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<ZIP>07205
<PHONE>973-282-2000
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<TEXT>



                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

/X/  Quarterly  report under Section 13 or 15(d) of the Securities  Exchange Act
     of 1934 for the quarterly period ended September 30, 2000.


                                       or

/_/  Transition report under Section 13 or 15(d) of the Securities  Exchange Act
     of 1934

                         Commission file number: 0-25940


                           WIRE ONE TECHNOLOGIES, INC.
             (Exact Name of registrant as Specified in its Charter)

           Delaware                                          77-0312442
State or other Jurisdiction of                         I.R.S. Employer Number
Incorporation or Organization)

                   225 Long Avenue, Hillside, New Jersey 07205
                    (Address of Principal Executive Offices)


                                  973-282-2000
                (Issuer's Telephone Number, Including Area Code)

     Check  whether  the issuer:  (1) filed all reports  required to be filed by
Section 13 or 15(d) of the Exchange  Act of 1934 during the  preceding 12 months
(or for such  shorter  period  that the  registrant  was  required  to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.

Yes [X]         No [_]

     The number of shares  outstanding  of the  registrant's  Common Stock as of
October 31, 2000 was 17,210,827.

<PAGE>


                           WIRE ONE TECHNOLOGIES, INC
                                      Index

PART I - FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements *

        Consolidated Balance Sheets
           September 30, 2000 and December 31, 1999                           1

        Consolidated Statements of Operations
           For the Nine Months and Three Months ended
           September 30, 2000 and 1999                                        2

        Consolidated Statements of Cash Flows
           For the Nine Months ended September 30, 2000 and 1999              3

        Notes to Consolidated Financial Statements                            4

Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations                                             9

PART II. OTHER INFORMATION

Legal Proceedings                                                            16

Changes in Securities                                                        16

Defaults Upon Senior Securities                                              16

Submission of Matters to a Vote of Security Holders                          16

Other Information                                                            16

Exhibits and Reports on Form 8-K                                             16

Signatures                                                                   17


*    The  Balance  Sheet at  December  31,  1999 has been taken from the audited
     financial  statements  at that date.  All other  financial  statements  are
     unaudited.

<PAGE>


                           WIRE ONE TECHNOLOGIES, INC.
                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                            September 30,     December 31,
                                                                                 2000             1999
                                                                            ------------      ------------
                                                                            (unaudited)
<S>                                                                         <C>               <C>
ASSETS
Current assets:
   Cash and cash equivalents                                                $  2,576,066      $     60,019
   Accounts receivable-net                                                    23,552,417         6,128,221
   Inventory                                                                   7,397,585         3,602,238
   Deferred income taxes                                                         531,131           230,083
   Other current assets                                                        1,836,715           161,947
                                                                            ------------      ------------
   Total current assets                                                       35,893,914        10,182,508

Furniture, equipment and leasehold improvements-net                            4,641,989           621,443

Goodwill-net                                                                  35,072,154              --
Other assets                                                                     326,763            63,353
                                                                            ------------      ------------
   Total assets                                                             $ 75,934,820      $ 10,867,304
                                                                            ============      ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Bank loan payable                                                        $       --        $  2,138,602
   Accounts payable                                                            6,140,243         2,022,687
   Accrued expenses                                                            2,572,042           891,033
   Income taxes payable                                                             --             124,372
   Deferred revenue                                                            5,490,390           403,524
   Customer deposits                                                             332,487            44,919
   Current portion of capital lease obligations                                   84,952            30,905
                                                                            ------------      ------------
   Total current liabilities                                                  14,620,114         5,656,042

Noncurrent liabilities:
       Capital lease obligations, less current portion                            90,563            17,444
                                                                            ------------      ------------
   Total liabilities                                                          14,710,677         5,673,486

Commitments

Series A mandatorily redeemable convertible preferred stock                   11,497,377              --

STOCKHOLDERS' EQUITY
Preferred stock, $.0001 par value;
   5,000,000 shares authorized, 2,450 shares issued and outstanding                     --                --
Common Stock, $.0001 par value; 100,000,000 authorized;
   16,953,052 and 4,910,000 shares outstanding, respectively                       1,695         5,229,740
Additional paid-in capital                                                    59,912,886           488,759
Accumulated deficit                                                          (10,187,815)         (524,681)
                                                                            ------------      ------------
   Total stockholders' equity                                                 49,726,766         5,193,818
                                                                            ------------      ------------
   Total liabilities, series A preferred stock and stockholders' equity     $ 75,934,820      $ 10,867,304
                                                                            ============      ============
</TABLE>


                 See Notes to Consolidated Financial Statements


                                      -1-
<PAGE>


                           WIRE ONE TECHNOLOGIES, INC
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                 Three months ended                 Nine months ended
                                                                     September 30,                    September 30,
                                                                 2000            1999             2000            1999
                                                             ------------    ------------     ------------    ------------
<S>                                                          <C>             <C>              <C>             <C>
Net revenues                                                 $ 18,287,167    $  6,669,783     $ 35,397,300    $ 15,908,891
Cost of revenues                                               12,345,638       4,507,656       23,632,170      10,917,374
                                                             ------------    ------------     ------------    ------------

Gross margin                                                    5,941,529       2,162,127       11,765,130       4,991,517

Operating expenses:
   Selling                                                      4,666,054       1,366,972        9,252,061       3,318,047
   General and administrative                                   1,249,381         441,386        2,599,475       1,159,772
   Amortization of goodwill                                       591,048            --            859,831            --
                                                             ------------    ------------     ------------    ------------
Total operating expenses                                        6,506,483       1,808,358       12,711,367       4,477,819
                                                             ------------    ------------     ------------    ------------
Income (loss) from operations                                    (564,954)        353,769         (946,237)        513,698
                                                             ------------    ------------     ------------    ------------
Other (income) expenses
   Amortization of deferred financing costs                         9,055          12,243          334,410          30,894
   Interest income                                               (146,573)         (3,968)        (291,508)        (18,135)
   Interest expense                                                13,634          38,650           67,118         134,762
                                                             ------------    ------------     ------------    ------------
Total other (income) expenses, net                               (123,884)         46,925          110,020         147,521
                                                             ------------    ------------     ------------    ------------
Income (loss) before income taxes                                (441,070)        306,844       (1,056,257)        366,177

Income tax provision (benefit)                                       --              --               --              --
                                                             ------------    ------------     ------------    ------------
Net income (loss)                                                (441,070)        306,844       (1,056,257)        366,177
Deemed dividends on Series A convertible preferred stock
                                                                 (427,322)           --         (8,606,877)           --
                                                             ------------    ------------     ------------    ------------
Net income (loss) attributable to common stockholders        $   (868,392)   $    306,844     $ (9,663,134)   $    366,177
                                                             ============    ============     ============    ============
Net income (loss) per share:
     Basic                                                   $       (.05)   $        .06     $       (.85)   $        .07
                                                             ============    ============     ============    ============
     Diluted                                                 $       (.05)   $        .05     $       (.85)   $        .06
                                                             ============    ============     ============    ============

Weighted average number of common shares and equivalents:
     Basic                                                     16,878,118       4,910,000       11,324,374       4,910,000
                                                             ============    ============     ============    ============
     Diluted                                                   16,878,118       6,176,834       11,324,374       5,771,478
                                                             ============    ============     ============    ============
</TABLE>


                 See Notes to Consolidated Financial Statements


                                      -2-
<PAGE>


                           WIRE ONE TECHNOLOGIES, INC
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                           Nine months ended
                                                                              September 30,
                                                                          2000            1999
                                                                      ------------    ------------
<S>                                                                   <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss)                                                   $ (1,056,257)   $    366,177
  Adjustments to reconcile net income (loss)
  to net cash provided by (used in) operating activities:
    Depreciation and amortization                                        2,073,208         241,304
    Loss on disposal of equipment                                                            1,832
    Non cash compensation                                                  130,002          65,201
    Increase (decrease) in cash attributable
      to changes in operating assets and liabilities net
      of effects from purchase of View Tech, Inc. and 2CONFER, LLC
        Accounts receivable                                             (9,645,989)     (1,437,924)
        Inventory                                                       (2,470,525)     (1,299,757)
        Other current assets                                              (946,366)       (263,455)
        Other assets                                                         4,180            --
        Accounts payable                                                (3,032,963)      2,369,152
        Accrued expenses                                                     1,425         100,047
        Income taxes payable                                              (132,130)         (2,860)
        Deferred revenue                                                 1,681,557         143,140
        Customer deposits                                                  244,082         264,845
                                                                      ------------    ------------
    Net cash (used in) provided by operating activities                (13,149,776)        547,702
                                                                      ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of furniture, equipment and leasehold improvements          (1,886,861)       (119,755)
  Costs related to acquisition of business including cash acquired      (2,029,831)           --
                                                                      ------------    ------------
    Net cash used in investing activities                               (3,916,692)       (119,755)
                                                                      ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from preferred stock offering, net                           16,150,000            --
  Exercise of warrants and options, net                                  8,782,287            --
  Payment of subordinated notes                                         (1,500,000)           --
  Financing costs                                                          (74,314)        (17,500)
  Proceeds from bank loans                                               3,350,000      10,205,000
  Payments on bank loans                                                (7,035,185)    (10,639,702)
  Payments on capital lease obligations                                    (90,273)        (20,094)
                                                                      ------------    ------------
    Net cash provided by (used in) financing activities                 19,582,515        (472,296)
                                                                      ------------    ------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                         2,516,047         (44,349)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                              60,019         325,915
                                                                      ------------    ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                              $  2,576,066    $    281,566
                                                                      ============    ============

Supplemental disclosures of cash flow information
  Cash paid during the period for:
    Interest                                                          $     67,118    $    134,762
                                                                      ============    ============
    Income taxes                                                      $      7,798    $      3,332
                                                                      ============    ============
</TABLE>


Non cash financing and investing activities:

     During the nine months  ended  September  30,  2000,  the Company  recorded
     non-cash deemed  dividends on Series A mandatorily  redeemable  convertible
     preferred stock of $8,606,877.

     On May 18, 2000, the Company  acquired the net assets of View Tech, Inc. in
     a merger transaction accounted for as a purchase for non-cash consideration
     of $31,339,258.


                 See Notes to Consolidated Financial Statements


                                      -3-
<PAGE>


                           WIRE ONE TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September, 30, 2000


Note 1 - The Business and Merger with View Tech, Inc.

     Wire One Technologies, Inc. ("Wire One" or the "Company") was formed by the
     merger  of All  Communications  Corporation  ("ACC")  and View  Tech,  Inc.
     ("VTI") on May 18, 2000, with the former directors and senior management of
     ACC  succeeding  to the  management  of Wire One.  In  connection  with the
     merger,  each former  shareholder  of ACC received  1.65 shares of Wire One
     common  stock  for  each  share  of ACC  common  stock  held by  them.  The
     transaction  has been  accounted for as a "reverse  acquisition"  using the
     purchase method of accounting.  The reverse  acquisition method resulted in
     ACC being  recognized as the acquirer of VTI for  accounting  and financial
     reporting purposes. As a result, ACC's historical results have been carried
     forward and VTI's operations have been included in the financial statements
     commencing  on the merger  date.  Accordingly,  all 1999 results as well as
     2000 results through the merger date are those of ACC only. Further, on the
     date of the  merger,  the assets and  liabilities  of VTI were  recorded at
     their  estimated  fair  values,  with  the  excess  purchase  consideration
     allocated to goodwill.

     Wire One is a single  source  provider of video  products and services that
     assist customers with the design,  installation,  maintenance and operation
     of their  videoconferencing  systems  from its 25  offices  throughout  the
     United States. The Company offers customers videoconferencing products from
     leading manufacturers such as Accord  Telecommunications,  Inc., PictureTel
     Corporation,    Polycom,   Inc.,   SONY   Electronics,    Inc.   and   VCON
     Telecommunications,  Ltd.  and provide a  comprehensive  suite of video and
     data  services   including   installation,   bridging,   on-site  technical
     assistance, customized training, engineering and maintenance.

Note 2 - Basis of Presentation

     The accompanying  unaudited  financial  statements of the Company have been
     prepared in accordance with generally  accepted  accounting  principles for
     interim financial  information and pursuant to the rules and regulations of
     the Securities and Exchange  Commission.  Accordingly,  they do not include
     all of  the  information  and  footnotes  required  by  generally  accepted
     accounting principles for complete financial statements.  In the opinion of
     management,  all  adjustments  (consisting  of normal  recurring  accruals)
     considered necessary for a fair presentation have been included.  Operating
     results  for the three and nine  months  ended  September  30, 2000 are not
     necessarily  indicative  of the results  that may be expected  for the year
     ending December 31, 2000. For further  information,  refer to the financial
     statements and footnotes thereto included in VTI's and ACC's Annual Reports
     for the fiscal year ended  December  31, 1999 as filed with the  Securities
     and Exchange Commission.

     The consolidated  financial  statements include the accounts of the Company
     and its wholly owned  subsidiaries,  AllComm  Products  Corporation and VTC
     Resources,  Inc.  All  intercompany  balances  and  transactions  have been
     eliminated in  consolidation.  The Company does not segregate or manage its
     operations by business segment.

