in any way on agreements,
     arrangements or understandings made by or on behalf of Purchaser.

     6. PRE-CLOSING COVENANTS.  The parties agree as follows with respect to the
period between the execution of this Agreement and the Closing.

          6.1 General. Each of the parties will use its best efforts to take all
     action and to do all things  necessary,  proper, or advisable to consummate
     and  make  effective  the  transactions   contemplated  by  this  Agreement
     (including satisfying the closing conditions set forth in Section 7 below).

          6.2  Notices  and  Consents.  Seller  will give any  notices  to third
     parties,  and  Seller  and  Stockholder  will each use its best  efforts to
     obtain  any  third  party  consents  that  the  Purchaser  may  request  in
     connection with the matters  pertaining to Seller or Stockholder  disclosed
     or required to be disclosed by this  Agreement,  including  those items set
     forth on Schedule 4.8A. Each of the parties will take any additional action
     that may be  necessary,  proper or advisable in  connection  with any other
     notices to, filings with, and  authorizations,  consents,  and approvals of
     governments,  governmental  agencies,  and  third  parties  that  it may be
     required to give, make or obtain.

          6.3  Operation  of Business.  Seller will not engage in any  practice,
     take any  action,  embark on any  course  of  inaction,  or enter  into any
     transaction  outside the ordinary course of business.  Without limiting the
     generality of the foregoing,  Seller will not engage in any practice,  take
     any action, embark on any course of inaction, or enter into any transaction
     of the nature described in Section 4.4 hereof.

          6.4  Preservation  of  Business.  Seller  will keep the  business  and
     properties  of the Business  substantially  intact,  including  its present
     operations, physical facilities, working conditions, and relationships with
     lessors, licensors, suppliers, customers, and employees.

                                       17
<PAGE>

          6.5 Full Access.  Seller will permit  representatives  of Purchaser to
     have full  access  at all  reasonable  times,  and in a manner so as not to
     interfere with the normal business  operations of Seller,  to all premises,
     properties,  books,  records,  contracts,  tax records, and documents of or
     pertaining to the Business.

          6.6 Notice of Developments.  Seller will give prompt written notice to
     Purchaser of any material  development  affecting the assets,  liabilities,
     business, financial condition, operations, results of operations, or future
     prospects of the Business.  Each party will give prompt  written  notice to
     the other of any material development  affecting the ability of the parties
     to  consummate  the  transactions   contemplated  by  this  Agreement.   No
     disclosure  by any party  pursuant to this Section 6.6,  however,  shall be
     deemed to amend or  supplement  the  Schedules  or Exhibits  hereto,  or to
     prevent or cure any  misrepresentation,  breach of  warranty,  or breach of
     covenant for purposes of Sections 7.1(a), 7.1(b) or 11.

          6.7 Exclusivity.  Seller and Stockholder will not, with respect to the
     Business or the Assets, (i) solicit,  initiate, or encourage the submission
     of any proposal or offer from any person  relating to any (A)  liquidation,
     dissolution,  or  recapitalization,   (B)  merger  or  consolidation,   (C)
     acquisition or purchase of securities or assets, or (D) similar transaction
     or  business  combination  involving  Seller,  or (ii)  participate  in any
     discussions or negotiations regarding, furnish any information with respect
     to, assist or participate  in, or facilitate in any other manner any effort
     or attempt by any person to do or seek any of the  foregoing.  Seller  will
     notify  Purchaser  immediately  if any person  makes any  proposal,  offer,
     inquiry, or contact with respect to any of the foregoing.

     7. CONDITIONS TO OBLIGATION TO CLOSE.

          7.1  Conditions  to  Obligation  of  Purchaser.   The  obligations  of
     Purchaser  to  consummate  the  transactions  to  be  performed  by  it  in
     connection  with the Closing is subject to  satisfaction  of the  following
     conditions:

               (a) the  representations  and  warranties  set forth in Section 4
          hereof shall be true and correct in all material respects at and as of
          the Closing Date;

               (b) Seller and Stockholder shall have performed and complied with
          all of their covenants  hereunder in all material respects through the
          Closing;

               (c) Seller and  Stockholder  shall have procured all of the third
          party consents specified on Schedule 7.1(c);

               (d) no action, suit, or proceeding shall be pending or threatened
          before any court or  quasi-judicial  or  administrative  agency of any
          federal,  state, local, or foreign

                                       18
<PAGE>

          jurisdiction   wherein  an  unfavorable   judgment,   order,   decree,
          stipulation,  injunction,  or charge would (i) prevent consummation of
          any of the transactions contemplated by this Agreement, (ii) cause any
          of the  transactions  contemplated  by this  Agreement to be rescinded
          following  consummation,  or  (iii)  affect  adversely  the  right  of
          Purchaser  to  own,  operate,  or  control  the  Assets  (and  no such
          judgment, order decree, stipulation, injunction, or charge shall be in
          effect);

               (e) Seller  shall  have  delivered  to  Purchaser  a  certificate
          (without qualification as to knowledge or materiality or otherwise) to
          the  effect  that each of the  conditions  specified  above in Section
          7.1(a)-(d) is satisfied in all respects;

               (f) [INTENTIONALLY DELETED];

               (g) [INTENTIONALLY DELETED];

               (h)  Purchaser  shall have  received  from each person  listed in
          Schedule 7.1(h) an executed Compliance  Agreement in substantially the
          form and substance attached hereto as Exhibit C;

               (i)  all  actions  and   approvals  to  be  taken  by  Seller  or
          Stockholder in connection with the  consummation  of the  transactions
          contemplated  hereby (including  approval of Seller's or Stockholder's
          stockholders  if  required  by law)  and all  certificates,  opinions,
          instruments,  and other documents  required to effect the transactions
          contemplated  hereby will be  satisfactory  in form and  substance  to
          Purchaser;

               (j) Purchaser  shall have received from  Ehrenreich,  Eilenberg &
          Krause, LLP, counsel for Seller and Stockholder,  an opinion addressed
          to Purchaser dated the date of the Closing,  and in form and substance
          attached hereto as Exhibit D;

               (k) [INTENTIONALLY DELETED];

               (l) [INTENTIONALLY DELETED];

               (m) Seller shall not have experienced any material adverse change
          in the Business;

               (n) Seller shall not have lost any continuing  material  customer
          or  customers  nor  shall the same have  significantly  curtailed  the
          buying of services from Seller. For purposes of this Section 7.1(n), a
          "material  customer"  shall mean a customer to whom Seller invoiced at
          least $50,000 of services in calendar year 1999; and

                                       19
<PAGE>

               (o)  Purchaser  shall  have  received  from  Seller  an  executed
          Transition  Services  Agreement  in form and  substance  substantially
          similar to Exhibit E hereto,  pursuant to which  certain  employees of
          Seller  designated  on  Schedule  7.1(o)  hereto  shall be assigned to
          Purchaser, and shall be dedicated exclusively and devoted full-time to
          performing the services  requested by Purchaser in connection with the
          operation of the Business (the "Transition Services Agreement").

          Purchaser may waive any condition  specified in this Section 7.1 if it
     executes a writing so stating at or prior to the Closing.

          7.2 Conditions to Obligations of Seller. The obligations of Seller and
     Stockholder  to  consummate  the  transactions  to  be  performed  by it in
     connection  with the Closing is subject to  satisfaction  of the  following
     conditions:

               (a) the  representations  and  warranties  set forth in Section 5
          above shall be true and correct in all material  respects at and as of
          the Closing Date;

               (b) Purchaser  shall have  performed and complied with all of its
          covenants hereunder in all material respects through the Closing;

               (c) no action,  suit, or proceeding  shall be pending  before any
          court or  quasi-judicial  or  administrative  agency  of any  federal,
          state, local, or foreign jurisdiction wherein an unfavorable judgment,
          order, decree,  stipulation,  injunction,  or charge would (i) prevent
          consummation of any of the transactions contemplated by this Agreement
          or (ii) cause any of the  transactions  contemplated by this Agreement
          to be rescinded following  consummation (and no such judgment,  order,
          decree, stipulation, injunction, or charge shall be in effect);

               (d) Purchaser  shall have  delivered to Seller and  Stockholder a
          certificate  (without  qualification as to knowledge or materiality or
          otherwise) to the effect that each of the conditions  specified  above
          in Section 7.2(a)-(c) is satisfied in all respects.

          Seller  or  Stockholder  may  waive any  condition  specified  in this
     Section 7.2 if it executes a writing so stating at or prior to the Closing.

