-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NXCalLWx1+Y7b9/E+1E8hSYkN/tiMtoA7xWVIfaoYSX85Wnvg38tZIkRIiqdUy0R xIygzFE4zwQCaCV83aP6Kg== /in/edgar/work/0000057201-00-500013/0000057201-00-500013.txt : 20001026 0000057201-00-500013.hdr.sgml : 20001026 ACCESSION NUMBER: 0000057201-00-500013 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20001019 ITEM INFORMATION: FILED AS OF DATE: 20001025 FILER: COMPANY DATA: COMPANY CONFORMED NAME: QUENTRA NETWORKS INC CENTRAL INDEX KEY: 0000057201 STANDARD INDUSTRIAL CLASSIFICATION: [3661 ] IRS NUMBER: 362448698 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-05486 FILM NUMBER: 745861 BUSINESS ADDRESS: STREET 1: 1640 S SEPULVEDA BOULEVARD STREET 2: SUITE 222 CITY: LOS ANGELES STATE: CA ZIP: 90025 BUSINESS PHONE: 8009358506 MAIL ADDRESS: STREET 1: 1640 S SEPULVEDA BOULEVARD STREET 2: SUITE 222 CITY: LOS ANGELES STATE: CA ZIP: 90025 FORMER COMPANY: FORMER CONFORMED NAME: COYOTE NETWORK SYSTEMS INC DATE OF NAME CHANGE: 19971212 FORMER COMPANY: FORMER CONFORMED NAME: DIANA CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: FH INDUSTRIES CORP DATE OF NAME CHANGE: 19850814 8-K 1 0001.htm FORM 8-K

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 19, 2000



QUENTRA NETWORKS, INC.

(Exact name of Registrant as specified in its charter)

                                                                                   Delaware                                                                1-5486                                                  36-2448698
                                                                ______________________                               _________________                                   ________________
                                                                (State or Other Jurisdiction                                    (Commission File No.)                                       (IRS Employer
                                                                   of Incorporation)                                                                                                                               Identification No.)


1640 S. Sepulveda Boulevard, Suite 222, Los Angeles, California 90025

Address of principal executive offices, including zip code)


(800) 935-8506

(Registrant's telephone number, including area code)





ITEM 2.  Acquisition or Disposition of Assets.

         On October 19, 2000, we acquired HomeAccess MicroWeb, Inc., a California corporation formerly known as Primary Knowledge,
Inc. ("HomeAccess"), through the merger of HomeAccess Acquisition Corp., our wholly owned subsidiary, with and into HomeAccess (the
"Merger").  The Merger was consummated in accordance with the terms and provisions of the Amended and Restated Agreement and Plan of
Merger (the "Merger Agreement") dated October 5, 2000 by and among HomeAccess, DQE Enterprises, Inc., a Pennsylvania corporation
("DQE"), Barbara Conrad and Jerry Conrad, which amended and restated the Agreement and Plan of Merger among the parties dated May 10,
2000, as subsequently amended on May 26, 2000 and July 28, 2000.  HomeAccess is a developer of local community e-commerce networks in
concentrated geographic markets using low-cost Internet appliances, such as screen phones and PDAs.

         In accordance with the terms of the Merger, we issued DQE 1,767,603 shares of our Series C convertible preferred stock and
issued Barbara Conrad 2,651,404 shares of our common stock.  In addition, our board of directors was increased to seven members, and
Jerry Conrad, Neal Taylor and Ron Bolen were appointed to the board.  The seventh director will appointed by our board of directors
following the Merger.  The parties to the Merger Agreement agreed to consummate the merger concurrently with the closing of a private
placement of shares of our common stock and warrants of at least $7.0 million.

         A more detailed description of the Merger Agreement and related transactions is contained in our Current Report on Form 8-K
dated October 5, 2000 as filed with the Securities and Exchange Commission on October 10, 2000.

ITEM 5.  Other Events.

         On October 19, 2000, concurrently with the closing of the Merger, we closed a private placement of our units for
approximately $7.1 million.  Each unit consisted of four shares of our common stock and a warrant to purchase one share of our common
stock at an exercise price of $2.75 per share.  The warrants are immediately exercisable and expire three years from the date of
issuance.  The units were offered and sold at $11.00 per share. As a result of the offering, we issued approximately 2,588,000 shares
of our common stock and approximately 647,000 warrants to purchase shares of our common stock to twenty-three accredited investors in
reliance on the exemption from the registration requirements provided by Rule 506 of the Securities Act of 1933.  We are continuing
to sell units in the offering and intend to raise an additional $1.0 million.

                                                                        -1-

Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits.


         (a)      Financial Statements.

                  The financial statements required by this item are not included in this report.  Such financial statements will be
filed by amendment to this Form 8-K within 60 days of the date hereof.

         (b)      Pro Forma Financial Information.

                  The financial information required by this item is not included in this report.  Such financial statements will be
filed by amendment to this Form 8-K within 60 days of the date hereof.

         (c)      Exhibits.

                  2.1(1)   Amended and Restated Agreement and Plan of Merger dated October 5, 2000 by and among Quentra Networks,
                           Inc., HomeAccess Microweb, Inc., DQE Enterprises, Inc., Barbara Conrad and Jerry Conrad.

                  4.1      Certificate of Designations, Preferences and Rights of Series C Preferred Stock filed on October 19, 2000.

                  4.2      Form of Warrants dated October 19, 2000 issued to various investors to purchase up to 646,933 shares of
                           common stock at $2.75 per share.

                  4.3      Stock Purchase Agreement dated September 21, 2000, as amended on October 10, 2000, between the Registrant
                           and various investors.

                  10.1     License Agreement dated October 19, 2000, between HomeAccess Microweb, Inc. and HA Technology, Inc.

                  10.2.    Option Agreement dated October 19, 2000, by and among the Registrant, HA Technology, Inc., Barbara and
                           Jerry Conrad, and DQE Enterprises, Inc.

                  10.3     Personal Services Agreement dated October 19, 2000, between the Registrant and Jerry Conrad.

                  10.4     Voting Agreement dated October 19, 2000, by and among Timothy G. Atkinson, DQE Enterprises, Inc. and
                           Barbara Conrad (voting agreements were also entered into by James McCullough, John Eger, Daniel Latham,
                           Cheryl Johnson and KRJ, LLC).

                  10.5     $2,000,000 Promissory Note dated October 19, 2000, between Jerry Conrad, as payor, and the Registrant, as
                           payee.


                                                                        -2-



                                                        SIGNATURES


         Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized, on this 24th day of October, 2000.

                                                                                QUENTRA NETWORKS, INC.



                                                                                By:  /s/ Timothy G. Atkinson
                                                                                     -----------------------------
                                                                                     Timothy G. Atkinson, Vice President of
                                                                                     Business Development and General Counsel




                                                                        -3-



                                                        Exhibit Index
                                                        -------------


        2.1(1)   Amended and Restated Agreement and Plan of Merger dated October 5, 2000 by and among Quentra Networks,
                 Inc., HomeAccess Microweb, Inc., DQE Enterprises, Inc., Barbara Conrad and Jerry Conrad.

        4.1      Certificate of Designations, Preferences and Rights of Series C Preferred Stock filed on October 19, 2000.

        4.2      Form of Warrants dated October 19, 2000 issued to various investors to purchase up to 646,933 shares of
                 common stock at $2.75 per share.

        4.3      Stock Purchase Agreement dated September 21, 2000, as amended on October 10, 2000, between the Registrant
                 and various investors.

        10.1     License Agreement dated October 19, 2000, between HomeAccess Microweb, Inc. and HA Technology, Inc.

        10.2.    Option Agreement dated October 19, 2000, by and among the Registrant, HA Technology, Inc., Barbara and
                 Jerry Conrad, and DQE Enterprises, Inc.

        10.3     Personal Services Agreement dated October 19, 2000, between the Registrant and Jerry Conrad.

        10.4     Voting Agreement dated October 19, 2000, by and among Timothy G. Atkinson, DQE Enterprises, Inc. and
                 Barbara Conrad (voting agreements were also entered into by James McCullough, John Eger, Daniel Latham,
                 Cheryl Johnson and KRJ, LLC).

        10.5     $2,000,000 Promissory Note dated October 19, 2000, between Jerry Conrad, as payor, and the Registrant, as
                 payee.


- --------
1        Incorporated by reference to Exhibit 2.1 of Registrant's Form 8-K dated October 5, 2000, filed on October 10, 2000.




                                                                        -4-
EX-4.1 2 0002.htm SERIES C CERTIFICATE OF DESIGNATIONS CERTIFICATE OF DESIGNATIONS

CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF SERIES C PREFERRED STOCK

OF

QUENTRA NETWORKS, INC.

Pursuant to Section 151 of the General Corporation
Law of the State of Delaware


         QUENTRA NETWORKS, INC., a Delaware corporation (the "Corporation"), certifies that pursuant to the authority contained in
Article IV of its Certificate of Incorporation, and in accordance with the provisions of Section 151 of the General Corporation Law
of the State of Delaware, its Board of Directors has adopted the following resolution creating a series of its Preferred Stock, par
value $.01 per share, designated as Series C Preferred Stock:

         RESOLVED, that a series of the class of authorized Preferred Stock, par value $.01 per share, to be known as "Series C
Preferred Stock", of the Corporation be hereby created, and that the designation and amount thereof and the voting powers,
preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:

         A.       Designation and Amount.  The shares of this series shall be designated as "Series C Preferred Stock" (the "Series C
Preferred Stock") and the number of shares constituting such series shall be 1,795,753.

         B.       Terms of Series C Preferred Stock.

         1.       Dividends.  Holders of shares of Series C Preferred Stock shall be entitled to receive, when and as declared by the
Board of Directors and to the extent permitted under the Delaware General Corporation Law, and the Corporation shall pay on a
quarterly basis commencing on December 31, 2000 preferential dividends in cash or in Common Stock, at the discretion of the Board of
Directors, to the holders of shares of Series C Preferred Stock as provided in this Section 1.  If such dividend is to be paid in
Common Stock, as aforesaid, such Common Stock shall be valued at the average Trading Price for the most recent five Business Days.
Dividends on each share of Series C Preferred Stock shall accrue on a daily basis at the rate of 6% per annum of the sum of (A)
Series C Preferred Original Issuance Price plus (B) all accumulated and unpaid dividends thereon commencing on the Series C Preferred
Original Issuance Date of such shares of Series C Preferred Stock.  Such dividends shall accrue whether or not they have been
declared and whether or not there are profits, surplus or other funds of the Corporation legally available for the payment of
dividends; provided, however, that such dividends shall not be paid unless and until all amounts then due to the holders of the
Series A Preferred Stock have theretofore been paid.

         The Corporation shall not declare or pay any dividend, or order or make any other distribution, upon any Junior Stock or
Liquidation Parity Stock (other than a dividend payable in such Junior Stock) unless the Corporation shall first pay, or

                                                                         -1-
simultaneously therewith declare and set apart a sum sufficient for the payment of, all accumulated and unpaid dividends upon the
Series C Preferred Stock.

         2.       Liquidation Preference.  In the event of any voluntary or involuntary liquidation, dissolution or winding-up of the
Corporation, the assets of the Corporation available for distribution to its stockholders, whether from capital, surplus or earnings,
shall be distributed in the following order of priority:

         The holders of Series C Preferred Stock shall be entitled to receive, prior and in preference to any distribution to the
holders of any Junior Stock but only after the holders of the Series A Preferred Stock have been paid in full and pari passu with any
distribution to the holder of any Liquidation Parity Stock, an amount per share equal to the Series C Preferred Original Issuance
Price (subject to appropriate adjustment upon the occurrence of any stock split, stock dividend or combination of the outstanding
shares of Series C Preferred Stock) and, in addition, an amount equal to any accumulated but unpaid dividends on the Series C
Preferred Stock.  If the assets of the Corporation available for distribution to the holders of Series C Preferred Stock shall be
insufficient to permit the payment of the full preferential amount set forth herein, then the holders of shares of Series C Preferred
Stock shall share ratably in any distribution of the assets of the Corporation (A) as to any Liquidation Parity Stock, in proportion
to the respective liquidation preferences of the Series C Preferred Stock and such Liquidation Parity Stock and (B) as to the other
holders of the Series C Preferred Stock, in proportion to their respective number of shares of Series C Preferred Stock.

         3.       Voting Rights.

                  (a)      The holders of the Series C Preferred Stock shall be entitled to vote as holders of Common Stock as though
all shares of Series C Preferred Stock had been converted into Common Stock.

                  (b)      The Corporation shall not, without the affirmative approval of the holders of shares representing at least
a majority of the voting power of the shares of Series C Preferred Stock then outstanding (which voting power shall be determined,
for purposes of this Section 3(b), based upon the number of votes per share that equals the number of shares of Common Stock
(including fractional shares) into which each such share of Series C Preferred Stock is then convertible, rounded up to the nearest
share), acting separately from the holders of Common Stock and the holders of any other series or class of capital stock of the
Corporation, given by written consent in lieu of a meeting or by vote at a meeting called for such purpose, for which meeting timely
and specific notice shall have been given to each holder of Series C Preferred Stock, in the manner provided in the By-Laws of the
Corporation:

                  (i)      alter or change the powers, preferences or rights of any class or series of capital stock of the
         Corporation, or the qualifications, limitations or restrictions thereon, if any such alteration or change would adversely
         affect the rights of the holders of Series C Preferred Stock; provided, however, that (A) the change in the qualifications,
         limitations or restrictions of the Series B Preferred Stock to provide voting rights equal to those granted under this
         Section 3(b), and (B) the alteration creation and issuance of another series of Preferred Stock shall not be deemed to


                                                                        -2-

         require the consent of the holders of the Series C Preferred Stock pursuant to this clause (i) so long as the proposed terms
         do not require consent of the holders of the Series C Preferred Stock pursuant to clause (ii) below; or

                  (ii)     authorize, designate, create, issue or agree to issue any shares of any class or series of capital stock of
         the Corporation unless such class or series of capital stock constitutes Junior Stock.

         4.       Optional Conversion.

         (a)      The holder of any shares of Series C Preferred Stock shall have the right, at such holder's option, at any time or
from time to time commencing on or after the date hereof, to convert any of such shares into such whole number of fully paid and
nonassessable shares of Common Stock as is equal to the quotient obtained by dividing (A) the product obtained by multiplying the
Series C Preferred Original Issuance Price by the number of shares of Series C Preferred Stock being converted, by (B) the Series C
Preferred Conversion Price, as last adjusted and then in effect, by surrender of the certificates representing the shares of Series C
Preferred Stock so to be converted in the manner provided in Section 4(b) hereof.  The holder of any shares of Series C Preferred
Stock exercising the aforesaid right to convert such shares into shares of Common Stock shall be entitled to payment of any dividends
accrued but unpaid with respect to such shares of Series C Preferred Stock.

         (b)      The holder of any shares of Series C Preferred Stock may exercise the conversion right pursuant to Section 4(a)
hereof as to any part thereof at any time after the Series C Preferred Original Issue Date by delivering to the Corporation during
regular business hours, at the principal executive office of the Corporation or any transfer agent of the Corporation for the
Series C Preferred Stock as may be designated by the Corporation, the certificate or certificates for the shares to be converted, duly
endorsed or assigned in blank or to the Corporation (if required by it), accompanied by written notice stating that the holder elects
to convert such shares and stating the name or names (with addresses) in which the certificate or certificates for the shares of
Common Stock are to be issued.  Conversion shall be deemed to have been effected on the date when the aforesaid delivery is made (the
"Conversion Date").  As promptly as practicable thereafter, the Corporation shall issue and deliver to or upon the written order of
such holder, to the place designated by such holder, a certificate or certificates for the number of full shares of Common Stock to
which such holder is entitled and a check or cash in respect of any fractional interest in a share of Common Stock as provided in
Section 4(c) hereof and a check or cash in payment of all dividends declared but unpaid, if any (to the extent permissible under
law), with respect to the shares of Series C Preferred Stock so converted.  The Person in whose name the certificate or certificates
for Common Stock are to be issued shall be deemed to have become a holder of record of Common Stock on the applicable Conversion Date
unless the transfer books of the Corporation are closed on that date, in which event such Person shall be deemed to have become a
holder of record of Common Stock on the next succeeding date on which the transfer books are open, but the Series C Preferred
Conversion Price shall be that in effect on the Conversion Date.  Upon conversion of only a portion of the number of shares covered
by a certificate representing shares of Series C Preferred Stock surrendered for conversion, the Corporation shall issue and deliver

                                                                        -3-

to or upon the written order of the holder of the certificate so surrendered for conversion, at the expense of the Corporation, a new
certificate covering the number of shares of Series C Preferred Stock representing the unconverted portion of the certificate so
surrendered, which new certificate shall entitle the holder thereof to dividends on the shares of Series C Preferred Stock
represented thereby to the same extent as if the portion of the certificate theretofore covering such unconverted shares had not been
surrendered for conversion.

         (c)      No fractional shares of Common Stock or scrip shall be issued upon conversion of shares of Series C Preferred
Stock.  If more than one share of Series C Preferred Stock shall be surrendered for conversion at any one time by the same holder,
the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of
shares of Series C Preferred Stock so surrendered. Instead of any fractional shares of Common Stock which would otherwise be issuable
upon conversion of any shares of Series C Preferred Stock, the Corporation shall pay a cash adjustment in respect of such fractional
interest in an amount equal to the then Current Market Price of a share of Common Stock multiplied by such fractional interest.
Fractional interests shall not be entitled to dividends, and the holders of fractional interests shall not be entitled to any rights
as stockholders of the Corporation in respect of such fractional interest.

         (d)      The Series C Preferred Conversion Price shall be subject to adjustment from time to time as follows:

                  (i)      If, at any time after such Series C Preferred Original Issuance Date, the number of shares of Common Stock
         outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up of shares of
         Common Stock, then, following the record date fixed for the determination of holders of Common Stock entitled to receive
         such stock dividend, subdivision or split-up, the Series C Preferred Conversion Price shall be appropriately decreased so
         that the number of shares of Common Stock issuable on conversion of each share of Series C Preferred Stock shall be
         increased in proportion to such increase in outstanding shares.

                  (ii)     If, at any time after the Series C Preferred Original Issuance Date, the number of shares of Common Stock
         outstanding is decreased by a combination of the outstanding shares of Common Stock, then, following the record date for
         such combination, the Series C Preferred Conversion Price shall be appropriately increased so that the number of shares of
         Common Stock issuable on conversion of each share of Series C Preferred Stock shall be decreased in proportion to such
         decrease in outstanding shares.

                  (iii)    In case, at any time after the Series C Preferred Original Issuance Date, of any capital reorganization, or
         any reclassification of the stock of the Corporation (other than a change in par value or from par value to no par value or
         from no par value to par value or as a result of a stock dividend or subdivision, split-up or combination of shares), or the
         consolidation or merger of the Corporation with or into another Person (other than a consolidation or merger in which the
         Corporation is the continuing company and which does not result in any change in the Common Stock) or of the sale or other
         disposition of all or substantially all the properties and assets of the Corporation as an entirety to any other Person,

                                                                        -4-

         each share of Series C Preferred Stock shall, after such reorganization, reclassification, consolidation, merger, sale or
         other disposition, be convertible into the kind and number of shares of stock or other securities or property of the
         Corporation or of the company resulting from such consolidation or surviving such merger or to which such properties and
         assets shall have been sold or otherwise disposed to which the holder of the number of shares of Common Stock deliverable
         (immediately prior to the time of such reorganization, reclassification, consolidation, merger, sale or other disposition)
         upon conversion of such share of Series C Preferred Stock would have been entitled upon such reorganization,
         reclassification, consolidation, merger, sale or other disposition.  The provisions of this Section 4 shall similarly apply
         to successive reorganizations, reclassifications, consolidations, mergers, sales or other dispositions.

         (e)      Whenever the Series C Preferred Conversion Price shall be adjusted as provided in Section 4(d) hereof, the
Corporation shall forthwith file, at the office of Corporation or any transfer agent designated by the Corporation for the Series C
Preferred Stock, a statement, signed by its Chief Financial Officer, showing in detail the facts requiring such adjustment and the
Series C Preferred Conversion Price then in effect.  The Corporation shall also cause a copy of such statement to be sent by
first-class certified mail, return receipt requested, postage prepaid, to each holder of shares of Series C Preferred Stock at such
Person's address appearing on the Corporation's records.  Where appropriate, such copy may be given in advance and may be included as
part of a notice required to be mailed under the provisions of Section 4(f) hereof.

         (f)      In the event the Corporation shall propose to take any action of the types described in clauses (i), (ii) or (iii)
of Section 4(d) hereof, the Corporation shall give notice to each holder of shares of Series C Preferred Stock, in the manner set
forth in Section 4(e) above, which notice shall specify the record date, if any, with respect to any such action and the date on
which such action is to take place.  Such notice shall also set forth such facts with respect thereto as shall be reasonably
necessary to indicate the effect of such action (to the extent such effect may be known at the date of such notice) on the Series C
Preferred Conversion Price and the number, kind or class of shares or other securities or property which shall be deliverable or
purchasable upon the occurrence of such action or deliverable upon conversion of shares of Series C Preferred Stock.  In the case of
any action which would require the fixing of a record date, such notice shall be given at least ten (10) days prior to the date so
fixed, and in case of any other action, such notice shall be given at least fifteen (15) days prior to the taking of such proposed
action.  Failure to give such notice, or any defect therein, shall not affect the legality or validity of any such action.

         (g)      The Corporation shall pay all documentary, stamp or other transactional taxes attributable to the issuance or
delivery of shares of Common Stock upon conversion of any shares of Series C Preferred Stock, except for any transfer taxes.

         (h)      The Corporation shall reserve, free from preemptive rights, out of its authorized but unissued shares of Common
Stock a sufficient number of shares of Common Stock to provide for the conversion of all outstanding shares of Series C Preferred
Stock.

         (i)      All shares of Common Stock which may be issued in connection with the conversion provisions set forth herein will,
upon issuance by the Corporation, be validly issued, fully paid and nonassessable, with no personal liability attaching to the

                                                                        -5-

ownership thereof, and free from all taxes, liens or charges with respect thereto.

         5.       Definitions.  As used herein, the following terms shall have the following meanings:

         (a)      The term "Business Day" shall mean any day other than a Saturday, Sunday or United States federal holiday.

         (b)      The term "Common Stock" shall mean the Corporation's common stock, $1.00 par value per share.

         (c)      The term "Current Market Price" shall mean, as of the day in question, the fair market value of a share of Common
Stock on such date, as determined in good faith by the Board of Directors of the Corporation.

         (d)      The term "Junior Stock" shall mean the Common Stock and any class or series of capital stock of the Corporation
ranking, as to payment of dividends or distribution of assets, junior to the Series C Preferred Stock.

         (e)      The term "Liquidation Parity Stock" shall mean the Series B Preferred Stock and any other class or series of capital
stock of the Corporation ranking, as to distribution of assets, pari passu to the Series C Preferred Stock.

         (f)      The term "Series C Preferred Conversion Price" shall mean the Series C Preferred Original Price, as adjusted from
time to time pursuant to the provisions of Section 4(d) hereof.

         (g)      The term "Series C Preferred Original Issuance Date" shall mean the date on which the first share of Series C
Preferred Stock has been issued.

         (h)      The term "Series C Preferred Original Issuance Price" shall mean $3.50 per share of Series C Preferred Stock.

         (i)      The term "Trading Price" shall mean the last reported sale price of the Common Stock or, in case no such reported
sale takes place on such day, the average of the reported closing bid and asked prices, in either case, as reported by the Nasdaq
National Market or such other United States securities exchange registered under the Securities and Exchange Act of 1934, as amended,
on which the Common Stock are listed or admitted to trading.





                                                                        -6-

         IN WITNESS WHEREOF, said QUENTRA NETWORKS, INC. has caused this Certificate of Designations, Preferences and Rights of
Series C Preferred Stock to be duly executed by its Chief Executive Officer this 19th day of October, 2000.


                                                                     QUENTRA NETWORKS, INC.


                                                                     By:  /s/ James R. McCullough
                                                                          -------------------------
                                                                          James R. McCullough
                                                                          Chief Executive Officer








                                                                             -7-
EX-4.2 3 0003.htm WARRANT AGREEMENT FORM OF WARRANT AGREEMENT

THIS WARRANT AND THE SECURITIES ISSUABLE UPON ITS EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES STATUTES OR REGULATIONS. NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON ITS EXERCISE MAY BE OFFERED, SOLD OR TRANSFERRED EXCEPT IN COMPLIANCE WITH APPLICABLE STATE SECURITIES STATUTES AND REGULATIONS, AND PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR IN A TRANSACTION WHICH QUALIFIES AS AN EXEMPT TRANSACTION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.



COMMON STOCK PURCHASE WARRANT



Warrant to Purchase [______] Shares                              Exercise Price:  $2.75
of Common Stock (subject to adjustment)                          (subject to adjustment)


                                                                 October 19, 2000

QUENTRA NETWORKS, INC., a Delaware corporation (the "Company"), hereby certifies that, for value received,
_____________________ (the "Holder") is entitled, subject to the terms set forth below, to purchase from the
Company, at any time and from time to time during the Exercise Period (as defined below), in whole or in part,
the number of fully paid and non-assessable shares of the Company's Common Stock, par value $1.00 per share
("Common Stock"), first set forth above at the per share exercise price (the "Exercise Price") first set forth
above (subject to adjustment as set forth in Article II).

                                         ARTICLE I - - EXERCISE OF WARRANT

1.1      Exercise Period and Procedure.

         (a)      The Warrant shall be exercisable, in whole or in part, by the Holder at any time and from time
to time during the period (the "Exercise Period") beginning on the date hereof (the "Warrant Issue Date") and
ending at 5:00 p.m. (prevailing local time at the principal executive office of the Company) on the third
anniversary date of the Warrant Issue Date.