Note 3 - Income (loss) per share

     Basic net income  (loss) per share is  calculated  by  dividing  net income
     (loss)  attributable  to common  stock by the  weighted  average  number of
     common shares outstanding during the


                                      -4-
<PAGE>


                           WIRE ONE TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September, 30, 2000


     period.  In  determining  basic  loss per  share in the 2000  periods,  the
     effects of deemed dividends on Series A mandatorily  redeemable convertible
     preferred  stock are added to the net loss.  Diluted net income  (loss) per
     share is calculated by dividing net income  (loss)  attributable  to common
     stock by the weighted average number of common shares  outstanding plus the
     weighted-average number of net shares that would be issued upon exercise of
     stock options and warrants  using the treasury  stock method and the deemed
     conversion of preferred stock using the if converted method.

<TABLE>
<CAPTION>
                                                   Three Months Ended         Nine Months Ended
                                                 -----------------------   -----------------------
                                                      September 30,             September 30,
                                                 -----------------------   -----------------------
                                                    2000         1999         2000         1999
                                                 ----------   ----------   ----------   ----------
<S>                                              <C>           <C>         <C>           <C>
     Weighted average shares outstanding         16,878,118    4,910,000   11,324,374    4,910,000
     Effect of dilutive options and warrants           --      1,266,834         --        861,478
                                                 ----------   ----------   ----------   ----------

     Weighted average shares outstanding
       including dilutive effect of securities   16,878,118    6,176,834   11,324,374    5,771,478
                                                 ==========   ==========   ==========   ==========
</TABLE>

     The  weighted  average  options  and  warrants to  purchase  7,237,816  and
     6,269,919  shares of common stock were  outstanding  during the nine months
     and three months ended September 30, 2000, respectively and preferred stock
     convertible   into  2,450,000  common  shares  were  not  included  in  the
     computation  of diluted EPS because  the Company  reported a net  operating
     loss for these periods and their effect would have been antidilutive.

Note 4 - Business Combinations

     Merger with View Tech, Inc.

     On May 18, 2000 the merger of ACC and VTI was  consummated in a transaction
     that has been accounted for as a "reverse  acquisition"  using the purchase
     method. The reverse  acquisition method resulted in ACC being recognized as
     the acquirer of VTI for accounting and financial reporting purposes.

     The final  allocation of the purchase  price may differ from that reflected
     in the  unaudited  September  30, 2000  financial  statements  after a more
     extensive  review of the fair market  values of the assets and  liabilities
     has been  completed  as of the  acquisition  date.  When  such a review  is
     completed,  a portion of the purchase  price may be ascribed to  intangible
     assets (other than goodwill) that have shorter  amortization lives than the
     life ascribed to goodwill in preparing the accompanying  September 30, 2000
     financial statements. Thus, the resulting incremental amortization charges,
     if  any,  from  that  portion  of the  purchase  price  ascribed  to  other
     intangible  assets  could be  materially  different  from the  amortization
     expense presented in the pro forma financial statements.

     Following is a schedule of the purchase  price,  estimated  purchase  price
     allocation and the annual amount of goodwill  amortization to be recognized
     prospectively:


                                      -5-
<PAGE>


                           WIRE ONE TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September, 30, 2000


     Purchase Price:

     Value of securities issued                                  $31,339,258
     Direct merger costs                                           1,008,059
                                                                 -----------
       Total purchase price                                      $32,347,317
                                                                 -----------

     The value of securities issued was determined as follows:
       Value of VTI shares exchanged (relinquished)              $28,466,308
       Value of VTI options and warrants                           2,872,950
                                                                 -----------
         Total value of securities issued                        $31,339,258
                                                                 -----------

     The value of VTI shares was computed  using a five-day  average share price
     with a midpoint of December 28, 1999, the date of the merger  announcement.
     The  number of  shares  used in the  computation  is based on the View Tech
     shares outstanding as of May 18, 2000.

     Estimated Purchase Price Allocation:

     VTI assets acquired                                        $ 11,583,008
     VTI liabilities assumed                                     (13,923,289)
     Goodwill                                                     34,687,598
                                                                ------------
       Total                                                    $ 32,347,317
                                                                ------------

     The VTI assets  acquired  and  liabilities  assumed  are  derived  from the
     historical  balance sheet of VTI as of May 18, 2000. The Company  estimates
     at this  time  that  the  annual  amortization  of  goodwill  (based  on an
     amortization period of 15 years) will approximate $2,312,000.  Amortization
     expense  for the nine  months and three  months  ended  September  30, 2000
     totaled $839,831 and $571,048, respectively.

     The  following  summarized  unaudited  pro forma  information  for the nine
     months  ended  September  30,  2000  assumes  the merger of the ACC and VTI
     occurred on January 1, 2000.

                                                          Nine Months
                                                            Ended
                                                         September 30,
                                                             2000
                                                         ------------
          Net revenues                                   $ 47,637,088
          Operating loss                                   (3,213,592)
          Net loss                                         (4,814,661)
          Basic and diluted loss per share                       (.40)


                                      -6-
<PAGE>
                           WIRE ONE TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September, 30, 2000

     The  unaudited  pro forma  operating  results  reflect  estimated pro forma
     adjustments for the  amortization of intangibles of $1,734,000 for the nine
     months  ended  September  30,  2000  arising  from  the  merger  and  other
     adjustments.  These pro forma operating  results do not reflect the effects
     of the series A preferred  stock issued in June 2000.  Pro forma results of
     operations are not necessarily indicative of the results of operations that
     would have  occurred had the merger been  consummated  at the  beginning of
     2000, or of the future results of the combined entity.

     Acquisition of 2CONFER, LLC

     In  July  2000,  the  Company  acquired  the net  assets  of  2CONFER,  LLC
     ("2CONFER"), a Chicago-based provider of videoconferencing,  audio and data
     solutions. The total consideration was $800,000,  consisting of $500,000 in
     cash and the  remainder  in  Company  common  stock  valued  at the time of
     acquisition.  Assets  consisted  primarily of accounts  receivables,  fixed
     assets and goodwill and other intangibles.

     Estimated Purchase Price Allocation:

     2CONFER assets acquired                             $ 1,024,730
     2CONFER liabilities assumed                          (1,424,730)
     Goodwill                                              1,200,000
                                                         -----------
                                                         $   800,000
                                                         ===========

     The 2CONFER assets  acquired and  liabilities  assumed are derived from the
     historical  balance sheet of 2CONFER,  LLC as of July 1, 2000.  The Company
     estimates at this time that the annual  amortization  of goodwill (based on
     an amortization period of 15 years) will approximate $80,000.  Amortization
     expense  for the nine  months and three  months  ended  September  30, 2000
     totaled $20,000.

Note 5 - Bank Loan Payable

     In  June  2000,  the  Company  renewed  its  credit  facility  with  Summit
     Commercial  Gibraltar Corp., a division of Summit Bancorp.  Under the terms
     of the two-year agreement,  loan availability was increased to $15,000,000,
     based on up to 75% of  eligible  accounts  receivable  and 50% of  eligible
     inventory,  subject to an inventory cap of  $5,000,000.  Borrowings  accrue
     interest at the lender's base rate plus 1/2% per annum. The credit facility
     contains certain  financial and operational  covenants.  The Company was in
     compliance  with those  covenants at September  30, 2000.  At September 30,
     2000, there were no borrowings outstanding under this credit facility.

Note 6 - Private Placement of Preferred Stock

     In June 2000,  the Company  raised  gross  proceeds of $17.15  million in a
     private  placement of 2,450 shares of its Series A  mandatorily  redeemable
     convertible  preferred  stock. The preferred shares are convertible into up
     to 2,450,000 shares of common stock at a price of $7.00 per share,  subject
     to adjustment.  Beginning on June 14, 2001, the preferred  stockholders may
     choose an alternative  conversion  price which equals the higher of (i) 70%
     of the fixed  conversion  price then in effect or (ii) the market  price on
     any conversion date, which is equal to the average of the closing prices of
     Company  common stock during the 20  consecutive  trading days  immediately
     preceding any conversion date. Preferred stockholders may, at their option,
     have the Company redeem their shares at the earlier of three years from the
     issuance date, or the  occurrence of a triggering  event,  as defined.  The
     redemption  price is 110% of the stated value of $7,000 per share.  None of
     the  triggering  events have occurred to date.  The  preferred  shares will
     convert  automatically if the Company's shares trade at $12.50 or above for
     twenty  consecutive  trading  days  and the  underlying  shares  have  been
     registered.  The Company  registered  the shares in September  2000. At the
     issuance  date,  the  Company  recorded  a deemed  dividend  charge  and an
     offsetting  increase in additional  paid-in capital of  approximately  $8.1
     million to reflect the beneficial  conversion  price of the preferred stock
     as compared to the prevailing market price of the common stock.

                                      -7-
<PAGE>

                           WIRE ONE TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September, 30, 2000

     Investors in the private  placement  also  received  five-year  warrants to
     purchase  a total of 857,500  shares of common  stock for $10.50 per share.
     The warrants are subject to certain anti-dilution  protection.  The Company
     has valued the  warrants  at  $3,740,000  using the  Black-Scholes  pricing
     model.  The Company also issued to its placement agent warrants to purchase
     193,748  shares of  common  stock for $7.00  per  share,  and  warrants  to
     purchase  67,876 shares of common stock for $10.50 per share.  The warrants
     expire on June 14, 2005.  The Company has valued the warrants at $1,410,000
     using the Black-Scholes pricing model.

     Costs of the offering,  including  the fair value of the warrants,  totaled
     $6,150,000. This amount has been recorded as a preferred stock discount and
     is being amortized as a deemed dividend over the three-year period from the
     date of issuance to the June 2003  redemption  date.  In addition,  the 10%
     redemption  premium of  $1,715,000 is being  accreted as a deemed  dividend
     into the carrying value of the series A mandatorily  redeemable convertible
     preferred  stock over the same  period.  Such  combined  accretion  totaled
     $497,377 and $427,322 for the nine months and three months ended  September
     30, 2000, respectively.

     Based on the lowest possible  conversion price of $4.90, the maximum number
     of shares  issuable  upon  conversion  of the series A  preferred  would be
     3,500,000  shares of common stock.  The rules of the Nasdaq National Market
     only  allow the  Company  to issue up to 20% of its  outstanding  shares of
     common stock upon  conversion of the series A preferred  stock and exercise
     of the related warrants without prior  stockholder  approval.  Wire One has
     not sought nor does it intend to seek such  stockholder  approval  for this
     issuance  in the future.  Based on the  16,570,641  shares of common  stock
     outstanding on June 14, 2000, the original date of issuance of the series A
     preferred and related warrants, the Company is only able to issue 3,314,128
     shares of its common  stock  upon  conversion  of the  series A  preferred.
     Accordingly,  beginning  on June  14,  2001,  if all  shares  of  series  A
     preferred stock were converted at the lowest possible  conversion price and
     all of the related  warrants  were  simultaneously  exercised,  the Company
     could be  required  to redeem up to 730  shares of its  series A  preferred
     stock at a price of $7,700  per share for an  aggregate  purchase  price of
     $5,621,000.

Note 7 - Stock Option Plan

     In September 2000, the Company adopted and approved the Wire One 2000 Stock
     Incentive Plan ("the Plan"). The Plan permits the grant of "incentive stock
     options"  ("ISOs")  to any  employees  or  employees  of its  subsidiaries.
     Non-qualified  stock  options may be granted to  employees,  directors  and
     consultants. As of October 27, 2000, options to purchase a total of 485,474
     shares were outstanding, and 2,514,526 shares remained available for future
     grant  under the Plan.  The  Company  has  issued  approximately  1,609,000
     options that are not governed by the Plan.

     The Plan  provides  for the grant of  options,  including  incentive  stock
     options  and  non-qualified  stock  options,   stock  appreciation  rights,
     dividend   equivalent   rights,   restricted  stock,   performance   units,
     performance shares or any combination thereof (collectively, the "Awards").
     The exercise price of Awards is established by the  Compensation  Committee
     and, in the case of  incentive  stock  options the  exercise  price must be
     equal to at least  100% of the fair  market  value of a share of the common
     stock on the date of grant. The Compensation Committee determines the terms
     and provisions of each award granted under the Plan,  including the vesting
     schedule,  repurchase  provisions,  rights  of  first  refusal,  forfeiture
     provisions,  form of payment, payment contingencies and satisfaction of any
     performance criteria.

Note 8 - Subsequent Events

     In October 2000, the Company acquired the assets and certain liabilities of
     Johns Brook Co.,  Inc.'s  videoconferencing  division,  a New  Jersey-based
     provider  of  videoconferencing  solutions.  The  total  consideration  was
     $635,000,  consisting  of  $481,000 in cash and  $154,000 in the  Company's
     common stock valued at the time of acquisition.  Assets consisted primarily
     of accounts  receivable,  fixed assets, and goodwill and other intangibles.
     The  acquisition of the assets and certain  liabilities of Johns Brook Co.,
     Inc.'s  videoconferencing  division is not  considered  to be a significant
     acquisition and, accordingly,  pro forma results of operations  disclosures
     are not required.