     8. TERMINATION.

          8.1  Termination  of  Agreement.  Certain of the parties may terminate
     this Agreement as provided below:

                                       20
<PAGE>

               (a)  Purchaser,   Seller  and   Stockholder  may  terminate  this
          Agreement by mutual written consent at any time prior to the Closing;

               (b)  Purchaser  may terminate  this  Agreement by giving  written
          notice to Seller at any time prior to the Closing in the event  Seller
          is in breach;

               (c)  Purchaser  may terminate  this  Agreement by giving  written
          notice to Seller at any time prior to the Closing if the Closing shall
          not have occurred on or before August 7, 2000 by reason of the failure
          of any condition  precedent under Section 7 hereof (unless the failure
          results primarily from Purchaser itself breaching any  representation,
          warranty, or covenant contained in this Agreement);

               (d) Seller or Stockholder  may terminate this Agreement by giving
          written  notice to  Purchaser  at any time prior to the Closing if the
          Closing  shall not have occurred on or before August 7, 2000 by reason
          of the  failure  of any  condition  precedent  under  Section 7 hereof
          (unless  the failure  results  primarily  from  Seller or  Stockholder
          breaching any representation,  warranty, or covenant contained in this
          Agreement).

               (e) Purchaser shall have the right in its good faith  discretion,
          to terminate this Agreement at any time if any material adverse change
          in the Business or Assets occurs or if any information is subsequently
          disclosed in the Schedules to be delivered by Seller  hereunder  after
          the  date  of  execution  of  this  Agreement  which  information  may
          reasonably  be  expected  to have a  material  adverse  effect  on the
          Business or the Assets following the Closing.

          8.2 Effect of  Termination.  If any party  terminates  this  Agreement
     pursuant to Section 8.1 above,  all  obligations  of the parties  hereunder
     shall  terminate  without  any  liability  of any party to any other  party
     (except for any  liability of any party then in breach of this  Agreement).
     Notwithstanding  the foregoing,  the parties'  obligations under Article 14
     and Section 20.10 shall survive the termination of this Agreement.

     9.  NATURE OF  STATEMENTS  AND  SURVIVAL OF  INDEMNIFICATIONS,  GUARANTEES,
REPRESENTATIONS AND WARRANTIES OF SELLER AND STOCKHOLDER. All statements of fact
contained in this  Agreement or in any written  statement  (including  financial
statements),  certificate,  schedule or other document delivered by or on behalf
of Seller or Stockholder  pursuant to this  Agreement or in connection  with the
transactions  contemplated hereby shall be deemed representations and warranties
of Seller and  Stockholder  hereunder.  Other than the  agreement  of Seller set
forth in Section 10.3 below,  which shall survive for a period of 60 months from
the Closing  Date,  all  indemnifications,  guarantees,  covenants,  agreements,
representations  and  warranties  made by Seller  or  Stockholder  hereunder  or
pursuant

                                       21
<PAGE>

hereto or in connection with the transactions  contemplated hereby shall survive
the  Closing  for a period  of 12  months  and one day from  the  Closing  Date,
regardless of any investigation at any time made by or on behalf of Purchaser.

     10. SPECIAL CLOSING AND POST-CLOSING COVENANTS.

          10.1 Delivery of Funds and Other Assets Collected by Purchaser;  Power
     of Attorney.  To the extent Purchaser receives any funds or other assets in
     payment of the Excluded Assets,  Purchaser shall  immediately  deliver such
     funds or assets to Seller  and take all steps  necessary  to vest  title to
     such  funds or assets in  Seller.  Purchaser  hereby  designates  Seller as
     Purchaser's   true  and  lawful   attorney-in-fact,   with  full  power  of
     substitution,  to execute or endorse  for the benefit of Seller any checks,
     notes  or  other  documents  received  by  Purchaser  in  payment  of or in
     substitution or exchange for any of the Excluded  Assets.  Purchaser hereby
     acknowledges  and  agrees  that the  power  of  attorney  set  forth in the
     preceding  sentence is coupled  with an  interest,  and  further  agrees to
     execute  and  deliver  to  Seller  from  time  to  time  any  documents  or
     instruments  reasonably  requested  by Seller  to  evidence  such  power of
     attorney.

          10.2  Delivery  of Funds  and  Other  Assets  Collected  by  Seller or
     Stockholder;  Power  of  Attorney.  To the  extent  Seller  or  Stockholder
     receives  any funds or other assets in payment of (i)  receivables  or (ii)
     work-in-process  incurred on or after the Closing  Date,  or in  connection
     with any other Assets being sold to  Purchaser  hereto,  each of Seller and
     Stockholder  shall  immediately  deliver such funds and assets to Purchaser
     and take all steps  necessary  to vest  title to such  funds and  assets in
     Purchaser.  Seller hereby designates Purchaser and its officers as Seller's
     true and  lawful  attorney-in-fact,  with full  power of  substitution,  to
     execute or endorse for the benefit of Purchaser any checks,  notes or other
     documents  received  by  Purchaser  in  payment  of or in  substitution  or
     exchange for any of the Assets.  Seller hereby acknowledges and agrees that
     the power of attorney set forth in the  preceding  sentence is coupled with
     an interest,  and further  agrees to execute and deliver to Purchaser  from
     time to time any documents or instruments reasonably requested by Purchaser
     to evidence such power of attorney.

          10.3  Employment.  Seller  and  Stockholder  hereby  agree  (i) to use
     commercially   reasonable   efforts  to  maintain  the  employment  of  the
     individuals set forth on Schedule 7.1(o) hereto,  (ii) not to terminate the
     employment of any  individual  set forth on Schedule  7.1(o) hereto without
     the prior written consent of Purchaser  except for cause, and (iii) so long
     as the Transition  Services  Agreement is in effect or Purchaser  otherwise
     agrees in writing,  each of the  individuals  set forth on Schedule  7.1(o)
     hereto,  other than  Deborah  Searle,  shall be dedicated  exclusively  and
     devoted  full-time by Seller and  Stockholder  to  performing  the services
     requested  by Purchaser in  connection  with the  operation of the Business
     after the Closing Date.

                                       22
<PAGE>

          10.4 Office  Space.  Seller shall have the right to use one office and
     three  cubicles at  Purchaser's  office space located at 700 Pete Rose Way,
     Cincinnati, Ohio without charge until August 31, 2000.

          10.5 Further  Assurances.  Purchaser hereby agrees (i) that during the
     Transfer Period it shall cooperate with Seller and take all such actions as
     are  reasonably  necessary  to  effectuate  the  transfer  of  the  License
     Agreements  or enter into  substantially  similar  agreements,  and (ii) to
     issue  instructions to the Escrow Agent to release the Adjustment Amount to
     the  Seller  upon  satisfaction  by Seller of the  conditions  set forth in
     Section 3.2(b).

     11. INDEMNITIES.

          11.1 Indemnity by Seller.  Seller and Stockholder shall and hereby do,
     jointly and severally,  indemnify,  hold harmless and defend Purchaser, its
     Affiliates and their officers, directors, stockholders,  employees, agents,
     representatives and consultants  (collectively,  the "Indemnified Parties")
     at all times from and after the date of this  Agreement,  from and  against
     any and all penalties,  demands, damages, punitive damages, losses, loss of
     profits,  liabilities,  suits,  costs, costs of any settlement or judgment,
     claims of any and every kind  whatsoever,  refund  obligations  (including,
     without limitation,  interest and penalties thereon), remediation costs and
     expenses (including, without limitation, reasonable attorneys' fees), of or
     to any of the  Indemnified  Parties  ("Damages"),  which  may now or in the
     future be paid, incurred or suffered by or asserted against the Indemnified
     Parties by any Person  resulting or arising from or incurred in  connection
     with any one or more of the following  (provided that this Section 11 shall
     not apply to any items that have been expressly  assumed by Purchaser under
     this Agreement):

               (a) any liability or claim for liability (whether in contract, in
          tort or otherwise, and whether or not successful) of or against Seller
          or  Stockholder or related in any way to the Business or Assets of any
          of them  (including any liability of Seller or  Stockholder  under all
          ERISA laws) to the extent that such liability  relates to the Business
          prior to the Closing Date;

               (b) any liability or claim for liability (whether in contract, in
          tort or otherwise,  and whether or not successful)  related in any way
          to the Assets or the Business to the extent such  liability  arises in
          connection with any action, omission or event occurring on or prior to
          the Closing Date;

               (c) any liability or claim for liability (whether in contract, in
          tort or  otherwise,  and  whether  or not  successful)  related to any
          liens, obligations or encumbrances of any nature whatsoever against or
          in any way related to the Assets or the  Business  which have not been
          expressly assumed by Purchaser hereunder;

                                       23
<PAGE>

               (d) any liability or claim for liability (whether in contract, in
          tort or otherwise, and whether or not successful) related to the Taxes
          of Seller or Stockholder;

               (e)  any  liability  or  claim  for  liability  (whether  or  not
          successful)  related  to any  lawsuit or  threatened  lawsuit or claim
          involving  Seller or Stockholder,  including but not limited to, those
          items listed on Schedule 4.12 hereto;

               (f) any  misrepresentation,  breach of warranty or nonfulfillment
          of any  covenant  or  agreement  on the part of Seller or  Stockholder
          under this Agreement or from any misrepresentation in or omission from
          any list, schedule, certificate or other instrument furnished or to be
          furnished to Purchaser pursuant to the terms of this Agreement;

               (g) any liability or claim for liability against Purchaser or any
          of the  Assets to the extent  such  liability  or claim for  liability
          arises in  connection  with the  failure  of  Purchaser  and Seller to
          comply with any applicable bulk transfer law; and

               (h)  all  actions,  suits,  proceedings,   demands,  assessments,
          adjustments,   costs  and  expenses  (including  costs  of  court  and
          reasonable attorneys' fees) incident to any of the foregoing.