         (b)      The purchase rights represented by this Warrant are exercisable by the Holder, in whole or in
part, during the Exercise Period by the surrender of this Warrant, with the form of Notice of Exercise attached
hereto as Annex A duly completed and executed by such Holder, to the Company at its principal executive office,
upon payment in cash, by certified or official bank check or by wire transfer, of an amount equal to the Exercise
Price multiplied by the number of shares of Common Stock being purchased pursuant to such exercise of the Warrant.

1.2      Partial Exercise.  This Warrant may be exercised for less than the full number of shares of Common Stock
first shown above, provided that this Warrant may not be exercised in part for less than a whole number of shares
of Common Stock.  Upon any such partial exercise, the Company at its expense will forthwith issue to the Holder a



                                                      -1-


new Warrant or Warrants of like tenor exercisable for the number of shares of Common Stock as to which rights
have not been exercised (subject to adjustment as herein provided), such Warrant or Warrants to be issued in the
name of the Holder or its nominee (upon payment by such Holder of any applicable transfer taxes).

1.3      Delivery of Stock Certificates on Exercise.  As soon as practicable after the exercise of this Warrant
and payment of the Exercise Price and in any event within 10 days thereafter, the Company, at its expense, will
cause to be issued in the name of and delivered to the Holder a certificate or certificates for the number of
duly authorized, validly issued, fully paid and non-assessable shares or other securities or property to which
such Holder shall be entitled upon such exercise, plus, in lieu of any fractional share to which such Holder
would otherwise be entitled, cash in an amount determined in accordance with Section 2.5 hereof.  The Company
agrees that the shares so purchased shall be deemed to be issued to the Holder as the record owner of such shares
as of the close of business on the date on which this Warrant shall have been surrendered and payment made for
such shares as aforesaid.

                                            ARTICLE II - - ADJUSTMENTS

2.1      Adjustments Generally.  In order to prevent dilution of the rights granted hereunder in the specific
circumstances contemplated by this Article II, the Exercise Price shall be subject to adjustment from time to
time in accordance with this Article II.  Upon each adjustment of the Exercise Price pursuant to this Article II,
the registered Holder of this Warrant shall thereafter be entitled to acquire upon exercise, at the Exercise
Price resulting from such adjustment, the number of shares of the Company's Common Stock determined by (a)
multiplying (i) the Exercise Price in effect immediately prior to such adjustment by (ii) the number of shares of
the Company's Common Stock issuable upon exercise hereof immediately prior to such adjustment, and (b) dividing
the product thereof by the Exercise Price resulting from such adjustment.

2.2      Subdivisions and Combinations.  In case the Company shall at any time subdivide its outstanding shares
of Common Stock into a greater number of shares (including, without limitation, through any stock split effected
by means of a dividend on the Common Stock which is payable in Common Stock), the Exercise Price in effect
immediately prior to such subdivision shall be proportionately reduced, and, conversely, in case the outstanding
shares of Common Stock of the Company shall be combined into a smaller number of shares, the Exercise Price in
effect immediately prior to such combination shall be proportionately increased.

2.3      Reorganization, Reclassification, Consolidation, Merger or Sale of Assets.  If any capital
reorganization or reclassification of the capital stock of the Company, or consolidation or merger of the Company
with another corporation, or the sale of all or substantially all of its assets to another corporation shall be
effected in such a way that holders of Common Stock shall be entitled to receive stock, securities, cash or other
property with respect to or in exchange for Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provision shall be made whereby the Holder
of this Warrant shall have the right to acquire and receive upon exercise of this Warrant such shares of stock,
securities, cash or other property of the successor corporation that a holder of the shares deliverable upon
exercise of this Warrant would have been entitled to receive in such reorganization, reclassification,


                                                      -2-


consolidation, merger or sale if this Warrant had been exercised immediately before such reorganization,
reclassification, consolidation, merger or sale.  The foregoing provisions shall similarly apply to successive
reorganizations, reclassifications, consolidations, mergers or sales and to the stock or securities of any other
corporation that are at the time receivable upon the exercise of this Warrant.  In all events, appropriate
adjustments (as determined by the Board of Directors of the Company) shall be made in the application of the
provisions of this Warrant with respect to the rights and interests of the Holder after the transaction, to the
end that the provisions of this Warrant shall be applicable after that event, as near as reasonably may be, in
relation to any shares or other property deliverable after that event upon exercise of this Warrant.

2.4      Adjustment by Board of Directors.  If any event occurs as to which, in the opinion of the Board of
Directors of the Company, the provisions of this Article II are not strictly applicable or if strictly applicable
would not fairly protect the rights of the Holder of this Warrant in accordance with the essential intent and
principles of such provisions, then the Board of Directors may make such adjustment in the application of such
provisions, in accordance with such essential intent and principles, as it deems appropriate so as to protect
such rights as aforesaid, but in no event shall any adjustment have the effect of increasing the Exercise Price
as otherwise determined pursuant to any of the provisions of this Article II except in the case of a combination
of shares of a type contemplated in Section 2.2 and then in no event to an amount larger than the Exercise Price
as adjusted pursuant to Section 2.2.

2.5      Fractional Shares.  The Company shall not issue fractions of shares of Common Stock upon exercise of
this Warrant or scrip in lieu thereof.  If any fraction of a share of Common Stock would, except for the
provisions of this Section 2.5, be issuable upon exercise of this Warrant, then the Company shall in lieu thereof
pay to the person entitled thereto an amount in cash equal to the fair market value of such fraction (as
determined in good faith by the Board of Directors of the Company), less the equivalent fraction of the then
applicable Exercise Price which would otherwise have been payable in respect of such fractional share.

2.6      Certificate as to Adjustments.  Whenever the Exercise Price shall be adjusted as provided in Article II,
the Company shall promptly compute such adjustment and furnish to the Holder a certificate setting forth such
adjustment and showing in reasonable detail the facts requiring such adjustment, the Exercise Price that will be
effective after such adjustment and the number of shares and the amount, if any, of other property that at the
time would be received upon the exercise of this Warrant.

                                           ARTICLE III - - NO IMPAIRMENT

The Company will not, by amendment of its charter or through reorganization, consolidation, merger, dissolution,
sale of assets or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in
the taking of all such actions as may be necessary or appropriate in order to protect the rights of the Holder
against impairment.  Without limiting the generality of the foregoing, the Company will not increase the par
value of any shares of stock receivable upon the exercise of this Warrant above the amount payable therefore upon


                                                      -3-


such exercise, and at all times will take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and non-assessable stock upon the exercise of this Warrant.

                                        ARTICLE IV - - RESERVATION OF STOCK

The Company shall at all times reserve and keep available out of its authorized but unissued stock, solely for
the issuance and delivery upon the exercise of this Warrant, such number of its duly authorized shares of Common
Stock as from time to time shall be issuable upon the exercise of this Warrant.  All of the shares of Common
Stock issuable upon exercise of this Warrant, when issued and delivered in accordance with the terms hereof, will
be duly authorized, validly issued, fully paid and non-assessable.

                                       ARTICLE V - - REPLACEMENT OF WARRANT

Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement reasonably
satisfactory to the Company or (in the case of mutilation) upon surrender and cancellation thereof, the Company
will issue, in lieu thereof, a new Warrant of like tenor and amount.

                                           ARTICLE VI - - NEGOTIABILITY

This Warrant is issued upon the following terms, to all of which each taker or owner hereof consents and agrees:

6.1      Transfer.  Subject to the legend appearing on the first page hereof, title to all or part of this
Warrant may be transferred by endorsement (by the Holder executing the Notice of Transfer attached hereto as
Annex B) and delivery in the same manner as in the case of a negotiable instrument transferable by endorsement
and delivery.  Absent an effective registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), covering the disposition of this Warrant or the shares of Common Stock issued or issuable upon
exercise hereof, the Holder will not sell or transfer any or all of such Warrant or shares, as the case may be,
without first providing the Company with an opinion of counsel (which may be counsel for the Company) to the
effect that such sale or transfer will be exempt from the registration and prospectus delivery requirements of
the Securities Act.  Each certificate representing shares of Common Stock issued upon exercise hereof shall bear
a legend in substantially the following form on the face thereof:

THE OFFER AND SALE OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 AND SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT COVERING SUCH SALE OR TRANSFER OR THE COMPANY RECEIVES AN OPINION OF COUNSEL (WHICH MAY
BE COUNSEL FOR THE COMPANY) STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS


                                                      -4-


DELIVERY REQUIREMENTS OF SUCH ACT.

Any certificate issued at any time in exchange or substitution for any certificate bearing such legend (except a
certificate issued upon completion of a distribution under a registration statement covering the securities
represented) shall also bear such legend unless, in the opinion of counsel to the Company, the securities
represented thereby may be transferred as contemplated by such Holder without violation of the registration
requirements of the Securities Act.

6.2      Title.  Any person in possession of this Warrant properly endorsed is authorized to represent himself as
absolute owner hereof and is granted power to transfer absolute title hereto by endorsement and delivery hereof
to a bona fide purchaser hereof for value; each prior taker or owner waives and renounces all of its equities or
rights in this Warrant in favor of every such bona fide purchaser, and every such bona fide purchaser shall
acquire title hereto and to all rights represented thereby.

6.3      Warrant Register.  The Company will maintain a warrant register containing the name and address of the
Holder.  The Holder may change its address as shown on the warrant register by written notice to the Company
requesting such change.  Until this Warrant is transferred on the books of the Company, the Company may treat the
registered Holder of this Warrant as the absolute owner hereof for all purposes without being affected by any
notice to the contrary.

6.4      No Rights as Stockholder.  Prior to the exercise of this Warrant, the Holder shall not be entitled to
any rights of a stockholder of the Company with respect to shares for which this Warrant shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company.

6.5      Transfer Taxes.  The Company shall not be required to pay any federal or state transfer tax or charge
that may be payable in respect of any transfer or delivery of this Warrant or the issuance or delivery of
certificates for Common Stock in a name other than that of the registered Holder of this Warrant or to issue or
deliver any certificates for Common Stock upon the exercise of this Warrant until any and all such taxes and
charges shall have been paid by the Holder of this Warrant or until it has been established to the Company's
reasonable satisfaction that no such tax or charge is due.

6.6      Compliance with Securities Laws.

                   (a)     The Holder of this Warrant, by acceptance hereof, acknowledges and represents that
          this Warrant and the shares of Common Stock to be issued upon exercise hereof are being acquired solely
          for the Holder's own account and not as a nominee for any other party, and for investment, and not with
          a view to, or for sale in connection with any distribution thereof; nor with any present intention of
          distributing or selling same; and that the Holder will not offer, sell or otherwise dispose of this


                                                      -5-

          Warrant or any shares of Common Stock to be issued upon exercise hereof except under circumstances that
          will not result in a violation of applicable federal and state securities laws.

                   (b)     The Holder has made detailed inquiry concerning the Company, its business and its
          personnel; the officers of the Company have made available to the Holder any and all written information
          which it has requested and have answered to the Holder's satisfaction all inquiries made by the Holder,
          and the Holder has sufficient knowledge and experience in investing in companies similar to the Company
          so as to be able to evaluate the risks and merits of its investment in the Company and is able
          financially to bear the risks thereof.  The Holder understands that the Company proposes to issue and
          deliver this Warrant and the shares of Common Stock to be issued upon exercise hereof without compliance
          with the registration requirements of the Securities Act; that for such purpose the Company will rely
          upon the representations, warranties, covenants and agreements contained herein; and that such
          non-compliance with registration is not permissible unless such representations and warranties are
          correct and such covenants and agreements performed.  The Holder is an "accredited investor" as such
          term is defined in Rule 501 under the Act.

                   (c)     The Holder (either alone or together with its advisors) has sufficient knowledge and
          experience in financial and business matters so as to be capable of evaluating the merits and risks of
          its investment in this Warrant and the shares of Common Stock to be issued upon exercise hereof and is
          capable of bearing the economic risks of such investment.

                                       ARTICLE VII - - SUBDIVISION OF RIGHTS

This Warrant (as well as any new Warrants issued pursuant to the provisions of this Article VII) is exchangeable,
upon the surrender hereof by the Holder, at the principal executive office of the Company for any number of new
Warrants of like tenor and date representing in the aggregate the right to subscribe for and purchase the number
of shares of Common Stock of the Company which may be subscribed for and purchased hereunder.

                                          ARTICLE VIII - - MISCELLANEOUS

8.1      Headings.  The headings in this Warrant are for purposes of reference only, and shall not limit or
otherwise affect the meaning hereof.

8.2      Amendment; Waiver.  This Warrant may be amended only by a writing executed by both the Company and the
Holder.  Any term of this Warrant may be waived by the party entitled to the benefit thereof by an instrument in
writing signed by such party.  No waiver of any term, condition or provision of this Warrant, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or
provision.

8.3      Governing Law.  This Warrant shall be construed and interpreted according to the laws of the State of
Delaware, without giving effect to any of the conflicts of laws or choice of law provisions thereof that would
compel the application of substantive laws of any other jurisdiction.



                                                      -6-


IN WITNESS WHEREOF, the Company has executed and issued this Warrant on the date first written above.

QUENTRA NETWORKS, INC.


By:    /s/ James R. McCullough
       -------------------------
Name:  James R. McCullough
Title: Chief Executive Officer

Attest:

/s/ Timothy G. Atkinson
- --------------------------------
Secretary




                                                      -7-

                                                      ANNEX A

                                                NOTICE OF EXERCISE

                                   [To be signed only upon exercise of Warrant]


To:      QUENTRA NETWORKS, INC.

The undersigned, the Holder of the within Warrant, hereby elects to exercise the purchase right represented by
such Warrant for, and to purchase thereunder, ___________ shares of Common Stock of Quentra Networks, Inc., and
herewith makes payment of $___________ therefore.

In exercising this Warrant, the undersigned hereby confirms and acknowledges that the shares of Common Stock to
be issued upon exercise hereof are being acquired solely for the Holder's own account and not as a nominee for
any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of any such
securities except under circumstances that will not result in a violation of applicable federal and state
securities laws.

Please issue a certificate or certificates representing said shares of Common Stock in the name of the
undersigned or in such other name as is specified below:

Dated:___________________                  ____________________________________
                                           NAME

                                           By:_________________________________
                                           (Signature must conform in all
                                           respects to name of Holder as
                                           specified on the face of the Warrant)

Address:

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




                                                      ANNEX B

                                                NOTICE OF TRANSFER

                                   [To be signed only upon transfer of Warrant)

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto the Assignee named below the right
represented by the within Warrant with respect to the number of shares of Common Stock of Quentra Networks, Inc.
set forth below:

Name of Assignee                    Address                   No. of Shares




and appoints ____________________ attorney to transfer said right on the warrant register of Quentra Networks,
Inc. with full power of substitution in the premises.


Dated:___________________                  ____________________________________
                                           NAME

                                           By:_________________________________
                                           (Signature must conform in all
                                           respects to name of Holder as
                                           specified on the face of the Warrant)

Address:

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




EX-4.3 4 0004.htm STOCK PURCHASE AGREEMENT Stock Purchase Agreement

QUENTRA NETWORKS, INC.

STOCK PURCHASE AGREEMENT

by and among

QUENTRA NETWORKS, INC.

(the Company), and

Each of the Investors (the Investors)

Listed in Schedule A

As amended on October 10, 2000

Table of Contents

                                                                                                           Page No.
                                                                                                           --------


Article I DEFINED TERMS...........................................................................................1


Article II PURCHASE AND SALE TERMS................................................................................3

     Section 2.01.   Purchase and Sale............................................................................3
     Section 2.02.   Closing......................................................................................3
     Section 2.03.   Payment......................................................................................3
     Section 2.04.   Transfer Legends and Restrictions............................................................4

Article III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................................................5

     Section 3.01.   Organization of the Company..................................................................5
     Section 3.02.   Company Capital Structure....................................................................5
     Section 3.03.   Authority....................................................................................6
     Section 3.04.   Valid Issuance of Warrants and Common Stock..................................................6
     Section 3.05.   No Conflict..................................................................................6
     Section 3.06.   Securities Laws..............................................................................6
     Section 3.07.   SEC Filings..................................................................................7
     Section 3.08.   Subsequent Events............................................................................7
     Section 3.09.   Brokers, etc.................................................................................7

Article IV REGISTRATION RIGHTS....................................................................................8

     Section 4.01.   Registration Rights..........................................................................8

Article V REPRESENTATIONS AND WARRANTIES OF THE INVESTORS........................................................10

     Section 5.01.   Power and Authority.........................................................................10
     Section 5.02.   Purchase for Investment.....................................................................10
     Section 5.03.   Financial Matters...........................................................................11
     Section 5.04.   Brokers, etc................................................................................11
     Section 5.05.   Subscription Agreements.....................................................................11

Article VI CLOSING CONDITIONS....................................................................................11

     Section 6.01.   Closing Conditions..........................................................................11

Article VII MISCELLANEOUS........................................................................................12

     Section 7.01.   Expenses....................................................................................12


                                                           i

     Section 7.02.   Remedies Cumulative.........................................................................12
     Section 7.03.   Severability................................................................................12
     Section 7.04.   Parties in Interest.........................................................................13
     Section 7.05.   Notices.....................................................................................13
     Section 7.06.   No Waiver...................................................................................13
     Section 7.07.   Amendments and Waivers......................................................................13
     Section 7.08.   Rights of Investors.........................................................................13
     Section 7.09.   Survival of Agreements; Indemnification.....................................................13
     Section 7.10.   Construction................................................................................14
     Section 7.11.   Entire Understanding........................................................................14
     Section 7.12.   Counterparts................................................................................14
     Section 7.13.   Assignment; No Third-Party Beneficiaries....................................................15
     Section 7.14.   Exhibits....................................................................................15

Article VIII TERMINATION.........................................................................................15

     Section 8.01.   Termination.................................................................................15
     Section 8.02.   Effect of Termination.......................................................................15


Schedule A        Investors
Exhibit A         Form of Escrow Agreement
Exhibit B         Form of Subscription Agreement
Exhibit C         Form of Warrant
Exhibit D         Form of Opinion



                                                           ii



                                             STOCK PURCHASE AGREEMENT



         This STOCK PURCHASE AGREEMENT  ("Agreement"),  dated  September 21,  2000 (the "Effective Date"),  between
Quentra  Networks,  Inc., a Delaware  corporation  with its principal place of business at 1640 S. Sepulveda Blvd.,
Suite 222, Los Angeles, California, 90025, and each of the Investors listed in Schedule A.


                                                     PREAMBLE

         The Company  wishes to obtain equity  financing.  The Investors are willing,  on the terms and  conditions
contained in this  Agreement,  to purchase the Units with each "Unit" being  comprised of four (4) shares of Common
Stock and a Warrant.  Capitalized  terms are defined in the first Article.  Exhibits are  incorporated by reference
into this Agreement as though such exhibits were set forth at the point of such reference.

                                                     ARTICLE I

                                                   DEFINED TERMS

         The  following  terms,  when used in this  Agreement,  have the  following  meanings,  unless the  context
otherwise indicates:

         "33 Act" means the Securities Act of 1933, as amended, or any similar federal law then in force.

         "34 Act" means the Securities Exchange Act of 1934, as amended, or any similar federal law then in force.

         "Acceptable Currency" means wire transfer of immediately available funds to the Escrow Account.

         "Affiliate"  means,  with  respect  to any  specified  Person,  (i) any  other  Person  who,  directly  or
indirectly,  owns or  controls,  is under common  ownership or control  with,  or is owned or  controlled  by, such
specified Person,  (ii) any other Person who is a director,  officer or partner or is, directly or indirectly,  the
beneficial  owner of 10  percent or more of any class of equity  securities,  of the  specified  Person or a Person
described  in clause (i) of this  paragraph,  (iii)  another  Person of whom the  specified  Person is a  director,
officer  or partner or is,  directly  or  indirectly,  the  beneficial  owner of 10 percent or more of any class of
equity  securities,  (iv) another Person in whom the specified Person has a substantial  beneficial  interest or as
to whom the  specified  Person  serves as trustee or in a similar  capacity,  or (v) any  relative or spouse of the
specified Person or any of the foregoing  Persons,  any relative of such spouse or any spouse of any such relative;
provided,  however,  that at any time after the Closing Date, the Company and the  Subsidiaries on the one hand and
Investor and its Affiliates (other than the Company and the  Subsidiaries)  shall not be deemed to be Affiliates of
each other.

         "Board of Directors" means the board of directors of the Company.

                                                      -1-

         "Bylaws" means the bylaws of the Company, as amended.

         "Certificate  of  Incorporation"  means the  certificate of  incorporation  of the Company,  as originally
filed with the Delaware Secretary of State together with all amendments thereto.

         "Closing" shall have the meaning specified in Section 2.02.

         "Closing Date" means the date on which the Closing occurs or occurred.

         "Closing Location" shall have the meaning specified in Section 2.02.

         "Code" means the Internal Revenue Code of 1986, as amended.

         "Commission" means the United States Securities and Exchange Commission.

         "Common Stock" means the $1.00 par value common stock of the Company.

         "Company  Capital Stock" means (i) shares of Common Stock,  (ii) shares of preferred stock of the Company,
and (iii) any other capital stock of the Company.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as amended.

         "Escrow Account" means the account established pursuant to the Escrow Agreement.

         "Escrow Agent" means Old Kent Bank.

         "Escrow  Agreement"  means the form  attached  hereto as  Exhibit  A, by and among the  Company,  Advanced
Equities, Inc. and Old Kent Bank

         "Investor" means a Person (or its successors or assigns) who purchases Units under this Agreement.

         "Losses" shall have the meaning specified in Section 7.09(b).

         "Material  Adverse  Effect"  means any  material  adverse  change in, or material  adverse  effect on, the
business, assets, results of operations, value or financial or other condition of the Company.

         "Minimum  Amount"  means  $6,000,000,  which  amount may be waived by the Company in its sole  discretion,
provided that in no event will such amount be less than $5,000,000.

         "Person"  means  an  individual,  corporation,   partnership,   association,  trust  or  other  entity  or
organization, including a government or political subdivision or agency or instrumentality thereof.

         "Shares"  means any shares of the Common  Stock and Shares of Common  Stock  issued  upon  exercise of the
Warrants purchased in accordance with the terms of this Agreement, as the context requires.


                                                      -2-

         "Subscription  Agreement" means the Subscription  Agreement and Letter of Investment  Intent,  in the form
of Exhibit B  hereto, to be executed by each Investor,  the terms of which are incorporated  herein and made a part
hereof.

         "Subsidiary" or  "Subsidiaries"  of any Person means any  corporation or other entity of which  securities
or other  ownership  interests  having ordinary voting power to elect a majority of the board of directors or other
Persons  performing  similar functions are at the time directly or indirectly owned or controlled by such Person or
one or more Subsidiaries of such Person.

         "Transaction Documents" means the Warrant, the Escrow Agreement and the Subscription Agreement.

         "Warrant"  shall mean a warrant to purchase one share of Common  Stock at an exercised  price of $2.75 per
share in accordance with the terms an provisions contained in the form of Warrant attached hereto as Exhibit C.

         The masculine form of words includes the feminine and the neuter and vice versa,  and,  unless the context
otherwise  requires,  the singular form of words includes the plural and vice versa. The words "herein,"  "hereof,"
"hereunder,"  and other words of similar  import when used in this  Agreement  refer to this  Agreement as a whole,
and not to any particular section or subsection.

                                                     ARTICLE II

                                              PURCHASE AND SALE TERMS

Section 2.01.  Purchase and Sale.  Subject to the terms of this  Agreement,  the Company shall issue and sell to
the  Investors  and each  Investor  shall  purchase  from the  Company  at the  Closing  the number of Units at the
aggregate  purchase  price set forth  opposite its name in Schedule A  with respect to the Closing.  The obligation
of each Investor to purchase is several and not joint.

Section 2.02.  Closing.  The  purchase  and sale of the Units  shall take place at such place as the Company and
the Investors mutually agree upon, orally or in writing (the "Closing").

Section 2.03.  Payment.  Each of the  Investors  shall pay the  purchase  price of the Units  purchased by it in
full upon  execution of this Agreement and  acceptance of the  Subscription  Agreement at the Closing in Acceptable
Currency.  Each party to this Agreement  acknowledges  and understands that purchase price shall not be released to
the Company  under the Escrow  Agreement  until (1) the Company has entered into a definitive  agreement to acquire
HomeAccess Microweb, Inc.  ("HomeAccess"),  through the merger of a wholly owned subsidiary of the Company with and
into  HomeAccess,   with  HomeAccess   being  the  surviving  entity  (the  "Merger"),   which  Merger  will  occur
simultaneously  with  the  disbursement  of the  escrow  funds to the  Company;  or  (2) the  Company  has  filed a
preliminary proxy statement on Schedule 14(A) with the Commission seeking  stockholder  approval of the Merger; and
(3) the Minimum Amount has been received by the Escrow Account (the "Escrow Release Conditions").

Section 2.04.  Transfer  Legends and  Restrictions.  The transfer of the Shares or Warrants  will be  restricted
in  accordance  with the  terms  hereof.  Each  certificate  evidencing  the  Shares  or  Warrants,  including  any
certificate issued to any transferee  thereof,  shall be imprinted with legends in substantially the following form


                                                      -3-


(unless  otherwise  permitted under this Section 2.04 or unless such Shares or Warrants shall have been effectively
registered and sold under the 33 Act and the applicable state securities laws):

         "THESE  SECURITIES  HAVE NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE  STATE LAWS
         AND HAVE BEEN ISSUED PURSUANT TO AN EXEMPTION FROM  REGISTRATION  PERTAINING TO SUCH SECURITIES.  THEY MAY
         NOT BE  OFFERED  OR  TRANSFERRED  BY SALE,  ASSIGNMENT,  PLEDGE OR  OTHERWISE  UNLESS  (I) A  REGISTRATION
         STATEMENT  FOR THE  SECURITIES  UNDER THE  SECURITIES  ACT OF 1933 IS IN EFFECT  OR (II) THE  COMPANY  HAS
         RECEIVED AN OPINION OF COUNSEL,  WHICH OPINION IS REASONABLY  SATISFACTORY  TO THE COMPANY,  TO THE EFFECT
         THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933."