                                      -8-
<PAGE>


Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS.

The  following  discussion  should  be read in  conjunction  with the  Company's
consolidated  financial  statements  and the notes  thereto.  The  discussion of
results,  causes and trends should not be construed to imply any conclusion that
such results or trends will necessarily continue in the future.

The statements contained herein, other than historical  information,  are or may
be deemed to be forward-looking  statements within the meaning of Section 27A of
the  Securities  Act of 1933, as amended,  and Section 21E of the Securities and
Exchange Act of 1934, as amended,  and involve factors,  risks and uncertainties
that may  cause  the  Company's  actual  results  in  future  periods  to differ
materially from such statements. These factors, risks and uncertainties, include
the relatively  short operating  history of the Company;  market  acceptance and
availability  of new  products;  the  non-binding  and  nonexclusive  nature  of
reseller  agreements with manufacturers;  rapid  technological  change affecting
products sold by the Company; the impact of competitive products and pricing, as
well as competition from other resellers; possible delays in the shipment of new
products;  and the availability of sufficient  financial resources to enable the
Company to expand its operations.

Overview

Wire One is a leading single source provider of video  communications  solutions
that encompass the entire video  communications  value chain. The Company offers
its  customers  videoconferencing  products from leading  manufacturers  such as
Accord    Telecommunications,    Inc.   ("Accord"),    PictureTel    Corporation
("PictureTel"),  Polycom, Inc. ("Polycom"),  SONY Electronics, Inc. ("SONY") and
VCON  Telecommunications,  Ltd.  ("VCON") and provide a  comprehensive  suite of
video and data services  including  installation,  bridging,  on-site  technical
assistance,  customized training,  engineering and maintenance.  Wire One is the
number one channel partner for Polycom, a leading video equipment  manufacturer,
and a leading channel partner for the other major manufacturers.

The Company  markets and sells its video and data  products  and services to the
commercial,  federal  and state  government,  medical  and  educational  markets
through a direct  sales  force of  account  executives,  and  telemarketers  and
through resellers.  These efforts are supported by sales engineers,  a marketing
department, a call center and a professional services and engineering group. The
Company  has  sold  its  products  and  services  to over  2,500  customers  who
collectively have approximately 12,000 videoconferencing endpoints.

The Company was formed on May 18, 2000 by the merger of ACC and VTI. VTI was the
surviving legal entity in the merger. However, for financial reporting purposes,
the merger has been accounted for as a "reverse  acquisition" using the purchase
method of accounting.  Under the purchase method of accounting, ACC's historical
results have been carried forward and VTI's operations have been included in the
financial  statements  commencing  on the  merger  date.  Accordingly,  all 1999
quarterly and  year-to-date  results as well as 2000 results  through the merger
date are those of ACC only.  Further,  on the date of the merger, the assets and
liabilities of VTI were recorded at their estimated fair values, with the excess
purchase consideration allocated to goodwill.


                                      -9-
<PAGE>


In July 2000, the Company  acquired the net assets of 2CONFER,  a  Chicago-based
provider of videoconferencing, audio and data solutions. The total consideration
was $800,000, consisting of $500,000 in cash and the remainder in Company common
stock  of  $300,000  valued  at the  time  of  acquisition.  On the  date of the
acquisition,  the  assets and  liabilities  of 2CONFER  were  recorded  at their
estimated  fair  values,  with the excess  purchase  consideration  allocated to
goodwill.

By the end of this year,  Wire One expects to introduce  its  Glowpoint  network
service  ("Glowpoint").  The  Company  believes  Glowpoint  will  be  the  first
dedicated  network to provide  video  communications  by  utilizing  a dedicated
Internet  Protocol ("IP") backbone and broadband  access and,  ultimately,  will
offer the same  reliability  as a  telephone  call.  Glowpoint  subscribers  can
utilize  the  Glowpoint  network to make  videoconference  calls on demand for a
fixed monthly fee.

Over 90% of the applications  utilizing video technology are Integrated Services
Digital   Network   ("ISDN")   standards-based.   ISDN  technology  has  several
shortcomings,  including poor quality of service  ("QoS") and high  transmission
costs. In recent years, providers of video services have sought to replace older
ISDN systems with newer IP-based  technologies.  By introducing  Glowpoint,  the
Company  is  providing  the first  end-to-end  IP-based  video  network  that it
believes will make video  communications  as reliable and  commonplace  as voice
telephony.

To provide its Glowpoint service,  the Company has strategic  relationships with
Exodus  Communications  ("Exodus")  for its IP  backbone  network and with Covad
Communications  ("Covad")  and other  broadband  access  providers for dedicated
broadband access to the Glowpoint  network.  The Company will also use dedicated
IP circuits ("T1").  Leading IP videoconferencing and video networking equipment
suppliers,  including Cisco Systems,  Polycom,  RADVision and VCON, have already
announced that their products will be compatible with Glowpoint.

Glowpoint employs a proprietary network  architecture over dedicated capacity on
a high  performance  redundant  backbone.  This backbone network connects all of
Glowpoint's  points of presence  ("POPs"),  using multiple  high-speed  OC-3 and
OC-12 lines which  virtually  eliminate  the risk of a single  point of failure.
Glowpoint's  POPs consist of the best available  equipment from multiple vendors
combined in a unique proprietary  architecture.  This configuration of equipment
at its POPs is expected to provide industry-leading throughput,  scalability and
mission-critical  resiliency. Wire One also maintains a state-of-the-art network
operations  center  ("NOC") from which it monitors the operations of the network
on a 24x7 basis.


                                      -10-
<PAGE>


Results of Operations

The following table sets forth, for the periods indicated,  information  derived
from the Company's  consolidated  financial statements expressed as a percentage
of the Company's revenues:

<TABLE>
<CAPTION>
                                                  Three Months Ended           Nine Months Ended
                                                     September 30,               September 30,
                                                 -------------------          ------------------
                                                  2000          1999           2000         1999
                                                 -----         -----          -----        -----
<S>                                              <C>           <C>            <C>          <C>
Net revenues                                     100.0%        100.0%         100.0%       100.0%
Cost of revenues                                  67.5          67.6           66.8         68.6
                                                 -----         -----          -----        -----

Gross margin                                      32.5          32.4           33.2         31.4

Operating expenses:
    Selling                                       25.6          20.5           26.1         20.9
    General and administrative                     6.8           6.6            7.3          7.3
    Amortization of goodwill                       3.2           0.0            2.4          0.0
                                                 -----         -----          -----        -----

Total operating expenses                          35.6          27.1           35.8         28.2
                                                 -----         -----          -----        -----

Income (loss) from operations                     (3.1)          5.3           (2.7)         3.2
                                                 -----         -----          -----        -----

Other (income) expenses
   Amortization of deferred
       financing costs                             0.0           0.2            0.9          0.2
   Interest income                                (0.8)         (0.1)          (0.8)        (0.1)
   Interest expense                                0.1           0.6            0.2          0.9
                                                 -----         -----          -----        -----

Total other expenses, net                         (0.7)          0.7            0.3          1.0
                                                 -----         -----          -----        -----

Income (loss) before income taxes                 (2.4)          4.6           (3.0)         2.3

Income tax provision (benefit)                     0.0           0.0            0.0          0.0
                                                 -----         -----          -----        -----

Net income (loss)                                 (2.4)          4.6           (3.0)         2.3

Deemed dividends on Series A
      convertible preferred stock                 (2.3)          0.0          (24.3)         0.0
                                                 -----         -----          -----        -----

Net income (loss) attributable to
common stockholders                               (4.7)%         4.6%         (27.3)%        2.3%
                                                 =====         =====          =====        =====
</TABLE>


                                      -11-
<PAGE>


Nine Months Ended  September  30, 2000 ("2000  period")  Compared to Nine Months
Ended  September 30, 1999 ("1999  period") and Three Months Ended  September 30,
2000 Compared to Three Months Ended September 30, 1999.


     NET  REVENUES.  The Company  reported net revenues of $35.4 million for the
2000 period,  an increase of $19.5 million over  revenues  reported for the 1999
period.  Net revenues of $18.3 million for the September 2000 quarter  represent
an increase of $11.6  million  over  revenues  reported for the  September  1999
quarter.  Although  VTI  operations  have now  been  fully  integrated  into the
Company,  management  estimates  that  revenues  from  the  core  businesses  in
existence before  contributions from VTI and 2CONFER have grown approximately 25
to 30%, with revenues from VTI and 2CONFER  accounting  for the remainder of the
growth experienced in the quarter and nine months ended September 30, 2000.

     Videoconferencing - Sales of videoconferencing equipment were $29.5 million
in the 2000 period, an increase of $21.5 million over the 1999 period. Sales for
the quarter ended  September 30, 2000 were $16.2  million,  an increase of $12.9
million over the  comparable  1999 quarter.  Management  estimates that revenues
from the  core  videoconferencing  business  before  contributions  from VTI and
2Confer have grown  approximately  80 to 90%, with revenues from VTI and 2Confer
accounting  for the remainder of the growth  experienced in the quarter and nine
months  ended  September  30,  2000.  Particular  strength was noted in sales to
federal and state  government  agencies under  government  contracts such as the
State of California contract.

     Voice communications - Sales of voice communications  products and services
were $5.9 million in the 2000  period,  a $2.0  million  decrease  from the 1999
period. Sales for the quarter ended September 30, 2000 were $2.1 million, a $1.3
million  decrease  from the  comparable  1999  quarter.  These  period-to-period
declines  in the voice  communications  division  were the result of declines in
revenue from three  significant  customers.  Business with these three customers
fluctuates  from  quarter to quarter  depending  upon their  respective  capital
expenditure budgets,  acquisition  strategy,  and other factors.  These declines
should not be considered permanent in nature.

     GROSS  MARGINS.  Gross  profits were $11.8  million in the 2000 period,  an
increase of $6.8  million over the 1999  period.  Gross  profits for the quarter
ended September 30, 2000 were $5.9 million, an increase of $3.7 million over the
comparable  1999 quarter.  Gross margins  increased in the 2000 period to 33% of
net  revenues,  as  compared  to 31% of net  revenues  in the 1999  period.  The
increase  is  attributable  to  inventory  purchase  discounts  negotiated  with
videoconferencing equipment manufacturers and increases in higher margin revenue
sources such as video maintenance contracts and installation services.

     SELLING.  Selling  expenses,  which  include sales  salaries,  commissions,
overhead, and marketing costs, increased $6.0 million in the 2000 period to $9.3
million from $3.3 million for the 1999 period.  Selling expenses for the quarter
ended  September 30, 2000  increased $3.3 million to $4.7 million as compared to
$1.4 million for the comparable 1999 quarter.  Increases in selling expenses are
attributable  to increases in the number of sales  personnel  and their  related
costs and the costs of additional sales offices brought about by the merger with
VTI and the  acquisition  of  2CONFER.  The  increase  in selling  expenses as a
percentage  of net revenues in the 2000 period and the quarter  ended  September
30, 2000 resulted  from the decline in voice  communications  revenues  combined
with  relatively  fixed  selling  costs in that  division,  as well as, from the
expansion of the  videoconferencing  division on a national basis.  Prior to the
merger, ACC focused its  videoconferencing  business on customers in the Eastern
United States.  This national  expansion  resulted in increased rent and related
office expenses,  depreciation,  travel and delivery expenses as a percentage of
revenue.


                                      -12-
<PAGE>


     GENERAL AND ADMINISTRATIVE.  General and administrative  expenses increased
$1.4  million in the 2000 period to $2.6 million as compared to $1.2 million for
the 1999  period.  General and  administrative  expenses  for the quarter  ended
September  30, 2000  increased  $0.8 million to $1.2 million as compared to $0.4
million  for the  comparable  1999  quarter.  The  inclusion  of VTI general and
administrative  expenses  from the merger date through the end of the  reporting
period  was  the  significant   factor  behind  these  increases.   General  and
administrative  expenses as a percentage of net revenues for 2000 period and the
quarter ended September 30, 2000 remained  relatively  constant though,  as this
cost category grew in proportion to the growth in revenues.

     AMORTIZATION  OF GOODWILL.  The Company has allocated  approximately  $34.7
million of the VTI  merger  purchase  consideration  to  goodwill.  Amortization
expense for the 2000 period totaled $0.8 million.  The Company estimates at this
time that the annual amortization expense (based on an amortization period of 15
years)  will  approximate  $2.3  million.  In  addition,  as  a  result  of  the
acquisition of the net assets of 2CONFER,  LLC on July 1, 2000,  $1.2 million of
goodwill and $20,000 of amortization was recorded in the quarter ended September
30,  2000.  The  Company  estimates  at this time that the  annual  amortization
expense (based on an amortization period of 15 years) will approximate $80,000.