          11.2  Limitation of Certain  Liability.  To the extent the Indemnified
     Parties  incur or  suffer  Damages  for any  matter  for which  Seller  and
     Stockholder are obligated to indemnify,  hold harmless and defend Purchaser
     under Section 11.1(f) above, Seller and Stockholder shall not be liable for
     any such  Damages (i) until  Purchaser  has  suffered  aggregate  losses by
     reason  of  all  such  misrepresentations,   breaches  of  warranty  and/or
     non-fulfillments  of covenants or  agreements  on the part of Seller and/or
     Stockholder  in excess of a $50,000  threshold  (at which point  Seller and
     Stockholder  will be obligated to indemnify  Purchaser from and against all
     such aggregate losses including losses back to the first dollar),  and (ii)
     in excess of the Purchase Price, as adjusted;  provided,  however, that the
     limitations set forth in (i) and (ii) above specifically shall not apply to
     Damages (y) resulting  from or  attributable  to  intentional  fraud or any
     willful  misconduct  by Seller  and  Stockholder,  or (z) for any matter or
     matters  (other  than  those set out in  Section  11.1(f)  above) for which
     Seller or Stockholder  is obligated to indemnify,  hold harmless and defend
     Purchaser.  The  provisions of this Section 11 will terminate on the second
     anniversary  of the Closing  Date  (except for any claims for Damages  made
     prior to such date  which  claims  shall  continue  after  such date  until
     finally resolved or in the event of any claims for Damages arising out of a
     breach of Section  10.3  below,  which  shall  survive for a period of five
     years from the Closing Date).

                                       24
<PAGE>

          11.3  Notice of Claim.  Purchaser  agrees that upon its  discovery  of
     facts giving rise to a claim for  indemnity  under the  provisions  of this
     Agreement,  including  receipt by it or any Indemnified  Party of notice of
     any demand, assertion, claim, action or proceeding,  judicial or otherwise,
     by any person with respect to any matter as to which any of the Indemnified
     Parties are entitled to indemnity  under the  provisions of this  Agreement
     (such  actions  being  collectively  referred to in this  Section 11 as the
     "Claim"),  Purchaser  will give prompt notice  thereof in writing to Seller
     and Stockholder;  provided that any delay in giving or failure to give such
     notice shall not limit the rights of Purchaser or any Indemnified  Party to
     indemnity  hereunder,  and Purchaser shall have no liability for such delay
     or failure,  except to the extent that Seller and  Stockholder are shown to
     have been materially damaged by such delay or failure.

          11.4 Right to Defend.  Seller and  Stockholder  shall be  entitled  at
     their sole cost and expense to contest and defend by all appropriate  legal
     proceedings any Claim with respect to which either Seller or Stockholder is
     called  upon  to  indemnify  any  of  the  Indemnified  Parties  under  the
     provisions  of  this  Agreement;  provided,  however,  that  notice  of the
     intention so to contest  shall be delivered  by Seller and  Stockholder  to
     Purchaser  within  twenty  (20) days from the  effective  date of notice to
     Seller and  Stockholder  by  Purchaser of the  assertion of the Claim,  and
     provided, further that such right to contest and defend shall exist only if
     Seller and  Stockholder  have (i)  admitted  in writing  to  Purchaser  the
     obligation of Seller and Stockholder to pay the indemnified  obligations to
     the  Indemnified  Parties with respect to the Claim and (ii) have  provided
     the  Indemnified   Parties  with   satisfactory   evidence  of  Seller  and
     Stockholder's  ability to pay any indemnity  obligation that reasonably may
     arise under the Claim. Any such contest may be conducted in the name and on
     behalf of Purchaser. Such contest shall be conducted by reputable attorneys
     employed by Seller and Stockholder and reasonably  acceptable to Purchaser,
     but Purchaser  shall have the right to participate in such  proceedings and
     to be represented by attorneys of its own choosing at its cost and expense.
     If, after such  opportunity,  Seller and Stockholder have not satisfied all
     requirements  for the  contest of a claim by them (i.e.,  timely  election,
     admission of liability and proof of ability regarding payment), then Seller
     and  Stockholder  shall (i) at their  expense,  except for travel  expenses
     requested to be incurred by Purchaser,  reasonably cooperate with Purchaser
     with  respect  to  defense  of the  Claim,  and (ii) be bound by the result
     obtained  with  respect  to the Claim by  Purchaser.  At any time after the
     commencement  of defense of any Claim,  Seller and  Stockholder may request
     Purchaser  to accept a bona fide offer from the other  parties to the Claim
     for a cash  settlement  payable solely from Seller and  Stockholder  (which
     places no burdens  or  restrictions  on  Purchaser  and does not  otherwise
     prejudice Purchaser), whereupon such action shall be taken unless Purchaser
     determines that the contest should be continued, and so notifies Seller and
     Stockholder in writing within fifteen (15) days of such request from Seller
     and  Stockholder.  In the event  that,  after  such a request by Seller and
     Stockholder for acceptance of a bona fide cash settlement offer,  Purchaser
     determines  that the contest  should be continued,  Seller and  Stockholder
     shall be liable for indemnity hereunder only to the extent of the lesser of
     (i) the amount which the other party to the  contested  Claim had agreed to
     accept in settlement as of the time Seller and

                                       25
<PAGE>

     Stockholder  made its request therefor to Purchaser or (ii) such amount for
     which  Seller and  Stockholder  may be liable with respect to such Claim by
     reason of the provisions hereof.

          11.5 Cooperation by Purchaser. If requested by Seller and Stockholder,
     Purchaser and its officers and employees  shall  reasonably  cooperate with
     Seller and Stockholder and its counsel in contesting any Claim with respect
     to which Seller and  Stockholder  have  satisfied  all  requirements  for a
     contest by them as set forth in Section  11.4 above;  provided  that Seller
     and  Stockholder  shall  reimburse  Purchaser for any actual  out-of-pocket
     expenses incurred by it in so cooperating.

          11.6 Payment.  Seller and Stockholder  shall promptly pay to Purchaser
     or such other Indemnified  Party as may be entitled to indemnity  hereunder
     in cash the amount of any Damages to which  Purchaser  or such  Indemnified
     Party may become entitled by reason of the provisions of this Agreement.

          11.7  Indemnity by  Purchaser.  Purchaser  agrees to  indemnify,  hold
     harmless and defend Seller and  Stockholder at all times from and after the
     date of this Agreement,  from and against any and all Damages which may now
     or in the future be paid,  incurred  or  suffered  by or  asserted  against
     Seller and Stockholder by any Person  resulting or arising from or incurred
     in connection with:

               (a) any liability or claim for liability (whether in contract, in
          tort or otherwise,  and whether or not successful)  related in any way
          to the Assets or the Business to the extent such  liability  arises in
          connection  with any  action,  omission or event  occurring  after the
          Closing Date;

               (b) any  misrepresentation,  breach of warranty or nonfulfillment
          of any  covenant  or  agreement  on the part of  Purchaser  under this
          Agreement or from any  misrepresentation in or omission from any list,
          schedule, certificate or other instrument furnished or to be furnished
          by Purchaser pursuant to the terms of this Agreement, and

               (c)  all  actions,  suits,  proceedings,   demands,  assessments,
          adjustments,   costs  and  expenses  (including  costs  of  court  and
          reasonable attorneys' fees) incident to any of the foregoing.

     12. LEASE AGREEMENT. Purchaser shall assume the leases for the office space
currently  used by Seller in  connection  with the  operation  of the  Business.
Purchaser will, from and after Closing,  hold harmless Seller from any liability
thereunder accruing after Closing.