         The holder of any Shares or Warrants by  acceptance  thereof  agrees,  so long as any legend  described in
this Section  2.04 shall remain on the  certificates  evidencing  the Shares or Warrants,  prior to any transfer of
any of the same (except for a transfer  effected pursuant to an effective  registration  statement under the 33 Act
or in compliance  with Rule 144 or Rule 144A  thereunder),  to give written  notice to the Company of such holder's
intention  to effect such  transfer  and agrees to comply in all  material  respects  with the  provisions  of this
Section 2.04.  Such notice,  if required,  shall describe the proposed method of transfer of the Shares or Warrants
in  question.  Upon receipt by the Company of such  notice,  if required,  and if in the opinion of counsel to such
holder,  which opinion  shall be  reasonably  satisfactory  to the Company,  the proposed  transfer may be effected
without  registration  under the 33 Act in  compliance  with an  exemption  therefrom  and under  applicable  state
securities  laws, then the proposed  transfer may be effected;  provided,  however,  that in the case of any holder
which is a  corporation,  trust,  partnership  or limited  liability  company,  no such opinion of counsel shall be
necessary for a transfer by such Person to a shareholder of such  corporation,  beneficiary of such trust,  partner
of such partnership or member of such limited liability  company,  as the case may be, or a retired partner of such
partnership or a retired member of such limited liability  company,  as the case may be, who retires after the date
such Person became a holder,  or the estate of any such partner or retired partner or member or retired member,  as
the case may be, if the  transferee  agrees in writing to be subject to the terms of this  Section 2.04 to the same
extent as if such transferee  were  originally a signatory to this  Agreement.  Upon receipt by the Company of such
opinion and of such  agreement by the  transferee  to be bound by this Section  2.04,  the holder of such Shares or
Warrants  shall  thereupon  be entitled to transfer  the same in  accordance  with the terms of the notice (if any)
delivered by such holder to the Company.  Each  certificate  evidencing  the Shares  issued upon any such  transfer
shall  bear the  legend  set forth in this  Section  2.04.  Upon the  written  request of a holder of the Shares or
Warrants,  the Company shall remove the foregoing legend from the  certificates  evidencing such Shares or Warrants
and issue to such  holder new  certificates  therefor,  free of any  transfer  legend if,  with such  request,  the
Company  shall  have  received  an opinion  of  counsel  selected  by the  holder,  such  opinion to be  reasonably
satisfactory  to the  Company,  to the effect that any  transfers  by said holder of such Shares or Warrants may be
made to the public  without  compliance  with either  Section 5 of the 33 Act or Rule 144 thereunder and applicable
state  securities  laws.  In no event will such legend be removed if such opinion is based solely upon the "private
offering" exemption of Section 4(2) of the 33 Act.

                                                      -4-

                                                   ARTICLE III

                                   REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The Company hereby represents and warrants to each of the Investors and as of the Closing that:

Section 3.01.  Organization of the Company.  The Company is a corporation  duly organized,  validly existing and
in good  standing  under  the  laws of the  State of  Delaware.  The  Company  has the  corporate  power to own its
properties  and to carry on its business.  The Company is duly  qualified or licensed to do business and is in good
standing as a foreign  corporation in each jurisdiction in which it conducts business,  except where the failure to
so qualify will not cause a Material Adverse Effect on the Company.

Section 3.02.  Company Capital  Structure.  As of the date hereof,  the authorized  capital stock of the Company
consisted of 70,000,000  shares of Common Stock and 10,000,000  shares of preferred stock, par value $.01 per share
(the  "Preferred  Stock").  As of  the  date  hereof:  (i)  19,176,130  shares  of  Common  Stock  are  issued  and
outstanding;  (ii)  708,692  shares  of  Common  Stock  are held in the  treasury;  (iii)  700  shares  of Series A
Convertible  Preferred  Stock are  authorized  for  issuance of which 124 shares are issued and  outstanding;  (iv)
3,157,895  shares of Series B Convertible  Preferred  Stock are authorized for issuance of which  3,157,895  shares
are issued and outstanding; and (v) 6,841,405 shares of undesignated Preferred Stock are authorized but unissued.

         In  addition,  as of the date  hereof:  (A) the Company has reserved  for  issuance  under  various  stock
option plans of the Company (the  "Plans")  7,090,463  shares of Common Stock of which  1,363,229  shares have been
issued and 5,523,512 shares are subject to outstanding  unexercised  options;  and (B) 11,702,986  shares of Common
Stock are subject to  outstanding  options,  warrants or  restricted  stock awards  granted  outside the Plans.  No
Person is entitled to any  preemptive  right or right of first  refusal  with respect to the issuance of the Shares
and the Warrants as  contemplated  by this  Agreement.  As of the date hereof,  all  outstanding  shares of Company
Capital  Stock were duly  authorized,  validly  issued,  fully paid and  nonassessable.  The  Company  has no other
capital stock authorized, issued or outstanding.

Section 3.03.  Authority.  The Company has all requisite  power and  authority to enter into this  Agreement and
the Transaction  Documents and to consummate the transactions  contemplated  hereby and thereby.  The execution and
delivery of this Agreement and the  Transaction  Documents and the  consummation of the  transactions  contemplated
hereby and thereby have been duly authorized by all necessary  corporate action on the part of the Company,  and no
further  action is required on the part of the Company to authorize this  Agreement and the  Transaction  Documents
and the transactions  contemplated  hereby and thereby.  This Agreement and the Escrow Agreement have been, and the
Subscription  Agreements  and Warrants will be as of the Closing Date,  duly executed and delivered by the Company.
Assuming  the due  authorization,  execution  and  delivery  by the  other  parties  to this  Agreement  and of the
Transaction  Documents,  this Agreement and the Escrow Agreement  constitute,  and the Subscription  Agreements and
the Warrants  when executed will  constitute,  the valid and binding  obligations  of the Company,  enforceable  in
accordance  with their terms,  except as such  enforceability  may be limited by  principles  of public  policy and


                                                      -5-


subject to the laws of general  application  relating to  bankruptcy,  insolvency  and the relief of debtors and to
rules of law governing specific performance, injunctive relief or other equitable remedies.

Section 3.04.  Valid  Issuance of Warrants and Common Stock.  The Shares and Warrants  that are being  purchased
by the Investors  hereunder,  when issued,  sold and delivered in accordance  with the terms of this  Agreement for
the consideration  expressed herein,  will be duly and validly issued,  fully paid, and nonassessable,  and will be
free of  restrictions  on transfer other than  restrictions  on transfer under this Agreement and under  applicable
state and federal  securities  laws.  The shares of Common Stock  issuable  upon exercise of the Warrants have been
duly and validly  reserved for issuance  and,  upon  issuance in  accordance  with the terms and  provisions of the
Warrant,  will be duly and validly  issued,  fully paid,  and  nonassessable  and will be free of  restrictions  on
transfer  other than  restrictions  on  transfer  under  this  Agreement  and under  applicable  state and  federal
securities laws.

Section 3.05.  No Conflict.  The  execution and delivery by the Company of this  Agreement  and the  Transaction
Documents  and the  consummation  of the  transactions  contemplated  hereby and thereby will not conflict  with or
result in any  violation of or default  under (with or without  notice or lapse of time, or both) or give rise to a
right of  termination,  cancellation,  modification  or acceleration of any obligation or loss of any benefit under
(i) any provision of the  Certificate of  Incorporation  and Bylaws of the Company,  (ii) any mortgage,  indenture,
lease,  contract or other agreement or instrument  filed as an exhibit to the Company's 34 Act reports to which the
Company or any of its properties or assets is currently  subject,  or (iii) any material judgment,  order,  decree,
statute, law, ordinance, rule or regulation applicable to the Company or its properties or assets.

Section 3.06.  Securities  Laws.  In  reliance  upon the  representations  of the  Investors  contained  in this
Agreement and the Subscription Agreement, no consent,  authorization,  approval,  permit or order of or filing with
any  governmental  or regulatory  authority is required under current laws and  regulations in connection  with the
execution  and delivery of this  Agreement or the offer,  issuance,  sale or delivery of the Units,  other than (i)
the filing of a Form D pursuant to  Regulation D under the Act;  (ii) the filing,  if required,  of any notice with
any state whose laws  require such  filing;  and (iii) the  qualification  thereof,  if  required,  under the other
applicable state laws, which qualification has been or will be effected as a condition of the offering.

Section 3.07.  SEC Filings.  The Company has  furnished,  or made  available to each Investor  through the EDGAR
Internet  web site of the  Commission,  true and  complete  copies of its SEC Filings  including  the risk  factors
("Risk Factors")  contained in Annual Report on Form 10-K for the year ended March 31, 2000 (the "Annual  Report"),
the  Quarterly  report  on Form  10-Q for the  quarter  ended  June 30,  2000 and the  Company's  definitive  proxy
statement for the Annual Meeting of Stockholders held on July 27, 2000  (collectively,  the "SEC filings").  Except
as set forth on Schedule 3.07 to this Agreement,  as of their respective  filing dates, the SEC Filings complied as
to form in all material  respects with the  applicable  requirements  of the 34 Act, and the rules and  regulations
promulgated  thereunder.  Except as set forth on Schedule 3.07 to this  Agreement,  none of the SEC Filings,  as of
their respective  dates,  and taken as a whole with the Risk Factors,  contained any untrue statement of a material


                                                      -6-


fact or  omitted  to state a  material  fact  required  to be  stated  therein  or  necessary  in order to make the
statements made therein, in the light of the circumstances under which they were made, not misleading.

Section 3.08.  Subsequent  Events.  Since  June  30,  2000,  the  Company  has not  incurred  any  liability  or
obligation,  contingent or otherwise,  that taken as a whole,  is material in the aggregate to the Company,  except
(i) in the  ordinary  course of  business  consistent  with past  practices,  or (ii) as  reflected  in or reserved
against in the balance  sheet of the Company as of June 30, 2000.  Since June 30, 2000,  the Company has  conducted
its business in the ordinary course of business  consistent with past practices,  and except as contemplated  under
this  Agreement  and the  Transaction  Documents,  there has not been any Material  Adverse  Effect and there is no
condition  existing  that could  reasonably be expected to result in a Material  Adverse  Effect on the business of
the Company.

Section 3.09.  Brokers,  etc.  Any  fees payable by the Company to any financial  advisor,  broker,  finder,  or
other similar Person in connection  with the offer or sale of the Units and the  transactions  contemplated by this
Agreement,  shall be the sole and absolute  responsibility  of the Company and no Investor  shall be liable for the
payment of any such fees.

                                                     ARTICLE IV

                                                REGISTRATION RIGHTS

Section 4.01.  Registration Rights.

(a)      The Company  agrees that it shall,  as its sole expense,  use its best efforts to file,  within sixty (60)
         days of the Closing Date, a registration  statement (the "Registration  Statement") with the Commission to
         register  under the 33 Act,  for resale by the  Investors,  the Common  Stock  purchased  pursuant to this
         Agreement  and  the   Subscription   Agreement,   including  the  Common  Stock  underlying  the  Warrants
         (collectively  the  "Registrable  Securities");  (i)  use its  best  efforts  to  cause  the  Registration
         Statement  to become  effective  under the 33 Act as soon as  possible  after it is filed;  (ii) after the
         Registration  Statement is declared  effective under the 33 Act,  furnish the undersigned with such number
         of copies of the final  prospectus  included in the  Registration  Statement as an Investor may reasonably
         request  to  facilitate  the  resale of the  Common  Stock;  and (iii) use its best  efforts to cause such
         Registration Statement to remain effective for a period of three (3) years after the Closing Date.

(b)      If the  Registration  Statement is not  declared  effective  by the  Commission  on or before the date one
         hundred and twenty (120) days after the Closing Date (the "Final Filing  Date"),  each  Investor  shall be
         entitled  to receive,  on the date after the Final  Filing  Date (the  "First  Payment  Date") and on each
         thirty (30) day  anniversary of the First Payment Date  thereafter  (each a "Penalty  Payment Date") until
         the Registration  Statement is declared  effective,  the following penalty payments ("Penalty  Payments"):
         (i) with  respect to each of the first four (4)  Penalty  Payment  Dates,  (A) that  number of  additional
         shares  of  Common  Stock as is equal to two  percent  (2%) of the  aggregate  number  of shares of Common
         Stock,  plus (B) the  aggregate  number of shares of Common Stock  issuable  upon exercise of the Warrant,
         each as held by such  Investor on the Closing Date (the  "Additional  Securities");  and (ii) with respect
         to each of the last four  Penalty  Payment  Dates,  cash in an amount  equal to $2.75 per share times that


                                                      -7-


         number of  Additional  Securities  that would  otherwise  be issuable  under  Section  4.01(b)(i)  on such
         Penalty  Payment  Date;  provided,  however,  that  regardless  of whether the  Registration  Statement is
         declared  effective  by the  Commission,  the Company  shall not be  obligated to make more than eight (8)
         Penalty  Payments and the Company shall pay cash in lieu of Additional  Securities as a Penalty Payment if
         the  issuance of such  Additional  Securities  would  result in the issuance of greater than 19.90% of the
         Company's  issued and  outstanding  Common Stock at the time of the closing of the  offering  (taking into
         account the shares  issuable upon the exercise of the Warrants and upon the exercise of warrants  issuable
         to the Company's  financial  advisors in connection  with the offering).  In addition,  no Penalty Payment
         shall be due and payable  with  respect to any Penalty  Payment  Date if the  Registration  Statement  was
         declared  effective on any date within the thirty (30) days  immediately  preceding  such Penalty  Payment
         Date.

(c)      The Company shall notify each Investor  promptly (i) when the  Registration  Statement or any amendment or
         supplement  thereto has been filed and when the same (as amended or supplemented,  as the case may be) has
         become  effective,  (ii) of the issuance by the Commission or any state  securities  authority of any stop
         order  suspending the  effectiveness  of the  Registration  Statement or the initiation of any proceedings
         for that purpose,  (iii) of the receipt by the Company of any notification  with respect to the suspension
         of the  qualification  of the  Registrable  Securities for sale in any  jurisdiction  or the initiation or
         threatening  of any  proceeding  for such purpose and (iv) of the  happening of any event or the discovery
         of any facts that makes any statement made in the Registration  Statement,  the prospectus  constituting a
         part thereof or any document  incorporated  therein by  reference  untrue in any material  respect or that
         requires the making of any changes in the  Registration  Statement,  the  prospectus  constituting  a part
         thereof or any document  incorporated  therein by reference  in order to make the  statements  therein not
         contain an untrue  statement of a material fact or omit to state any material  fact  necessary to make the
         statements  therein not  misleading.  The Company shall make every effort to obtain the  withdrawal of any
         order suspending the effectiveness of the Registration Statement at the earliest possible time.

(d)      Each Investor  agrees that it may not participate in or have its  Registrable  Securities  included in the
         Registration  Statement  unless  such  Investor  completes  and  executes  all  questionnaires,  powers of
         attorney,  indemnities,  underwriting  agreements and other documents  reasonably required under the terms
         of such underwriting arrangements or to ensure compliance with the requirements of the 33 Act.

(e)      In addition to the information  required to be provided in a notice and  questionnaire by each Investor to
         the Company,  the Company may require each Investor to furnish to the Company such additional  information
         regarding  such  Investor  and  such  Investor's  intended  method  of  distribution  of  the  Registrable
         Securities  as the Company  may from time to time  reasonably  request in writing,  but only to the extent
         that such  information  is  required in order to comply with the 33 Act.  Each  Investor  agrees to notify
         the Company as promptly as practicable of any  inaccuracy or change in  information  previously  furnished
         by such  Investor  to the  Company or of the  occurrence  of any event in either case as a result of which
         any  prospectus  contains or would contain an untrue  statement of a material fact regarding such Investor
         or such  Investor's  intended  method of disposition of the  Registrable  Securities or omits to state any
         material  fact  regarding  such  Investor  or  such  Investor's  intended  method  of  disposition  of the
         Registrable  Securities  required  to be stated  therein  or  necessary  to make  statements  therein  not


                                                      -8-

         misleading  in light of the  circumstances  then  existing,  and  promptly  to furnish to the  Company any
         additional  information  required to correct and update any previously  furnished  information or required
         so that such  prospectus  shall not  contain,  with  respect to such  Investor or the  disposition  of the
         applicable  Registrable  Securities  an untrue  statement  of a material  fact or omit to state a material
         fact required to be stated  therein or necessary to make the  statements  therein not  misleading in light
         of the circumstances then existing.

(f)      The Company  agrees to indemnify,  to the extent  permitted by law,  each Investor and if an entity,  such
         Investor's  directors,  officers,  trustees,  members and each person that  controls the  undersigned  (as
         "control"  is defined in the 33 Act),  against all  losses,  claims,  damages,  liabilities  and  expenses
         including,  without  limitation,  reasonable  attorneys'  fees,  caused by any  untrue or  alleged  untrue
         statement  of material  fact  contained in the  Registration  Statement,  any  prospectus  or  preliminary
         prospectus  or any  amendment  thereof or  supplement  thereto or any  omission  or alleged  omission of a
         material fact required to be stated  therein or necessary to make the statements  therein not  misleading,
         except  insofar as the same are caused by or  contained  in any  information  furnished  in writing to the
         Company by such Investor for use therein or by such Investor's  negligence,  willful misconduct or failure
         to deliver a copy of the prospectus,  which forms a part of the Registration  Statement, or any amendments
         or supplements thereto.

(g)      Each  Investor  agrees to  indemnify,  to the extent  permitted  by law, the Company,  its  directors  and
         officers and each person who  controls the Company  (within the meaning of the 33 Act) against any and all
         losses, claims, damages, liabilities and expenses,  including,  without limitation,  reasonable attorneys'
         fees,  caused by any untrue or alleged  untrue  statement of material fact  contained in the  Registration
         Statement,  any prospectus or  preliminary  prospectus or any amendment  thereof or supplement  thereto or
         any omission or alleged  omission of a material  fact  required to be stated  therein or necessary to make
         the statements therein not misleading,  insofar as such losses, claims, damages,  liabilities and expenses
         are caused by any such untrue statement or omission or alleged untrue  statement or omission  furnished by
         such  Investor  in writing  to the  Company  for use  therein or such  Investor's  failure to provide  the
         prospective  purchaser  with a copy of the  current  prospectus,  which  forms a part of the  Registration
         Statement.

                                                     ARTICLE V

                                  REPRESENTATIONS AND WARRANTIES OF THE INVESTORS

         Each of the Investors severally represents and warrants to the Company, at and as of the Closing that:

Section 5.01.  Power and  Authority.  Such  Investor  has full power and  authority  and,  if not an  individual
Investor,  has taken all required  corporate (or trust,  partnership or other entity, as the case may be) and other
action  necessary  to permit it to execute and deliver  this  Agreement,  and all other  documents  or  instruments
required  by this  Agreement,  and to carry out the terms of this  Agreement  and of all such  other  documents  or
instruments.

                                                      -9-


Section 5.02.  Purchase  for  Investment.  Such  Investor is  purchasing  the Shares and Warrants and any Common
Stock  issuable upon  exercise of the Warrants for its own account and not for the account of any Employee  Benefit
Plan (as  defined  in  ERISA)  (or if such  Units  are  being  acquired  for the  account  of any such  Plan,  such
acquisition  does not  involve a  nonexempt  prohibited  transaction  within the meaning of Section 406 of ERISA or
Section 4975 of the Code) and not with a view to distribution  thereof,  except for transfers permitted  hereunder.
Such  Investor  understands  that the Shares and  Warrants  and any Common  Stock  issuable  upon  exercise  of the
Warrants  must be held  indefinitely  unless  they are  registered  under  the  33 Act  or an  exemption  from such
registration  becomes  available,  and that the Shares and Warrants and any Common Stock  issuable upon exercise of
the Warrants may only be transferred as provided in this Agreement and the Subscription Agreement.

Section 5.03.  Financial  Matters.   Such  Investor   understands  that  the  purchase  of  the  Units  involves
substantial  risk and that its financial  condition and investments are such that it is in a financial  position to
hold the Shares and Warrants for an  indefinite  period of time and to bear the economic  risk of, and  withstand a
complete  loss of,  its  investment.  In  addition,  by virtue of its  expertise,  the advice  available  to it and
previous  investment  experience,  such Investor has extensive  knowledge and  experience in financial and business
matters,  investments,  securities  and private  placements  and the capability to evaluate the merits and risks of
the  transactions  contemplated  by  this  Agreement.  Such  Investor  is not  relying  upon  any of the  Company's
financial  advisors,  including  Advanced  Equities,  Inc., in any manner whatsoever with respect to evaluating the
merits and risks of investment,  including but not limited to performing due diligence and/or  financial  analysis,
with respect to its  decision to purchase  the Units and has been advised to seek the advice of an attorney  and/or
tax counsel regarding its investment in the Units.

         During the negotiation of the transactions  contemplated  herein, the Investors and their  representatives
have been afforded full and free access to corporate books, financial statements,  records,  contracts,  documents,
and other information  concerning the Company and to its offices and facilities,  have been afforded an opportunity
to ask such  questions of the Company's  officers and employees  concerning  the  Company's  business,  operations,
financial  condition,  assets,  liabilities and other relevant  matters as they have deemed necessary or desirable,
and have been given all such  information as has been  requested,  in order to evaluate the merits and risks of the
prospective investment contemplated herein.

Section 5.04.  Brokers,  etc.  Such  Investor  has dealt  with no broker,  finder,  commission  agent,  or other
similar  person  in  connection  with the  offer or sale of the Units  and the  transactions  contemplated  by this
Agreement,  and is under no  obligation to pay any broker's  fee,  finder's  fee, or commission in connection  with
such transactions.

Section 5.05.  Subscription  Agreements.  Such  Investor  has  entered  into a  Subscription  Agreement  and all
representations made by such Investor in such agreement are true and correct as of the date hereof.

                                                      -10-

                                                   ARTICLE VI

                                                CLOSING CONDITIONS

Section 6.01.  Closing  Conditions.  The  obligation of each Investor to purchase the Units at the Closing shall
be subject to satisfaction of the following conditions at and as of the Closing:

(a)      Issuance of Common Stock and Warrants.  The Company shall have duly issued and delivered  certificates  to
         each of the  Investors  for the number  shares of the Common Stock and Warrants at the Closing as provided
         in Exhibit 2.01.

(b)      Certificate  of  Officer  of the  Company.  The  representations  and  warranties  made by the  Company in
         Article  III  shall be true  and  correct,  and the  Company  shall  have  delivered  to the  Investors  a
         certificate of its chief  executive,  dated the Closing Date, to the effect that the  representations  and
         warranties  of the Company are true at and as of the Closing  Date as if made at and as of such date,  and
         that each of the conditions in this Article VI has been satisfied.

(c)      Performance.  The Company shall have performed and complied with all  agreements and conditions  contained
         herein  required to be performed or complied with by it prior to or at the Closing  Date,  and the Company
         shall have certified to such effect to the Investors in writing.

(d)      Escrow Release Conditions.  The Escrow Release Conditions shall have been satisfied.

(e)      Opinion.  On or prior to the  Closing  Date the  Investors  shall  have  received  copies of an opinion of
         Morrison + Foerster LLP, counsel to the Company, substantially in the form of Exhibit D attached hereto.

                                                    ARTICLE VII

                                                   MISCELLANEOUS

Section 7.01.  Expenses.  The Company  and the  Investors  will each bear their own  expenses,  including  legal
fees, in connection with this Agreement.

Section 7.02.  Remedies  Cumulative.  The remedies  provided  herein shall be cumulative  and shall not preclude
assertion  by any party  hereto of any other  rights or the seeking of any other  remedies  against the other party
hereto.

Section 7.03.  Severability.  Whenever  possible,  each provision of this Agreement shall be interpreted in such
a manner as to be effective  and valid under  applicable  law,  but if any  provision  of this  Agreement  shall be
prohibited  by or  invalid  under  applicable  law,  such  provisions  shall be  ineffective  to the extent of such
prohibition  or invalidity,  without  invalidating  the remainder of such provision or the remaining  provisions of
this Agreement.



                                                      -11-

Section 7.04.  Parties in Interest.  All covenants and  agreements  contained in this  Agreement by or on behalf
of any of the  parties  hereto  shall  bind and  inure to the  benefit  of the  respective  legal  representatives,
successors and assigns of the parties hereto whether so expressed or not.

Section 7.05.  Notices.  Notices  required under this Agreement  shall be deemed to have been  adequately  given
if delivered  personally or by commercial  messenger or courier service,  or mailed by registered or certified mail
(return receipt requested) or sent via facsimile (with  acknowledgement of complete  transmission),  to an Investor
at its address set forth in Exhibit  2.01 or to the  Company at the  address  set forth in the first  paragraph  of
this Agreement or such other address as such party may from time to time designate in writing.

Section 7.06.  No Waiver.  No failure to  exercise  and no delay in  exercising  any right,  power or  privilege
granted  under this  Agreement  shall operate as a waiver of such right,  power or privilege.  No single or partial
exercise  of any right,  power or  privilege  granted  under this  Agreement  shall  preclude  any other or further
exercise  thereof or the  exercise of any other right,  power or  privilege.  The rights and  remedies  provided in
this Agreement are cumulative and are not exclusive of any rights or remedies provided by law.

Section 7.07.  Amendments  and Waivers.  Except as herein  provided,  this  Agreement may be modified or amended
only by a writing  signed by the  Company  and by the  holders  of  seventy-five  percent  (75%) of the Units  (the
"Required  Majority").  Each  Investor  acknowledges  that by the  operation  of this  Section  7.07  the  Required
Majority will have the right and power to diminish or eliminate all rights of such Investor under this Agreement.

Section 7.08.  Rights of  Investors.  Each holder of Units shall have the absolute  right to exercise or refrain
from  exercising  any right or rights  that such  holder may have by reason of this  Agreement,  including  without
limitation  the right to consent to the waiver of any  obligation of the Company under this  Agreement and to enter
into an agreement  with the Company for the purpose of modifying  this  Agreement or any  agreement  effecting  any
such  modification,  and such holder  shall not incur any  liability  to any other  holder or holders of Units with
respect to exercising or refraining from exercising any such right or rights.