     OTHER  (INCOME)  EXPENSES.   The  principal  component  of  this  category,
amortization  of deferred  financing  costs,  increased  to $334,000 in the 2000
period as compared to $31,000 in the 1999  period.  The  increase  reflects  the
amortization  of  $305,000  related to the  issuance  of  warrants to former VTI
subordinated debt holders.  These costs were fully amortized as of September 30,
2000. In addition,  interest income  increased in the 2000 period to $292,000 as
compared to $18,000 in the 1999 period. The increase reflects interest earned on
the proceeds  received from the Company's  private  placement of 2,450 shares of
its series A  convertible  preferred  stock and related  warrants  (the "Private
Placement")  in the second  quarter of 2000 and the proceeds  received  from the
Company's warrant call in the first quarter of 2000.

     INCOME  TAXES.  During the 2000  period,  the  Company  has  established  a
valuation  allowance  to  offset  the  benefits  of  significant  temporary  tax
differences  due to the  uncertainty  of their  realization.  These deferred tax
assets  consist  primarily of net operating  losses  carried  forward in the VTI
merger, reserves and allowances, and stock-based compensation. Due to the nature
of the deferred tax assets, the related tax benefits, upon realization,  will be
credited  substantially  to the goodwill  asset or additional  paid-in  capital,
rather than to income tax expense.

     During the 1999  period,  the  Company  reversed  the  valuation  allowance
established  in 1998 in an amount  sufficient to offset tax expense  provided on
pre-tax income.


                                      -13-
<PAGE>

     NET INCOME (LOSS).  The Company reported a net loss  attributable to common
stockholders for the 2000 period of $(9.7) million, or $(.85) per diluted share,
as compared to net income  attributable to common  stockholders of $0.4 million,
or $.06 per diluted  share for the 1999  period.  The net loss  attributable  to
common stockholders for the quarter ended September 30, 2000 was $(0.9) million,
or $(.05) per diluted share,  as compared to net income  attributable  to common
stockholders of $0.3 million,  or $.05 per diluted share for the comparable 1999
quarter.   The  2000  period  contained  a  non-recurring  deemed  dividend  and
offsetting increase in additional paid-in capital of $8.1 million to reflect the
beneficial  conversion price of preferred stock issued in the Private  Placement
in the second quarter of 2000 as compared to the prevailing  market value of the
common stock.  In addition,  a $0.5 million deemed  dividend was recorded in the
period to amortize the costs of the Private  Placement.  Costs of $6.15  million
incurred in connection with the private  placement,  including the fair value of
warrants, have been recorded as a preferred stock discount and will be amortized
as a deemed dividend over the three-year period from the date of issuance to the
current  redemption  date. The Company reported a net loss of $(1.1) million for
the 2000 period as  compared  to net income of $0.4  million for the 1999 period
and for the quarter  ended  September  30, 2000 it reported a net loss of $(0.4)
million  as  compared  to net income of $0.3  million  for the  comparable  1999
quarter.

Liquidity and Capital Resources

     At September  30, 2000,  the Company had working  capital of $21.3  million
compared to $4.5  million at December  31,  1999,  an increase of  approximately
370%.  In addition,  the Company had $2.6  million in cash and cash  equivalents
compared to $60,000 at December 31, 1999. This improved working capital position
resulted  primarily from the Private Placement that raised $16.15 million in net
cash proceeds.

     The  Company  currently  has a  $15.0  million  credit  facility  with  New
York-based  Summit  Commercial  Gibraltar  Corp., a division of Summit  Bancorp.
Borrowings under this facility will bear interest at the lender's base rate plus
1/2% per annum.  The Company has not borrowed funds under this line of credit to
date.

     On June 14, 2000 the Company  completed the Private Placement with a select
group of  institutional  and strategic  investors led by Peconic Fund,  Ltd., an
affiliate of Ramius  Capital Group,  and Polycom,  Inc. The Company raised gross
proceeds of $17.15 million in the Private Placement. A one-time, non-cash deemed
dividend of  approximately  $8.1 million was recognized in the second quarter of
2000.  Other  offering costs are being  amortized over a three-year  period as a
deemed dividend and will reduce net income attributable to common  stockholders.
The  amortization  of these costs  totaled  $0.4  million in the  quarter  ended
September 30, 2000. The proceeds of the private placement are being used to fund
internal growth,  acquisitions  and expansions into emerging video  applications
technologies,  including  further  development and installation of its Glowpoint
network.

     Net cash used in  operating  activities  for the 2000  period  was  $(13.1)
million as compared to net cash provided by  operations  of $0.5 million  during
the 1999 period. Sources of operating cash in 2000 included deferred revenue and
customer  deposits.  Increases in accounts  receivable of $9.6 million resulting
from sales growth,  purchase of inventory  totaling $2.5 million and payments on
accounts  payable balances with vendors of $3.0 million were the primary uses of
operating cash in the 2000 period.

     Investing activities for the 2000 period included purchases of $1.0 million
for  bridging,  computer and  demonstration  equipment for the core business and
$0.9 million for network  equipment  related to the  Glowpoint  network that the
Company is  developing.  In addition,  cash costs  incurred in  connection  with
mergers and acquisitions totaled $2.0 million.

                                      -14-
<PAGE>

     Financing  activities  in the 2000 period  included  the Private  Placement
totaling $16.15 million in net proceeds,  proceeds from the exercise of warrants
and options totaling $8.8 million,  the net repayment of the outstanding balance
of the Company's  revolving  credit line  totaling  $3.1  million,  and the $1.5
million of VTI subordinated notes that were outstanding.

     Management  believes  that it has  adequate  capital  resources  to support
current operating levels for the next twelve months.  The Company is considering
raising up to $50  million  in a private  placement  of its common  stock in the
fourth quarter of 2000, if market  conditions are acceptable to the Company.  In
the event that the Company completes a financing transaction,  the proceeds will
be used for capital  expenditures,  acquisitions,  and the continued development
and  expansion  of  the  Glowpoint  network.  There  can  be no  assurance  that
additional financing will be available on terms acceptable to the Company, if at
all.

Inflation

     Management does not believe  inflation had a material adverse effect on the
financial statements for the periods presented.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company has exposure to interest  rate risk related to its cash  equivalents
portfolio.  The  primary  objective  of the  Company's  investment  policy is to
preserve  principal  while  maximizing  yields.  The Company's cash  equivalents
portfolio is short-term in nature,  therefore changes in interest rates will not
materially impact the Company's consolidated financial condition.  However, such
interest  rate  changes  can cause  fluctuations  in the  Company's  results  of
operations and cash flows.

The Company's $15 million  secured credit facility has an interest rate based on
the lender's  prime rate.  The Company  currently has no borrowings  outstanding
under the facility.  If the Company  should draw on the facility,  interest rate
fluctuations  could have an impact on the Company's  results of  operations  and
cash flows.

                                      -15-

<PAGE>

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     None.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

     None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     The Annual  Meeting  ("Annual  Meeting")  of  Stockholders  of the Wire One
     Technologies, Inc. was held on September 15, 2000.

     The  12,016,573  shares of Common  Stock  ("Common  Stock")  present at the
     Annual  Meeting out of a then total of 16,879,716  shares  outstanding  and
     entitled to vote acted as follows with respect to the  following  proposals
     with the following results:

     1.   (a) The  election  of Eric  Friedman  to the  Board of  Directors  was
          approved:

          For: 11,865,308  Against: 0  Abstain: 151,265  Broker Non-Votes: 0


          (b) The  election  of  Andrea  Grasso to the  Board of  Directors  was
          approved:

          For: 11,865,308  Against: 0  Abstain: 151,265  Broker Non-Votes: 0

     2.   The adoption of the Wire One  Technologies,  Inc. 2000 Stock Incentive
          Plan was approved,

          For: 8,202,665  Against: 518,701  Abstain: 59,995  Broker Non-Votes: 0

     3.   The  ratification  of the  appointment  of BDO Seidman as  independent
          auditors was approved.

          For: 11,981,334  Against: 22,884  Abstain: 11,855  Broker Non-Votes: 0

ITEM 5. OTHER INFORMATION

     None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

4.9  Wire One Technologies, Inc. 2000 Stock Incentive Plan

10.37 Fourth Amendment to Lease

27   Financial Data Schedule

(b)  Reports on Form 8-K

     None.




                                      -16-
<PAGE>


Signatures

     In accordance with 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, thereunto duly authorized.


                               WIRE ONE TECHNOLOGIES, INC.
                                       Registrant

Date:  October 31, 2000             By:  /s/ Richard Reiss
                                         -----------------------------------
                                    Richard Reiss,
                                    President and Chief Executive
                                    Officer


Date:  October 31, 2000             By:  /s/ Christopher Zigmont
                                         -----------------------------------
                                    Christopher Zigmont
                                    Chief Financial Officer
                                    (principal financial and accounting officer)


                                      -17-
<PAGE>


                                  Exhibit Index

                Exhibit No.                Description
                -----------                -----------

                    4.9                    Wire One Technologies, Inc. 2000
                                           Stock Incentive Plan

                    10.37                  Fourth Amendment to Lease

                    27                     Financial Data Schedule



                                      -18-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.37
<SEQUENCE>2
<FILENAME>d23878_ex10-37.txt
<TEXT>


                                                                   Exhibit 10.37


                            FOURTH AMENDMENT OF LEASE

     THIS FOURTH  AMENDMENT OF LEASE (this  "Amendment")  is made as of the 29th
day of August, 2000, between VITAMIN REALTY ASSOCIATES,  L.L.C.  (the "LESSOR"),
a New Jersey limited  liability  company,  having an address at 225 Long Avenue,
Hillside,  New Jersey 07205, and WIRE ONE TECHNOLOGIES,  INC. (the "LESSEE"),  a
Delaware corporation, having an address at 225 Long Avenue, Hillside, New Jersey
07205.

                               W I T N E S S E T H

     WHEREAS,  pursuant to that certain Lease  Agreement dated March 20, 1997 by
and  between  LESSOR and All  Communications  Corporation,  the  predecessor  of
LESSEE,  LESSOR  leased  to  All  Communications  Corporation  certain  premises
consisting of approximately 1,560 rentable square feet of warehouse space on the
first floor of the building known as 225 Long Avenue,  Hillside, New Jersey (the
"Building"), and approximately 7,180 rentable square feet of office space on the
second floor of the Building (collectively the "Demised Premises"); and

     WHEREAS,  pursuant to that  certain  First  Amendment  of Lease dated as of
December,  1997, LESSOR and All Communications  Corporation amended the Lease to
add to the  Demised  Premises  an  additional  5,840  rentable  square  feet  of
warehouse space on the first floor of the Building; and

     WHEREAS,  pursuant to that  certain  Second  Amendment of Lease dated as of
December,  1999, LESSOR and All Communications  Corporation amended the Lease to
provide that the Demised Premises consisted of a total of 13,730 rentable square
feet of warehouse space on the first floor of the Building, and a total of 8,491
rentable square feet of office space on the second floor of the Building; and

     WHEREAS, pursuant to that certain Third Amendment of Lease dated as of June
1, 2000 (which,  together with the Lease  Agreement,  First Amendment and Second
Amendment referred to above, shall be referred to herein as the "Lease"), LESSOR
and LESSEE amended the Lease to provide that the Demised Premises  consists of a
total of 18,000  rentable  square feet of warehouse  space on the first floor of
the Building, and a total of 15,215 rentable square feet of office and warehouse
space on the second floor of the Building; and

     WHEREAS,  LESSOR and LESSEE have agreed to further amend the Lease,  on the
terms and conditions hereinafter set forth; and




<PAGE>


     WHEREAS,  all  capitalized  terms  defined  in the Lease and not  otherwise
defined herein shall have their respective meanings set forth in the Lease.

     NOW,  THEREFORE,  in consideration of the mutual covenants contained herein
and other good and valuable consideration,  the receipt and sufficiency of which
are hereby  acknowledged,  the parties  hereto do hereby agree that the Lease is
hereby amended as follows:

     1. (a) Commencing as of September 1, 2000 or occupancy,  whichever is later
(the "Expansion Space  Commencement  Date"),  LESSOR shall demise to LESSEE, and
LESSEE shall lease from LESSOR,  an  additional  5,739  rentable  square feet of
space  located on the second floor of the Building,  which is more  particularly
depicted in Schedule A attached hereto (the "Expansion Space"). For all purposes
of the Lease, and this Amendment,  the term "Demised  Premises" shall, as of the
Expansion Space Commencement Date, include the current Demised Premises plus the
Expansion Space.

     (b) LESSOR and LESSEE each hereby agrees that the Demised  Premises  shall,
as of the  Expansion  Space  Commencement  Date,  consist  of a total of  18,000
rentable square feet of warehouse space on the first floor of the Building,  and
a total of 20,954  rentable  square  feet of office and  warehouse  space on the
second floor of the Building.

     2.  Section  1.1(ar) of the Lease is hereby  amended  to  provide  that the
Termination Date shall be August 31, 2005.

     3. (a) Schedule C of the Second Amendment is hereby superseded and replaced
with Schedule B annexed hereto.

     (b) LESSEE's Proportionate Share with respect to the Demised Premises shall
be 24.35% as of the Expansion Space Commencement Date.