                                       26
<PAGE>

     13. NON-COMPETITION.

          13.1 Agreement Not to Compete. As an inducement for Purchaser to enter
     into this  Agreement  and in return for the payment of $180,000 as provided
     by Section  3.1(a),  the parties  hereby  agree to the  provisions  of this
     Section 13. For a period  commencing on the date hereof  through the second
     anniversary  of the Closing Date,  neither  Seller nor  Stockholder,  shall
     within the territorial  boundaries of North America (i) solicit directly or
     indirectly any of the Accounts (as hereinafter  defined) of the Business or
     otherwise compete with the activities of the Business,  (ii) be employed by
     or  otherwise  render  services to, or own any interest in, any Person that
     directly or  indirectly  (a) competes  with the Business as it is currently
     conducted,  or (b) solicits  directly or indirectly  any of the Accounts of
     the Business,  or (iii) solicit  directly or indirectly  for  employment by
     Seller or Stockholder any of the employees of the Business. For purposes of
     this Section 13.1,  the term  "Accounts"  shall mean any Person  located in
     North America for which Seller has  performed  services with respect to the
     Business during the period beginning eighteen (18) months prior to the date
     hereof and ending on the second  anniversary  of the Closing Date.  Each of
     Seller and Stockholder  agrees that the limitations set forth herein on the
     rights of Seller and its  Affiliates  to compete  with the the Business are
     reasonable and necessary for the  protection of Purchaser.  In this regard,
     Seller and Stockholder specifically agree that the limitations as to period
     of time and  geographic  area,  as well as all  other  restrictions  on its
     activities   specified  herein,   are  reasonable  and  necessary  for  the
     protection of Purchaser. Seller and Stockholder further recognize and agree
     that violation of any of the  agreements  contained in this Section 13 will
     cause irreparable damage or injury to Purchaser,  the exact amount of which
     may be impossible to ascertain,  and that,  for such reason,  among others,
     Purchaser and its Affiliates  shall be entitled to an  injunction,  without
     the necessity of posting a bond,  restraining any further violation of such
     agreements.  Such rights to any injunction shall be in addition to, and not
     in  limitation  of,  any  other  rights  and  remedies  Purchaser  and  its
     Affiliates  may have against Seller or  Stockholder  and their  Affiliates,
     including,  but not limited to, the  recovery  of damages.  Further,  it is
     agreed by Seller and  Stockholder  that in the event the provisions of this
     Agreement   should  ever  be  deemed  to  exceed  the  time  or  geographic
     limitations  permitted by  applicable  law, then such  provisions  shall be
     reformed to the maximum time or geographic limitations permitted.

          13.2 Permitted  Activities.  Notwithstanding the provisions of Section
     13.1   above,   Purchaser   recognizes   and  hereby   agrees  that  either
     Stockholder's or Seller's engaging in the activities  described on Schedule
     13  hereto  shall  not be deemed to be a  violation  of the  provisions  of
     Section 13.1(ii)(a).

     14. NONDISCLOSURE OF CONFIDENTIAL INFORMATION.  Seller and Stockholder each
recognizes  and  acknowledges  that it has  and  will  have  access  to  certain
confidential  information  of Seller that is included in the Assets  (including,
but not limited to, list of

                                       27
<PAGE>

customers,  and costs and financial  information) that after the consummation of
the  transactions  contemplated  hereby  will be  valuable,  special  and unique
property  of  Purchaser.  Seller  and  Stockholder  each  agree that it will not
disclose,  and it will use its best efforts to prevent  disclosure  by any other
Person of, any such confidential information to any Person, except to authorized
representatives  of Purchaser.  Seller and Stockholder  recognize and agree that
violation  of any of the  agreements  contained  in this  Section  14 will cause
irreparable  damage  or injury to  Purchaser,  the exact  amount of which may be
impossible  to ascertain,  and that,  for such reason,  among others,  Purchaser
shall be  entitled to an  injunction,  without the  necessity  of posting  bond,
therefor,  restraining any further violation of such agreements.  Such rights to
any  injunction  shall be in addition  to, and not in  limitation  of, any other
rights and remedies Purchaser may have against Seller or Stockholder.

     15.  ASSIGNMENT OF CONTRACTS.  Notwithstanding  any other provision of this
Agreement,  nothing in this Agreement or any related document shall be construed
as an  attempt to assign (i) any  contract  which,  as a matter of law or by its
terms, is nonassignable  without the consent of the other parties thereto unless
such  consent has been given,  or (ii) any contract or claims as to which all of
the  remedies  for the  enforcement  thereof  enjoyed by Seller  would not, as a
matter of law or by its terms, pass to Purchaser as an incident of the transfers
and assignments to be made under this  Agreement.  In order,  however,  that the
full value of every contract and claim of the character described in clauses (i)
and (ii) above and all claims and demands on such  contracts may be realized for
the  benefit of  Purchaser,  Seller,  at the  request  and expense and under the
direction  of  Purchaser,  shall take all such action and do or cause to be done
all such things as will, in the opinion of Purchaser,  be necessary or proper in
order that the  obligations  of Seller under such  contracts may be performed in
such manner that the value of such  contract will be preserved and will inure to
the benefit of  Purchaser,  and for, and to  facilitate,  the  collection of the
monies due and payable and to become due and payable  thereunder to Purchaser in
and under every such contract and claim incurred after the Closing. Seller shall
promptly pay over to Purchaser all monies  collected by or paid to it in respect
of every such contract,  claim or demand to the extent such monies are earned by
Purchaser on or after the Closing Date. Nothing in this Section 15 shall relieve
Seller of its obligation to obtain any consents required for the transfer of the
Assets and all rights thereunder to Purchaser,  or shall relieve Seller from any
liability to Purchaser for failure to obtain such consents.

                                       28
<PAGE>

     16. SPECIAL PROVISIONS REGARDING EMPLOYEES OF SELLER.

          16.1 New Employees of Purchaser. It is the intention of Purchaser, and
     Seller  hereby  acknowledges  and  agrees  with  such  position,  that  any
     employees of the Business  that  Purchaser  hires will be new  employees of
     Purchaser as of the Closing  Date or the date of hire,  whichever is later.
     Except as set forth in Section  16.3  below,  such new  employees  shall be
     entitled only to such  compensation and employee  benefits as are agreed to
     by such employees and Purchaser, or as are otherwise provided by Purchaser,
     in its sole discretion.

          16.2 Hiring of Employees.

               (a)  Purchaser  will  use its  reasonable  efforts  to  hire  the
          existing  employees of Seller  engaged in the  Business in  connection
          with its purchase of the Assets;  provided,  however,  that  Purchaser
          shall  be  entitled  to  review  employee  records,  conduct  employee
          interviews and employee screening  procedures used by Purchaser in its
          business, and may refuse to offer employment to any employee of Seller
          if such employee fails to meet the hiring criteria of Purchaser.

               (b) As a condition to their employment by Purchaser, all existing
          employees  of Seller  listed in  Schedule  7.1(h)  shall  execute  and
          deliver  to  Purchaser  a  Compliance  Agreement,  each  in  form  and
          substance acceptable to Purchaser.

          16.3  Existing  Employee  Benefit  Plans.   Purchaser  shall  have  no
     obligation  after the Closing to continue any pension plans or work benefit
     plans  currently  offered  by Seller  to its  employees.  Seller  agrees to
     indemnify and hold harmless  Purchaser from and against any claim which may
     arise because of the failure to continue such pension plans or work benefit
     programs.

          16.4  Indemnity  Concerning  Accrued  Benefits.  Except  as  expressly
     assumed by Purchaser  hereunder and as reflected in the Net Working Capital
     of Seller,  Seller and Stockholder jointly and severally agree to indemnify
     and hold  harmless  Purchaser  from and  against  any and all  accrued  and
     outstanding employee benefits,  salary, vacation pay, bonuses,  commissions
     and other  emoluments of its employees and from any other employee  related
     matters or  liabilities  with respect to Seller's  employees to and through
     the Closing Date.

     17.  EXPENSES.  Whether  or not the  transactions  contemplated  hereby are
consummated, Seller and Stockholder will pay all of their costs and expenses and
Purchaser  will pay all of its costs and expenses,  incurred in connection  with
the  preparation of and execution of this Agreement and the  consummation of the
transactions contemplated hereby.