Section 7.09.  Survival of Agreements; Indemnification.

(a)      All agreements,  covenants,  representations and warranties contained in this Agreement or made in writing
         by or on behalf of the Company or the Investors in connection with the  transactions  contemplated by this
         Agreement shall survive the execution and delivery of this Agreement,  the Closing,  and any investigation
         at any time made by or on behalf of any Investor.  Notwithstanding  the preceding sentence,  however,  all
         such representations (other than intentional  misrepresentations)  and warranties,  but no such agreements
         or covenants, shall expire two years after the date of this Agreement.

(b)      The Company will defend,  indemnify  and hold each of the Investors or any other holder of all or any part
         of the Units harmless from and against any and all actions, suits, losses, damages,  liabilities,  claims,
         obligations and expenses (including,  but not limited to, legal fees and court costs) ("Losses"),  whether
         or not resulting  from  judgments or  arbitration  awards,  that shall be suffered or incurred by any such
         Investor  or  holder,  as the case may be,  resulting  from or  arising  out of any  breach  of any of the


                                                      -12-


         representations   or  warranties  of  the  Company  contained  in  this  Agreement  or  in  any  schedule,
         certificate,  exhibit or other  instrument  furnished  or to be  furnished  by the  Company  hereunder  or
         thereunder.  The Company  will  defend,  indemnify  and hold each of the  Investors or any other holder of
         all or any part of the Units  harmless  from and  against any and all  actions,  suits,  losses,  damages,
         liabilities,  claims,  obligations  and  expenses  (including,  but not limited  to,  legal fees and court
         costs),  whether or not  resulting  from  judgments  or  arbitration  awards,  that shall be  suffered  or
         incurred by any such Investor or holder,  as the case may be,  resulting from or arising out of any breach
         of the covenants of the Company contained in this Agreement.

(c)      Each  Investor will defend,  indemnify and hold the Company  harmless from and against any and all Losses,
         whether or not resulting from judgments or arbitration  awards,  that shall be suffered or incurred by the
         Company  resulting from or arising out of any breach of any of the  representations  or warranties of such
         Investor  contained in this  Agreement or the  Subscription  Agreement  or in any  schedule,  certificate,
         exhibit or other instrument furnished or to be furnished by such Investor hereunder or thereunder.

Section 7.10.  Construction.  This  Agreement  shall  be  governed  by and  construed  in  accordance  with  the
procedural and  substantive  laws of the State of Delaware  without  regard for its  conflicts-of-laws  rules.  The
Company  agrees  that it may be served  with  process  in the State of  Delaware  and any action for breach of this
Agreement prosecuted against it in the courts of that State.

Section 7.11.  Entire  Understanding.  This  Agreement  expresses  the entire  understanding  of the parties and
supersedes all prior and  contemporaneous  agreements and  undertakings  of the parties with respect to the subject
matter of this Agreement.

Section 7.12.  Counterparts.  This  Agreement may be executed in one or more  counterparts,  each of which shall
be deemed to be an original but all of which taken together shall constitute one agreement.

Section 7.13.  Assignment; No Third-Party Beneficiaries.

(a)      This Agreement and the rights  hereunder  shall not be assignable or  transferable by the Investors or the
         Company  (except  in  the  case  of  the  Company  by  operation  of law  in  connection  with  a  merger,
         consolidation  or sale of  substantially  all the assets of the Company) without the prior written consent
         of the other parties  hereto.  Subject to the preceding  sentence,  this Agreement  shall be binding upon,
         inure to the benefit of and be  enforceable  by the parties  hereto and their  respective  successors  and
         assigns.

(b)      This  Agreement  is for the sole  benefit of the parties  hereto and their  permitted  assigns and nothing
         herein  expressed  or implied  shall give or be  construed  to give to any Person,  other than the parties
         hereto and such assigns, any legal or equitable rights hereunder.

                                                      -13-


Section 7.14.  Exhibits.  The  information  disclosed  in any  Section or Exhibit  hereto  shall be deemed to be
disclosed  and   incorporated   in  any  other  Section  or  Exhibit  hereto   provided  that  such  disclosure  is
cross-referenced  elsewhere  as  applicable  or unless it is  apparent  from the  express  disclosure  made that an
exception is being made to such representation or warranty.

                                                   ARTICLE VIII

                                                    TERMINATION

Section 8.01.  Termination.  This  Agreement  may be  terminated  at any time  prior to the  Closing  by  mutual
consent of the Required Majority and the Company;

Section 8.02.  Effect of  Termination.  If this  Agreement  shall be terminated  pursuant to Section  8.01,  all
obligations,  representations  and warranties of the parties hereto under the Agreement  shall  terminate and there
shall be no liability,  except for any breach of this Agreement prior to such termination,  of any party to another
party.



                                   [Remainder of Page Intentionally Left Blank]



                                                      -14-




         IN  WITNESS  WHEREOF,  the  parties  hereto  have  caused  this  Agreement  to be duly  executed  by their
respective authorized officer or person as of the Effective Date.

                                                     QUENTRA NETWORKS, INC.


                                                     By:        /s/ Timothy G. Atkinson
                                                                -----------------------
                                                     Name:      Timothy G. Atkinson
                                                     Title:     Vice President of Business Development
                                                                and General Counsel


                                                     INVESTORS:


                                                     If an Individual:
                                                     ----------------

                                                     ----------------------------------
                                                            [Type or Print Name]

                                                     ----------------------------------
                                                              [Signature]


                                                     If an Entity:
                                                     ------------


                                                     ----------------------------------
                                                         [Type or Print Entity Name]


                                                     By:
                                                         ------------------------------
                                                                   [Signature]

                                                     Name:
                                                          -----------------------------
                                                                [Type or Print Name]

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




                                                      -15-


                                                     Sch. A-1

                                                    SCHEDULE A

                                                     INVESTORS

- ---------------------------------------------------------------------------- ----------------------------------------
                             Name and Address                                            Number of Units
                             ----------------                                            ---------------

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

- ---------------------------------------------------------------------------- ----------------------------------------
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                                                        A-1

                                                     EXHIBIT A

                                             FORM OF ESCROW AGREEMENT

                                                  [See Attached]









                                                        B-1

                                                     EXHIBIT B

                                          FORM OF SUBSCRIPTION AGREEMENT



                                                  [See Attached]






                                                        C-1

                                                     EXHIBIT C

                                                  FORM OF WARRANT

                                                  [See Attached]





                                                        D-1

                                                     EXHIBIT D

                                                  FORM OF OPINION

                                                  [See Attached]


EX-10.1 5 0005.htm LICENSE AGREEMENT License Agreement

LICENSE AGREEMENT



                  THIS LICENSE  AGREEMENT  (this  "Agreement") is made and entered into as of October 19, 2000, by
and between HomeAccess MicroWeb. Inc.,  ("HOMEACCESS"),  a California corporation having a place of business at 905
Toledo Way, Irvine,  California 92618, and HA Technology,  Inc., a Delaware  corporation having a place of business
at 905 Toledo Way, Irvine, California  92618 ("HA").

                  WHEREAS,  HOMEACCESS  has developed a system that allows the user to access the Internet  using a
screen  phone,  and has  developed  unique  proprietary  technology  and  know-how,  including  software,  which is
incorporated  into the  design,  manufacturing,  marketing,  operation  and  support  of such  technology,  and has
developed  methods and  procedures and know-how for the operation of such  technology and owns certain  trademarks,
service marks and domain names relating to the system; and

                  WHEREAS,  HA  desires  to  acquire  a  license  for such  intellectual  property  including  such
technology, know-how, software, trademarks, service marks, methods and procedures relating to such system.

                  NOW,  THEREFORE,  HOMEACCESS and HA have reached certain agreements with respect to the licensing
of such  intellectual  property of HOMEACCESS upon the terms and conditions  more  particularly  described  herein;
and, inasmuch as the parties desire to set forth their agreements and  understandings in writing,  in consideration
of the promises,  covenants and matters  hereinafter set forth,  intending to be legally bound hereby,  the parties
mutually covenant, contract and agree, each with the other, as follows:


                                                    ARTICLE 1.
                                                    DEFINITIONS

                  As used in this Agreement, the following terms shall have the meanings set forth below:

                  1.01     "Effective Date" means that day and year first above written.

                  1.02     "HOMEACCESS   Intellectual   Property"   means  the  (a)  Technical   Information,   (b)
Improvements,  (c) trademarks and service  marks,  trademark or service mark  applications  and  registrations  and
goodwill  related thereto,  listed on Schedule 1 attached hereto  (collectively  "the Marks"),  and (d) copyrights,
mask works,  software  and  documentation  (in object code form),  designs,  specifications.  or other  proprietary
rights of HOMEACCESS relating to the Products.

                  1.03     "Improvement"  means  any  and  all  improvements,   upgrades,  updates,   enhancements,
additions, successor versions, maintenance releases, bug fixes, corrections,  developments,  variations, derivative
works and innovations (whether or not patented or patentable) relating to the HOMEACCESS Intellectual Property.

                  1.04     "Licensed  Product"  shall  mean a Product  which  incorporates  substantial  HOMEACCESS
Intellectual  Property  and/or a Product that would  violate  HOMEACCESS's  rights in the  HOMEACCESS  Intellectual
Property if made, used, sold, offered for sale or imported by an unlicensed third party.

                                                      -1-


                  1.05     "Product"  means  the  technology  and  business  model,  including  without  limitation
software,  relating to a system for  accessing  the  Internet  using a screen  phone,  and  telephone  and wireless
communication   services  enabling  access  to  commercial  services  including  financial  and  banking  services,
purchasing of various goods and services,  bill  presentation and payment,  electronic mail,  paging,  health care,
commercial advertisements, and community-based public service notices.

                  1.06     "Technical   Information"   means  information  which:  (a)  is  in  the  possession  of
HOMEACCESS as of the Effective  Date of this  Agreement;  (b) is freely  licensable by HOMEACCESS and may be freely
disclosed to HA by HOMEACCESS  without any obligation to another party; and (c) is reasonably  useful and necessary
in the commercial,  use, maintenance,  sale, and production of Products,  including the following  information,  as
applicable:  know-how;  show-how;  design drawings;  assembly drawings; bills of material;  product specifications;
application,  maintenance and operation  information;  quality control  specifications;  electrical diagrams;  plot
plan;  equipment  specifications;  instrument  specifications;  general  specifications;  description of laboratory
equipment and procedures; test data; and preliminary operating manuals.

                  1.07     "Territory"  means the world,  except for the states of Washington,  Nevada,  Oregon and
Pennsylvania in the United States of America, and such other territories as the parties may agree to in writing.


                                                    ARTICLE 2.
                                                      LICENSE

                  2.01     License  to  HOMEACCESS  Intellectual  Property.  HOMEACCESS  hereby  grants  to  HA  an
exclusive,  non-transferable,  non-assignable  and fully  paid  license to make,  use,  sell and offer for sale the
HOMEACCESS  Intellectual  Property  in the  Territory  during  the Term (the  "License").  The  License  shall also
include  an  exclusive,  non-transferable,  non-assignable  and  fully  paid  right to  sublicense  the  HOMEACCESS
Intellectual  Property in the Territory  during the Term;  provided  that during the first  eighteen (18) months of
the Term,  such  sublicense  right  shall be  limited  to those  circumstances  in which,  in the  absence  of such
sublicense,  a third-party  purchaser of the Licensed  Product could not use the Licensed  Product for its intended
use without  violating the proprietary  rights of HOMEACCESS with respect to the HOMEACCESS  Intellectual  Property
(unless the consent to a broader  sublicense  is obtained  from  HOMEACCESS  which  consent shall not be reasonably
withheld.  Such consent shall not be deemed to be unreasonably  withheld,  if HOMEACCESS  reasonably  believes such
sublicense would adversely affect the value of HA as a result of such  sublicense).  HOMEACCESS  reserves the right
to make,  use,  sell,  offer  for  sale,  and  sublicense  the  HOMEACCESS  Intellectual  Property  outside  of the
Territory.

         Prior to executing any sublicense agreement with a third party, HA shall forward to HOMEACCESS the
following information: (i) the name and address of the prospective sublicensee; (ii) the name, address and
telephone number of a contact person or authorized representative of the prospective sublicensee; (iii) the
HOMEACCESS Intellectual Property to be licensed; (iv) the number of licensed users; and (v) the location and
manner in which the HOMEACCESS Intellectual Property will be used.

         If a HOMEACCESS Bankruptcy Event (as hereinafter defined) occurs, the Territory shall be automatically
redefined as the entire world and, in such event, the parties agree to execute any and all documents necessary or
appropriate to evidence such expansion.  "HOMEACCESS Bankruptcy Event" means (i) a receiver is appointed for
HOMEACCESS or its property and HOMEACCESS is liquidated or dissolved, (ii) HOMEACCESS makes an assignment for the
benefit of its creditors, or (iii) any proceeding is commenced by, for or against HOMEACCESS under any
bankruptcy, insolvency or debtor's relief law for the purpose of seeking a reorganization of HOMEACCESS' debts,
and such proceeding is not dismissed within ninety (90) calendar days of its commencement.

                                                      -2-


                  2.02     Consideration.   In  consideration  for  the  License  of  the  HOMEACCESS  Intellectual
Property,  HA shall pay HOMEACCESS the sum of two hundred fifty thousand  dollars  ($250,000) in readily  available
funds upon the execution of this Agreement.

                  2.03     Ownership.  HA understands and acknowledges  that the HOMEACCESS  Intellectual  Property
is  licensed  and not sold  and that  HOMEACCESS  shall  retain  all  right,  title  and  interest  (including  all
copyrights,  patents,  service  marks,  trademarks,  trade secret rights,  domain names and any other  intellectual
property  rights,  including the goodwill  associated  with such rights) in the HOMEACCESS  Intellectual  Property.
Nothing contained in this Agreement,  except the License,  shall be deemed to convey to HA any right or interest in
the HOMEACCESS Intellectual Property.


                                                    ARTICLE 3.
                                             QUALITY CONTROL OF MARKS

                  3.01     Proper  Use. HA agrees  that all use of the Marks  shall only occur in  connection  with
the Licensed  Products and shall be in strict  compliance  with the terms of this  Agreement.  HA may use the Marks
only in connection  with the promotion of the Licensed  Products.  HA undertakes and agrees not to use the Marks in
any manner  whatsoever which,  directly or indirectly,  would derogate or detract from the Licensed Products repute
and to use the  Marks  in  conformance  with  HOMEACCESS'  trademark  guidelines  ("Trademark  Guidelines"),  which
Trademark  Guidelines  will be provided  by and may be revised by  HOMEACCESS  from time to time.  HA agrees not to
use any other  trademark or service mark in combination  with the Marks.  HA has no right to  sublicense,  transfer
or assign the use of the Marks or use the marks for any other  purposes  other than the purpose  described  herein.
HA may not use the Mark in  connection  with,  or for the benefit of, any third  party's  products or services.  HA
will not remove,  alter or destroy any Mark,  copyright  markings or notices  placed upon or  contained  within the
HOMEACCESS Intellectual Property.

                  3.02     Quality  Standards.  HA agrees to maintain a level of quality of the  Licensed  Products
and  services  related  thereto and in  connection  with the Marks  wherein  such level of quality  shall be to the
satisfaction  of  HOMEACCESS.  HA further  agrees to maintain a level of quality in connection  with its use of the
Marks.

                  3.03     Monitoring  By  Licensor.  HA  acknowledges  that  HOMEACCESS  does  have  the  right to
periodically  monitor  HA's  use  of the  Marks  in  conjunction  with  the  Licensed  Products.  Upon  request  by
HOMEACCESS,  HA shall provide HOMEACCESS with  representative  samples of each such use prior to the time the Marks
are  published  on the  Internet or in press  materials  or  marketing  or  advertising  materials.  If  HOMEACCESS
determines  that HA is using the Marks  improperly,  and/or in connection  with the Licensed  Products which do not
meet the  standards  set forth in  Sections  3.01 and 3.02,  HOMEACCESS  shall  notify HA, and HA shall  remedy the
improper use within two (2) business days  following  receipt of such notice from  HOMEACCESS.  Use of the Marks on
goods or services other than the Licensed Products in a manner  inconsistent with the Trademark  Guidelines,  or in
connection  with an  infringement  of  HOMEACCESS' or a third party's  rights,  including but not limited to rights
under  trademark,  patent,  trade secret or copyright laws constitute a material breach of this Agreement.  If such
material breach has not been cured within two (2) business days following  receipt of notice from HOMEACCESS,  this
Agreement shall be terminated.

                  3.04     Legend and  Disclaimer.  HA shall  include with any online  publication  or  publication
in print of the Marks a legend  indicating  that the  Marks are those of  HOMEACCESS,  used  under  license,  and a
disclaimer  that HA and not HOMEACCESS has produced the Licensed  Products  related  thereto and is responsible for
the content thereof.


                                                      -3-


                                                    ARTICLE 4.
                                                   IMPROVEMENTS

                  4.01     Improvements.  HOMEACCESS  shall own all  Improvements  to the  HOMEACCESS  Intellectual
Property whether  developed or created by HOMEACCESS,  HA or jointly by the parties.  HOMEACCESS may at its expense
file patent  applications or copyright  applications  anywhere in the world on any such Improvements,  and title to
any such patent  application  and copyright  application  shall be and remain  exclusively in HOMEACCESS.  HA shall
cooperate  fully with  HOMEACCESS,  but at  HOMEACCESS's  expense,  in the  preparation and prosecution of any such
patent  application  and copyright  application  and in the  maintenance and enforcement of any patent or copyright
registration  that may  issue  therefrom.  Each  party  shall  disclose  promptly  to the  other  party  any of its
Improvements  to the HOMEACCESS  Intellectual  Property,  and such  Improvements  shall  automatically  be included
within the definition of HOMEACCESS Intellectual Property.

                  4.02     Infringement.  HA  shall  give  prompt  notice  to  HOMEACCESS  of any  infringement  or
suspected infringement or misappropriation of HOMEACCESS  Intellectual  Property.  HOMEACCESS shall be obligated to
take  appropriate  legal action,  in accordance  with good  commercial  judgement,  to cease such  infringement  or
suspected  infringement  or  misappropriation  of  HOMEACCESS  Intellectual  Property,  and HA shall at its expense
render reasonable  assistance to HOMEACCESS in connection  therewith.  HOMEACCESS shall bear all other expenses and
shall be entitled to all recoveries and/or settlements resulting from any such action.


                                                    ARTICLE 5.
                                   DISCLAIMER OF WARRANTIES AND INDEMNIFICATION

                  5.01     Limited  HOMEACCESS  Intellectual  Property  Warranty.   EXCEPT  AS  OTHERWISE  PROVIDED
HEREIN,  TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW,  HOMEACCESS AND ITS SUPPLIERS  DISCLAIM ALL WARRANTIES,
EITHER EXPRESS OR IMPLIED,  INCLUDING,  BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTIBILITY AND FITNESS FOR A
PARTICULAR PURPOSE WITH RESPECT TO THE HOMEACCESS INTELLECTUAL PROPERTY OR THE LICENSED PRODUCT.

                  5.02     HOMEACCESS's Indemnification.

                  (a)  HOMEACCESS  shall  indemnify and hold HA harmless from and against any and all  liabilities,
         obligations,  damages,  losses, claims,  encumbrances,  costs and expenses,  including attorney's fees and
         costs  (collectively  "Losses")  to which HA may  become  subject  as a result of any (i)  claim,  demand,
         action or  proceeding  by any third party to the extent such Losses arise  directly or  indirectly  out of
         the  breach  of this  Agreement  by  HOMEACCESS  or  (ii)  claim,  action,  suit  or  proceeding  claiming
         infringement  of any  patents,  copyrights,  trademarks  or trade secret  rights  involved in the Licensed
         Product,  provided  such  claim,  action,  suit or  proceeding  is not the result of any  modification  or
         addition by HA to the HOMEACCESS Intellectual Property.

                  (b) If there is an  adjudication  that the use by HA of the HOMEACCESS  Intellectual  Property is
         an infringement or misappropriation,  or if the use of such HOMEACCESS  Intellectual Property is enjoined,
         in  addition to its  indemnification  obligation,  HOMEACCESS  shall,  at its  expense,  use  commercially
         reasonable  efforts to either:  (i)  procure  for HA the past and future  rights  granted to HA  hereunder
         with  respect  to the  allegedly  infringing  portion of the  HOMEACCESS  Intellectual  Property;  or (ii)
         replace or modify the  allegedly  infringing  portion to make such portion  non-infringing,  provided that
         the replacement or modified  portion  provides  substantially  the same  functionality  as the replaced or
         original portion;  and upon failure to complete (i) or (ii),  HOMEACCESS shall, at its expense,  reimburse


                                                      -4-


         HA for the total  amount of its  license fee paid  hereunder,  after  giving  effect to the length of time
         that HA has had use of the HOMEACCESS Intellectual Property.

                  (c) THIS SECTION 5.02 STATES  HOMEACCESS'S  ENTIRE OBLIGATION AND LIABILITY TO HA WITH RESPECT TO
         ANY CLAIM REGARDING ALLEGED  INFRINGEMENT OR MISAPPROPRIATION  OF THE INTELLECTUAL  PROPERTY RIGHTS OF ANY
         THIRD PARTY.

                  Section 5.03      HA's Indemnity.

                  (a) HA shall defend  HOMEACCESS  against any Losses to which  HOMEACCESS  may become subject as a
         result of any claim,  demand,  action or  proceeding  by any third party to the extent  such Losses  arise
         directly or  indirectly  out of (i) the breach of this  Agreement by HA or (ii) that any  modification  or
         addition to the  HOMEACCESS  Intellectual  Property  made by or for HA infringes a published  intellectual
         property right of a third party.

                  (b) THIS SECTION 5.03 STATES HA'S ENTIRE  OBLIGATION AND LIABILITY TO HOMEACCESS  WITH RESPECT TO
         ANY CLAIM REGARDING ALLEGED  INFRINGEMENT OR MISAPPROPRIATION  OF THE INTELLECTUAL  PROPERTY RIGHTS OF ANY
         THIRD PARTY.

                  5.04     Limitation  on  Liability.   IN  NO  EVENT  SHALL  EITHER  PARTY  OR  THEIR   RESPECTIVE
DIRECTORS,  OFFICERS,  PARENT COMPANY,  AND AFFILIATES,  LICENSORS,  AND SUPPLIERS,  BE LIABLE FOR ANY LOST DATA OR
CONTENT, LOST PROFITS, BUSINESS INTERRUPTION OR FOR ANY INDIRECT,  INCIDENTAL,  SPECIAL,  CONSEQUENTIAL,  EXEMPLARY
OR PUNITIVE  DAMAGES ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE HOMEACCESS  INTELLECTUAL  PROPERTY,  EVEN
IF THE OTHER PARTY HAS BEEN ADVISED OF THE  POSSIBILITY OF SUCH DAMAGES AND  NOTWITHSTANDING  ANY ASSERTED  FAILURE
OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.


                                                    ARTICLE 6.
                                               TERM AND TERMINATION

                  6.01     Term.  Unless  terminated in accordance  with this Article 6, the term of this Agreement
shall be for perpetuity from the Effective Date hereof.

                  6.02     Termination.

                  (a)      HOMEACCESS  may terminate  this  Agreement  immediately  (i) in accordance  with Section
         3.03,  (ii) if HA breaches a material  term of this  Agreement and fails to cure such breach within thirty
         (30) days after  receiving  written  notice of such breach (unless such breach can not reasonably be cured
         in such thirty (30) day period,  in which event such cure period  shall be extended so long as HA is using
         commercially  reasonable  efforts to cure such  default,  but in no event  greater than ninety (90) days),
         and (iii) if HA fails to pay any amount due hereunder and such  non-payment  remains  uncured for five (5)
         business days following written notice to HA of non-payment; and

                  (b)      either party may terminate  this  Agreement  immediately  in the event (i) a receiver is
         appointed for the other party or its property or such other party is  liquidated  or  dissolved,  (ii) the
         other party makes an  assignment  for the benefit of its  creditors or (iii) any  proceeding  is commenced
         by, for or against  the other  party  under any  bankruptcy,  insolvency  or  debtor's  relief law for the


                                                      -5-


         purpose of seeking a  reorganization  of such party's debts,  and such proceeding is not dismissed  within
         ninety (90) calendar days of its commencement.

                  6.03     Effect of  Termination.  Upon the  termination  of this  Agreement  for any reason:  (a)
each party  shall  retain its rights  against  the other  party in respect of any past  breach,  in addition to any
other rights,  powers or remedies  provided at law or in equity,  (b) the License shall  terminate and no longer be
of any force or effect,  and (c) within (30) days after the date of  termination,  HA shall  immediately  cease the
use, sale,  offer for sale and manufacture of the Licensed  Products and shall destroy all HOMEACCESS  Intellectual
Property.

                  6.04     Bankruptcy.  In the event that  HOMEACCESS  as a debtor in  possession,  or a trustee in
bankruptcy  under the U.S.  Bankruptcy  Code,  rejects this  Agreement or HA's right to continue the License  under
this Agreement,  HA may elect to retain its license rights under this Agreement by paying all applicable  fees, and
otherwise acting in accordance with Section 365(n) of the U.S.  Bankruptcy  Code.  Thereafter,  neither  HOMEACCESS
as debtor in possession,  nor a trustee in bankruptcy,  shall interfere with the rights of HA to use the HOMEACCESS
Intellectual Property in accordance with the terms of this Agreement.

                  6.05     Survival.  The following  provisions  shall survive the  termination  of this  Agreement
for any reason: Sections 2.03, 4.01, 4.02, 8.06 and Articles 5 and 7.