     4. (a) LESSOR has engaged Costa Construction Co. to perform the fit up work
within the  Expansion  Space  ("LESSOR'S  Work")  outlined  on the  construction
contract  attached  hereto as Schedule C (the  Contract").  Provided that LESSEE
does not default under the terms and provisions of this Lease,  LESSOR shall pay
for the cost of performing LESSOR'S Work up to the amount of $50,000.00.  LESSEE
shall pay the excess cost of completing LESSOR'S Work over $50,000.00 within ten
(20) days after  receipt of an  invoice  therefor  from  LESSOR,  together  with
evidence   that  such  costs  were   actually   incurred  by  LESSOR.   LESSEE'S
reimbursement



                                       2
<PAGE>

obligation  shall not be limited by the fixed price set forth in the Contract if
the actual cost of LESSOR'S Work exceeds the Contract amount. If LESSEE requests
any  changes  in  LESSOR'S  Work  described  in the  Contract,  LESSEE  shall be
responsible for all costs including but not limited to design expenses resulting
from such changes.  No such changes shall be made without prior written approval
of LESSOR.  LESSOR  shall not be  responsible  for delay in  occupancy by LESSEE
because of such changes,  and any such delay in completing  the Expansion  Space
shall not in any manner affect the Expansion Space Commencement Date.

     (b) Except as set forth in subsection (a) above,  LESSEE agrees that it has
inspected  the  Expansion  Space,  and  agrees  to  occupy  same  in its "AS IS"
condition.

     5.  Provided  that  LESSEE is not in  default  under the Lease  beyond  any
applicable notice or cure period, then LESSEE shall have the right to assign the
portion of the Demised Premises  depicted on Schedule A annexed hereto as Tenant
Spaces N, O and P, which consists of  approximately  7,113 rentable square feet,
in  connection  with the sale of a division of LESSEE.  LESSEE shall  deliver to
LESSOR  prior  written  notice  of such  sublease.  LESSOR  further  waives  the
recapture  right specified in Section 15.5 of the Lease with respect to any such
sublease.  Except as set forth above,  such  subleasing  shall be subject to the
provisions of Article 15 of the Lease.

     6.  LESSOR and LESSEE  each  represents  to the other that it has not dealt
with any broker or agent with respect to the Demised  Premises or this Lease and
each shall  indemnify  and hold  harmless the other from and against any and all
liabilities, claims, suits, demands, judgments, costs, interests and expenses to
which it nay be  subject  or suffer by reason of any claim  made by any  person,
firm or  corporation  for any  commission,  expense or other  compensation  as a
result  of the  execution  and  delivery  of this  Lease  and  based on  alleged
conversations  or negotiations by said person,  firm or corporation  with either
LESSOR or LESSEE, as the case may be.

     7. As hereby modified and amended, the Lease shall remain in full force and
effect.

     8.  This   Amendment  and  the  Lease  embody  and  constitute  the  entire
understanding between the parties with respect to the subject matter hereof, and
all prior agreements,  representations and statements, oral or written, relating
to the subject matter hereof are merged into this Amendment.


                                       3
<PAGE>

     9.  Neither  this  Amendment  nor any  provision  contained  herein  may be
amended,  modified  or  extended  except  by an  instrument  signed by the party
against whom enforcement of such amendment, modification or extension is sought.

     10. This Amendment may be executed in counterparts,  each of which shall be
deemed a duplicate original hereof.

     IN WITNESS  WHEREOF,  this Amendment has been executed by LESSOR and LESSEE
as of the day and year first above written.

                                       VITAMIN REALTY ASSOCIATES, L.L.C.


                                       By: /s/ Eric Friedman
                                           ------------------------------
                                           Name:  Eric Friedman
                                           Title: Member



                                       WIRE ONE TECHNOLOGIES, INC.


                                       By: /s/ Richard Reiss
                                           ------------------------------
                                           Name:  Richard Reiss
                                           Title: President and Chief
                                                  Executive Officer


                                       4
<PAGE>


                                   SCHEDULE A

                                 EXPANSION SPACE

<PAGE>


                                   SCHEDULE B

                                   BASIC RENT

     The Basic Rent shall be payable in equal monthly installments,  in advance,
on the  Basic  Rent  Payment  Dates.  The  Basic  Rent for the Term  shall be as
follows:

     (a) for the period from the  Commencement  Date to, but not including,  the
Inclusion  Date  (defined  in the  First  Amendment),  the Basic  Rent  shall be
$62,680.00 per annum, payable in equal monthly installments of $5,306.67;

     (b) for the  period  from the  Inclusion  Date to, but not  including,  the
Amendment  Commencement Date (defined in the Second  Amendment),  the Basic Rent
shall be  $87,040.00  per  annum,  payable  in  equal  monthly  installments  of
$7,253.33;

     (c) for the  period  from  the  Amendment  Commencement  Date  to,  but not
including,  the First Additional Space  Commencement  Dare (defined in the Third
Amendment),  the Basic Rent  shall be  $122,846.00  per annum,  payable in equal
monthly installments of $10,237.17;

     (d) for the period from the First  Additional Space  Commencement  Date to,
but not including, the Second Additional Space Commencement Date (defined in the
Third  Amendment),  the Basic Rent shall be  $139,928.00  per annum,  payable in
equal monthly installments of $11,660.67;

     (e) for the period from the Second  Additional Space  Commencement Date to,
but not including,  the Expansion Space  Commencement Date, the Basic Rent shall
be $193,720.00 per annum,  payable in equal monthly  installments of $16,143.33;
and

     (f) for the period from the Expansion Space  Commencement  Date to, but not
including,  the Termination Date, the Basic Rent shall be $259,100.00 per annum,
payable in equal monthly installments of $21,591.67.

<PAGE>


                                   SCHEDULE C

                              CONSTRUCTION CONTRACT

<PAGE>


[LOGO]  COSTA CONSTRUCTION CO.
================================================================================
        26 Wortendyke Avenue
        Emerson, N.J. 07630
        (201) 262-3434
        Fax (201) 262-2230


                                                                 August 21, 2000

Mr. Eric Friedman
Vitamin Realty Associates
225 Long Avenue
Hillside, NJ 07205


                                    Contract

Re: Renovation to rental space

Existing  Accounting  Room & Two Previous  Offices  Renovated  on Exterior  Wall
Previously Rented by N.W. International.

Cover  exterior  wall with 5/8"  sheetrock  above and below  windows  and finish
completely as needed.
Remove  existing steel  doorframe and enlarge  existing rough opening to receive
new 6'0" x 7'0" steel jamb with two new wood store-front doors in oak.
Install all matching hardware on door located in main office.
Install new key locks to above-mentioned door.
Build new 16" wide Formica counter top with supports. 1 - 20'9", 1 - 11' 5".
Build new tops and support to match existing. Colors to be selected by owner.
Install approximately 440 yd. of vinyl wall covering in existing finished office
space.


Room Next to previously renovated room, as noted above.

Install new  suspended  ceiling to match  existing  ceiling  work in  previously
renovated room and hallway.
Build  approximately  50 linear feet of partitions along exterior wall to create
three independent offices.
All walls to be 3 5/8" 25 gauge metal studs with 5/8"  sheetrock  and spackle as
needed.
Install  three new steel  doorframes  and birch veneer  doors to match  existing
previous work.


<PAGE>


                  Second Floor Tenant Space Plan Appears here.

<PAGE>


[LOGO]  COSTA CONSTRUCTION CO.
================================================================================
        26 Wortendyke Avenue
        Emerson, N.J. 07630
        (201) 262-3434
        Fax (201) 262-2230


Vitamin Realty Associates
Contract
Page 2


On  exterior  wall in three  offices,  install  5/8"  sheetrock  above and below
windows as needed.
Install three steel doorjambs with solid core birch doors. Size 3/0x7/0.
Build 10' of additional metal stud partition.
Install one 3/0x7/0 solid core wood door at coffee room with matching hardware.
Install two solid core birch doors on entranceway from hallway. Install matching
hardware. Both doors to be 1 1/2-hour fire rated.


New Office Space with Hallway

Construct new 30' long wall to create  approximately a 4' hallway and cover with
sheetrock and finish as needed.
In remaining office space of large room,  construct four new offices on exterior
wall as previously discussed.
All walls to be build of 25 gauge studs and 5/8" sheetrock and spackle.
Install four new steel doorjambs and birch veneer doors as noted above.
All doors to receive mill finish, lever design passage knob.
On exterior wall,  install 5/8" sheetrock  above and below windows and finish as
needed.


Coffee Room Off of Main Room, Approx. 13' x lO',

Cover existing metal - partition wall with 5/8" sheetrock and finish as needed.
Install new suspended ceiling as noted above.
Install new suspended ceiling in hallway and new office space.
Install new 6' wood sink base cabinet in new kitchen area.
Install new Formica counter top with stainless steel sink and faucet & all drain
and water lines as needed.

<PAGE>


[LOGO]  COSTA CONSTRUCTION CO.
================================================================================
        26 Wortendyke Avenue
        Emerson, N.J. 07630
        (201) 262-3434
        Fax (201) 262-2230


Vitamin Realty Associates
Contract
Page 3


Electrical Work

Install fifty-two (52) 2x4 drop-in suspended ceiling lights to match existing.
Install seven (7) 2x2 drop-in suspended ceiling lights to match existing.
Install five (5) switches to control lighting fixtures.
Install thirty (30) outlets.
Install  all rough  wiring for feeds and  homeruns to supply the power to lights
and outlets.


Painting and Finishing

Paint all new sheet rock with primer and one coat. (One color throughout)
Paint all new and existing steel doorjambs.
Finish all new and existing birch doors. (Natural finish.)

Total for all work listed above................ $ 60,450.00


Note:
     Remove all garbage to owner's container.
     Permits to be paid by owner.
     All demolition by owner.


      Continued on page 4

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.9
<SEQUENCE>3
<FILENAME>d23878_ex4-9.txt
<TEXT>


                                                                     Exhibit 4.9

                           WIRE ONE TECHNOLOGIES, INC.

                            2000 STOCK INCENTIVE PLAN

     1. Purposes of the Plan.  The purposes of this Stock  Incentive Plan are to
attract and retain the best available personnel, to provide additional incentive
to  Employees,  Directors  and  Consultants  and to promote  the  success of the
Company's business.

     2. Definitions. As used herein, the following definitions shall apply:

     (a) "Administrator"  means the Board or any of the Committees  appointed to
administer the Plan.

     (b) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 promulgated under the Exchange Act.

     (c)  "Applicable  Laws"  means  the  legal  requirements  relating  to  the
administration of stock incentive plans, if any, under applicable  provisions of
federal  securities  laws,  state  corporate and securities  laws, the Code, the
rules of any applicable stock exchange or national market system,  and the rules
of any foreign jurisdiction applicable to Awards granted to residents therein.

     (d) "Award" means the grant of an Option,  SAR, Dividend  Equivalent Right,
Restricted Stock, Performance Unit, Performance Share, or other right or benefit
under the Plan.

     (e) "Award Agreement" means the written  agreement  evidencing the grant of
an Award  executed by the  Company and the  Grantee,  including  any  amendments
thereto.

     (f) "Board" means the Board of Directors of the Company.

     (g) "Cause"  means,  with  respect to the  termination  by the Company or a
Related Entity of the Grantee's Continuous Service, that such termination is for
"Cause" as such term is expressly defined in a then-effective  written agreement
between the Grantee and the Company or such Related Entity, or in the absence of
such  then-effective  written  agreement  and  definition,  is based  on, in the
determination of the Administrator, the Grantee's: (i) refusal or failure to act
in accordance with any specific,  lawful  direction or order of the Company or a
Related Entity;  (ii) unfitness or unavailability  for service or unsatisfactory
performance (other than as a result of Disability); (iii) performance of any act
or failure to perform any act in bad faith and to the  detriment  of the Company
or a Related Entity; (iv) dishonesty,  intentional misconduct or material breach
of any agreement  with the Company or a Related  Entity;  or (v) commission of a
crime  involving  dishonesty,  breach of trust, or physical or emotional harm to
any  person.  At  least  30  days  prior  to the  termination  of the  Grantee's
Continuous  Service  pursuant  to (i) or (ii)  above,  the  Administrator  shall
provide the Grantee with notice of the Company's or such Related Entity's intent
to terminate,  the reason  therefor,  and an opportunity


                                       1
<PAGE>

for the Grantee to cure such  defects in his or her service to the  Company's or
such Related Entity's  satisfaction.  During this 30 day (or longer) period,  no
Award issued to the Grantee under the Plan may be exercised or purchased.