                                       29
<PAGE>

     18.  FURTHER  ACTIONS.  In case at any time after the  Closing  any further
action is legally necessary or reasonably desirable (as determined by any of the
Parties)  to carry  out the  purposes  of this  Agreement  and the  transactions
contemplated  hereby,  each  of  the  Parties  will  take  such  further  action
(including  the  execution  and/or  delivery  of such  further  instruments  and
documents) as any other Party  reasonably may request,  all at the sole cost and
expense of the  requesting  Party  (unless the  requesting  Party is entitled to
indemnification  therefor  under  Article  XI  below).  Seller  and  Stockholder
acknowledge  and  agree  that  from and after  the  Closing,  Purchaser  will be
entitled  to  possession  of all  documents,  books,  records,  agreements,  and
financial  data of any sort relating to the Business,  which shall be maintained
at the chief executive office of Purchaser;  provided,  however, that Seller and
Stockholder shall be entitled to reasonable access to and to make copies of such
books and records at their sole cost and expense,  and  Purchaser  will maintain
all of the  same  for a  period  of at  least  five  (5)  years  after  Closing.
Thereafter,  Purchaser will offer such  documentation  to Seller and Stockholder
before  disposal  thereof.  Seller and  Stockholder  further agree to convey all
rights to any  Intellectual  Property  reasonably  related  to the  Business  to
Purchaser.  Purchaser and Seller each agree to use their respective best efforts
to  cause  Sun  Microsystems  to  enter  into a  Hardware  Value-Added  Reseller
Agreement with Purchaser within the Transfer Period.

     19.  NOTICES.  All  notices,  requests,  demands  and other  communications
required or  permitted  to be given  hereunder  shall be in writing and shall be
deemed to have been duly given if delivered  personally,  given by prepaid telex
or  telegram  or  by  facsimile  or  other  similar   instantaneous   electronic
transmission  device or mailing first class,  postage prepaid,  certified United
States mail, return receipt requested, as follows:

          (a) If to Purchaser, at:

                  Eclipse Networks, Inc.
                  c/o Thoma Cressey Equity Stockholders
                  600 Montgomery Street
                  27th Floor
                  San Francisco, CA  94111
                  Attention: Joseph Bonocore
                  Tel No.:(415) 983-0499
                  Fax No.:(415) 981-1010

                                       30
<PAGE>

          With a copy to:

                  Thoma Cressey Equity Stockholders
                  600 Montgomery Street
                  27th Floor
                  San Francisco, CA  94111
                  Attention: Joseph Bonocore
                  Tel No.:(415) 983-0499
                  Fax No.:(415) 981-1010

          With a copy to:

                  Hogan & Hartson L.L.P.
                  Columbia Square
                  555 Thirteenth Street, NW
                  Washington, DC  20004-1109
                  Attention: J. Hovey Kemp
                  Tel No.:(202) 637-5623
                  Fax No.:(202) 637-5910

          (b) If to Seller or Stockholder, at:

                  International Data Operations, Inc.
                  200 Route 17
                  Mahwah, New Jersey  07430
                  Attention: Shlomie Morgenstern
                  Tel No.:(201) 529-2026
                  Fax No.:(201) 529-3163

          With a copy to:

                  Ehrenreich, Eilenberg & Krause LLP
                  11 East 44th Street
                  17th Floor
                  New York, New York 10017
                  Attention: Sheldon Krause, Esq.
                  Tel No.:(212) 986-9700
                  Fax No.:(212) 986-2399

                                       31
<PAGE>

provided that any party may change its address for notice by giving to the other
party  written  notice of such  change.  Any notice  given under this Section 19
shall be effective (i) if delivered personally,  when delivered, (ii) if sent by
telex or telegram or by  facsimile  or other  similar  instantaneous  electronic
transmission device,  twenty-four (24) hours after sending, and (iii) if mailed,
forty-eight (48) hours after mailing.

     20. GENERAL PROVISIONS.

          20.1 GOVERNING LAW;  INTERPRETATION;  SECTION HEADINGS. THIS AGREEMENT
     SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
     OF THE  STATE OF  DELAWARE,  WITHOUT  REGARD TO  CONFLICT-OF-LAWS  RULES AS
     APPLIED IN DELAWARE. THE SECTION HEADINGS CONTAINED HEREIN ARE FOR PURPOSES
     OF  CONVENIENCE  ONLY, AND SHALL NOT BE DEEMED TO CONSTITUTE A PART OF THIS
     AGREEMENT OR TO AFFECT THE MEANING OR  INTERPRETATION  OF THIS AGREEMENT IN
     ANY WAY.

          20.2  Severability.  Should any  provision  of this  Agreement be held
     unenforceable  or invalid under the laws of the United States of America or
     the State of  Delaware,  or under any  other  applicable  laws of any other
     jurisdiction,  then the parties hereto agree that such  provision  shall be
     deemed  modified  for  purposes of  performance  of this  Agreement in such
     jurisdiction to the extent  necessary to render it lawful and  enforceable,
     or if such a modification is not possible without  materially  altering the
     intention  of the  parties  hereto,  then such  provision  shall be severed
     herefrom  for   purposes  of   performance   of  this   Agreement  in  such
     jurisdiction.  The validity of the remaining  provisions of this  Agreement
     shall not be affected by any such modification or severance, except that if
     any severance  materially  alters the  intentions of the parties  hereto as
     expressed  herein  (a  modification  being  permitted  only if  there is no
     material  alteration),  then  the  parties  hereto  shall  use  their  best
     reasonable  effort to agree to  appropriate  equitable  amendments  to this
     Agreement  in  light of such  severance,  and if no such  agreement  can be
     reached within a reasonable time, any party hereto may initiate arbitration
     under the then current  rules of the American  Arbitration  Association  to
     determine and effect such appropriate equitable amendments.

          20.3 Entire Agreement.  This Agreement sets forth the entire agreement
     and  understanding  of the parties hereto with respect to the  transactions
     contemplated  hereby and supersedes all prior agreements,  arrangements and
     understandings  related to the subject  matter hereof.  No  representation,
     promise,  inducement  or statement of intention  has been made by any party
     hereto which is not embodied in this  Agreement,  and no party hereto shall
     be bound by or

                                       32
<PAGE>

     liable for any alleged representation,  promise, inducement or statement of
     intention not so set forth.

          20.4  Binding  Effect.  All  the  terms,  provisions,   covenants  and
     conditions of this Agreement shall be binding upon and inure to the benefit
     of and be  enforceable by the parties  hereto and their  respective  heirs,
     executors, administrators, representatives, successors and assigns.

          20.5 Assignment.  This Agreement and the rights and obligations of the
     parties  hereto  shall not be assigned  or  delegated  by any party  hereto
     without the prior written consent of the other parties hereto.

          20.6  Amendment;  Waiver.  This  Agreement  may be amended,  modified,
     superseded or canceled, and any of the terms, provisions,  representations,
     warranties, covenants or conditions hereof may be waived, only by a written
     instrument  executed by all parties hereto, or, in the case of a waiver, by
     the party waiving compliance. The failure of any party at any time or times
     to require  performance  of any provision  hereof shall in no manner affect
     the  right to  enforce  the same.  No waiver by any party of any  condition
     contained  in this  Agreement,  or of the  breach of any term,  provisions,
     representation,  warranty or covenant  contained in this Agreement,  in any
     one or more  instances,  shall be deemed to be or construed as a further or
     continuing  waiver of any such  condition or breach,  or as a waiver of any
     other   condition   or  of  the  breach  of  any  other  term,   provision,
     representation, warranty or covenant.

          20.7  Gender;  Numbers.  All  references  in  this  Agreement  to  the
     masculine,  feminine or neuter genders shall, where appropriate,  be deemed
     to include all other  genders.  All plurals used in this  Agreement  shall,
     where appropriate, be deemed to be singular, and vice versa.

          20.8  Counterparts.  This Agreement may be executed  simultaneously in
     two or more  counterparts,  each of which shall be deemed an original,  but
     all of which together shall  constitute one and the same  instrument.  This
     Agreement  shall  be  binding  when  one  or  more   counterparts   hereof,
     individually  or taken  together,  shall bear the signatures of the parties
     reflected hereon as signatories.

          20.9 Telecopy Execution and Delivery.  A facsimile,  telecopy or other
     reproduction  of this  Agreement  may be  executed  by one or more  parties
     hereto,  and an executed copy of this  Agreement may be delivered by one or
     more  parties  hereto by  facsimile  or  similar  instantaneous  electronic
     transmission device pursuant to which the signature of or on behalf of such
     party can be seen,  and such  execution  and delivery  shall be  considered
     valid, binding and

                                       33
<PAGE>

     effective for all purposes. At the request of any party hereto, all parties
     hereto  agree to  execute  an  original  of this  Agreement  as well as any
     facsimile, telecopy or other reproduction hereof.