                                                    ARTICLE 7.
                                        PROTECTION OF TECHNICAL INFORMATION

                  7.01     Confidential  Information.  "Confidential  Information"  means any and all technical and
nontechnical  information,  including  but  not  limited  to  patent,  copyright,  trade  secret,  and  proprietary
information,  techniques,  and software programs related to the current,  future and proposed products and services
of a party, as well as any trade information,  process, technique,  algorithm,  computer program (source and object
codes),  design,  drawing formula,  test data,  financial data and budgetary  information,  income or sales data or
projections,  purchasing,  customer  lists,  business  development  plans and forecasts,  sales and  merchandising,
marketing  plans,  concepts,  records and files,  and information  that a party discloses or that is otherwise made
available to the other party, in writing or electronic form, pursuant to this Agreement.

                  7.02     Protection  of  Confidential   Information.   Each  party  retains  sole  and  exclusive
ownership to its own Confidential  Information.  Neither party will disclose,  publish,  communicate or divulge any
of the other party's  Confidential  Information  to any third party or use such  Confidential  Information  for any
purpose except to accomplish the intent of this  Agreement,  except either as allowed in this Agreement or with the
other party's prior written  consent.  Each party  receiving  Confidential  Information  under this  Agreement will
protect  such  Confidential  Information  with the same  degree  of care it uses to  protect  its own  Confidential
Information  of a similar  nature,  but never less than a  reasonable  degree of care.  Each party  agrees that the
other  party's  Confidential  Information  will be disclosed or made  available  only to those of its employees who
need to know  such  information  and are  aware of the  confidentiality  obligations  hereunder  or to  independent
contractors who are obliged to treat the Confidential  Information in a manner  consistent with all the obligations
under this Agreement or as otherwise necessary to exercise the rights set forth in this Agreement.

                  7.03     Exceptions.  A party has no  obligation to maintain the  confidentiality  of, or refrain
from using,  Confidential  Information of the other party that (a) the receiving party knew prior to receiving from
the  disclosing  party as evidenced by written  records  maintained  in the  ordinary  course of business;  (b) the
receiving  party  independently  develops  or has  developed  by  individuals  who do not have  access to the other
party's  Confidential  Information;  (c) has become  publicly  available  other than as a result of any  default or
wrongful or negligent  act or omission by the receiving  party;  (d) the receiving  party has  rightfully  received


                                                      -6-


from a third party under no  obligation of  confidentiality  prohibiting  such  disclosure;  or (e) the  disclosing
party has  approved  for  release  by written  authorization.  In the event that a party is  required  to  disclose
Confidential  Information pursuant to applicable law or judicial or administrative  government  proceedings,  then,
prior to the  required  disclosure,  the  receiving  party  shall give notice to the  disclosing  party so that the
disclosing  party may take  reasonable  steps to oppose or limit the  required  disclosure  and that the  receiving
party does not disclose any more information than necessary to comport with the law or order.

                  7.04     Injunctive  Relief.  Each party  acknowledges  and agrees that (a) the  restrictions and
obligations  contained in this Article 7 are  reasonable  and  necessary  to protect the other  party's  legitimate
interests;  (b) in the event of a violation of these  restrictions  or a breach of these  obligations,  remedies at
law shall be  inadequate  and such  violation or breach may cause  irreparable  damages to the other party within a
short period of time; and (c) the  non-disclosing  party shall be entitled to injunctive  relief,  without  posting
bond or other  security,  against  each and every such  violation or breach,  provided  the party  charged is given
lawful notice of the proceeding and an opportunity to appear therein.



                                                    ARTICLE 8.
                                                      GENERAL

                  8.01     Independent Contractor.   The  relationship  created  by  this  Agreement  is  one  of
independent contractors, and not partners, franchisees or joint venturers. No employees,  consultants,  contractors
or agents of one party are employees,  consultants,  contractors or agents of the other party, nor do they have any
authority  to bind the other  party by contract or  otherwise  to any  obligation,  except as  expressly  set forth
herein. Neither party will represent to the contrary, either expressly, implicitly or otherwise.

                  8.02     Miscellaneous.  This  Agreement  and  the  Schedules  attached  hereto  and  made a part
hereof,  constitute the complete and exclusive  agreement between HOMEACCESS and HA and supersede all prior oral or
written  understandings  or agreements not  specifically  incorporated  herein.  This Agreement may not be modified
except in a writing duly signed by an authorized  officer of HOMEACCESS  and HA. If any provision of this Agreement
is held to be unenforceable  for any reason,  such provision shall be reformed only to the extent necessary to make
it  enforceable,   and  such  decision  shall  not  affect  the   enforceability  of  such  provision  under  other
circumstances,  or of the remaining provisions hereof under all circumstances.  Headings shall not be considered in
interpreting this Agreement.

                  8.03     Binding Effect.  All covenants,  representations,  warranties and other  stipulations in
this  Agreement,  given by or on behalf of any of the  parties  hereto,  shall bind and inure to the benefit of the
respective  successors and assigns of the parties hereto.  Notwithstanding  Section 2.01 hereof, the license rights
set forth in Section 2.01 shall be assignable commencing after the first eighteen (18) months of the Term.

                  8.04     Cumulative  Powers.  No  remedy  herein  conferred  upon a party  to this  Agreement  is
intended to be exclusive of any other  remedy,  and each such remedy shall be  cumulative  and in addition to every
other remedy given hereunder or now or hereafter existing at law, or in equity or by statute or otherwise.

                  8.05     Notices.  Any notice,  request,  instruction,  or other  document to be given must be in
writing and delivered  personally  or sent by certified  mail or by United  States  Express  Mail,  postage or fees
prepaid,  or by FedEx to any such party at its  address  set forth on the first page of this  Agreement.  Notice so
given shall be deemed given and received (i) if by registered  mail on the third (3rd) day after  mailing;  (ii) by
personal delivery on the date of personal  delivery;  and (iii) if by overnight  courier,  on the next business day
following the day such notice is delivered to the courier service.

                                                      -7-


                  8.06     Waiver.  Failure or delay on the part of either  party to  exercise  any right,  remedy,
power,  privilege or option  hereunder  which is not subject to an express time limitation with respect to exercise
shall not operate or be construed to operate as a waiver  thereof.  A waiver,  to be effective,  must be in writing
and be signed by the party making the waiver.  No written waiver of any term or condition of this  Agreement  shall
operate or be  construed  to operate as a waiver of any other term or  condition,  nor shall any written  waiver of
any  breach or  default  operate or be  construed  to operate as a waiver of any other  breach or default or of the
same type of breach or default on a  subsequent  occasion  or operate or be  construed  to operate as a  continuing
waiver.

                  8.07     Counterparts.  This  Agreement  may be  executed  in two or more  counterparts,  each of
which shall be deemed an original, and which together shall constitute but one and the same instrument.

                  IN WITNESS  WHEREOF,  the parties have caused this Agreement to be duly executed and delivered as
of the day and year first above written.

                                                     HOMEACCESS

                                                     By:  /s/ Mark DiCamillo
                                                         ---------------------------
                                                              Name:   Mark DiCamillo
                                                              Title:  Vice President


                                                     HA

                                                     By:  /s/ Jerry Conrad
                                                          ---------------------------
                                                              Name:  Jerry Conrad
                                                              Title: President



                                                      -8-



                                                    SCHEDULE 1
                                                 HOMEACCESS MARKS
                                                 ----------------

Mark                                  Serial No.                          Registration Number
- ----                                  ----------                          -------------------
Home Access                           75-019,859                          2,074,636

EX-10.2 6 0006.htm OPTION AGREEMENT OPTION AGREEMENT

OPTION AGREEMENT




         THIS OPTION AGREEMENT ("Agreement") is made and entered into as of this 19th day of October, 2000 (the
"Contract Date") by and between Quentra Networks, Inc., a Delaware corporation ("Optionee"), HA Technology, Inc.,
a Delaware corporation (the "Company" or "HA"), Barbara Conrad, the sole shareholder of the Company ("Conrad"),
Jerry Conrad, an employee of the Company ("Employee"), and DQE Enterprises, Inc., the holder of a warrant to
purchase shares in the Company ("Enterprises").  As used herein the term "Optionor" shall mean Conrad,
Enterprises and HA, as appropriate.

                                                W I T N E S S E T H

         WHEREAS, Optionee, Conrad, Employee, Enterprises and HomeAccess MicroWeb, Inc., a California corporation
("HomeAccess"), entered into that certain Amended and Restated Agreement and Plan of Merger of even date herewith
(the "Merger Agreement"), under which a wholly owned subsidiary of Optionee will be merged with and into
HomeAccess with HomeAccess being the surviving corporation (the "Merger"); and

         WHEREAS, in consideration of the parties' previous business relationships and Optionee's offer to pay
the Option Consideration (as defined herein), the parties have agreed to enter into this Agreement.

         NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants and agreements as
hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

         1.       Definitions.  Terms not otherwise defined in this Agreement shall have the meanings given to
them in the Merger Agreement (provided, however, that references to HomeAccess shall be deemed to refer to the
Company in construing such definitions, where the context so requires).

         "Closing Date" means the date the Transaction (as defined below) is consummated.

         "Enterprises  Warrant"  means the warrant  issued to  Enterprises by the Company to purchase forty percent
(40%) of the capital stock of the Company  (333,333 shares of the Company  Preferred Stock (as defined  herein)) in
the form attached hereto at Exhibit A.

         "HA License  Agreement"  means that certain  license  agreement dated October 19, 2000 between the Company
and HomeAccess, in the form attached hereto as Exhibit B, as the same may be amended from time to time.

         "Merger Closing Date" means the date of this Agreement.

         "Quentra Common Stock" means the common stock, $1.00 par value per share, of Optionee.

                                                      -1-


         2.       Grant of Rights.

                  (a)               Grant of Option.  Optionor and HA, as applicable, hereby grant to Optionee an
         irrevocable option ("Option") to acquire from Optionor all of the capital stock of the Company now owned
         or acquired by Optionor in the future, or to acquire from HA all or substantially all of the assets of
         HA (the "Transaction") at any time on or prior to April ___, 2002 (the "Option Expiration Date") in
         accordance with the terms of a merger agreement, stock purchase agreement or asset purchase agreement
         (the "Purchase Agreement") to be entered by the parties in accordance with Section 2(d).  Optionee shall
         determine, in its sole discretion, whether the transaction will be in the form of a merger, stock
         purchase or asset sale, provided that the Transaction shall be treated as a tax-free reorganization.

                  (b)               Exercise Price.  The exercise price for the Option shall be nine million
         (9,000,000) shares of Quentra Common Stock and warrants substantially in the form attached hereto as
         Exhibit C (the "Warrants") to purchase three million eight hundred thousand (3,800,000) shares of
         Quentra Common Stock at an exercise price of $8.64 per share (each subject to adjustment in the event of
         a stock split, recapitalization or similar event) (collectively, the "Option Consideration").  If
         (i) the Closing Date occurs within six (6) months after the Merger Closing Date, and (ii) Enterprises has
         not exercised the Enterprises Warrant, in full, on or prior to the Closing Date, Optionee shall only pay
         sixty percent (60%) of the Option Consideration (i.e., 5,400,000 shares of Quentra Common Stock and
         2,280,000 Warrants) to Conrad and the Enterprises Warrant shall convert into the right to receive forty
         percent (40%) of the Option Consideration (i.e., 3,600,000 shares of Quentra Common Stock and 1,520,000
         Warrants) for the same consideration as set forth in the Enterprises Warrant; in such event, if the
         Enterprises Warrant, as converted, is not exercised, in full, on or prior to the six (6) month
         anniversary of the Merger Closing Date, such warrant shall expire and no longer be of any force or
         effect.  If the Closing Date occurs after the six (6) month anniversary of the Merger Closing Date and
         Enterprises fails to exercise the Enterprises Warrant, in full, on or prior to the Closing Date, such
         warrant shall terminate and no longer be of any force or effect and Optionee shall only be obligated to
         pay sixty percent (60%) of the Option Consideration to Conrad.

                  (c)               Option Exercise.  Optionee may exercise the Option at any time on or before
         the Option Expiration Date by giving Optionor and HA written notice of such exercise (the "Exercise
         Notice").  The Exercise Notice shall set forth the anticipated Closing Date and the time and place of
         closing; provided, however, the Closing Date shall occur within thirty (30) days after the delivery of
         the Exercise Notice to Optionor and HA and not earlier than fifteen (15) days after the delivery of the
         Exercise Notice to Optionor and HA, time being of the essence, unless otherwise agreed to by Optionee,
         Optionor and HA.

                  (d)               Additional Actions Upon Exercise.  Upon Optionee's exercise of the Option, the
         parties will execute a definitive Purchase Agreement as soon as practicable, but in no event later than
         thirty (30) days after Optionor's and HA's receipt of the Exercise Notice.  The Purchase Agreement will
         contain the representations, warranties, covenants, indemnification and limitation of liability
         provisions set forth in the Merger Agreement (with references in the Merger Agreement to "HomeAccess"
         referring to "HA"), except to the extent necessary to incorporate the business terms set forth in this


                                                      -2-


         Agreement and necessary to make the representations and warranties set forth in the Purchase Agreement
         true and correct, including without limitation, an obligation by Optionee to register the Optionee
         shares issued or to be issued as part of the Option Consideration, or upon the exercise of the
         Enterprises Warrant, in accordance with Section 6.3(e) of the Merger Agreement, and the survival,
         indemnification and limitation of liability provisions of Article 7 of the Merger Agreement

         3.   Conduct of Business of the Company.  Except as contemplated by this Agreement or with the prior
written consent of Optionee, which consent shall not be unreasonably withheld, during the period from the date of
this Agreement to the Closing Date, the Company shall conduct its operations only in the ordinary course of
business and shall use its reasonable best efforts to preserve intact the business organization of the Company,
to keep available the services of the present officers and key employees of the Company, and to preserve the good
will of customers, suppliers and all other persons having business relationships with the Company.  Without
limiting the generality of the foregoing, and except as otherwise contemplated by this Agreement, prior to the
Closing Date, the Company shall not, without the prior written consent of Optionee, which consent shall not be
unreasonably withheld and shall not fail to take into account the desire of the parties to operate their business
independently if this Option is not exercised:

                  (a)               amend or otherwise change the Company's certificate of incorporation or bylaws;

                  (b)               except as contemplated by this Agreement, issue, sell, pledge, dispose of or
         encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of the
         Company capital stock of any class, or any options, warrants, convertible securities or other rights of
         any kind to acquire any shares of the Company capital stock, or any other ownership interest (including,
         without limitation, any phantom interest) of the Company, any subsidiary or any of its affiliates;

                  (c)               sell, pledge, dispose of or encumber any assets or inventory of the Company
         (except for (i) sales of assets or inventory in the ordinary course of business, (ii) dispositions of
         obsolete or worthless assets, and (iii) pledges of assets pursuant to existing agreements, or agreements
         the Company is permitted to enter into in connection with the purchase of assets), or take any action
         that would reasonably be expected to result in any damage to, destruction or loss of any material asset
         of the Company (whether or not covered by insurance);

                  (d)               (i) declare, set aside, make or pay any dividend or other distribution
         (whether in cash, stock or property or any combination thereof) in respect of any of the Company capital
         stock, (ii) split, combine or reclassify any of the Company capital stock or issue or authorize or
         propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of
         the Company capital stock, (iii) amend the terms of, repurchase, redeem or otherwise acquire any of its
         securities, except in accordance with preexisting commitments as of the date hereof, or propose to do
         any of the foregoing;

                                                      -3-


                  (e)               (i) acquire (by merger, consolidation, or acquisition of stock or assets) any
         Entity or division thereof, or enter into or amend any contract to effect any such acquisition, (ii)
         incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than
         guarantees of bank debt of a subsidiary entered into in the Ordinary Course of Business) or endorse or
         otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans
         or advances, except in each case in the ordinary course of business (including pursuant to existing
         credit lines and lease facilities); (iii) provide funds to or make any investment (in the form of a
         loan, capital contribution or otherwise) in any Entity; (iv) except in the Ordinary Course of Business
         or otherwise provided or permitted by this Agreement, enter into or amend any material Contract which
         provides for the sale, license, or purchase by the Company of assets; (v) authorize any capital
         expenditures or purchase of fixed assets which are, in the aggregate, in excess of $10,000; (vi) except
         in the ordinary course of business, license, grant or sell any right to use or otherwise encumber in any
         manner whatsoever the Company's rights to the intellectual property, including all updates, revisions,
         or modifications thereof, granted to the Company pursuant to the HA License Agreement or any other
         intellectual property or proprietary rights now owned or subsequently developed or created by the
         Company (the "HA Intellectual Property") (by way of example, entering into a license agreement with
         respect to the HA Intellectual Property similar to the terms contemplated in the proposed agreement
         between HomeAccess and Portland General Electric Company, shall be considered a license entered into in
         the ordinary course of business); or (vii) enter into or amend any Contract to effect any of the matters
         prohibited by this Section 3(e);

                  (f)               increase the compensation payable or to become payable to its officers or
         employees, except for increases in salary or wages of employees of the Company who are not executive
         officers of the Company in the ordinary course of business or grant any severance or termination pay to,
         or enter into any employment or severance agreement with any director, officer (except for officers who
         are terminated on an involuntary basis), or, in the ordinary course of business, establish, adopt, enter
         into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option,
         restricted stock, pension, retirement, deferred compensation, employment, termination, severance or
         other plan, agreement, trust, fund, policy or arrangement for the benefit of any current or former
         directors, officers or employees, except, in each case, as may be required by law;

                  (g)               take any action to change accounting policies or procedures (including,
         without limitation, procedures with respect to revenue recognition, payments of accounts payable and
         collection of accounts receivable);

                  (h)               settle or compromise any material federal, state, local or foreign Tax
         liability or agree to an extension of a statute of limitations;

                  (i)               pay, discharge or satisfy any claims, Liabilities or obligations (absolute,
         accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or
         satisfaction in the ordinary course of business;

                                                      -4-


                  (j)               engage in any action or enter into any transaction or permit any action to be
         taken or transaction to be entered into that could reasonably be expected to delay the consummation of,
         or otherwise adversely affect, any of the transactions contemplated by this Agreement;

                  (k)               undertake any revaluation of any of the Company's assets, including, without
         limitation, writing down the value of inventory or writing off notes or accounts receivable other than
         in the ordinary course of business;

                  (l)               take, or agree in writing or otherwise to take, any of the actions described
         in Sections 3(a) through (k).

         4.       Legends.  The Company shall cause all certificates evidencing securities of the Company to
contain the following restrictive legend:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN OPTION AGREEMENT BETWEEN THE
         COMPANY, THE SHAREHOLDER AND QUENTRA NETWORKS, INC.  A COPY OF THIS AGREEMENT IS AVAILABLE FOR
         REVIEW AT THE COMPANY'S OFFICES.

         In addition, the Company shall not authorize the assignment, pledge, hypothecation or otherwise
allow the transfer (the "Transfer") by Optionor of the securities subject to the terms of this
Agreement, unless the transferee has agreed to be bound by the terms of this Agreement and such Transfer
is made in accordance with Section 8(a).

         5.       The Company's Warranties, Representations and Covenants.  The Company warrants and represents
as of the date hereof (with the express understanding that Optionee is relying on said warranties,
representations and covenants) that:

                  (a)               The Company has been duly organized and is validly existing and in good
         standing under the laws of the State of Delaware, and has the requisite power and authority and all
         necessary governmental approvals to own, lease and operate its properties and to carry on its business
         as it is now being conducted.  The Company is duly qualified or licensed to do business, and is in good
         standing, in each jurisdiction where the character of the properties owned, leased or operated by it or
         the nature of its business makes such qualification or licensing necessary, except where the failure to
         so qualify would not have a Material Adverse Effect on the Company.  The Company has no Subsidiaries and
         has never owned beneficially or otherwise any equity interest in any other Person.

                  (b)               The Company has never conducted any business under or otherwise used, for any
         purpose or in any jurisdiction, any fictitious name, assumed name, trade name or name other than the
         name set forth in its articles of incorporation, as amended.

                  (c)               As of the date of this Agreement, the authorized capital stock of the Company
         consists of 833,333 shares of the Company's common stock, $.001 par value (the "Company Common Stock")


                                                      -5-


         and 333,333 shares of Series A Convertible Preferred Stock, $.001 par value per share ("Company
         Preferred Stock"), none of which are issued and outstanding.  As of the date of this Agreement, 500,000
         shares of Company Common Stock are issued and outstanding, all of which are owned by Conrad, and
         Enterprises owns the Enterprises Warrant to purchase 333,333 shares of the Company Preferred Stock.
         Except as set forth in this Section 5(c), there are no options, warrants, conversion rights, stock
         appreciation rights, redemption rights, repurchase rights or other rights, agreements, arrangements or
         commitments of any character to which the Company is a party or by which the Company is bound relating
         to the issued or unissued capital stock of the Company or obligating the Company to issue or sell any
         shares of capital stock of, or other equity interests in, the Company.  All Company Common Stock, the
         Enterprises Warrant, and the shares of Company Preferred Stock issuable upon exercise of the Enterprises
         Warrant, will be free and clear of all Encumbrances and have been duly authorized, validly issued, fully
         paid and nonassessable, will not be subject to preemptive rights and have been issued in full compliance
         with all applicable securities laws and other Legal Requirements.  There are no outstanding contractual
         obligations of the Company to repurchase, redeem or acquire any shares of capital stock of the Company
         or securities convertible into or exchangeable for any of the foregoing.

                  (d)               The Company has entered into the HA License Agreement with Home Access and
         granted the Enterprises Warrant to Enterprises, both in the form previously reviewed by Optionee.

                  (e)               The Company has all necessary power and authority to execute and deliver this
         Agreement, to perform its obligations hereunder and to consummate the Transaction and the other
         transactions contemplated hereby.  The execution and delivery of this Agreement and the consummation by
         the Company of the Transaction and the transactions contemplated hereby have been duly and validly
         authorized by all necessary action on the part of the Company and no other proceedings on the part of
         the Company are necessary to authorize this Agreement or to consummate such transactions.  This
         Agreement has been validly executed and delivered by the Company and constitutes a legal, valid and
         binding obligation of the Company, enforceable against it in accordance with its terms.

                  (f)               The Company has delivered to Optionee accurate and complete copies of:  (i)
         the Company's certificate of incorporation and bylaws, including all amendments thereto; (ii) the stock
         records of the Company; and (iii) the minutes and other records of the meetings and other proceedings
         (including any actions taken by written consent or otherwise without a meeting) of the shareholders of
         the Company, and any predecessor thereto, and the board of directors of the Company, and any predecessor
         thereto.  There have been no meetings or other proceedings of the shareholders of the Company, or any
         predecessor thereto, or the board of directors of the Company, or any predecessor thereto, that are not
         reflected in such minutes or other records.

                  (g)               There has not been any violation of any of the provisions of the Company's
         certificate of incorporation or bylaws or of any resolution adopted by the Company's shareholders or the
         Company's board of directors, and to the Knowledge of the Company no event has occurred, and no


                                                      -6-


         condition or circumstance exists, that likely would (with or without notice or lapse of time) constitute
         or result directly or indirectly in such a violation.

                  (h)               The books of account, stock records, minute books and other records of the
         Company are accurate, up to date and complete, and have been maintained in accordance with sound and
         prudent business practices.  All of the records of the Company and any predecessor thereto are in the
         actual possession and direct control of the Company.

                  (i)               Neither the execution and delivery of this Agreement, nor the consummation or
         performance of the Transaction, will directly or indirectly (with or without notice or lapse of time):

                           (i)              contravene, conflict with or result in a violation of (A) any of the
                  provisions of the Company's certificate of incorporation or bylaws, or (B) any resolution
                  adopted by the Company's shareholders, the Company's board of directors or any committee of the
                  Company's board of directors, if any;

                           (ii)             to the Knowledge of the Company, contravene, conflict with or result
                  in a violation of, or give any Governmental Body or other Person the right to challenge this
                  Agreement or the transactions contemplated hereby or to exercise any remedy or obtain any
                  relief under, any Legal Requirement or any Order to which the Company, or any of the assets
                  owned or used by the Company, is subject;

                           (iii)            cause the Company to become subject to, or to become liable for the
                  payment of, any Tax;

                           (iv)             cause any of the assets owned or used by the Company to be reassessed
                  or revalued by any taxing authority or other Governmental Body;

                           (v)              to the Knowledge of the Company, contravene, conflict with or result
                  in a violation of any of the terms or requirements of, or give any Governmental Body the right
                  to revoke, withdraw, suspend, cancel, terminate or modify, any Governmental Authorization that
                  is held by the Company or any of its employees or that otherwise relates to the Company's
                  business or to any of the assets owned or used by the Company;

                           (vi)             contravene, conflict with or result in a violation or breach of, or
                  result in a default under, any material provision of any of the Company Contracts;

                           (vii)            give any Person the right to (A) declare a default or exercise any
                  remedy under any the Company Contract, (B) accelerate the maturity or performance of any the
                  Company Contract, or (C) cancel, terminate or modify any the Company Contract;



                                                      -7-


                           (viii)   give any Person the right to any payment by the Company or give rise to any
                  acceleration or change in the award, grant, vesting or determination of options, warrants,
                  rights, severance payments or other contingent obligations of any nature whatsoever of the
                  Company in favor of any Person, in any such case as a result of the change in control of the
                  Company or otherwise resulting from this Agreement or the transactions contemplated hereby; or

                           (ix)             result in the imposition or creation of any Encumbrance upon or with
                  respect to any asset owned or used by the Company.

                  (j)               Except as set forth in the HA License Agreement, the Company is not a party to
         any agreement or license with any other party concerning the HA Intellectual Property.

                  The Company will not be required to make any filing with or give any notice to, or obtain any
         Consent from, any Person in connection with the execution and delivery of this Agreement or the
         consummation or performance of the Transaction.  As of the date hereof, all such filings, notices and
         Consents have been duly made, given or obtained and are in full force and effect, other than those which
         by their nature are required to be made, given or obtained after the execution of this Agreement, all of
         which shall be made, given or obtained within the time required therefor.