     (h)  "Change  in  Control"  means a change in  ownership  or control of the
Company effected through either of the following transactions:

          (i) the direct or indirect  acquisition by any person or related group
     of  persons  (other  than an  acquisition  from or by the  Company  or by a
     Company-sponsored  employee  benefit  plan or by a person that  directly or
     indirectly controls, is controlled by, or is under common control with, the
     Company) of beneficial  ownership  (within the meaning of Rule 13d-3 of the
     Exchange Act) of securities possessing more than fifty percent (50%) of the
     total  combined  voting  power  of  the  Company's  outstanding  securities
     pursuant  to a tender or  exchange  offer made  directly  to the  Company's
     stockholders  which a  majority  of the  Continuing  Directors  who are not
     Affiliates or Associates of the offeror do not recommend such  stockholders
     accept, or

          (ii) a  change  in the  composition  of the  Board  over a  period  of
     thirty-six  (36) months or less such that a majority  of the Board  members
     (rounded  up to the next  whole  number)  ceases,  by reason of one or more
     contested  elections for Board  membership,  to be comprised of individuals
     who are Continuing Directors.

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

     (j)  "Committee"  means any committee  appointed by the Board to administer
the Plan.

     (k) "Common Stock" means the common stock of the Company.

     (l) "Company" means Wire One Technologies, Inc., a Delaware corporation.

     (m)  "Consultant"  means any person  (other than an Employee or a Director,
solely  with  respect to  rendering  services  in such  person's  capacity  as a
Director)  who is  engaged  by the  Company  or any  Related  Entity  to  render
consulting or advisory services to the Company or such Related Entity.

     (n) "Continuing  Directors"  means members of the Board who either (i) have
been Board members  continuously for a period of at least thirty-six (36) months
or (ii) have been Board  members for less than  thirty-six  (36) months and were
elected or nominated for election as Board members by at least a majority of the
Board members  described in clause (i) who were still in office at the time such
election or nomination was approved by the Board.

     (o)  "Continuous  Service"  means that the  provision  of  services  to the
Company or a Related Entity in any capacity of Employee, Director or Consultant,
is not  interrupted  or terminated.  Continuous  Service shall not be considered
interrupted  in the case of (i) any approved  leave of absence,  (ii)  transfers
among the Company,  any Related  Entity,  or any


                                       2
<PAGE>

successor,  in any capacity of Employee,  Director or  Consultant,  or (iii) any
change in status as long as the individual remains in the service of the Company
or a Related Entity in any capacity of Employee,  Director or Consultant (except
as  otherwise  provided in the Award  Agreement).  An approved  leave of absence
shall  include sick leave,  military  leave,  or any other  authorized  personal
leave.  For purposes of each  Incentive  Stock Option granted under the Plan, if
such leave exceeds ninety (90) days, and  reemployment  upon  expiration of such
leave is not guaranteed by statute or contract,  then the Incentive Stock Option
shall be treated as a Non-Qualified Stock Option on the day three (3) months and
one (1) day following the expiration of such ninety (90) day period.

     (p) "Corporate Transaction" means any of the following transactions:

          (i) a  merger  or  consolidation  in  which  the  Company  is not  the
     surviving  entity,  except for a transaction the principal purpose of which
     is to change the state in which the Company is incorporated;

          (ii) the sale,  transfer or other  disposition of all or substantially
     all of the  assets  of the  Company  (including  the  capital  stock of the
     Company's subsidiary corporations);

          (iii) approval by the Company's  shareholders  of any plan or proposal
     for the complete liquidation or dissolution of the Company;

          (iv) any reverse  merger in which the Company is the surviving  entity
     but in which  securities  possessing  more than fifty  percent (50%) of the
     total  combined  voting power of the Company's  outstanding  securities are
     transferred  to a person  or  persons  different  from  those who held such
     securities immediately prior to such merger; or

          (v)  acquisition by any person or related group of persons (other than
     the Company or by a Company-sponsored  employee benefit plan) of beneficial
     ownership  (within  the  meaning  of Rule  13d-3  of the  Exchange  Act) of
     securities  possessing  more than fifty percent (50%) of the total combined
     voting power of the Company's  outstanding  securities (whether or not in a
     transaction also constituting a Change in Control),  but excluding any such
     transaction  that the  Administrator  determines  shall not be a  Corporate
     Transaction.

     (q) "Director" means a member of the Board or the board of directors of any
Related Entity.

     (r)  "Disability"  means a Grantee would qualify for benefit payments under
the long-term  disability  policy of the Company or the Related  Entity to which
the Grantee  provides  services  regardless of whether the Grantee is covered by
such policy.  If the Company or the Related Entity to which the Grantee provides
service does not have a long-term  disability plan in place,  "Disability" means
that a Grantee  is  permanently  unable to carry  out the  responsibilities  and
functions  of the  position  held by the  Grantee  by  reason  of any  medically
determinable physical or mental impairment.  A Grantee will not be considered to
have incurred


                                       3
<PAGE>

a Disability  unless he or she furnishes proof of such impairment  sufficient to
satisfy the Administrator in its discretion.

     (s)  "Dividend  Equivalent  Right" means a right  entitling  the Grantee to
compensation measured by dividends paid with respect to Common Stock.

     (t) "Employee" means any person,  including an Officer or Director,  who is
an employee of the Company or any Related  Entity.  The payment of a  director's
fee by the Company or a Related  Entity shall not be  sufficient  to  constitute
"employment" by the Company.

     (u) "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     (v) "Fair Market  Value" means,  as of any date,  the value of Common Stock
determined as follows:

          (i) Where there exists a public market for the Common Stock,  the Fair
     Market Value shall be (A) the closing price for a Share for the last market
     trading day prior to the time of the determination (or, if no closing price
     was  reported  on that date,  on the last  trading  date on which a closing
     price was reported) on the stock exchange  determined by the  Administrator
     to be the  primary  market  for the  Common  Stock or the  Nasdaq  National
     Market, whichever is applicable or (B) if the Common Stock is not traded on
     any such exchange or national market system, the average of the closing bid
     and asked  prices of a Share on the  Nasdaq  Small Cap  Market  for the day
     prior to the time of the determination (or, if no such prices were reported
     on that date, on the last date on which such prices were reported), in each
     case,  as reported in The Wall Street  Journal or such other  source as the
     Administrator deems reliable; or

          (ii) In the absence of an  established  market for the Common Stock of
     the type  described in (i),  above,  the Fair Market Value thereof shall be
     determined by the Administrator in good faith.

     (w) "Good  Reason"  means the  occurrence  after a  Corporate  Transaction,
Change in Control or a Related Entity Disposition of any of the following events
or conditions unless consented to by the Grantee:

          (i)  (A)  a  change  in  the  Grantee's  status,  title,  position  or
     responsibilities  which  represents  an adverse  change from the  Grantee's
     status, title, position or responsibilities as in effect at any time within
     six (6) months  preceding  the date of a Corporate  Transaction,  Change in
     Control or Related Entity  Disposition or at any time thereafter or (B) the
     assignment  to the  Grantee  of any  duties or  responsibilities  which are
     inconsistent   with   the   Optionee's   status,    title,    position   or
     responsibilities  as in effect at any time within six (6) months  preceding
     the date of a Corporate  Transaction,  Change in Control or Related  Entity
     Disposition or at any time thereafter; or

          (ii)  reduction in the Grantee's  base salary to a level below that in
     effect at any time within six (6) months  preceding the date of a Corporate
     Transaction, Change in Control or Related Entity Disposition or at any time
     thereafter.



                                       4
<PAGE>

     (x) "Grantee"  means an Employee,  Director or  Consultant  who receives an
Award pursuant to an Award Agreement under the Plan.

     (y)  "Immediate  Family" means any child,  stepchild,  grandchild,  parent,
stepparent,   grandparent,   spouse,  former  spouse,  sibling,  niece,  nephew,
mother-in-law,  father-in-law,  son-in law, daughter-in-law,  brother-in-law, or
sister-in-law,   including  adoptive  relationships,   any  person  sharing  the
Grantee's  household  (other than a tenant or employee),  a trust in which these
persons  have  more than  fifty  percent  (50%) of the  beneficial  interest,  a
foundation  in which these  persons (or the Grantee)  control the  management of
assets,  and any other  entity in which these  persons (or the Grantee) own more
than fifty percent (50%) of the voting interests.

     (z)  "Incentive  Stock  Option"  means an Option  intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.

     (aa)  "Non-Qualified  Stock Option" means an Option not intended to qualify
as an Incentive Stock Option.

     (bb) "Officer" means a person who is an officer of the Company or a Related
Entity  within the meaning of Section 16 of the  Exchange  Act and the rules and
regulations promulgated thereunder.

     (cc)  "Option"  means an option to  purchase  Shares  pursuant  to an Award
Agreement granted under the Plan.

     (dd)  "Parent"  means a  "parent  corporation,"  whether  now or  hereafter
existing, as defined in Section 424(e) of the Code.

     (ee)  "Performance  Shares" means Shares or an Award  denominated in Shares
which may be earned in whole or in part upon attainment of performance  criteria
established by the Administrator.

     (ff) "Performance  Units" means an Award which may be earned in whole or in
part upon attainment of performance  criteria  established by the  Administrator
and which may be settled for cash,  Shares or other  securities or a combination
of cash, Shares or other securities as established by the Administrator.

     (gg) "Plan" means this 2000 Stock Incentive Plan.

     (hh)  "Related  Entity"  means any  Parent,  Subsidiary  and any  business,
corporation, partnership, limited liability company or other entity in which the
Company,  a Parent  or a  Subsidiary  holds a  substantial  ownership  interest,
directly or indirectly.

     (ii) "Related  Entity  Disposition"  means the sale,  distribution or other
disposition by the Company, a Parent or a Subsidiary of all or substantially all
of the interests of the Company,  a Parent or a Subsidiary in any Related Entity
effected by a sale, merger or


                                       5
<PAGE>

consolidation or other transaction  involving that Related Entity or the sale of
all or  substantially  all of the assets of that Related Entity,  other than any
Related Entity Disposition to the Company, a Parent or a Subsidiary.

     (jj)  "Restricted  Stock" means Shares issued under the Plan to the Grantee
for such  consideration,  if any, and subject to such  restrictions on transfer,
rights of first refusal, repurchase provisions, forfeiture provisions, and other
terms and conditions as established by the Administrator.

     (kk) "Rule  16b-3" means Rule 16b-3  promulgated  under the Exchange Act or
any successor thereto.

     (ll) "SAR" means a stock appreciation right entitling the Grantee to Shares
or  cash  compensation,  as  established  by  the  Administrator,   measured  by
appreciation in the value of Common Stock.

     (mm) "Share" means a share of the Common Stock.

     (nn)  "Subsidiary"  means  a  "subsidiary   corporation,"  whether  now  or
hereafter existing, as defined in Section 424(f) of the Code.

     3. Stock Subject to the Plan.

     (a) Subject to the provisions of Section 10, below,  the maximum  aggregate
number of Shares which may be issued pursuant to all Awards (including Incentive
Stock Options) is 3,000,000  Shares.  The Shares to be issued pursuant to Awards
may be authorized, but unissued, or reacquired Common Stock.

     (b) Any  Shares  covered  by an Award (or  portion  of an  Award)  which is
forfeited  or  canceled,  expires or is settled in cash,  shall be deemed not to
have been issued for purposes of  determining  the maximum  aggregate  number of
Shares which may be issued under the Plan. Shares that actually have been issued
under the Plan  pursuant to an Award shall not be returned to the Plan and shall
not become available for future issuance under the Plan, except that if unvested
Shares are forfeited,  or repurchased by the Company at their original  purchase
price, such Shares shall become available for future grant under the Plan.

     4. Administration of the Plan.

     (a) Plan Administrator.

          (i)  Administration  with  Respect to  Directors  and  Officers.  With
     respect to grants of Awards to Directors or Employees who are also Officers
     or  Directors  of the Company,  the Plan shall be  administered  by (A) the
     Board or (B) a Committee  designated by the Board, which Committee shall be
     constituted  in such a manner  as to  satisfy  the  Applicable  Laws and to
     permit  such grants and  related  transactions  under the Plan to be exempt
     from Section


                                       6
<PAGE>

     16(b) of the Exchange Act in accordance  with Rule 16b-3.  Once  appointed,
     such Committee  shall  continue to serve in its  designated  capacity until
     otherwise directed by the Board.

          (ii)  Administration  With Respect to Consultants and Other Employees.
     With  respect  to  grants of Awards to  Employees  or  Consultants  who are
     neither  Directors  nor  Officers  of  the  Company,   the  Plan  shall  be
     administered  by (A) the Board or (B) a Committee  designated by the Board,
     which  Committee  shall be  constituted  in such a manner as to satisfy the
     Applicable Laws. Once appointed,  such Committee shall continue to serve in
     its designated  capacity until otherwise  directed by the Board.  The Board
     may  authorize one or more Officers to grant such Awards and may limit such
     authority as the Board determines from time to time.

          (iii)  Administration  Errors.  In the event an Award is  granted in a
     manner  inconsistent with the provisions of this subsection (a), such Award
     shall be  presumptively  valid as of its grant date to the extent permitted
     by the Applicable Laws.