          20.10  Arbitration.  The Parties  agree to submit to  arbitration,  in
     accordance with these provisions, any disputed claim or controversy,  other
     than those seeking equitable relief, arising from or related to the alleged
     breach  of  this  Agreement  or any  disputed  indemnification  claim  made
     pursuant to this Article XI. The Parties further agree that the arbitration
     process  agreed upon herein shall be the exclusive  means for resolving all
     disputes made subject to arbitration  herein,  but that no arbitrator shall
     have  authority to expand the scope of these  arbitration  provisions.  Any
     arbitration  hereunder shall be conducted under the Commercial  Arbitration
     Rules of the  American  Arbitration  Association  (AAA).  Either  Party may
     invoke  arbitration  procedures  herein by written  notice for  arbitration
     containing a statement of the matter to be  arbitrated.  The Parties  shall
     then  have  fourteen  (14)  days in which  they  may  identify  a  mutually
     agreeable,  neutral  arbitrator.  After the  fourteen  (14) day  period has
     expired,  the  parties  shall  prepare  and  submit  to  the  AAA  a  joint
     submission,   with  each  Party  to  contribute  half  of  the  appropriate
     administrative  fee. In the event the parties  cannot  agree upon a neutral
     arbitrator  within  fourteen (14) days after written notice for arbitration
     is received,  their joint  submission to the AAA shall request  arbitrators
     who are practicing  attorneys with professional  experience in the field of
     corporate  law, and the Parties shall attempt to select an arbitrator  from
     the panel  according  to AAA  procedures.  Unless  otherwise  agreed by the
     Parties, the arbitration hearing shall take place in Chicago,  Illinois, at
     a place designated by the AAA. All arbitration  procedures  hereunder shall
     be confidential.  Each Party shall be responsible for its costs incurred in
     any arbitration, and the arbitrator shall not have authority to include all
     or any  portion  of said  costs  in an  award  regardless  of  which  Party
     prevails.  The award of the arbitrator arbitrator may not include equitable
     relief. Any arbitration awarded shall be accompanied by a written statement
     containing a summary of the issues in  controversy,  a  description  of the
     award, and an explanation of the reasons for the award.

                                       34
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written. "PURCHASER"

                                      ECLIPSE NETWORKS, INC.

                                      By:    /s/ Joseph Bonocore
                                             -----------------------------------
                                      Name:  Joseph Bonocore
                                      Title: President & Chief Executive Officer

                                      "STOCKHOLDER"

                                      DATA SYSTEMS & SOFTWARE INC.

                                      By:    /s/ Shlomie Morgenstern
                                             -----------------------------------
                                      Name:  Shlomie Morgenstern
                                      Title: Vice President - Operations

                                      "SELLER"

                                      INTERNATIONAL DATA OPERATIONS, INC.

                                      By:    /s/ Shlomie Morgenstern
                                             -----------------------------------
                                      Name:  Shlomie Morgenstern
                                      Title: Vice President

                                       35[LOGO]

                QUENTRA NETWORKS, INC. 2000 EQUITY INCENTIVE PLAN
                          NOTICE OF STOCK OPTION AWARD

     Participant's Name and Address:
                                         --------------------------------------

                                         --------------------------------------

                                         --------------------------------------

     You have been granted an award, subject to the terms and conditions of this
Notice of Stock Option Award (the "Notice"), the Quentra Networks, Inc. 2000
Equity Incentive Plan, as amended from time to time (the "Plan") and the Stock
Option Award Agreement (the "Award Agreement") attached hereto, as follows.
Unless otherwise defined herein, the terms defined in the Plan shall have the
same defined meanings in this Notice.

     Award Number:
                                         --------------------------------------
     Date of Award:
     Vesting Commencement Date:
     Exercise Price per Share:
     Total Number of Shares Subject to the Option:
     Total Exercise Price:
     Type of Option:                     |X|  Nonstatutory Stock Option
                                         |_|  Incentive Stock Option
     Expiration Date:
     Post-Termination Exercise Period:   Three (3) Months

Vesting Schedule:

     Subject to Participant's employment or service and other limitations set
forth in this Notice, the Plan and the Award Agreement, the Option may be
exercised, in whole or in part, in accordance with the following schedule:

     33% of the Shares subject to the Option shall vest twelve months after the
Vesting Commencement Date, and an additional 33% of the Shares subject to the
Option shall vest on each yearly anniversary of the Vesting Commencement Date
thereafter.

     During any authorized leave of absence, the vesting of the Option as
provided in this schedule shall cease after the leave of absence exceeds a
period of ninety (90) days. Vesting of the Option shall resume upon the
Participant's termination of the leave of absence and return to service to the
Company or a subsidiary.

     In the event of the Participant's change in status from employee to
consultant or from an employee whose customary employment is 20 hours or more
per week to an employee

                                       1
<PAGE>

whose customary employment is fewer than 20 hours per week, vesting of the
Option shall continue only to the extent determined by the Committee as of such
change in status.

     In the event of termination of the Participant's employment or service for
cause, the Participant's right to exercise the Option shall terminate
concurrently with the termination of the Participant's employment or service.

     IN WITNESS WHEREOF, the Company and the Participant have executed this
Notice and agree that the Option is to be governed by the terms and conditions
of this Notice, the Plan, and the Award Agreement.

                                            Quentra Networks, Inc.,
                                            a Delaware corporation

                                            By:
                                                --------------------------------

                                            Title:
                                                   -----------------------------

THE PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION
SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE PARTICIPANT'S EMPLOYMENT OR
SERVICE (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR
ACQUIRING SHARES HEREUNDER). THE PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES
THAT NOTHING IN THIS NOTICE, THE AWARD AGREEMENT, OR THE PLAN SHALL CONFER UPON
THE PARTICIPANT ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF
PARTICIPANT'S EMPLOYMENT OR SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE
PARTICIPANT'S RIGHT OR THE RIGHT OF THE PARTICIPANT'S EMPLOYER TO TERMINATE
PARTICIPANT'S EMPLOYMENT OR SERVICE, WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT
NOTICE. THE PARTICIPANT ACKNOWLEDGES THAT UNLESS THE PARTICIPANT HAS A WRITTEN
EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, PARTICIPANT'S STATUS IS
AT WILL.

     The Participant acknowledges receipt of a copy of the Plan and the Award
Agreement, and represents that he or she is familiar with the terms and
provisions thereof, and hereby accepts the Option subject to all of the terms
and provisions hereof and thereof. The Participant has reviewed this Notice, the
Plan, and the Award Agreement in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Notice, and fully
understands all provisions of this Notice, the Plan and the Award Agreement. The
Participant hereby agrees that all disputes arising out of or relating to this
Notice, the Plan and the Award Agreement shall be resolved in accordance with
Section 13 of the Award Agreement. The Participant further agrees to notify the
Company upon any change in the residence address indicated in this Notice.

Dated:                                      Signed:
       ----------------------                      -----------------------------
                                                             Participant

                                       2
<PAGE>

                                                      Award Number:
                                                                    ------------

                QUENTRA NETWORKS, INC. 2000 EQUITY INCENTIVE PLAN
                          STOCK OPTION AWARD AGREEMENT

     1. Grant of Option. Quentra Networks, Inc., a Delaware corporation (the
"Company"), hereby grants to the Participant (the "Participant") named in the
Notice of Stock Option Award (the "Notice"), an option (the "Option") to
purchase the Total Number of Shares of Common Stock subject to the Option (the
"Shares") set forth in the Notice, at the Exercise Price per Share set forth in
the Notice (the "Exercise Price") subject to the terms and provisions of the
Notice, this Stock Option Award Agreement (the "Award Agreement") and the
Company's 2000 Equity Incentive Plan, as amended from time to time (the "Plan"),
which are incorporated herein by reference. Unless otherwise defined herein, the
terms defined in the Plan shall have the same defined meanings in this Award
Agreement.

     If designated in the Notice as an Incentive Stock Option, the Option is
intended to qualify as an Incentive Stock Option as defined in Section 422 of
the Code. However, notwithstanding such designation, to the extent that the
aggregate Fair Market Value of Shares subject to Options designated as Incentive
Stock Options which become exercisable for the first time by the Participant
during any calendar year (under all plans of the Company or any parent or
subsidiary) exceeds $100,000, such excess Options, to the extent of the Shares
covered thereby in excess of the foregoing limitation, shall be treated as
Nonstatutory Stock Options. For this purpose, Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares shall be determined as of the date the Option with respect
to such Shares is awarded.

     2. Exercise of Option.

          (a) Right to Exercise. The Option shall be exercisable during its term
     in accordance with the Vesting Schedule set out in the Notice and with the
     applicable provisions of the Plan and this Award Agreement. No partial
     exercise of the Option may be for less than the lesser of five percent (5%)
     of the total number of Shares subject to the Option or the remaining number
     of Shares subject to the Option. In no event shall the Company issue
     fractional Shares.