         6.       Optionor's Representations and Warranties.  Each Optionor severally warrants and represents as
of the date hereof with respect to such Optionor (with the express understanding that Optionee is relying on said
warranties, representations and covenants) that:

                  (a)               Optionor has all necessary power and authority to execute and deliver this
         Agreement, to perform its obligations under this Agreement and to consummate the Transaction and the
         other transactions contemplated by this Agreement.  The execution and delivery of this Agreement and the
         consummation by Optionor of the Transaction contemplated hereby have been duly and validly authorized by
         all necessary action, and no other proceedings on the part of the Optionor are necessary to authorize
         this Agreement or to consummate such transactions.  This Agreement has been validly executed and
         delivered by the Optionor and constitutes a legal, valid and binding obligation of the Optionor,
         enforceable against it in accordance with its terms.

                  (b)               The Optionor has legal, valid, beneficial and exclusive title to, in the case
         of Conrad, 500,000 shares of Company Common Stock, and, in the case of Enterprises, the Enterprises
         Warrant, free and clear of all Encumbrances other than those imposed by the Securities Act.

         7.       Optionee's Representations and Warranties.  Optionee warrants and represents as of the date
hereof (with the express understanding that the Optionor, the Company and Employee are relying on said
warranties, representations and covenants) that:

                  (a)               Optionee and each Subsidiary of Optionee (collectively, the "Optionee
         Subsidiaries") has been duly organized and is validly existing and in good standing under the laws of
         the jurisdiction of its incorporation or organization, as the case may be, and has the requisite power


                                                      -8-


         and authority and all necessary governmental approvals to own, lease and operate its properties and to
         carry on its business as it is now being conducted.  Each of Optionee and each Optionee Subsidiary is
         duly qualified or licensed to do business, and is in good standing, in each jurisdiction where the
         character of the properties owned, leased or operated by it or the nature of its business makes such
         qualification or licensing necessary, except where the failure to so qualify would not have a Material
         Adverse Effect on Optionee.  Schedule 7(a) sets forth a complete and correct list of all of the Optionee
         Subsidiaries.  Neither Optionee nor any Optionee Subsidiary holds any equity interest in any Person
         other than the Optionee Subsidiaries so listed.

                  (b)               Optionee has all necessary corporate power and authority to execute and
         deliver this Agreement, to perform its obligations hereunder and to consummate the Transaction and the
         other transactions contemplated hereby.  The execution and delivery of this Agreement and the
         consummation by Optionee of the Transaction and the transactions contemplated hereby have been duly and
         validly authorized by all necessary corporate action other than the approval of Optionee's stockholders
         (the "Optionee Shareholder Approval") and no other corporate proceedings on the part of Optionee are
         necessary to authorize this Agreement or to consummate such transactions, except for the Optionee
         Shareholder Approval.  This Agreement has been duly authorized and validly executed and delivered by
         Optionee and constitutes a legal, valid and binding obligation of Optionee, enforceable against it in
         accordance with its terms.

                  (c)               The representations and warranties set forth in Section 5.2 of the Merger
         Agreement are true and correct.

         8.       Covenants.

                  (a)               Until the termination of this Agreement, each Optionor agrees not to Transfer
         or otherwise Encumber the Company Common Stock, the Enterprises Warrant or the Company Common Stock
         issuable upon exercise of the Enterprises Warrant, as applicable, unless the transferee has agreed to be
         bound by the terms hereof and without the prior written consent of Optionee, which consent shall not be
         unreasonably withheld.  Notwithstanding the foregoing, Optionee's consent shall not be required with
         respect to a Transfer to an Affiliate of Optionor or as a result of a merger, change in control or the
         sale of all or substantially all of the Optionor's assets.

                  (b)               Subject to the terms and conditions provided in this Agreement and to
         applicable legal requirements, each of the parties agrees to use its best efforts to take, or cause to
         be taken, all action, and to do, or cause to be done, and to assist and cooperate with the other parties
         in doing, as promptly as practicable, all things necessary, proper or advisable under applicable laws to
         consummate and make effective the transactions contemplated by this Agreement.



                                                      -9-

         9.       Non-Performance.

                  (a)               In the event of a failure of Optionor or HA to consummate the Transaction in
         accordance with the terms hereof, Optionee may pursue, any one or all of the following remedies:

                           (i)              Terminate this Agreement;

                           (ii)             Waive such default and close;

                           (iii)            Institute an action for specific performance; and/or

                           (iv)             Pursue any other remedies available under law or in equity;

                  (b)               This Agreement shall terminate automatically if Optionee has not provided
         Optionor and HA an Exercise Notice on or prior to the Option Expiration Date, time being of the essence.

         10.      Assignment.  Except upon the prior written consent of the parties Optionee may not assign the
Option or any other right under this Agreement.

         11.      Broker.  Each of the parties hereto represents to the other that it has not retained the
services of a broker or finder in connection with this transaction.  Optionor hereby expressly agrees to
indemnify and hold Optionee harmless from and against any and all loss incurred by Optionee as a result of a
claim by any person(s) or entity(ies) for a commission claim through Optionor with respect to the transaction
contemplated by this Agreement.  HA hereby expressly agrees to indemnify and hold Optionee harmless from and
against any and all loss incurred by Optionee as a result of a claim by any person(s) or entity(ies) for a
commission claim through HA with respect to the transaction contemplated by this Agreement.  Optionee hereby
expressly agrees to indemnify and hold Optionor harmless from and against any and all loss incurred by Optionor
as a result of a claim by any person(s) or entity(ies) for a commission claim through Optionee with respect to
the transaction contemplated by this Agreement.

         12.      Notice.  Any and all notices or other communications required or permitted under this Agreement
shall be given in writing and delivered in Person or sent by United States certified or registered mail, postage
prepaid, return receipt requested, or by overnight express mail, or by telex, facsimile or telecopy to the
address of such party set forth below.  Any such notice shall be effective upon receipt or three (3) days after
placed in the mail, whichever is earlier.

               If to Quentra:

                        Quentra Networks, Inc.
                        1460 S. Sepulveda Blvd., Suite 222
                        Los Angeles, CA 90025
                        Attention: Timothy G. Atkinson, General Counsel
                        Facsimile No.:

                                                      -10-


               With copies to:

                        Morrison + Foerster, LLP
                        370 17th Street, Suite 5200
                        Denver, CO 80202
                        Attention:  Warren L. Troupe, Esq.
                        Facsimile No.: (303) 592-1510

               If to the Company, Conrad or Employee:

                        HA Technology, Inc.
                        c/o Jerry Conrad
                        9500 Toledo Way
                        Irvine, California 92618-1806

               With copies to:

                        Cassady + Klein
                        908 Kenfield Avenue
                        Los Angeles, CA 90049
                        Attention:  Raymond M. Klein, Esq.
                        Facsimile No.: (310) 471-3006

               And:

                        DQE Enterprises, Inc.
                        One Northshore Center
                        Suite 100
                        12 Federal Street
                        Pittsburgh, PA 15212
                        Attention: President
                        Facsimile No.:  (412) 231-2140

               If to Enterprises, to the address set forth above,
               with a copy to:

                        Kirkpatrick and Lockhart LLP
                        1500 Oliver Building
                        Pittsburgh, PA 15222
                        Attention:  David J. Lehman, Esq.
                        Facsimile No.:  (412) 355-6501

         Any party may, by notice so delivered, change its address for notice purposes hereunder.

         13.      Arbitration.  Any dispute between the parties pursuant to this Agreement shall be settled by
arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association in Los


                                                      -11-


Angeles, California.  The arbitration proceeding shall be conducted by one arbitrator selected in accordance with
the Commercial Arbitration Rules of the American Arbitration Association.  The arbitration shall be conducted in
accordance with the following procedures and time schedules unless otherwise mutually agreed to by Optionor or
HA, as applicable, and Optionee: (i) within ten (10) days after the appointment of the arbitrator, Optionor or
HA, as applicable, and Optionee shall provide the arbitrator with all documents, records and supporting
information reasonably necessary to resolve the dispute and a hearing on such dispute shall be held; (ii) within
three (3) days after the hearing, the arbitrator shall render his or her decision; (iii) Optionor or HA, as
applicable, and Optionee shall each be entitled to present the testimony of up to two (2) individuals, which
testimony shall not exceed four (4) hours in the aggregate; and (iv) no discovery shall be allowed.  The decision
or award of the arbitrator shall be final and binding upon Optionor or HA, as applicable, and Optionee to same
extent and to the same degree as if the matter had been adjudicated by a court of competent jurisdiction and
shall be enforceable under the Federal Arbitrations Act.  The costs and expenses of the arbitration and of the
prevailing party (including reasonable attorneys' fees) shall be paid by the non-prevailing party.

         14.      General Provisions.

                  (a)               Integration Clause.  This is the entire agreement between the parties with
         respect to this transaction.  There are no oral promises, conditions, representations, understandings,
         interpretations, or terms of any kind as conditions or inducements to the execution hereof or in effect
         between the parties.  This Agreement may not be amended or modified except by a document in writing
         signed by the parties.

                  (b)               Applicable Law.  This Agreement shall be interpreted in accordance with the
         laws of the State of California.

                  (c)               Severability.  In the event any provisions hereof or any portion of any
         provision hereof shall be deemed to be invalid, illegal or unenforceable, such invalidity, illegality or
         unenforceability shall not alter the remaining portion of any provision, or any other provision hereof,
         as each provision of this Agreement shall be deemed to be severable from all other provisions hereof.

                  (d)               Waivers.  The waiver of either party hereto of any right granted to it
         hereunder shall not be deemed to be a waiver of any other right granted herein, nor shall the same be
         deemed to be a waiver of a subsequent right obtained by reason of the continuation of any matter
         previously waived.

                  (e)               Binding Agreement; Inurement.  This Agreement shall be binding upon and inure
         to the benefit of the parties hereto and their respective legal representatives, successors and assigns.

                  (f)               Time Calculations.  Unless otherwise indicated, all periods of time referred
         to in this Agreement shall refer to calendar days unless specifically stated otherwise and shall include
         all Saturdays, Sundays and state or national holidays; provided that if the date or last date to perform
         any act or give any notice with respect to this Agreement shall fall on a Saturday, Sunday or state or


                                                      -12-


         national holiday, such act or notice may be timely performed or given on the next succeeding day which
         is not a Saturday, Sunday or state or national holiday.

                  (g)               Construction of Party Relationships.  Nothing herein contained shall be deemed
         or construed by the parties hereto or by any third person to create the relationship of principal or
         agent or of partnership or joint venture or of any association between the parties.

                  (h)               Captions.  The captions of the paragraphs hereof are for convenience only and
         shall not govern or influence the interpretation hereof.

                  (i)               Parties Not Bound.  No term or provision of this Agreement or the Exhibits
         hereto is intended to, or shall be for the benefit of any person, firm, corporation or other entity not
         a party hereto (including, without limitation, any broker) and no such other person, firm, corporation
         or entity shall have any right or cause of action hereunder.

                  (j)               Preparation of Agreement.  The parties hereto acknowledge that this Agreement
         has been negotiated and prepared in an arms-length transaction and that the parties have negotiated all
         the terms contained herein.  Accordingly, the parties agree that no party shall be deemed to have
         drafted the Agreement and the Agreement shall not be interpreted against any party as the draftsman.

                  (k)               Counterparts.  This Agreement may be executed in two or more counterparts,
         each of which shall be deemed an original, and which together shall constitute but one and the same
         instrument.



                                                      -13-


         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly
authorized representatives as of the day and year first above written.



                                                     HA Technology, Inc., a Delaware corporation


                                                     By:   /s/ Jerry Conrad
                                                           -------------------------------------

                                                     OPTIONOR:


                                                     DQE Enterprises, Inc.


                                                     By:  /s/ Neal G. Taylor
                                                          --------------------------------------


                                                     OPTIONOR:


                                                     Barbara Conrad

                                                     /s/ Barbara Conrad
                                                     -------------------------------------------


                                                     Jerry Conrad

                                                     /s/ Jerry Conrad
                                                     -------------------------------------------


                                                     OPTIONEE:

                                                     Quentra Networks, Inc., a Delaware corporation


                                                     By:   /s/ James R. McCullough
                                                           -------------------------------------



                                                      -14-


                                                     EXHIBIT A

                                            Form of Enterprises Warrant







                                                     EXHIBIT B

                                                  Form of License







                                                     EXHIBIT C

                                                  Form of Warrant

EX-10.3 7 0007.htm PERSONAL SERVICE AGMT PERSONAL SERVICES AGREEMENT

PERSONAL SERVICES AGREEMENT



         THIS  PERSONAL  SERVICES  AGREEMENT  ("Agreement"),  made as of this 19th day of October,  2000, is by and
between QUENTRA NETWORKS, INC., a Delaware corporation (the "Company"), and JERRY CONRAD (the "Employee").

                                                     RECITALS

         WHEREAS,  the  Employee is willing to be employed by the Company upon the terms and  conditions  set forth
in this Agreement; and

         WHEREAS,  the  provisions of this  Agreement are a condition of Employee's  being employed by the Company,
of Employee's having access to certain of the Company's  confidential business and technological  information,  and
Employee's  being eligible to receive  certain  salary,  bonuses,  perquisites  and  supplementary  benefits at the
Company.  This  Agreement is entered into,  and is reasonably  necessary to protect  confidential  information  and
customer  relationships  to which the  Employee may have  access,  and to protect the  goodwill and other  business
interests of the Company.

         NOW,  THEREFORE,  in order to set forth the terms and  conditions of the  Employee's  employment  with the
Company and in  consideration  of the covenants and  agreements of the parties  herein  contained,  the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.       EMPLOYMENT SERVICES

         (a)      Subject to the terms and  conditions  hereinafter  set forth,  the Company  hereby  employees the
Employee as President of the Company's newly formed e-commerce  division  commencing on October __, 2000 and ending
on the last day of the Term (as defined  below).  The Employee  accepts such  employment  and agrees to perform all
duties in a  conscientious,  reasonable and competent  manner and to devote his reasonable  best efforts to perform
his duties  pursuant to this  Agreement  and to further the  business of the  Company,  as directed by the Board of
Directors.  Without  further  action  of the  Company,  the  Employee  may  engage in other  business,  consulting,
financial and other  activities  during his employment  hereunder  subject to fulfilling  his duties  hereunder and
provided that any such  activities are  insubstantial  and do not include any active  involvement in the management
of any entity,  other than Primary  Knowledge,  Inc.,  Predictive  Data,  Inc.,  HomeAccess  MicroWeb,  Inc. and HA
Technology,  Inc.  ("HA"),  and  provided  further that except for HA, no such  activities  involve  entities  that
constitute a  Competitive  Business  (as defined in Section 7). The  Employee has  disclosed in Schedule 1 attached
hereto  the names of his other  business  affiliations  as of the date  hereof and  agrees to  promptly  notify the
Company of any additional affiliations.

         (b)      Employee  agrees  to comply  with the  terms and  conditions  of the  standard  Company  Employee
Proprietary  Information and Inventions Agreement,  which is annexed to this Agreement and referred to as ("Exhibit
A") to this Agreement.

                                                      -1-

2.       TERM AND TERMINATION

         2.1      TERM

                  Subject to Section  2.2  hereof,  the  employment  of the  Employee  under  this  Agreement  will
         commence on October 19, 2000 (the  "Effective  Date") and continue until the occurrence of the first of
         the following:

                           (a)      October 19, 2005 (i.e., a term of five years);

                           (b)      The Employee's death; or

                           (c)      The  Employee's  illness,  physical or mental  disability  or other  incapacity
                  resulting in the  Employee's  inability to  effectively  perform his duties under this  Agreement
                  for an aggregate of thirty (30) days during any period of six (6) consecutive months.

                  The period  beginning on the  Effective  Date and ending on the  Termination  Date is referred to
         herein as the "Term."

         2.2      TERMINATION

                  The Employee may be terminated  prior to the  expiration  of the Term with or without  "Cause" at
         the sole discretion of the Board of Directors. "Cause" shall include any of the following occurrences:

                           (a)      The  Employee's  conduct  involving  fraud or  moral  turpitude  or  dishonesty
                  involving the Company's business;

                           (b)      The  Employee's  chronic  absence  from work other  than by reason of  illness,
                  injury,  vacation or business  related travel,  which continues after the Employee has received a
                  written notice from the Company to halt such chronic absence;

                           (c)      Employee is indicted for, or convicted of, or pleads guilty or nolo  contendere
                  with respect to, theft,  fraud, a crime involving moral  turpitude,  or a felony under federal or
                  state law;

                           (d)      The Employee's  conviction of any misdemeanor which is substantially related to
                  the Employee's services hereunder;

                           (e)      The Employee's  abuse of alcohol  (whether or not on the job) after receiving a
                  written  notice  from the  Company to halt such  usage or the  Employee's  conviction  of a crime
                  involving alcohol;

                           (f)      The Employee's use of illegal drugs or other illegal substance  (whether or not
                  on the job)  after  receiving  a  written  notice  from the  Company  to halt  such  usage or the
                  Employee's  conviction  of a crime  involving  illegal drugs or other  illegal  substance,  which


                                                      -2-


                  impairs the  Employee's  ability to perform  his duties  under this  Agreement  or has an adverse
                  effect  (other than an  insignificant  effect) on the Company,  its business or its  relationship
                  with any customer or supplier of the Company;

                           (g)      Conduct either within or outside the scope of the Employee's  employment  which
                  has an adverse effect (other than an  insignificant  effect) on the Company,  its business or its
                  relationship with any customer or supplier of the Company;

                           (h)      A breach by the Employee of his  obligations  under Sections 8, 9 or 10 hereof;
                  and

                           (i)      A material  breach of any other  provision of this  Agreement by the  Employee,
                  following  written  notice and failure to cure within a reasonable  time (which cure period shall
                  be no less than five days after Employee's receipt of such notice).

                  The Employee may resign and terminate  this  Agreement on five days prior  written  notice to the
         Company for no reason or any reason  ("Voluntary  Termination").  In addition,  the Employee may terminate
         this  Agreement if the Company has  materially  breached any provision of this  Agreement or the Agreement
         and Plan of Merger and the Company has not cured such breach  within a  reasonable  time (but no less than
         five days) after receipt of written notice of such breach ("Termination for Good Cause").

         2.3      EFFECT OF TERMINATION

                  (a)      If the Employee is terminated  for "Cause" as defined above,  or the Employee  effects a
         Voluntary  Termination,  then this Agreement shall terminate and the Employee shall not be entitled to any
         unearned  compensation  or benefits  under this Agreement as of the date of  termination.  If the Employee
         is terminated  without  "Cause" as defined above,  or the Employee  effects a Termination  for Good Cause,
         then this  Agreement  shall  terminate and the Employee  shall  nevertheless  be entitled to six months of
         semi-monthly  salary  installments as set forth in Section 3.1 and the remaining First Year Bonus, up to a
         maximum  of six  months,  as set forth in Section  3.2,  provided  that upon  Employee's  separation  from
         employment,  Company is  authorized  to deduct from  Employee's  wages or other  monies due  Employee  any
         debts,  other  than  debts  forgiven  in  accordance  with  Section  6.2,  or  amounts  owed to Company by
         Employee.

                  (b)      The  Employee  hereby  acknowledges  and agrees that all personal  property,  including,
         without limitation,  all books,  manuals,  records,  reports,  notes,  contracts,  lists, files, disks and
         other media with Company information,  blueprints,  and other documents,  or materials, or copies thereof,
         and  equipment  furnished  to or  prepared  by  Employee  in  the  course  of or  incident  to  Employee's
         employment,  belong to the Company and shall be promptly  returned  to the  Company  upon  termination  of
         Employee's employment.

                  (c)      For two (2) months  after  termination  of  Employee's  employment,  Employee  agrees to
         fully  cooperate  with the Company in all matters  relating to the winding up of pending work on behalf of


                                                      -3-


         the Company and the orderly  transfer of work to other employees of the Company  following any termination
         of Employee's  employment.  For two (2) years after termination of Employee's  employment,  Employee shall
         also  cooperate in the  resolution  of any dispute,  including  litigation  of any action,  involving  the
         Company that relates in any way to Employee's  activities  while employed by the Company.  Such activities
         and all such activities shall be scheduled for mutually convenient times.

                  (d)      The  Employee's  obligations  in Sections 7, 8, 9, 10, 11 and 13.5 hereof shall  survive
         the termination of employment hereunder for any reason.

3.       COMPENSATION

         3.1      SALARY

                  The Company  agrees to pay the Employee  for each full fiscal year of the term of this  Agreement
         an annual  salary,  at a rate equal to $160,000 per year in accordance  with the Company's  normal payroll
         schedule,  less all  applicable  tax  withholdings  for state and  federal  income  taxes,  FICA and other
         deductions as required by law and/or authorized by Employee.

         3.2      BONUS

                  Employee  shall  receive a cash  bonus in an amount  equal to  $500,000,  which  amount  shall be
         prorated over the first twelve  months in  accordance  with the  Company's  normal  payroll  schedule (the
         "First Year  Bonus").  In  addition,  Employee  shall  receive an  additional  bonus in an amount equal to
         $1,500,000,  at such time as the  Company  has  received  a license  fee or  similar  payment  of at least
         $7,500,000 from  Albertson's,  Inc. (the "Albertson  Bonus").  The Albertson Bonus shall be payable within
         fifteen  business  days after the month end in which the Company  receives  such payment from  Albertsons,
         Inc.  All bonus  payments  shall be less all  applicable  tax  withholdings  for state and federal  income
         taxes, FICA and other deductions as required by law and/or authorized by Employee.

4.       REIMBURSEMENT FOR EXPENSES

         The Company  agrees to reimburse  the Employee for all  reasonable  business  expenses  incurred by him in
connection  with the  performance of his obligations  under this  Agreement,  subject to established  reimbursement
policies  of  the  Company  in  effect  from  time-to-time  regarding  expense  reimbursement,  including,  without
limitation,  reasonable travel,  entertainment,  cell phone, long distance charges and other customary expenses the
Employee incurs in the performance of his duties hereunder.

5.       BENEFITS

         The Employee  shall be entitled to the following  benefits  during the term of his  employment  under this
Agreement,  and shall be offered  any  additional  benefits  typically  offered  or  provided  any other  executive
officers of the Company.


                                                      -4-


         5.1      VACATION

                  The  Employee  shall be  allowed  three (3) weeks of  vacation  per year  during the term of this
         Agreement,  with full pay and without loss of any other  compensation  of  benefits,  in  accordance  with
         established  Company  policies.  The Employee  shall  coordinate  the schedule of his vacations with other
         executives and the personnel of the Company at its affiliates so as to provide  sufficient  managerial and
         executive coverage for the Company's operations.

         5.2      OTHER BENEFITS

                  The  Employee  may  receive  such other  benefits,  if any,  as the Board of  Directors  may from
         time-to-time  make  available  to the  Employee  in the Board of  Directors'  sole  discretion;  provided,
         however,  the Employee  shall be eligible for any  benefits  offered to any other member of the  Company's
         senior  executive  team on terms no less  favorable  that  those  offered  to other  members of the senior
         executive team.

         5.3      PAYMENTS

                  All cash  payments  due to the  Employee  hereunder  shall be paid  promptly  (no later  than two
         business  days  after  the due  date) in  immediately  available  funds to the  account  specified  by the
         Employee or by check made payable to the order of the Employee.

6.       LOAN TO EXECUTIVE; FORGIVENESS

         6.1      LOAN

                  Concurrent  with the Closing (as defined in the  Agreement  and Plan of Merger),  Employee  shall
         borrow from the Company,  and Company shall loan to Employee the sum of $2,000,000  (Two Million  Dollars)
         (the  "Loan").  The Loan shall be made under the terms and  conditions  set forth in a promissory  note of
         Employee  (the  "Promissory  Note")  and  Pledge  and  Security  Agreement  of Marine  Aircraft,  a Nevada
         corporation,  (the "Pledge") in the forms  attached  hereto as Exhibits B and C,  respectively.  Execution
         and delivery of the Promissory Note and the Pledge,  and the closing of the  transactions  contemplated by
         the Agreement and Plan of Merger,  shall be  conditions to the Company's  obligations  to make the Loan to
         Employee.

         6.2      FORGIVENESS

                  As of each of the second,  third and fourth  anniversaries  of the date of the  Promissory  Note,
         the Company shall forgive the  installment  of principal and interest then due under the  Promissory  Note
         as and to the extent  provided in the  Promissory  Note.  In the event (a) Employee is  terminated  by the
         Company  without  "Cause," (b) Employee  terminates his  employment  hereunder for  "Termination  for Good
         Cause," (c) Employee dies prior to the fourth  anniversary of the date of the Promissory  Note, or (d) the
         Closing Price is equal to or less than $2 (two dollars) for twenty  consecutive  trading days,  all of the
         outstanding  principal  and  interest  due on the  Promissory  Note shall be  forgiven as set forth in the
         Promissory Note.

                                                      -5-

7.       DEFINITIONS

         As used in this Agreement, the following words have the meanings specified:

                  (a)      "Affiliate"  shall mean the Company and any parent of the Company and any  subsidiaries,
         direct or indirect, and sister corporations.

                  (b)      "Agreement  and Plan of Merger" shall mean that certain  Amended and Restated  Agreement
         and Plan of Merger  dated  October 5, 2000 among the  Company,  HomeAccess  MicroWeb,  Inc.,  a California
         corporation, DQE Enterprises, Inc., a Pennsylvania corporation, Barbara Conrad and Employee.

                  (c)      "Board" shall mean the board of director of the Company.

                  (d)      As used in  Sections  8, 9, 10 and 11 only,  the term "the  Company"  shall  include the
         Company and Affiliates.

                  (e)      "Competitive  Business"  means a business that is involved in or relates to any business
         in which the Company or an  Affiliate  is  currently,  or had been during the twelve (12) months  prior to
         Employee's  involvement with the subject business,  actively engaging in or contemplating  engaging in (as
         evidenced by inclusion in a written business plan or proposal disclosed to Employee).