     (b)  Powers  of the  Administrator.  Subject  to  Applicable  Laws  and the
provisions of the Plan  (including  any other powers given to the  Administrator
hereunder),  and except as otherwise  provided by the Board,  the  Administrator
shall have the authority, in its discretion:

          (i) to select the Employees,  Directors and Consultants to whom Awards
     may be granted from time to time hereunder;

          (ii) to  determine  whether  and to what  extent  Awards  are  granted
     hereunder;

          (iii) to  determine  the  number  of  Shares  or the  amount  of other
     consideration to be covered by each Award granted hereunder;

          (iv) to approve forms of Award Agreements for use under the Plan;

          (v) to  determine  the  terms  and  conditions  of any  Award  granted
     hereunder;

          (vi) to amend the terms of any  outstanding  Award  granted  under the
     Plan, provided that any amendment that would adversely affect the Grantee's
     rights under an  outstanding  Award shall not be made without the Grantee's
     written consent;

          (vii) to  construe  and  interpret  the  terms of the Plan and  Awards
     granted pursuant to the Plan,  including without limitation,  any notice of
     Award or Award Agreement, granted pursuant to the Plan;

          (viii) to establish additional terms, conditions,  rules or procedures
     to accommodate the rules or laws of applicable foreign jurisdictions and to
     afford Grantees  favorable  treatment under such laws;  provided,  however,
     that no Award shall be granted under


                                       7
<PAGE>

     any such additional  terms,  conditions,  rules or procedures with terms or
     conditions which are inconsistent with the provisions of the Plan; and

          (ix) to take such other action, not inconsistent with the terms of the
     Plan, as the Administrator deems appropriate.

     5. Eligibility. Awards other than Incentive Stock Options may be granted to
Employees,  Directors and  Consultants.  Incentive  Stock Options may be granted
only to  Employees  of the  Company,  a Parent  or a  Subsidiary.  An  Employee,
Director or Consultant who has been granted an Award may, if otherwise eligible,
be granted additional Awards. Awards may be granted to such Employees, Directors
or Consultants who are residing in foreign  jurisdictions  as the  Administrator
may determine from time to time.

     6. Terms and Conditions of Awards.

     (a) Type of Awards. The Administrator is authorized under the Plan to award
any type of  arrangement  to an  Employee,  Director or  Consultant  that is not
inconsistent  with the  provisions of the Plan and that by its terms involves or
might involve the issuance of (i) Shares, (ii) an Option, a SAR or similar right
with a fixed or variable  price  related to the Fair Market  Value of the Shares
and with an exercise or conversion privilege related to the passage of time, the
occurrence of one or more events, or the satisfaction of performance criteria or
other  conditions,  or (iii) any other  security with the value derived from the
value of the Shares.  Such awards include,  without limitation,  Options,  SARs,
sales or bonuses of Restricted Stock,  Dividend  Equivalent Rights,  Performance
Units or  Performance  Shares,  and an Award may consist of one such security or
benefit, or two (2) or more of them in any combination or alternative.

     (b)  Designation  of Award.  Each Award  shall be  designated  in the Award
Agreement. In the case of an Option, the Option shall be designated as either an
Incentive Stock Option or a Non-Qualified Stock Option. However, notwithstanding
such  designation,  to the extent that the aggregate Fair Market Value of Shares
subject  to  Options   designated  as  Incentive   Stock  Options  which  become
exercisable  for the first time by a Grantee during any calendar year (under all
plans of the Company or any Parent or Subsidiary) exceeds $100,000,  such excess
Options,  to the extent of the Shares covered thereby in excess of the foregoing
limitation,  shall be treated as Non-Qualified Stock Options.  For this purpose,
Incentive  Stock  Options shall be taken into account in the order in which they
were granted,  and the Fair Market Value of the Shares shall be determined as of
the date the Option with respect to such Shares is granted.

     (c)   Conditions  of  Award.   Subject  to  the  terms  of  the  Plan,  the
Administrator  shall  determine the  provisions,  terms,  and conditions of each
Award  including,  but not limited to, the Award  vesting  schedule,  repurchase
provisions,  rights of first  refusal,  forfeiture  provisions,  form of payment
(cash,  Shares, or other  consideration)  upon settlement of the Award,  payment
contingencies,  and  satisfaction of any performance  criteria.  The performance
criteria  established  by the  Administrator  may be  based  on any one  of,  or
combination of, increase in share price,  earnings per share,  total stockholder
return, return on equity, return on assets, return on investment,  net operating
income,   cash  flow,  revenue,   economic  value  added,   personal


                                       8
<PAGE>

management  objectives,   or  other  measure  of  performance  selected  by  the
Administrator.  Partial  achievement  of the specified  criteria may result in a
payment or vesting  corresponding  to the degree of  achievement as specified in
the Award Agreement.

     (d) Acquisitions and Other Transactions. The Administrator may issue Awards
under the Plan in settlement, assumption or substitution for, outstanding awards
or  obligations  to grant  future  awards in  connection  with the  Company or a
Related Entity  acquiring  another  entity,  an interest in another entity or an
additional interest in a Related Entity whether by merger, stock purchase, asset
purchase or other form of transaction.

     (e) Deferral of Award Payment.  The Administrator may establish one or more
programs under the Plan to permit selected  Grantees the opportunity to elect to
defer  receipt of  consideration  upon  exercise  of an Award,  satisfaction  of
performance  criteria, or other event that absent the election would entitle the
Grantee to payment or receipt of Shares or other  consideration  under an Award.
The  Administrator  may  establish the election  procedures,  the timing of such
elections,  the  mechanisms  for  payments  of, and accrual of interest or other
earnings,  if any, on amounts,  Shares or other  consideration so deferred,  and
such other terms, conditions,  rules and procedures that the Administrator deems
advisable for the administration of any such deferral program.

     (f) Award Exchange  Programs.  The  Administrator may establish one or more
programs under the Plan to permit  selected  Grantees to exchange an Award under
the Plan for one or more other types of Awards  under the Plan on such terms and
conditions as determined by the Administrator from time to time.

     (g) Separate Programs. The Administrator may establish one or more separate
programs under the Plan for the purpose of issuing particular forms of Awards to
one or more classes of Grantees on such terms and  conditions  as  determined by
the Administrator from time to time.

     (h)  Early  Exercise.  The Award  Agreement  may,  but need not,  include a
provision whereby the Grantee may elect at any time while an Employee,  Director
or  Consultant to exercise any part or all of the Award prior to full vesting of
the Award. Any unvested Shares received pursuant to such exercise may be subject
to a  repurchase  right in favor of the  Company  or a Related  Entity or to any
other restriction the Administrator determines to be appropriate.

     (i) Term of Award.  The term of each Award  shall be the term stated in the
Award Agreement,  provided,  however, that the term of an Incentive Stock Option
shall be no more than ten (10) years from the date of grant thereof. However, in
the case of an Incentive  Stock Option granted to a Grantee who, at the time the
Option is granted,  owns stock  representing  more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the term of the Incentive  Stock Option shall be five (5) years from the date of
grant thereof or such shorter term as may be provided in the Award Agreement.



                                       9
<PAGE>

     (j)  Transferability  of Awards.  Incentive  Stock Options may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent  or  distribution  and may be  exercised,
during the lifetime of the Grantee, only by the Grantee; provided, however, that
the Grantee may designate a beneficiary of the Grantee's  Incentive Stock Option
in the event of the Grantee's death on a beneficiary  designation  form provided
by the  Administrator.  Other  Awards  may be  transferred  by gift or through a
domestic  relations  order to members of the Grantee's  Immediate  Family to the
extent  provided  in the Award  Agreement  or in the  manner  and to the  extent
determined by the Administrator.

     (k) Time of  Granting  Awards.  The date of grant of an Award shall for all
purposes be the date on which the Administrator makes the determination to grant
such Award, or such other date as is determined by the Administrator.  Notice of
the grant determination shall be given to each Employee,  Director or Consultant
to whom an Award is so granted  within a reasonable  time after the date of such
grant.

     7. Award Exercise or Purchase Price, Consideration and Taxes.

     (a) Exercise or Purchase Price. The exercise or purchase price, if any, for
an Award shall be as follows:

          (i) In the case of an Incentive Stock Option:

               (A) granted to an Employee  who, at the time of the grant of such
          Incentive Stock Option owns stock  representing  more than ten percent
          (10%) of the voting  power of all  classes of stock of the  Company or
          any Parent or  Subsidiary,  the per Share  exercise price shall be not
          less than one hundred ten percent  (110%) of the Fair Market Value per
          Share on the date of grant; or

               (B) granted to any Employee  other than an Employee  described in
          the preceding  paragraph,  the per Share  exercise  price shall be not
          less than one  hundred  percent  (100%) of the Fair  Market  Value per
          Share on the date of grant.

          (ii) In the  case  of a  Non-Qualified  Stock  Option,  the per  Share
     exercise price shall be not less than eighty-five percent (85%) of the Fair
     Market Value per Share on the date of grant unless otherwise  determined by
     the Administrator.

          (iii) In the case of other Awards,  such price as is determined by the
     Administrator.

          (iv) Notwithstanding the foregoing provisions of this Section 7(a), in
     the case of an Award issued pursuant to Section 6(d),  above,  the exercise
     or purchase price for the Award shall be determined in accordance  with the
     principles of Section 424(a) of the Code.

     (b) Consideration. Subject to Applicable Laws, the consideration to be paid
for the Shares to be issued upon exercise or purchase of an Award  including the
method of payment, shall be determined by the Administrator (and, in the case of
an  Incentive  Stock


                                       10
<PAGE>

Option,  shall be  determined  at the time of grant).  In  addition to any other
types of consideration  the  Administrator  may determine,  the Administrator is
authorized  to accept as  consideration  for  Shares  issued  under the Plan the
following, provided that the portion of the consideration equal to the par value
of the Shares must be paid in cash or other legal consideration permitted by the
Delaware General Corporation Law:

          (i) cash;

          (ii) check;

          (iii)  delivery  of  Grantee's  promissory  note with  such  recourse,
     interest,   security,   and  redemption  provisions  as  the  Administrator
     determines as appropriate;

          (iv)  surrender of Shares or delivery of a properly  executed  form of
     attestation  of  ownership  of  Shares  as the  Administrator  may  require
     (including withholding of Shares otherwise deliverable upon exercise of the
     Award)  which  have  a Fair  Market  Value  on the  date  of  surrender  or
     attestation equal to the aggregate exercise price of the Shares as to which
     said Award shall be exercised (but only to the extent that such exercise of
     the  Award  would not  result in an  accounting  compensation  charge  with
     respect to the  Shares  used to pay the  exercise  price  unless  otherwise
     determined by the Administrator);

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

          (vi) any combination of the foregoing methods of payment.

     (c) Taxes.  No Shares shall be  delivered  under the Plan to any Grantee or
other person until such Grantee or other person has made arrangements acceptable
to the  Administrator  for the satisfaction of any foreign,  federal,  state, or
local income and  employment tax  withholding  obligations,  including,  without
limitation,  obligations  incident to the receipt of Shares or the disqualifying
disposition of Shares  received on exercise of an Incentive  Stock Option.  Upon
exercise of an Award,  the Company  shall  withhold or collect  from  Grantee an
amount sufficient to satisfy such tax obligations.

     8. Exercise of Award.

     (a) Procedure for Exercise; Rights as a Stockholder.

          (i) Any Award granted hereunder shall be exercisable at such times and
     under such conditions as determined by the Administrator under the terms of
     the Plan and specified in the Award Agreement.



                                       11
<PAGE>

          (ii) An Award shall be deemed to be exercised  when written  notice of
     such exercise has been given to the Company in accordance with the terms of
     the Award by the person entitled to exercise the Award and full payment for
     the Shares with respect to which the Award is exercised,  including, to the
     extent selected,  use of the broker-dealer sale and remittance procedure to
     pay the purchase price as provided in Section  7(b)(v).  Until the issuance
     (as evidenced by the appropriate  entry on the books of the Company or of a
     duly  authorized  transfer  agent of the Company) of the stock  certificate
     evidencing such Shares,  no right to vote or receive dividends or any other
     rights as a  stockholder  shall exist with respect to Shares  subject to an
     Award,  notwithstanding  the  exercise  of an  Option or other  Award.  The
     Company shall issue (or cause to be issued) such stock certificate promptly
     upon exercise of the Award.  No  adjustment  will be made for a dividend or
     other  right  for  which  the  record  date is prior to the date the  stock
     certificate is issued, except as provided in the Award Agreement or Section
     10, below.

     (b) Exercise of Award Following Termination of Continuous Service.

          (i) An Award may not be exercised after the  termination  date of such
     Award set forth in the Award  Agreement and may be exercised  following the
     termination of a Grantee's  Continuous  Service only to the extent provided
     in the Award Agreement.

          (ii) Where the Award Agreement  permits a Grantee to exercise an Award
     following  the  termination  of  the  Grantee's  Continuous  Service  for a
     specified period,  the Award shall terminate to the extent not exercised on
     the last day of the  specified  period or the last day of the original term
     of the Award, whichever occurs first.

          (iii) Any Award  designated as an Incentive Stock Option to the extent
     not  exercised  within  the  time  permitted  by law  for the  exercise  of
     Incentive Stock Options following the termination of a Grantee's Continuous
     Service shall convert  automatically  to a  Non-Qualified  Stock Option and
     thereafter  shall be exercisable  as such to the extent  exercisable by its
     terms for the period specified in the Award Agreement.