          (b) Method of Exercise. The Option shall be exercisable only by
     delivery of an Exercise Notice (attached as Exhibit A) which shall state
     the election to exercise the Option, the whole number of Shares in respect
     of which the Option is being exercised, such other representations and
     agreements as to the holder's investment intent with respect to such Shares
     and such other provisions as may be required by the Committee. The Exercise
     Notice shall be signed by the Participant and shall be delivered in person,
     by certified mail, or by such other method as determined from time to time
     by the Committee to the Company accompanied by payment of the Exercise
     Price. The Option shall be deemed to be exercised upon receipt by the
     Company of such written notice accompanied by the Exercise Price, which, to
     the extent selected, shall be deemed to be satisfied by use of the
     broker-dealer sale and remittance procedure to pay the Exercise Price
     provided in Section 3(d), below.

                                       1
<PAGE>

          (c) Acceleration. Notwithstanding Section 7(g) of the Plan, upon a
     Change in Control, the right to exercise the Option shall not be
     accelerated.

          (d) Taxes. The Company and its subsidiaries are authorized to withhold
     from any Option granted or to be settled, any payment relating to an Option
     under the Plan, including from a distribution of Shares, or any payroll or
     other payment to a Participant, amounts of withholding and other taxes due
     or potentially payable in connection with any transaction involving an
     Option, and to take such other action as the Committee may deem advisable
     to enable the Company and Participants to satisfy obligations for the
     payment of withholding taxes and other tax obligations relating to any
     Option. This authority shall include authority to withhold or receive
     Shares or other property and to make cash payments in respect thereof in
     satisfaction of a Participant's tax obligations.

     3. Method of Payment. Payment of the Exercise Price shall be by any of the
following, or a combination thereof, as determined by the Committee; provided,
however, that such exercise method does not then violate any applicable federal
and state laws, rules and regulations; and, provided further, that the portion
of the Exercise Price equal to the par value of the Shares must be paid in cash
or other legal consideration permitted by the Delaware General Corporation Law:

          (a) cash;

          (b) check;

          (c) surrender of Shares or delivery of a properly executed form of
     attestation of ownership of Shares as the Committee may require (including
     withholding of Shares otherwise deliverable upon exercise of the Option)
     which have a Fair Market Value on the date of surrender or attestation
     equal to the aggregate Exercise Price of the Shares as to which the Option
     is being exercised (but only to the extent that such exercise of the Option
     would not result in an accounting compensation charge with respect to the
     Shares used to pay the exercise price); or

          (d) payment through a broker-dealer sale and remittance procedure
     pursuant to which the Participant (i) shall provide written instructions to
     a Company designated brokerage firm to effect the immediate sale of some or
     all of the purchased Shares and remit to the Company, out of the sale
     proceeds available on the settlement date, sufficient funds to cover the
     aggregate exercise price payable for the purchased Shares and (ii) shall
     provide written directives to the Company to deliver the certificates for
     the purchased Shares directly to such brokerage firm in order to complete
     the sale transaction.

     4. Restrictions on Exercise. The Option may not be exercised if the
issuance of the Shares subject to the Option upon such exercise would constitute
a violation of any applicable federal and states laws, rules and regulations. In
addition, the Option, if an Incentive Stock Option, may not be exercised until
such time as the Plan has been approved by the stockholders of the Company.

     5. Termination or Change of Employment or Service. In the event the
Participant's employment or service terminates, other than for cause, the
Participant may, to

                                       2
<PAGE>

the extent otherwise so entitled at the date of such termination (the
"Termination Date"), exercise the Option during the Post-Termination Exercise
Period. In the event of termination of the Participant's employment or service
for cause, the Participant's right to exercise the Option shall, except as
otherwise determined by the Committee, terminate concurrently with the
termination of the Participant's employment or service. In no event shall the
Option be exercised later than the Expiration Date set forth in the Notice. In
the event of the Participant's change in status from employee, director or
consultant to any other status of employee, director or consultant, the Option
shall remain in effect and, except to the extent otherwise determined by the
Committee, continue to vest; provided, however, that with respect to any
Incentive Stock Option that shall remain in effect after a change in status from
employee to director or consultant, such Incentive Stock Option shall cease to
be treated as an Incentive Stock Option and shall be treated as a Nonstatutory
Stock Option on the day three (3) months and one (1) day following such change
in status. Except as provided in Sections 6 and 7 below, to the extent that the
Participant is not entitled to exercise the Option on the Termination Date, or
if the Participant does not exercise the Option within the Post-Termination
Exercise Period, the Option shall terminate.

     6. Disability of Participant. In the event the Participant's employment or
service terminates as a result of his or her disability, the Participant may,
but only within twelve (12) months from the Termination Date (and in no event
later than the Expiration Date), exercise the Option to the extent he or she was
otherwise entitled to exercise it on the Termination Date; provided, however,
that if such disability is not a "disability" as such term is defined in Section
22(e)(3) of the Code and the Option is an Incentive Stock Option, such Incentive
Stock Option shall cease to be treated as an Incentive Stock Option and shall be
treated as a Nonstatutory Stock Option on the day three (3) months and one (1)
day following the Termination Date. To the extent that the Participant is not
entitled to exercise the Option on the Termination Date, or if the Participant
does not exercise the Option to the extent so entitled within the time specified
herein, the Option shall terminate.

     7. Death of Participant. In the event of the termination of the
Participant's employment or service as a result of his or her death, or in the
event of the Participant's death during the Post-Termination Exercise Period or
during the twelve (12) month period following the Participant's termination of
employment or service as a result of his or her disability, the Participant's
estate, or a person who acquired the right to exercise the Option by bequest or
inheritance, may exercise the Option, but only to the extent the Participant
could exercise the Option at the date of termination, within twelve (12) months
from the date of death (but in no event later than the Expiration Date). To the
extent that the Participant is not entitled to exercise the Option on the date
of death, or if the Option is not exercised to the extent so entitled within the
time specified herein, the Option shall terminate.

     8. Transferability of Option. Except as otherwise provided by the
Committee, Options and other rights of Participants under the Plan may not be
transferred to third parties, pledged, mortgaged, hypothecated, or otherwise
encumbered, and may note subject to claims of creditors, except as designated by
the Participant by will or by the laws of descent and distribution (or pursuant
to a Beneficiary designation).

                                       3
<PAGE>

     9. Term of Option. The Option may be exercised no later than the Expiration
Date set forth in the Notice or such earlier date as otherwise provided herein.

     10. Tax Consequences. Set forth below is a brief summary as of the date of
this Award Agreement of some of the federal tax consequences of exercise of the
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE PARTICIPANT SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.

          (a) Exercise of Incentive Stock Option. If the Option qualifies as an
     Incentive Stock Option, there will be no regular federal income tax
     liability upon the exercise of the Option, although the excess, if any, of
     the Fair Market Value of the Shares on the date of exercise over the
     Exercise Price will be treated as income for purposes of the alternative
     minimum tax for federal tax purposes and may subject the Participant to the
     alternative minimum tax in the year of exercise.

          (b) Exercise of Incentive Stock Option Following Disability. If the
     Participant's employment or service terminates as a result of disability
     that is not total and permanent disability as defined in Section 22(e)(3)
     of the Code, to the extent permitted on the date of termination, the
     Participant must exercise an Incentive Stock Option within three (3) months
     of such termination for the Incentive Stock Option to be qualified as an
     Incentive Stock Option.

          (c) Exercise of Nonstatuory Stock Option. On exercise of a
     Nonstatutory Stock Option , the Participant will be treated as having
     received compensation income (taxable at ordinary income tax rates) equal
     to the excess, if any, of the Fair Market Value of the Shares on the date
     of exercise over the Exercise Price. If the Participant is an employee or a
     former employee, the Company will be required to withhold from the
     Participant's compensation or collect from the Participant and pay to the
     applicable taxing authorities an amount in cash equal to a percentage of
     this compensation income at the time of exercise, and may refuse to honor
     the exercise and refuse to deliver Shares if such withholding amounts are
     not delivered at the time of exercise.

          (d) Disposition of Shares. In the case of a Nonstatutory Stock Option,
     if Shares are held for more than one year, any gain realized on disposition
     of the Shares will be treated as long-term capital gain for federal income
     tax purposes and subject to tax at a maximum rate of 20%. In the case of an
     Incentive Stock Option, if Shares transferred pursuant to the Option are
     held for more than one year after receipt of the Shares and are disposed
     more than two years after the Date of Award, any gain realized on
     disposition of the Shares also will be treated as capital gain for federal
     income tax purposes and subject to the same tax rates and holding periods
     that apply to Shares acquired upon exercise of a Nonstatutory Stock Option
     . If Shares purchased under an Incentive Stock Option are disposed of prior
     to the expiration of such one-year or two-year periods, any gain realized
     on such disposition will be treated as compensation income (taxable at
     ordinary income rates) to the extent of the difference between the Exercise
     Price and the lesser of (i) the Fair Market Value of the Shares on the date
     of exercise, or (ii) the sale price of the Shares.