                  (f)      "Confidential  Information" means Proprietary Ideas and also information  related to the
         Company's  business,  whether  or not in  written or printed  form,  not  generally  known in the trade or
         industry  of which the  Employee  has or will  become  informed  during  the period of  employment  by the
         Company,  which may  include  but is not  limited to  product  specifications,  manufacturing  procedures,
         methods,   equipment,   compositions,   technology,   formulas,  trade  secrets,  know-how,  research  and
         development  programs,  sales methods,  customer lists,  mailing lists,  customer usage and  requirements,
         software and other  confidential  technical or business  information  and data;  provided,  however,  that
         Confidential  Information  shall not include any information  which is in the public domain by means other
         than  disclosure  by the  Employee or which the  Employee  must  disclose by  operation of law or legal or
         administrative process.

                  (g)      "Innovations"  shall mean all  developments,  improvements,  designs,  original works of
         authorship,  formulas,  processes,  software  programs,  databases,  and  trade  secrets,  whether  or not
         patentable,  copyrightable  or  protectable  as trade  secrets,  that  Employee by himself or jointly with
         others,  creates,  modifies,  develops,  or implements  during the period of Employee's  employment  which
         relate  in any  way to the  Company's  business.  The  term  Innovations  shall  not  include  Innovations
         developed entirely on the Company's own time without using the Company's equipment,  supplies,  facilities
         or  Confidential  Information,  and which neither  relate to the Company's  business,  nor result from any
         work performed by or for the Company.

                  (h)      "Invention" means inventions,  designs, discoveries,  improvements and ideas, whether or
         not patentable,  including  without  limitation,  upon the generality of the foregoing,  novel or improved


                                                      -6-

         products, processes,  machines, software,  promotional and advertising materials, business data processing
         programs and systems,  and other  manufacturing and sales  techniques,  which either (a) relate to (i) the
         business of the Company as  conducted  from  time-to-time  or (ii) the  Company's  actual or  demonstrably
         anticipated  research  or  development,  or (b) result from any work  performed  by the  Employee  for the
         Company.

                  (i)      "Moral  Rights" shall mean any rights to claim  authorship,  to object to or prevent the
         modification  of any such work of authorship,  or to withdraw from  circulation or control the publication
         or distribution of any such work of authorship.

                  (j)      "Proprietary  Ideas" means ideas,  suggestions,  inventions and work relating in any way
         to the business and activities of the Company which may be subjects of protection  under  applicable laws,
         including common law, respective patents, copyrights,  trade secrets,  trademarks,  service marks or other
         intellectual property rights.

                  (k)      "Termination  Date" means the date that  Employee's  employment  with the Company  shall
         cease for any reason as set forth in Section 2 of this  Agreement or such other date as  determined by the
         Board.

8.       DISCLOSURE AND ASSIGNMENT OF INVENTIONS

         The Employee  agrees to disclose to the Company,  and hereby  assigns to the Company all of the Employee's
rights in and, if requested to do so,  provide a written  description  of, any  Inventions  conceived or reduced to
practice at any time during the  Employee's  employment  by the Company,  either  solely or jointly with others and
whether or not developed on the  Employee's  own time or with the  Company's  resources.  The Employee  agrees that
Inventions  first reduced to practice within one (1) year after  termination of the Employee's  employment shall be
treated as if conceived  during such  employment  unless the Employee can establish  specific events giving rise to
the conception  which  occurred  after such  employment.  Further,  the Employee  disclaims and will not assert any
rights in Inventions as having been made,  conceived or acquired  prior to employment by the Company except such as
are  specifically  listed at the conclusion of this  Agreement.  The Employee shall  cooperate with the Company and
shall  execute and deliver  such  documents  and do such other acts and things as the Company may  request,  at the
Company's  expense,  to obtain and maintain letters patent or registrations  covering any Inventions and to vest in
the Company all rights therein free of all encumbrances and adverse claims.

9.         CONFIDENTIAL INFORMATION

         (a)      The  Employee  shall not  disclose  to the  Company  or induce  the  Company to use any secret or
confidential  information  belonging to persons not affiliated  with the Company,  including any former employer of
the  Employee.  In addition to all duties of loyalty  imposed on the Employee by law, the Employee  shall  maintain
Confidential  Information in strict  confidence and secrecy and shall not at any time,  during or at any time after
termination of employment with the Company,  directly or indirectly,  use, disclose, copy or duplicate or otherwise
permit the use, disclosure or unauthorized  copying or duplication of any Confidential  Information of the Company,
other than in  connection  with  authorized  activities  conducted in the course of  Employee's  employment  at the


                                                      -7-


Company  for the  benefit of the  Company or with the  written  consent of the Board.  Employee  agrees to take all
reasonable  steps and  precautions  to  prevent  any  unauthorized  disclosure,  use,  copying  or  duplication  of
Confidential  Information.  The Employee shall carefully  preserve any documents,  records,  tangible data relating
to Inventions or  Confidential  Information  coming into the  Employee's  possession and shall deliver the same and
any copies thereof to the Company upon request and, in any event,  upon  termination  of the Employee's  employment
by the Company.

         (b)      Employee  agrees to promptly  disclose,  in writing,  all  Innovations  to the Company.  Employee
further agrees to provide all  assistance  requested by the Company,  at its expense,  in the  preservation  of its
interests  in any  Innovations,  and hereby  assigns  and agrees to assign to the  Company  all  rights,  title and
interest in and to all worldwide patents,  patent  applications,  copyrights,  trade secrets and other intellectual
property rights or "Moral Rights" in any Innovation.

10.      NON-SOLICITATION

         (a)      The Employee  agrees that he will not, during the one-year  period  following  termination of his
employment  with the  Company,  be  connected  in any way with the  solicitation  of any then  current or potential
(defined as persons or  companies  with  pending  quotes to or from the  Company)  customers  or  suppliers  of the
Company if such solicitation is likely to result in a loss of business for the Company.

         (b)      The Employee  agrees that he will not,  during the one year period  following  termination of his
employment with the Company,  solicit for  employment,  employ or engage as a consultant any person who had been an
employee of the Company at any time in the two year period prior to the Employee's  termination of employment  with
the Company.

         (c)      Participate  in the  inducement  of or  otherwise  encourage  Company  employees,  customers,  or
vendors to breach, modify, or terminate any agreement or relationship that they have with the Company.

         (d)      Participate  voluntarily  with or provide  assistance or information to any person or entity that
is involved in negotiations with the Company  involving a contract or services to be rendered by the Company;  or a
potential  or existing  business or legal  dispute  with the Company,  including,  but not limited to,  litigation,
except as may be required by law.

         (e)      In the event the covenants set forth in this Section 9 are found to be  unenforceable  or invalid
by reason of being overly  broad,  the parties  hereto intend that such  covenants  shall be limited to such scope,
geographic area and duration as shall make such covenants valid and enforceable.

11.      ENFORCEMENT OF SECTION 8, 9 AND 10

         Recognizing  that  compliance  with the  provisions of Sections 8, 9 and 10 of this Agreement is necessary
to protect  the  goodwill  and other  proprietary  interests  of the  Company,  and that  breach of the  Employee's
agreements  thereunder will result in irreparable and continuing  damages to the Company for which there will be no
adequate  remedy at law,  the  Employee  hereby  agrees  that in the event of any  breach of such  agreements,  the


                                                      -8-


Company shall be entitled to seek injunctive relief and such other and further relief,  including  damages,  as may
be proper.

12.      LAWS, REGULATIONS AND CONTRACTS

         The  Employee  agrees to  comply,  and to do all things  necessary  for the  Company  to comply,  with all
federal,  state,  local and foreign laws and regulations  which may be applicable to the business and operations of
the Company, and with any contractual  obligations,  including,  without limitation,  confidentiality  obligations,
which may be  applicable  to the Company or Employee  under any  contracts  between the Company and its  customers,
suppliers or third parties.

13.      MISCELLANEOUS

         13.1     AMENDMENT AND MODIFICATION

                  The Company  (by action of the Board) and the  Employee  may amend,  modify and  supplement  this
         Agreement only in such manner as may be agreed upon by the Company and the Employee in writing.

         13.2     ENTIRE AGREEMENT

                  This  Agreement  embodies  the entire  agreement  between the parties  hereto with respect to the
         employment  relationship  created hereby and supersedes  and replaces any prior  agreements  pertaining to
         employment  between the Employee and the Company.  There have been and are no agreements,  representations
         or  warranties  between the parties  other than those set forth or  provided  for herein  relating to such
         employment relationship.

         13.3     ASSIGNMENT

                  This  Agreement  shall not be  assigned  by the  Employee  without  the  written  consent  of the
         Company.  Any attempted  assignment  without such written consent shall be null and void and without legal
         effect;  provided,  however,  nothing  herein shall  prevent the  Employee  from  assigning  his rights to
         payment  hereunder  to any  third  company  in full  compliance  with all  state and  federal  laws.  This
         Agreement  may be assigned by the Company to a successor  corporation  or a  good-faith  purchaser  of the
         Company's  stock or assets only in  connection  with a sale of all or  substantially  all of the Company's
         assets  or as a result  of a merger or other  business  combination  involving  the  Company  and any such
         assignment  shall not terminate or modify this  Agreement,  except that the  employing  party to which the
         Employee shall have been transferred  shall, for the purposes of this Agreement,  be construed as standing
         in the same place and stead as the Company as of the date of the assignment.

         13.4     BINDING

                  Subject to Section 13.3 hereof,  this  Agreement  shall be binding upon and insure to the benefit
         of the respective  parties hereto and their successors,  assigns,  heirs,  executors,  administrators  and
         personal  representatives.  The  parties  hereto  shall be  entitled,  at their  option,  to the remedy of


                                                      -9-


         specific performance to enforce any of the provisions of this Agreement.

         13.5     ARBITRATION

                  (a)      The Company and the Employee  mutually  agree that any  controversy or claim arising out
         of or  relating  to this  Agreement  or the breach  thereof,  or any other  dispute  between  the  parties
         relating in any way to Employee's  employment  with the Company or the  termination of that  relationship,
         including  disputes  arising  under  the  common  law  and/or  any  federal  or  state  statutes,  laws or
         regulations,  shall be submitted to mediation before a mutually  agreeable  mediator,  which cost is to be
         borne  equally  by the  parties.  In the  event  mediation  is  unsuccessful  in  resolving  the  claim or
         controversy,  such claim or controversy shall be resolved exclusively by binding  arbitration.  The claims
         covered by this  Agreement  ("Arbitrable  Claims")  include,  but are not limited to,  claims for wages or
         other  compensation  due;  claims for breach of any  contract  (limited  to this  Agreement)  or  covenant
         (express or implied);  tort claims; claims for discrimination  (including,  but not limited to, race, sex,
         religion,  national origin, age, marital status,  medical condition,  or disability);  claims for benefits
         (except where an Employee  benefit or pension plan specifies that its claims  procedure shall culminate in
         an arbitration  procedure  different from this one),  and claims for violation of any federal,  state,  or
         other law,  statute,  regulation,  or ordinance,  except claims excluded in the following  paragraph.  The
         parties hereby waive any rights they may have to trial by jury in regard to Arbitrable Claims.

                  (b)      Claims   Employee  or  the  Company  may  have  regarding   Workers'   Compensation   or
         unemployment  compensation  benefits and the  noncompetition  provisions of this Agreement are not covered
         by the  arbitration and mediation  provisions of this  Agreement.  Claims Employee or the Company may have
         for  violation  of the  proprietary  information  provisions  of this  Agreement  are not  covered  by the
         arbitration and mediation provisions of this Agreement.

                  (c)      Arbitration  under this  Agreement  shall be the  exclusive  remedy  for all  Arbitrable
         Claims.  The  Company  and  Employee  agree  that  arbitration  shall  be  held in or  near  Los  Angeles,
         California,  and shall be in accordance with the then-current  Employment  Dispute Resolution Rules of the
         American  Arbitration  Association,  before an  arbitrator  licensed to practice  law in  California.  The
         arbitrator  shall have authority to award or grant both legal,  equitable,  and declaratory  relief.  Such
         arbitration  shall be final and binding on the  parties.  The  Federal  Arbitration  Act shall  govern the
         interpretation and enforcement of this Section pertaining to Alternative Dispute Resolution.

         13.6     AGREEMENT SEVERABLE; WAIVER

                  This is a severable  Agreement and in the event that any part of this Agreement  shall be held to
         be  unenforceable,  all other parts of this Agreement  shall remain valid and fully  enforceable as if the
         unenforceable  part or parts had not been included  herein.  No waiver of any provision of this  Agreement
         shall be binding  unless  executed  in writing by the party to be bound  hereby.  No waiver of a breach of
         any of the  provisions of this  Agreement  shall be deemed to be or shall  constitute a waiver of a breach


                                                      -10-


         of any other  provision  of this  Agreement,  whether or not similar,  nor shall such waiver  constitute a
         continuing waiver of such breach unless otherwise  expressly  provided.  No failure or delay in exercising
         any right,  power or remedy  hereunder shall operate as a waiver thereof,  nor shall any single or partial
         exercise  of any such  right,  power or remedy  preclude  any other or  further  exercise  thereof  or the
         exercise of any other right, power or remedy.

         13.7     USE OF LIKENESS

                  For so long as  Employee is employed by the  Company or an  Affiliate,  Employee  authorizes  the
         Company  or such  affiliate  to use,  reuse  and to  reasonably  grant  others  the right to use and reuse
         without additional compensation,  Employee's name, photograph,  likeness (including caricature), voice and
         biographical  information and any  reproduction or simulation  thereof in any media now known or hereafter
         developed, for valid business purposes of the Company or such Affiliate.

         13.8     PROPERTY OF OTHERS

                  Employee will not bring to the Company or use in the  performance  of his duties any documents or
         materials  of a former  employer  that are not  generally  available  to the  public or that have not been
         legally transferred to the Company.

         13.9     NOTICES

                  For  purposes  of this  Agreement,  notices  and all  other  communications  provided  for in the
         Agreement  shall be in writing  and shall be deemed to have been duly given  when  delivered  or mailed by
         United States  certified or registered  mail,  return receipt  requested,  postage  prepaid,  addressed as
         follows:

         If to EMPLOYEE, to:                JERRY CONRAD
                                            9500 Toledo Way
                                            Irvine, California 92618-1806
                                            Telephone: (949) 588-5120
                                            Facsimile: (949) 588-5182

         If to COMPANY, to:                 Quentra Networks, Inc.
                                            Attn:  Timothy G. Atkinson, General Counsel
                                            1640 S. Sepulveda Blvd., Suite 222
                                            Los Angeles, CA 90025
                                            Telephone:
                                            Facsimile:

         or to such  other  address  as either  party may have  furnished  to the other in  writing  in  accordance
         herewith except that notices of a change of address shall be effective only upon receipt.

                                                      -11-

         13.10    AFFILIATED PARTIES

                  The Employee  hereby  represents to the Company that he has ownership  interests in the companies
         or entities  listed on Schedule 1 attached  hereto which may from time to time enter into  transactions or
         other  business  relationships  with the Company.  The Employee  hereby  agrees he will update  Schedule 1
         immediately if there are changes. No contract,  transaction or other business  relationship  involving the
         Company  and any  such  company  or  entity  affiliated  with  Employee  as of the  date of such  proposed
         contract, transaction or business relationship may be authorized solely by the Employee.

         13.11    GOVERNING LAW

                  This Agreement shall be governed and construed under the laws of the State of California.

         13.12    INDEMNIFICATION; INSURANCE

                  The Company  represents  and  warrants to the  Employee  that it has and will  maintain  adequate
         directors and officers'  liability  insurance coverage and that it will indemnify the Employee to the full
         extent permitted by the General  Corporation Law of the State of Delaware,  as provided in the Certificate
         of Incorporation of the Company.

         13.13    CORPORATE AUTHORITY; ENFORCEABILITY

                  The Company  represents and warrants to the Employee that it is a corporation  duly organized and
         validly  existing  under the laws of the State of Delaware  and that the  execution  and  delivery of this
         Agreement,  and the performance by the Company of its obligations hereunder,  have been duly authorized by
         proper  corporate  action  on the part of the  Company.  This  Agreement  is a legal,  valid  and  binding
         obligation of the Company, enforceable against the Company in accordance with its terms.

         13.14    REFORMATION

                  If any provisions of this  Agreement  should be found by any court of competent  jurisdiction  to
         be  unreasonable  by  reason  of its being too  broad as to the  period  of time,  territory,  aspects  of
         business or customers  covered or otherwise,  then, and in that event,  such provision shall  nevertheless
         remain  valid  and  fully  effective,  but  shall  be  considered  to be  amended  so that any term of the
         provision found unreasonable  shall be limited to the maximum period of time, the largest  territory,  the
         most aspects of business and customers  covered  and/or the broadest  other  limitations,  as the case may
         be, which would be found  reasonable and  enforceable by such court and similarly,  if any remedy is found
         to be unenforceable  in whole or in part, or to any extent,  such provision shall remain in effect only to
         the extent the remedy or remedies would be enforceable by such court.

         13.15    SEVERABILITY AND SURVIVAL

                  Whenever  possible,  each  provision of this Agreement will be interpreted in such a manner as to
         be  effective  and valid under  applicable  law,  but if any  provision  of this  Agreement  is held to be


                                                      -12-


         prohibited by or invalid under  applicable  law, such  provisions,  to the extent of such  prohibition  or
         invalidity,  shall be deemed not to be part of this  Agreement,  and shall not invalidate the remainder of
         such provision or the remaining  provisions of this Agreement.  Employee  specifically agrees that Section
         7  (Disclosure  and  Assignment  of  Inventions),  Section  8  (Confidential  Information)  and  Section 9
         (Non-Solicitation)  and each of their sub-paragraphs and sub-parts,  are independent of and severable from
         each  other,  and that  these  restrictions  shall  survive  and  remain in full  force and effect for the
         periods specified after the Termination Date.

         13.16    COUNTERPARTS

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

THE EMPLOYEE  ACKNOWLEDGES THAT HE HAS CONSULTED WITH INDEPENDENT  COUNSEL AND HAVING READ, EXECUTED AND RECEIVED A
COPY OF THIS  AGREEMENT,  INCLUDING  THE  FOLLOWING  NOTICE,  AND AGREES THAT,  WITH RESPECT TO THE SUBJECT  MATTER
HEREOF, IT CONSTITUTES THE EMPLOYEE'S  ENTIRE AGREEMENT WITH THE COMPANY,  SUPERSEDING ANY PREVIOUS ORAL OR WRITTEN
COMMUNICATIONS,  REPRESENTATIONS,  UNDERSTANDINGS  OR  AGREEMENTS  WITH  THE  COMPANY  OR ANY OF ITS  OFFICIALS  OR
REPRESENTATIVES.

         IN WITNESS  WHEREOF,  the parties  have caused this  Agreement to be executed as of the day and year first
above written.

QUENTRA NETWORKS, INC.                               EMPLOYEE:



By       /s/ James R. McCullough                     /s/ Jerry Conrad
         --------------------------                  ---------------------------
         James R. McCullough                         Jerry Conrad, an Individual
         Chief Executive Officer



                                                      -13-


                                                    SCHEDULE 1

                                ENTITIES WHICH EMPLOYEE HAS OWNERSHIP INTERESTS IN






                                                     EXHIBIT A
                                 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
                                                   FOR EMPLOYEES

         I  recognize  that  Quentra  Networks,  Inc.,  a Delaware  corporation,  together  with its  predecessors,
successors,  subsidiaries  and  affiliates  (hereinafter  collectively  called  the  "Company"),  is  engaged  in a
continuous program of research,  development and production respecting its business,  present and future,  relating
to the  telecommunications  (the  "Business").  I recognize that these programs  represent  valuable  assets to the
Company.

         In  consideration of my employment,  the  compensation  received by me from the Company from time to time,
and other good and valuable  consideration,  the sufficiency of which is hereby acknowledged by my signature below,
I hereby agree as follows:

         1.       As an employee of the  Company,  I will devote my best  efforts to the  interests  of the Company
and to making contributions and inventions of value to the Company.

         2.       I agree that  employment  creates a relationship  of confidence and trust between the Company and
me and,  in  acknowledgement  of this  relationship,  I will not engage in any  activity,  investment,  interest or
association:

                  (a)      which is hostile, adverse to or competitive with the Company, or

                  (b)      which  so  occupies  my  attention  as  to  interfere  with  the  proper  and  efficient
         performance of my duties at the Company, or

                  (c)      which  interferes  with  the  independent  exercise  of my  judgment  in  the  Company's
         interests.

         3.       I agree  that the  Company  possesses  and will  continue  to possess  information  that has been
created,  discovered,  developed  or  otherwise  become  known to the Company  (including  but without  limitation,
information  created,  discovered,  developed  or made  known to me  during  the  period  of or  arising  out of my
employment  by the  Company)  and/or in which  property  rights  have been  assigned or  otherwise  conveyed to the
Company,  which  information  has  commercial  value  in  the  Business.  All  the  aforementioned  information  is
hereinafter called "Proprietary  Information."  Proprietary Information,  for purposes of this Agreement,  includes
all information  disclosed to me or known by me as a result of my employment with the Company,  not generally known
to the trade or industry in which the Company is engaged,  about the Company's  products,  processes,  machines and
services,  including research,  development,  manufacturing,  purchasing,  finance,  data processing,  engineering,
marketing, merchandising and selling.

         4.       As used herein,  the period of my employment  includes any time in which I may be retained by the
Company as a consultant or on contract before or after being an employee.

         5.       All Proprietary  Information  shall be the sole property of the Company and its assigns,  and the
Company  and its  assigns  shall be the sole owner of all  patents  and other  rights in  connection  therewith.  I


                                                      -1-


hereby  assign to the  Company  any  rights I may have or acquire in such  Proprietary  Information.  At all times,
both during my  employment  by the  Company  and after its  termination,  I will keep in  confidence  and trust all
Proprietary  Information,  and I will not use or disclose any Proprietary Information or anything directly relating
to it without the prior  written  consent of the Company,  except as may be  necessary  in the  ordinary  course of
performing my duties as an employee of the Company.  Notwithstanding  the foregoing,  it is understood that, at all
such times, I am free to use information  clearly in the public domain and my own knowledge,  skills and experience
to whatever extent and in whatever way I wish.

         6.       I agree  that all  algorithms,  flow  charts,  sketches,  schematics,  drawings,  models,  plans,
specifications,  microcodes,  computer programs, source codes,  documentation,  circuit and logic diagrams, circuit
layouts,  silkscreens  and similar  items  documenting  my work for the Company fall under the category of Work for
Hire under the copyright laws of the United States.  In consideration  of my employment,  I agree that programs and
other such  documentation  written or created by me in the general areas of research and development  being pursued
by or under  study by the  Company  in the  Business  shall be  presumed  to be Works  for Hire  performed  for the
Company,  unless I have notified the Company,  in writing,  that the  particular  work is being created  outside my
employment.  Such  notification  must be made as soon as is practical  and with  sufficient  detail to identify the
material in question.

         I understand  that,  in the absence of such  notification,  at the time of creation or  immediately  after
creation,  works made in whole or in part by me during my  employment by the Company,  falling  within the scope of
the  Business of the  Company,  will be presumed to be Works for Hire.  All  copyrights  to such works shall be the
sole and exclusive  property of the Company.  I also  understand that all such works are protected by the copyright
laws of the United States from the time of their creation,  and that any copying or  appropriation of such works by
me, for my own use or that of others for purposes not  authorized  by the Company or in its  interests,  will be in
violation of the copyright  laws of the United  States and of  international  copyright  conventions.  Finally,  in
consideration  of my  employment,  I agree to cooperate  with the Company in  performing  all  necessary  steps for
securing  copyright  registration  of works created by me in whole or in part.  This last  obligation  shall extend
beyond  the  period  of  employment,  providing  that  the  Company  agrees  to  provide  reasonable  expenses  and
compensation  for my time,  such  compensation  not to exceed  twice the highest  hourly rate paid to me during the
period of my employment by the Company.

         7.       In the event of the  termination of my employment by me or by the Company for any reason,  I will
deliver to the Company all documents  and data of any nature  pertaining to my work with the Company and I will not
take with me any  documents  or data of any  description  or any  reproduction  of any  description  containing  or
pertaining to any Proprietary Information.

         8.       I will  promptly  disclose to the Company,  or any persons  designated  by it, all  improvements,
inventions,  formulae,  processes,  techniques,  skills and data,  whether or not patentable,  made or conceived or
reduced to practice or learned by me,  either  alone or jointly  with  others,  during the period of my  employment
which are related to or useful in the Business of the Company,  or result from tasks  assigned me by the Company or
result from the use of premises  owned,  leased or contracted for the Company (all said  improvements,  inventions,
formulae, processes, techniques, skills and data shall be collectively hereinafter called "Inventions").


                                                      -2-

         9.       I agree that all Inventions  shall be the sole property of the Company and its assigns,  and that
the Company and its assigns  shall be the sole owner of all patents and other  rights in  connection  therewith.  I
hereby  assign to the Company any rights I may have or acquire in such  Inventions.  I further agree as to all such
Inventions  to assist the Company in every  proper way (but at the  Company's  expense) to obtain and enforce  from
time to time patents on said  Inventions  in any and all  countries,  and to that end I will execute all  documents
for use in applying for and  obtaining  such patents  thereon and  enforcing  the same,  as the Company may desire,
together  with any  assignments  thereof to the  Company or persons  designated  by it. In the event the Company is
unable,  because of my mental or physical incapacity or for any reason whatsoever,  to secure my signature to apply
for, or to pursue any application  for any United States  ("U.S.") or for any foreign patent or copyright  covering
Inventions  assigned to the Company as stated  above,  I hereby  irrevocably  designate and appoint the Company and
its duly  authorized  officers  and  agents as my agent and  attorney  in fact,  to act for me and on my behalf and
stead to  execute  and file any such  applications  and to do all other  lawfully  permitted  acts to  further  the
prosecution,  issuance and renewal of U.S.  and foreign  patents and  copyrights  thereon with the same legal force
and effect as if executed by me. My obligation  to assist the Company in obtaining  and enforcing  patents for such
Inventions in any and all countries shall continue  beyond the termination of my employment,  but the Company shall
compensate me at a reasonable rate after such  termination  for time actually spent by me at the Company's  request
with such  compensation  not to exceed twice the highest  hourly rate paid to me during the period of my employment
by the Company.