     9. Conditions Upon Issuance of Shares.

     (a) Shares shall not be issued  pursuant to the exercise of an Award unless
the exercise of such Award and the issuance and delivery of such Shares pursuant
thereto shall comply with all Applicable  Laws, and shall be further  subject to
the approval of counsel for the Company with respect to such compliance.

     (b) As a condition to the exercise of an Award, the Company may require the
person  exercising  such Award to represent  and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present  intention  to sell or  distribute  such  Shares  if, in the  opinion of
counsel for the Company,  such a  representation  is required by any  Applicable
Laws.

     10.  Adjustments  Upon Changes in  Capitalization.  Subject to any required
action by the stockholders of the Company,  the number of Shares covered by each
outstanding  Award,  and the  number of Shares  which have been  authorized  for
issuance under the Plan but as to which no


                                       12
<PAGE>

Awards  have yet been  granted  or which  have been  returned  to the Plan,  the
exercise or purchase price of each such outstanding  Award, as well as any other
terms  that  the   Administrator   determines   require   adjustment   shall  be
proportionately  adjusted  for (i) any  increase  or  decrease  in the number of
issued Shares resulting from a stock split, reverse stock split, stock dividend,
combination or  reclassification  of the Shares,  or similar event affecting the
Shares,  (ii) any other  increase  or  decrease  in the number of issued  Shares
effected  without  receipt  of  consideration  by the  Company,  or (iii) as the
Administrator  may  determine  in its  discretion,  any other  transaction  with
respect  to Common  Stock to which  Section  424(a) of the Code  applies  or any
similar  transaction;  provided,  however  that  conversion  of any  convertible
securities  of the Company  shall not be deemed to have been  "effected  without
receipt of  consideration."  Such adjustment shall be made by the  Administrator
and its  determination  shall be final,  binding and  conclusive.  Except as the
Administrator  determines,  no issuance by the Company of shares of stock of any
class,  or  securities  convertible  into  shares of stock of any  class,  shall
affect,  and no  adjustment  by reason hereof shall be made with respect to, the
number or price of Shares subject to an Award.

     11. Corporate  Transactions/Changes in Control/Related Entity Dispositions.
Except as may be provided in an Award Agreement:

     (a) In the event of any Corporate  Transaction,  each Award which is at the
time  outstanding  under the Plan  automatically  shall  become fully vested and
exercisable  and be  released  from any  restrictions  on  transfer  (other than
transfer  restrictions  applicable  to Options)  and  repurchase  or  forfeiture
rights,  immediately  prior to the specified  effective  date of such  Corporate
Transaction,  for all of the  Shares  at the  time  represented  by such  Award.
Effective upon the  consummation of the Corporate  Transaction,  all outstanding
Awards  under the Plan  shall  terminate.  However,  all such  Awards  shall not
terminate  if the Awards  are, in  connection  with the  Corporate  Transaction,
assumed  by the  successor  corporation  or  Parent  thereof.  In  addition,  an
outstanding  Award under the Plan shall not so fully vest and be exercisable and
released  from such  limitations  if and to the  extent:  (i) such  Award is, in
connection  with the  Corporate  Transaction,  either  assumed by the  successor
corporation or Parent  thereof or replaced with a comparable  Award with respect
to shares of the capital stock of the successor corporation or Parent thereof or
(ii) such Award is to be replaced with a cash incentive program of the successor
corporation  which preserves the compensation  element of such Award existing at
the time of the  Corporate  Transaction  and provides for  subsequent  payout in
accordance with the same vesting  schedule  applicable to such Award;  provided,
however, that such Award (if assumed),  the replacement Award (if replaced),  or
the cash incentive program automatically shall become fully vested,  exercisable
and payable  and be  released  from any  restrictions  on  transfer  (other than
transfer restrictions applicable to Options) and repurchase or forfeiture rights
immediately upon termination of the Grantee's  Continuous Service  (substituting
the  successor  employer  corporation  for  "Company or Related  Entity" for the
definition of "Continuous  Service") if such Continuous Service is terminated by
the  successor  company  without Cause or  voluntarily  by the Grantee with Good
Reason within twelve (12) months of the Corporate Transaction. The determination
of Award comparability above shall be made by the Administrator.



                                       13
<PAGE>

     (b)  Following a Change in Control  (other  than a Change in Control  which
also is a Corporate  Transaction)  and upon the  termination  of the  Continuous
Service of a Grantee if such Continuous  Service is terminated by the Company or
Related  Entity  without  Cause or  voluntarily  by the Grantee with Good Reason
within  twelve (12) months of a Change in  Control,  each Award of such  Grantee
which is at the time outstanding under the Plan automatically shall become fully
vested and exercisable and be released from any  restrictions on transfer (other
than transfer  restrictions  applicable to Options) and repurchase or forfeiture
rights, immediately upon the termination of such Continuous Service.

     (c) Effective upon the  consummation of a Related Entity  Disposition,  for
purposes of the Plan and all Awards,  the Continuous Service of each Grantee who
is at the time engaged  primarily in service to the Related  Entity  involved in
such Related Entity  Disposition  shall be deemed to terminate and each Award of
such Grantee which is at the time outstanding under the Plan automatically shall
become fully vested and  exercisable  and be released from any  restrictions  on
transfer (other than transfer restrictions applicable to Options) and repurchase
or forfeiture rights for all of the Shares at the time represented by such Award
and  be  exercisable  in  accordance  with  the  terms  of the  Award  Agreement
evidencing such Award.  However,  such Continuous Service shall be not be deemed
to  terminate  if  such  Award  is,  in  connection   with  the  Related  Entity
Disposition,  assumed by the successor entity or its Parent.  In addition,  such
Continuous  Service  shall not be deemed to terminate and an  outstanding  Award
under the Plan shall not so fully vest and be exercisable and released from such
limitations  if and to the  extent:  (i) such Award is, in  connection  with the
Related Entity Disposition,  either to be assumed by the successor entity or its
parent or to be replaced  with a  comparable  Award with respect to interests in
the  successor  entity or its parent or (ii) such Award is to be replaced with a
cash incentive  program of the successor entity which preserves the compensation
element of such Award existing at the time of the Related Entity Disposition and
provides for  subsequent  payout in  accordance  with the same vesting  schedule
applicable to such Award;  provided,  however, that such Award (if assumed), the
replacement  Award (if replaced),  or the cash incentive  program  automatically
shall  become fully  vested,  exercisable  and payable and be released  from any
restrictions  on  transfer  (other  than  transfer  restrictions  applicable  to
Options) and repurchase or forfeiture rights immediately upon termination of the
Grantee's  Continuous  Service  (substituting the successor  employer entity for
"Company or Related Entity" for the definition of "Continuous  Service") if such
Continuous  Service is  terminated  by the  successor  entity  without  Cause or
voluntarily  by the Grantee  with Good Reason  within  twelve (12) months of the
Related Entity Disposition. The determination of Award comparability above shall
be made by the Administrator.

     12.  Effective Date and Term of Plan. The Plan shall become  effective upon
the  earlier  to occur of its  adoption  by the  Board  or its  approval  by the
stockholders of the Company.  It shall continue in effect for a term of ten (10)
years unless sooner  terminated.  Subject to Section 17, below,  and  Applicable
Laws, Awards may be granted under the Plan upon its becoming effective.

     13. Amendment, Suspension or Termination of the Plan.



                                       14
<PAGE>

     (a) The Board may at any time amend,  suspend or terminate the Plan. To the
extent  necessary  to comply with  Applicable  Laws,  the Company  shall  obtain
stockholder approval of any Plan amendment in such a manner and to such a degree
as required.

     (b) No Award may be  granted  during  any  suspension  of the Plan or after
termination of the Plan.

     (c)  Any  amendment,  suspension  or  termination  of the  Plan  (including
termination of the Plan under Section 12, above) shall not affect Awards already
granted,  and such Awards  shall  remain in full force and effect as if the Plan
had not been amended, suspended or terminated,  unless mutually agreed otherwise
between the Grantee and the  Administrator,  which  agreement must be in writing
and signed by the Grantee and the Company.

     14. Reservation of Shares.

     (a) The Company, during the term of the Plan, will at all times reserve and
keep  available  such  number of Shares as shall be  sufficient  to satisfy  the
requirements of the Plan.

     (b) The inability of the Company to obtain  authority  from any  regulatory
body having jurisdiction,  which authority is deemed by the Company's counsel to
be necessary  to the lawful  issuance  and sale of any Shares  hereunder,  shall
relieve the Company of any  liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.

     15.  No  Effect on Terms of  Employment/Consulting  Relationship.  The Plan
shall not  confer  upon any  Grantee  any right with  respect  to the  Grantee's
Continuous  Service,  nor shall it interfere in any way with his or her right or
the Company's right to terminate the Grantee's  Continuous  Service at any time,
with or without cause.

     16. No Effect on Retirement and Other Benefit Plans. Except as specifically
provided  in a  retirement  or other  benefit  plan of the  Company or a Related
Entity,  Awards  shall not be deemed  compensation  for  purposes  of  computing
benefits or contributions  under any retirement plan of the Company or a Related
Entity,  and shall not affect any benefits  under any other  benefit plan of any
kind or any benefit plan subsequently instituted under which the availability or
amount  of  benefits  is  related  to level of  compensation.  The Plan is not a
"Retirement  Plan" or  "Welfare  Plan"  under  the  Employee  Retirement  Income
Security Act of 1974, as amended.

     17.  Stockholder  Approval.  The grant of Incentive Stock Options under the
Plan shall be subject to approval  by the  stockholders  of the  Company  within
twelve  (12)  months  before  or after  the date the Plan is  adopted  excluding
Incentive Stock Options issued in substitution  for outstanding  Incentive Stock
Options pursuant to Section 424(a) of the Code. Such stockholder  approval shall
be  obtained  in the degree and  manner  required  under  Applicable  Laws.  The
Administrator may grant Incentive Stock Options under the Plan prior to approval
by the  stockholders,  but until such  approval is obtained,  no such  Incentive
Stock Option shall be exercisable. In the event that stockholder approval is not
obtained within the twelve (12) month


                                       15
<PAGE>


period provided above, all Incentive Stock Options  previously granted under the
Plan shall be exercisable as Non-Qualified Stock Options.




                                       16
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-27
<SEQUENCE>4
<FILENAME>d23878_ex-27.xfd
<TEXT>

<TABLE> <S> <C>

<ARTICLE>    5
<LEGEND>    This  schedule  contains  summary  financial   information
extracted  from  the
financial  statements  accompanying the filings of Form 10-Q and is qualified in
its entirety by reference to such financial statements.

<S>                                                      <C>                           <C>
<PERIOD-TYPE>                                          3-MOS                         9-MOS
<PERIOD-START>                                   Jul-01-2000                   Jan-01-2000
<FISCAL-YEAR-END>                                Dec-31-2000                   Dec-31-2000
<PERIOD-END>                                     Sep-30-2000                   Sep-30-2000
<CASH>                                             2,576,066                     2,576,066
<SECURITIES>                                               0                             0
<RECEIVABLES>                                     24,124,243                    24,124,243
<ALLOWANCES>                                         571,826                       571,826
<INVENTORY>                                        7,397,585                     7,397,585
<CURRENT-ASSETS>                                  35,893,914                    35,893,914
<PP&E>                                             9,903,083                     9,903,083
<DEPRECIATION>                                     5,261,094                     5,261,094
<TOTAL-ASSETS>                                    75,934,820                    75,934,820
<CURRENT-LIABILITIES>                             14,620,114                    14,620,114
<BONDS>                                                    0                             0
<PREFERRED-MANDATORY>                             11,497,377                    11,467,377
<PREFERRED>                                                0                             0
<COMMON>                                               1,695                         1,695
<OTHER-SE>                                        49,726,766                    49,726,766
<TOTAL-LIABILITY-AND-EQUITY>                      75,934,820                    75,934,820
<SALES>                                           18,287,167                    35,397,300
<TOTAL-REVENUES>                                  18,287,167                    35,397,300
<CGS>                                             12,345,638                    23,632,170
<TOTAL-COSTS>                                     18,852,121                    36,343,537
<OTHER-EXPENSES>                                   (137,518)                        42,902
<LOSS-PROVISION>                                           0                             0
<INTEREST-EXPENSE>                                    13,634                        67,118
<INCOME-PRETAX>                                    (441,070)                   (1,056,257)
<INCOME-TAX>                                               0                             0
<INCOME-CONTINUING>                                (441,070)                   (1,056,257)
<DISCONTINUED>                                             0                             0
<EXTRAORDINARY>                                            0                             0
<CHANGES>                                                  0                             0
<NET-INCOME>                                       (441,070)                   (1,056,257)
<EPS-BASIC>                                            (.05)                         (.85)
<EPS-DILUTED>                                          (.05)                         (.85)


</TABLE>
</TEXT>
</DOCUMENT>
</SUBMISSION>