                                       4
<PAGE>

     11. Entire Agreement; Amendment; Governing Law. The Notice, the Plan and
this Award Agreement constitute the entire agreement of the parties with respect
to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and the Participant with respect to
the subject matter hereof, and may not be modified adversely to the
Participant's interest except by means of a writing signed by the Company and
the Participant. Notwithstanding the foregoing, the Board may make any such
amendment to cause the Plan or an Option to qualify for an exemption under Rule
16b-3 without the consent of a Participant. Nothing in the Notice, the Plan and
this Award Agreement (except as expressly provided therein) is intended to
confer any rights or remedies on any persons other than the parties. The Notice,
the Plan and this Award Agreement are to be construed in accordance with and
governed by the internal laws of the State of Delaware without giving effect to
any choice of law rule that would cause the application of the laws of any
jurisdiction other than the internal laws of the State of Delaware to the rights
and duties of the parties. Should any provision of the Notice, the Plan or this
Award Agreement be determined by a court of law to be illegal or unenforceable,
such provision shall be enforced to the fullest extent allowed by law and the
other provisions shall nevertheless remain effective and shall remain
enforceable.

     12. Headings. The captions used in the Notice and this Award Agreement are
inserted for convenience and shall not be deemed a part of the Option for
construction or interpretation.

     13. Dispute Resolution The provisions of this Section 13 shall be the
exclusive means of resolving disputes arising out of or relating to the Notice,
the Plan and this Award Agreement. The Company, the Participant, and the
Participant's assignees pursuant to Section 8 (the "parties") shall attempt in
good faith to resolve any disputes arising out of or relating to the Notice, the
Plan and this Award Agreement by negotiation between individuals who have
authority to settle the controversy. Negotiations shall be commenced by either
party by notice of a written statement of the party's position and the name and
title of the individual who will represent the party. Within thirty (30) days of
the written notification, the parties shall meet at a mutually acceptable time
and place, and thereafter as often as they reasonably deem necessary, to resolve
the dispute. If the dispute has not been resolved by negotiation, the parties
agree that any suit, action, or proceeding arising out of or relating to the
Notice, the Plan or this Award Agreement shall be brought in the United States
District Court for the Central District of California (or should such court lack
jurisdiction to hear such action, suit or proceeding, in a California state
court in the county of Los Angeles, California) and that the parties shall
submit to the jurisdiction of such court. The parties irrevocably waive, to the
fullest extent permitted by law, any objection the party may have to the laying
of venue for any such suit, action or proceeding brought in such court. THE
PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF
ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or more provisions of this
Section 13 shall for any reason be held invalid or unenforceable, it is the
specific intent of the parties that such provisions shall be modified to the
minimum extent necessary to make it or its application valid and enforceable.

     14. Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United

                                       5
<PAGE>

States mail by certified mail (if the parties are within the United States) or
upon deposit for delivery by an internationally recognized express mail courier
service (for international delivery of notice), with postage and fees prepaid,
addressed to the other party at its address as shown beneath its signature in
the Notice, or to such other address as such party may designate in writing from
time to time to the other party.

                                       6
<PAGE>

                                    EXHIBIT A

                QUENTRA NETWORKS, INC. 2000 EQUITY INCENTIVE PLAN
                                 EXERCISE NOTICE

Quentra Networks, Inc.
1640 S. Sepulveda Blvd., Suite 222
Los Angeles, California  90025

Attention: Corporate Secretary

     1. Exercise of Option. Effective as of today, ______________, ___ the
undersigned (the "Participant") hereby elects to exercise the Participant's
option to purchase ___________ shares of the Common Stock (the "Shares") of
Quentra Networks, Inc. (the "Company") under and pursuant to the Company's 2000
Equity Incentive Plan, as amended from time to time (the "Plan") and the [ ]
Incentive [ ] Nonstatutory Stock Option Award Agreement (the "Award Agreement")
and Notice of Stock Option Award (the "Notice") dated ______________, ________.
Unless otherwise defined herein, the terms defined in the Plan shall have the
same defined meanings in this Exercise Notice.

     2. Representations of the Participant. The Participant acknowledges that
the Participant has received, read and understood the Notice, the Plan, and the
Award Agreement and agrees to abide by and be bound by their terms and
conditions.

     3. Rights as Stockholder. Until the stock certificate evidencing such
Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder shall exist with
respect to the Shares, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such stock certificate promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the stock certificate is issued,
except as provided in Section 4 of the Plan.

     4. Delivery of Payment. The Participant herewith delivers to the Company
the full Exercise Price for the Shares, which, to the extent selected, shall be
deemed to be satisfied by use of the broker-dealer sale and remittance procedure
to pay the Exercise Price provided in Section 3(d) of the Award Agreement.

     5. Tax Consultation. The Participant understands that the Participant may
suffer adverse tax consequences as a result of the Participant's purchase or
disposition of the Shares. The Participant represents that the Participant has
consulted with any tax consultants the Participant deems advisable in connection
with the purchase or disposition of the Shares and that the Participant is not
relying on the Company for any tax advice.

     6. Taxes. The Participant agrees to satisfy all applicable federal, state
and local income and employment tax withholding obligations and herewith
delivers to the Company

                                       1
<PAGE>

the full amount of such obligations or has made arrangements acceptable to the
Company to satisfy such obligations. In the case of an Incentive Stock Option,
the Participant also agrees, as partial consideration for the designation of the
Option as an Incentive Stock Option, to notify the Company in writing within
thirty (30) days of any disposition of any shares acquired by exercise of the
Option if such disposition occurs within two (2) years from the Date of Award or
within one (1) year from the date the Shares were transferred to the
Participant. If the Company is required to satisfy any federal, state or local
income or employment tax withholding obligations as a result of such an early
disposition, the Participant agrees to satisfy the amount of such withholding in
a manner that the Committee prescribes.

     7. Successors and Assigns. The Company may assign any of its rights under
this Exercise Notice to single or multiple assignees, and this agreement shall
inure to the benefit of the successors and assigns of the Company. This Exercise
Notice shall be binding upon the Participant and his or her heirs, executors,
administrators, successors and assigns.

     8. Headings. The captions used in this Exercise Notice are inserted for
convenience and shall not be deemed a part of this agreement for construction or
interpretation.

     9. Dispute Resolution. The provisions of Section 13 of the Award Agreement
shall be the exclusive means of resolving disputes arising out of or relating to
this Exercise Notice.

     10. Governing Law; Severability. This Exercise Notice is to be construed in
accordance with and governed by the internal laws of the State of Delaware
without giving effect to any choice of law rule that would cause the application
of the laws of any jurisdiction other than the internal laws of the State of
Delaware to the rights and duties of the parties. Should any provision of this
Exercise Notice be determined by a court of law to be illegal or unenforceable,
such provision shall be enforced to the fullest extent allowed by law and the
other provisions shall nevertheless remain effective and shall remain
enforceable.

     11. Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States mail by certified mail, (if the parties are within
the United States) or upon deposit for delivery by an internationally recognized
express mail courier service (for international delivery of notice) with postage
and fees prepaid, addressed to the other party at its address as shown below
beneath its signature, or to such other address as such party may designate in
writing from time to time to the other party.

     12. Further Instruments. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this agreement.

     13. Entire Agreement. The Notice, the Plan, and the Award Agreement are
incorporated herein by reference, and together with this Exercise Notice
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Participant with respect to the subject matter
hereof, and may not be modified adversely to the Participant's interest except
by means of a writing signed by the Company and the Participant.

                                       2
<PAGE>

Notwithstanding the foregoing, the Board may make any such amendment to cause
the Plan or an Option to qualify for an exemption under Rule 16b-3 without the
consent of a Participant. Nothing in the Notice, the Plan, the Award Agreement
and this Exercise Notice (except as expressly provided therein) is intended to
confer any rights or remedies on any persons other than the parties.

Submitted by:                              Accepted by:
PARTICIPANT:                               QUENTRA NETWORKS, INC.
                                           By:
                                           Title:
------------------------------------             -------------------------------
               (Signature)
Address:                                   Address:
-------                                    -------

------------------------------------       -------------------------------------

------------------------------------       -------------------------------------

                                       3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}]]