         10.      Any  provision  in this  Agreement  requiring  me to assign my rights in any  Invention  does not
apply to an Invention for which no equipment,  supplies,  facility or trade secret  information  of the Company was
used and which was  developed  entirely  on my own time,  and (a) which does not relate (i) to the  Business of the
Company,  or (ii) to the Company's actual or demonstrably  anticipated  research or development,  or (b) which does
not result from any work  performed  by me for the  Company.  I also agree to assign to or to assign as directed by
the Company all my right,  title and interest,  in and to any and all Inventions full title to which is required to
be in the U.S. by a contract between the Company and the U.S. or any of its agencies.

         11.      As a matter of record,  I have  identified  on  Exhibit A,  attached  hereto,  all  Inventions or
improvements  relevant to the subject  matter of my  employment by the Company which have been made or conceived or
first  reduced to practice by me alone or jointly  with  others  prior to my  engagement  by the  Company,  which I
desire to remove from the operation of this  Agreement;  and I covenant that such list is complete.  If there is no
such list on Exhibit A,  I represent that there are no such inventions  and/or  improvements at the time of signing
this Agreement.

         12.      I represent  that my  performance  of all the terms of this  Agreement  and my  employment by the
Company  does not and will not, to the best of my present  knowledge  and belief,  breach any  agreement or duty to
keep in confidence  Proprietary  Information acquired by me in confidence or in trust prior to my employment by the
Company.  I have not entered  into,  and I agree I will not enter into,  any  agreement  either  written or oral in
conflict herewith.

         13.      (a)      I understand as part of the  consideration  for the offer of  employment  extended to me
         by the Company and my  employment  or continued  employment  by the  Company,  that I have not brought and


                                                      -3-

         will not bring with me to the  Company or use in the  performance  of my  responsibilities  at the Company
         any materials or documents of a former  employer which are not generally  available to the public,  unless
         I have obtained written authorization from the former employer for their possession and use.

                  (b)      The Company has not induced or solicited the breach of  disclosure  of any  confidential
         information,  trade secrets,  agreement, duty, commitment,  understanding by me, or other proprietary data
         of any previous employer of mine.

                  (c)      The  Company  shall  not  utilize  any  trade  secrets  or   confidential   business  or
         information of any other person, including any previous employer of mine, currently known by me.

                  (d)      Accordingly,  I advise the Company  that the only  materials  or  documents  of a former
         employer  which are not  generally  available  to the public that I will bring to the Company or use in my
         employment  are  identified in Exhibit A  attached  hereto,  and as to each such item, I represent  that I
         have obtained,  prior to the effective date of my employment with the Company,  written  authorization for
         their  possession  and use in my employment  with the Company.  If there is no such list on  Exhibit A,  I
         represent that there are no such materials and/or documents at the time of signing this Agreement.

                  (e)      Neither my carrying on the  Company's  Business as an  employee,  nor the conduct of the
         Company's  Business as proposed,  will  conflict  with or result in a breach of the terms,  conditions  or
         provisions  of or constitute a default  under any  contract,  covenant or instrument  under which I am now
         obligated.

                  (f)      I am not  obligated  under any  contract,  agreement  or  commitment,  or subject to any
         judgment,  decree or order of any court or administrative  agency,  that would conflict with my obligation
         to use my best efforts to promote the  interests of the Company or that would  conflict with the Company's
         Business now carried on or as proposed to be conducted.

         14.      This  Agreement  shall be  effective  as of the first day of my  employment  by the  Company.  By
signing this Agreement, I acknowledge receipt of a copy of this Agreement.

         15.      This Agreement shall be binding upon me, my heirs,  executors,  assigns,  and  administrators and
shall inure to the benefit of the Company, its successors and assigns.

         Dated (today's date):  _______________ __, _____.

                                                CAUTION TO EMPLOYEE:
                                      This Agreement affects important rights.
                                  Do not sign it unless you have read it carefully,
                                and are satisfied that you understand it completely.


                                                      -4-


                                                     ---------------------------------------
                                                     Name (Please Print)

                                                     ---------------------------------------
                                                     Signature

                                                     ---------------------------------------
                                                     Title


ACCEPTED AND AGREED TO:

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


By  _____________________

Name ____________________

Title____________________



                                                      -5-

                                                      EXHIBIT A

         1.       The  following  is a complete  list of all  inventions  or  improvements  relevant to the subject
matter of my  employment  by  ____________________________  (the  "Company")  which have been made of  conceived or
first reduced to practice by me alone or jointly with others prior to my engagement by the Company:

                  _____             No inventions or improvements
                  _____             See below

__________________________________________________________________________
__________________________________________________________________________

                  _____             Additional sheets attached

         2.       I propose to bring to my employment  the following  materials and documents of a former  employer
which are not generally available to the public, which materials and documents may be used in my employment:

                  _____             No materials
                  _____             See below

__________________________________________________________________________
__________________________________________________________________________

                  _____             Additional sheets attached

         My  signature  on this  document  confirms  that my  continued  possession  and use of these  materials is
authorized.

         3.       Exceptions to copyright Works for Hire (paragraph 6.)

                  _____             No exceptions
                  _____             See below

__________________________________________________________________________
__________________________________________________________________________

                  _____             Additional sheets attached

__________________________________________________________________________
(Please Print Name and Title)

__________________________________________________________________________
Representative (Please Print Name and Title)

EX-10.4 8 0008.htm VOTING AGREEMENT VOTING AGREEMENT

>VOTING AGREEMENT




         This Voting Agreement (this "Agreement") is entered into as of this 19th day of October, 2000 by and
among DQE Enterprises, Inc., a Pennsylvania corporation ("Enterprises"), Barbara Conrad, an individual resident
of the State of California ("Conrad," and, together with Enterprises, the "Sellers") and Timothy G. Atkinson (the
"Shareholder").

                                                    WITNESSETH:

         WHEREAS, the Sellers, HomeAccess MicroWeb, Inc., a California corporation formerly known as Primary
Knowledge, Inc. ("HomeAccess"), Quentra Networks, Inc., a Delaware corporation formerly known as Quentra Network
Systems, Inc. ("Quentra"), Jerry Conrad and Barbara Conrad have entered into that certain Amended and Restated
Agreement and Plan of Merger dated October 5, 2000 (the "Merger Agreement") pursuant to which the businesses of
Quentra and HomeAccess will be combined pursuant to a transaction in which a wholly owned subsidiary of Quentra
will be merged with and into HomeAccess, whereupon HomeAccess will become a wholly owned subsidiary of Quentra
and the Sellers will become shareholders of Quentra (the "Merger"); and

         WHEREAS, the Merger Agreement provides that the Shareholder shall execute and deliver this Agreement as
of the date hereof.

         NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties to this Agreement hereby agree as follows:

         1.       Voting of Shares.

                  (a)      In any and all elections of directors of Quentra (whether at a meeting or by written
consent in lieu of a meeting), the Shareholder shall vote or cause to be voted all Shares (as defined in
Section 2 below) owned by him or it, or over which he or it has voting control (shared or exclusive), and
otherwise use his or its respective best efforts, so as to fix the number of directors of Quentra at seven and to
elect (i) (A) so long as Enterprises and/or its Affiliates (as defined in the Merger Agreement) collectively
beneficially owns (within the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission under
the Securities Exchange Act of 1934, as amended)("Beneficially Owns") a number of shares of the capital stock of
Quentra entitled to vote in the election of directors ("Quentra Voting Stock") equal to or greater than fifty
percent (50%) of the number of shares of Quentra Voting Stock issued to Enterprises at the Effective Time (as
defined in the Merger Agreement) of the Merger (in each case subject to appropriate adjustment in the event of a


                                                      -1-


stock split, stock dividend or other similar event), two members designated by Enterprises, and (B) so long as
Enterprises and/or its Affiliates collectively Beneficially Owns a number of shares of Quentra Voting Stock equal
to or greater than twenty five percent (25%) but less than fifty percent (50%) of the number of shares of Quentra
Voting Stock issued to Enterprises at the Effective Time of the Merger (in each case subject to appropriate
adjustment in the event of a stock split, stock dividend or other similar event), one member designated by
Enterprises, and (ii) so long as Conrad (together with Marine Aircraft, a Nevada corporation ("Marine"))
Beneficially Owns a number of shares of Quentra Voting Stock equal to or greater than thirty three percent (33%)
of the number of shares of Quentra Voting Stock issued to Conrad at the Effective Time of the Merger (in each
case subject to appropriate adjustment in the event of a stock split, stock dividend or other similar event), one
member designated by Conrad.  The Shareholder shall not vote to remove any director designated pursuant to this
Section l(a).

                  (b)      The Sellers shall give written notice to Quentra and to the other parties to this
Agreement, no later than 10 days prior to the intended mailing of a notice to stockholders for a meeting at which
directors are to be elected (provided that Quentra provides the Sellers with at least 20 days' prior written
notice of such mailing), of the persons designated by the Sellers pursuant to Section l(a) as nominees for
election as directors.  If the Sellers shall fail to give notice as provided above, it shall be deemed that the
designees of the Sellers then serving as directors shall be their designees for reelection.

         2.       Shares.  "Shares" shall mean and include any and all shares of the capital stock of Quentra, by
whatever name called, that carry voting rights (including voting rights that arise by reason of a default) and
shall include any shares now owned or subsequently acquired by the Shareholder, however acquired, including
without limitation shares received on account of stock splits and stock dividends.

         3.       Termination.  This Agreement shall terminate automatically on the date on which both (i)
Enterprises and/or any of its Affiliates collectively ceases to Beneficially Own a number of shares of Quentra
Voting Stock at least equal to twenty-five percent (25%) of the number of shares of Quentra Voting Stock issued
to Enterprises at the Effective Time of the Merger (subject to appropriate adjustment in the event of a stock
split, stock dividend or other similar event) and (ii) Conrad (together with Marine) ceases to Beneficially Own a
number of shares of Quentra Voting Stock at least equal to thirty three percent (33%) of the number of shares of
Quentra Voting Stock issued to Conrad at the Effective Time of the Merger (subject to appropriate adjustment in
the event of a stock split, stock dividend or other similar event).

         4.       No Revocation.  The voting agreement contained herein is coupled with an interest and may not
be revoked, except by written consent of the Sellers.

         5.       Restrictive Legend.  All certificates representing Shares owned or hereafter acquired by the
Shareholder or any transferee of the Shareholder bound by this Agreement shall have affixed thereto a legend
substantially in the following form:

                  "The shares of stock represented by this certificate are subject to
                  certain voting agreements as set forth in a Voting Agreement by and
                  among the registered owner of this certificate, the Company and
                  certain other stockholders of the Company, a copy of which is
                  available for inspection at the offices of the Company."

                                                      -2-


         6.       Assignment; Transferees of Shares.

                  (a)      Either Seller may transfer this Agreement and its rights hereunder to any transferee
of all of the Quentra Voting Stock Beneficially Owned by such Seller at the time of such transfer if Quentra has
approved such transferee in accordance with Section 6.2(a) of the Merger Agreement.

                  (b)      Any Associate (as defined in the Merger Agreement) of the Shareholder to whom the
Shareholder transfers Shares, whether voluntarily or by operation of law, shall be bound by the voting
obligations imposed upon the transferor under this Agreement, and shall be entitled to the rights granted to the
transferor under this Agreement, to the same extent as if such transferee were the Shareholder hereunder.  As a
condition precedent to the effectiveness of any transfer of Shares to an Associate of the Shareholder, such
Associate shall be obligated to execute and deliver to the Sellers its agreement to be bound by the provisions
hereof to the same extent as if such transferee were the original Shareholder.  Any purported transfer of Shares
without such agreement shall be null and void ab initio.

         7.       General.

                  (a)      Severability.  The provisions of this Agreement are severable, so that the invalidity
or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any
other term or provision of this Agreement, which shall remain in full force and effect.

                  (b)      Specific Performance.  In addition to any and all other remedies that may be available
at law in the event of any breach of this Agreement, each Seller shall be entitled to specific performance of the
agreements and obligations of the Shareholder hereunder and to such other injunctive or other equitable relief as
may be granted by a court of competent jurisdiction.

                  (c)      Governing Law.  This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware.

         (d)      Notices.  All notices, requests, consents, and other communications under this Agreement shall
be in writing and shall be (i) delivered by hand, (ii) mailed by first class certified or registered mail, return
receipt requested, postage prepaid, (iii) sent by reputable overnight express courier service or (iv) transmitted
by telecopy with a hard copy mailed pursuant to clause (ii) or (iii) above, as follows:

         If to Enterprises, at One Northshore Center, Suite 100, 12 Federal Street, Pittsburgh, PA 15212, or at
such other address or addresses as may have been furnished in writing by Enterprises, with a copy to Kirkpatrick
+ Lockhart LLP, Henry W. Oliver Building, 535 Smithfield Street, Pittsburgh, PA 15222, Facsimile Number (412)
355-6501, Attention:  David J. Lehman, Esq.

                                                      -3-


         If to Conrad, at 9500 Toledo Way, Irvine, California 92618, with a copy to Cassady + Klein, 908 Kenfield
Avenue, Los Angeles, CA 90049, Facsimile Number (310) 471-3006, Attention:  Raymond M. Klein, Esq.

         If to the Shareholder, at his or its address as set forth below his or its signature to this Agreement
or at such other address as may have been furnished in writing by the Shareholder.

         Notices provided in accordance with this Section 7(d) shall be deemed delivered upon personal delivery
or (i) in the case of notices provided within the continental United States, 48 hours after deposit in the mail
or noon on the first business day next following deposit with a reputable overnight express courier service,
(ii) in the case of notices provided outside the continental United States, ten days after deposit in the mail or
noon on the second business day next following deposit with a reputable overnight express courier service, or
(iii) in the case of notices provided by telecopy, upon completion of transmission to the addressee's telecopier.

                  (e)      Complete Agreement; Amendments.  This Agreement constitutes the full and complete
agreement of the parties hereto with respect to the subject matter hereof.  No amendment, modification or
termination of any provision of this Agreement shall be valid unless in writing and signed by the parties hereto.

                  (f)      Pronouns.  Whenever the content may require, any pronouns used in this Agreement shall
include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall
include the plural, and vice versa.

                  (g)      Counterparts.  This Agreement may be executed in any number of counterparts, each of
which shall constitute one Agreement binding on all the parties hereto.

                  (h)      Captions.  Captions of sections have been added only for convenience and shall not be
deemed to be a part of this Agreement.



                                                      -4-

         IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the day and year first
above written.

                                                     DQE ENTERPRISES, INC.

                                                     By: /s/ Neal G. Taylor
                                                         ---------------------------
                                                     Name:   Neal G. Taylor
                                                     Title:  Senior Vice President


                                                     /s/ Barbara Conrad
                                                     -------------------------------
                                                     Barbara Conrad


                                                     Shareholder

                                                     /s/ James R. McCullough
                                                     -------------------------------
                                                     Name:  James R. McCullough

                                                     /s/ Daniel W. Latham
                                                     -------------------------------
                                                     Name:  Daniel W. Latham

                                                     /s/ John M. Eger
                                                     -------------------------------
                                                     Name:  John M. Eger


                                                     /s/ Timothy G. Atkinson
                                                     -------------------------------
                                                     Name:  Timothy G. Atkinson


                                                     /s/ Cheryl Johnson
                                                     -------------------------------
                                                     Name:  Cheryl Johnson

                                                     Address:   1640 S. Sepulveda Blvd., Suite 222
                                                                Los Angeles, CA 90025


                                                     /s/ Kevin O. Kelley
                                                     -------------------------------
                                                     Name:   KRJ, LLC
                                                             Kevin O. Kelley, Managing Member

                                                     Address:   777 Summer Street
                                                                Stamford, CT 06901


                                                      -5-


EX-10.5 9 0009.htm PROMISSORY NOTE PROMISSORY NOTE

PROMISSORY NOTE

$2,000,000                                                                                        October 19, 2000

         FOR VALUE RECEIVED,  the undersigned,  Jerry Conrad  ("Borrower"),  hereby promises to pay to the order of
Quentra Networks,  Inc., a Delaware  corporation with its principal offices at 1640 S. Sepulveda  Blvd., Suite 222,
Los Angeles,  CA 90025  ("Payee"),  the  aggregate  principal  amount  of Two  Million  Dollars  ($2,000,000)  (the
"Principal  Amount"),  plus interest thereon to accrue  commencing on the date hereof at an interest rate per annum
equal to the prime rate as published  in The Wall Street  Journal as of the date hereof,  which  interest  shall be
payable at such time as the principal is due hereunder as set forth below, unless previously paid.

         This Promissory  Note is made pursuant to and is the Promissory  Note referenced in that certain  Personal
Services Agreement dated October __,  2000 between Borrower and Payee (the "Personal Services  Agreement"),  and is
subject to the terms of the  Personal  Services  Agreement.  Concurrent  with the  execution  and  delivery of this
Promissory Note, Marine Aircraft,  a Nevada  corporation,  will be delivering a Pledge and Security  Agreement (the
"Pledge  Agreement")  under which Marine  Aircraft  will pledge  shares of Common Stock (as defined in the Personal
Services Agreement) as security for this Promissory Note.

         Principal  and accrued  interest  shall be due and payable in three (3) equal annual  installments  on the
second,  third and fourth  anniversaries of this Promissory Note.  Notwithstanding  the foregoing,  under the terms
of the Personal  Services  Agreement,  if Borrower is  terminated  for "Cause" or if Borrower  effects a "Voluntary
Termination"  of his employment  with Payee (each, a "Termination  Event"),  the entire unpaid balance of principal
and interest on this  Promissory Note then  outstanding  shall be forthwith due and payable,  and such  Termination
Event shall constitute a Default (as defined below) hereunder.  Further  notwithstanding the foregoing,  as of each
of the second,  third and fourth  anniversaries of this Promissory Note, and concurrent with the payments to become
due  hereunder as above set forth,  Payee shall  forgive the  installment  of principal and interest then due under
this Promissory Note,  provided there has been no Termination Event as of each such  anniversary.  In the event (a)
Borrower is  terminated  under the  Personal  Services  Agreement  by the Company  without  "Cause,"  (b)  Borrower
terminates his employment  under the Personal  Services  Agreement for "Good Cause," (c) Borrower dies prior to the
fourth  anniversary  of the date of this  Promissory  Note,  or (d) the closing sales price for the Common Stock on
the primary  market for such stock or the Nasdaq  National  Market,  whichever is  applicable,  is equal to or less
than $2 (two dollars) for twenty  consecutive  trading days, all of the  outstanding  principal and interest due on
this  Promissory Note shall be forgiven as of the date of such event.  "Cause",  "Good Cause",  "Company",  "Common
Stock" and  "Voluntary  Termination"  are used in this  paragraph  with the  meanings  as  defined in the  Personal
Services Agreement.

         Borrower may prepay any amount due under this  Promissory  Note,  in whole or in part, at any time without
penalty.  Payments  received  for  application  to this  Promissory  Note shall be applied  first to the payment of
accrued interest, if any, and the balance applied in reduction of the principal amount hereof.

         A default  shall occur under this  Promissory  Note in the event that (i) Borrower  shall fail to make any
payment in respect of  principal  or  interest on this  Promissory  Note as the same shall  become due,  whether by
acceleration  or  otherwise,  which  failure  shall  continue  for a period of 5 days;  (ii)  Borrower  shall:  (A)
commence a voluntary  case under Title 11 of the United  States Code as from time to time in effect,  or  authorize
the  commencement  of such a voluntary case; (B) have filed against him a petition  commencing an involuntary  case
under said Title 11 which  shall not have been  dismissed  within 30 days after the date on which such  petition is
filed;  (C) seek  relief as a debtor  under any  applicable  law,  other  than said  Title 11, of any  jurisdiction
relating to the  liquidation or  reorganization  of debtors or to the  modification  or alteration of the rights of
creditors,  or  consent  to or  acquiesce  in such  relief;  (D) have  entered  against  him an order by a court of
competent  jurisdiction  (1) finding him to be bankrupt or insolvent,  (2) ordering or approving  his  liquidation,
reorganization  or any  modification or alteration of the rights of his creditors,  or (3) assuming  custody of, or
appointing a receiver or other custodian for all or a substantial  part of his property;  or (E) make an assignment
for the benefit of, or enter into a composition  with, his creditors,  or appoint or consent to the  appointment of
a receiver or other custodian for all or a substantial part of his property;  (iii) a Termination  Event shall have
occurred,  or (iv) a breach by Marine of the Pledge  Agreement  shall have  occurred  (collectively  a  "Default").
Upon Default,  all of the unpaid  balance of the principal and interest on this  Promissory  Note then  outstanding
shall be forthwith  due and payable,  and  thereupon  such unpaid  balance or part thereof  shall become so due and
payable without  presentation,  protest or demand or notice of any kind, all of which are hereby expressly  waived,
and the Payee may  proceed to  enforce  payment of such  balance  or part  thereof in such  manner as the Payee may
elect.  Further upon  Default,  the balance of principal  and  interest due under this  Promissory  Note shall bear
interest  at a rate  equal to the  lesser of (i)  eighteen  (18%)  percent  or (ii) the  highest  rate  allowed  by
applicable law from the date of such Default until the date that Borrower makes full payment hereunder.

         Payee shall be entitled to collect all  reasonable  costs and expenses of  collection of amounts due under
this  Promissory  Note. In the event this  Promissory Note is placed in the hands of any attorney for collection or
is  collected  through any legal  proceedings,  Borrower  promises to pay (in  addition to costs and  disbursements
otherwise  allowed),  to the extent  permitted by law,  reasonable  attorneys' fees and legal costs (whether or not
suit is commenced  and whether or not incurred in connection  with appeal of a lower court  judgment or order or in
collecting any judgment entered therein).  This obligation shall survive payment of this Promissory Note.

         Any notice or other  communication  required or permitted  under this  Promissory Note shall be in writing
and shall be deemed to have been duly given if delivered by hand, overnight delivery,  or mailed,  postage prepaid,
by certified or registered  mail,  return receipt  requested,  and addressed to Borrower at his address given below
and to Payee at its address  given  above.  Borrower  and Payee shall be obligated to notify the other party of any
change in  address.  Notice of  change  of  address  shall be  effective  only  when made in  accordance  with this
paragraph.

         BORROWER  HEREBY  CONSENTS TO THE PERSONAL  JURISDICTION  OF THE STATE AND FEDERAL  COURTS OF THE STATE OF
CALIFORNIA.  BORROWER  HEREBY  IRREVOCABLY  WAIVES,  TO THE FULLEST  EXTENT  PERMITTED BY LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL  PROCEEDING  ARISING OUT OF OR RELATING TO THIS  PROMISSORY  NOTE,  OR THE  TRANSACTIONS
CONTEMPLATED THEREBY.

         The  rights or  remedies  of Payee as  provided  in this  Promissory  Note,  as well as any  other  remedy
provided at law or in equity,  shall be  cumulative  and  concurrent  and may be pursued  singly,  successively  or
together against Borrower.

         Borrower,  for itself and its successors and assigns,  hereby: (a) waives  presentment,  demand,  protest,
notice of protest,  notice of dishonor and all other notices and demands  whatever;  and (b) consents to extensions
of time for payment, and acceptance of late or partial payments before, at or after maturity.

         No failure on the part of the Payee to  exercise  any right or remedy  under  this  Promissory  Note shall
constitute  a waiver of such right or remedy,  and no waiver of any past  default  shall  constitute  waiver of any
future  default or of any other  default.  No  indulgence  granted  from time to time,  shall be  construed to be a
waiver of the right to insist upon prompt payment  thereafter  retroactively or  prospectively,  or shall be deemed
to be a novation of this Promissory Note or as a reinstatement  of the debt evidenced  hereby or as a waiver of any
other right,  or be  construed so as to preclude the exercise of any right that the Payee may have,  whether by the
laws of the jurisdiction  governing this Promissory Note, by agreement,  or otherwise;  and the Borrower  expressly
waives  the  benefit  of any  statute  or rule of law or equity  which  would  produce a result  contrary  to or in
conflict  with the  foregoing.  The  acceptance  by the Payee of any  payment  that is in an  amount  less than the
amount that is due shall not constitute an accord and satisfaction.

         If any provision of this  Promissory  Note (or any part of any  provision) is held by a court of competent
jurisdiction  to  be  invalid,   illegal  or  unenforceable  in  any  respect,   such  invalidity,   illegality  or
unenforceability  shall not affect any other  provision  (or  remaining  part of the  affected  provision)  of this
Promissory  Note;  but this  Promissory  Note shall be  construed  as if such  invalid,  illegal  or  unenforceable
provision (or part thereof) had not been contained in this  Promissory  Note, but only to the extent it is invalid,
illegal or unenforceable.

         Time is of the  essence  of this  Promissory  Note  and of  each  and  every  obligation  of the  Borrower
hereunder.

         This  Promissory  Note may not be amended  orally,  but only by an amendment in writing signed by Borrower
and Payee.

         THIS  PROMISSORY  NOTE MAY BE ASSIGNED,  PLEDGED OR OTHERWISE  TRANSFERRED BY PAYEE WITHOUT THE CONSENT OF
BORROWER.  Reference in this  Promissory  Note to "Payee" shall mean the original  Payee  hereunder so long as such
Payee  shall be holder of this  Promissory  Note and  thereafter  shall mean any  assignee  of Payee or  subsequent
holder of this  Promissory  Note.  This  Promissory  Note shall be binding  upon  Borrower and its  successors  and
assigns and shall inure to the benefit of Payee.

         This  Promissory  Note shall be  governed  in all  respects  in  accordance  with the laws of the State of
California.

                                                     BORROWER:



                                                     /s/ Jerry Conrad
                                                     --------------------------
                                                     Jerry Conrad, Individually


Borrower's Address:        ------------------------

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

-----END PRIVACY-ENHANCED MESSAGE-----