<PAGE>


THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.

--------------------------------------------------------------------------------
                            AM Communications, Inc.
               WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK


Warrant No. P-__________                               ________Shares
_________________, 2002
--------------------------------------------------------------------------------

         FOR VALUE RECEIVED AM Communications, Inc., a Delaware corporation (the
"Company"), with its principal office at 1900 AM Drive, Quakertown, Pennsylvania
18951-2107, hereby certifies that ________________ (the "Holder") is entitled,
subject to the provisions of this Warrant, to purchase from the Company, at any
time and continuing for a period of six (6) years through ______, 2008 (the
"Expiration Date"), up to the number of fully paid and non-assessable shares of
Common Stock of the Company set forth above, subject to adjustment as
hereinafter provided.

         The Holder may purchase such number of shares of Common Stock at a
purchase price per share of twenty-seven cents ($0.27) or (the "Exercise
Price"). The term "Common Stock" shall mean the aforementioned Common Stock of
the Company, together with any other equity securities that may be issued by the
Company in addition thereto or in substitution therefor as provided herein.

         The number of shares of Common Stock to be received upon the exercise
or exchange of this Warrant and the price to be paid for a share of Common Stock
are subject to adjustment from time to time as hereinafter set forth. The shares
of Common Stock deliverable upon such exercise or exchange, as adjusted from
time to time, are hereinafter sometimes referred to as "Warrant Shares."

                                       1

<PAGE>



         Section 1. Exercise of Warrant; Cashless Exercise.

         (a) This Warrant may be exercised in whole or in part on any business
day on or before the Expiration Date by presentation and surrender hereof to the
Company at its principal office at the address set forth in the initial
paragraph hereof (or at such other address as the Company may hereafter notify
the Holder in writing) with the Purchase Form annexed hereto duly executed and
accompanied by proper payment of the Exercise Price in lawful money of the
United States of America in the form of a check, subject to collection, or a
wire transfer for the number of Warrant Shares specified in the Purchase Form.
If this Warrant should be exercised in part only, the Company shall, upon
surrender of this Warrant, execute and deliver a new Warrant evidencing the
rights of the Holder thereof to purchase the balance of the Warrant Shares
purchasable hereunder. Upon receipt by the Company of this Warrant and such
Purchase Form, together with proper payment of the Exercise Price, at such
office, the Holder shall be deemed to be the holder of record of the Warrant
Shares, notwithstanding that the stock transfer books of the Company shall then
be closed or that certificates representing such Warrant Shares shall not then
be actually delivered to the Holder. The Company shall pay any and all
documentary stamp or similar issue or transfer taxes payable in respect of the
issue or delivery of the Warrant Shares.

         (b) In addition to the rights of the Holder under paragraph (a) above,
the Holder shall have the right to exercise this Warrant, in whole or in part,
in lieu of paying the Exercise Price in cash, by instructing the Company to
issue that number of Warrant Shares determined by multiplying the number of
Warrant Shares in respect of which this Warrant is being exercised by a
fraction, the numerator of which shall be the difference between the Market
Price (as defined in Section 6(g) below) per share of Common Stock on the date
of exercise and the Exercise Price, and the denominator of which shall be the
Market Price (as defined in Section 6(g) below) per share of Common Stock.

         Section 2. Reservation of Shares. The Company hereby agrees that at all
times there shall be reserved for issuance and delivery upon exercise or
exchange of this Warrant all shares of its Common Stock or other shares of
capital stock of the Company from time to time issuable upon exercise or
exchange of this Warrant. All such shares shall be duly authorized and, when
issued upon the exercise or exchange of the Warrant in accordance with the terms
hereof, shall be validly issued, fully paid and nonassessable, free and clear of
all liens, security interests, charges and other encumbrances or restrictions on
sale (other than any restrictions on sale pursuant to applicable federal and
state securities laws) and free and clear of all preemptive rights.

         Section 3. Fractional Interest

         The Company will not issue a fractional share of Common Stock upon
exercise or exchange of this Warrant. Instead, the Company will deliver its
check for the current market value of the fractional share. The current market
value of a fraction of a share is determined as follows: multiply the Market
Price (as defined in Section 6(g) below) of a full share by the fraction of a
share and round the result to the nearest cent.

                                       2
<PAGE>
         Section 4. Assignment or Loss of Warrant.

         (a) Except as provided in Section 9, and only upon the presentation to
the Company of written instruction from a bona fide officer or director of the
Holder, the Holder of this Warrant shall be entitled, without obtaining the
consent of the Company, to assign its interest in this Warrant, or any of the
Warrant Shares, in whole or in part, provided, however, that the transferee,
prior to any such transfer, agrees in writing, in form and substance
satisfactory to the Company, to be bound by the terms of this Agreement as if
originally a party hereto and provides the Company with an opinion of counsel in
such form reasonably acceptable to the Company and its counsel, that such
transfer would not be in violation of the Act or any applicable state securities
or blue sky laws. Subject to the provisions hereof and of Section 9, upon
surrender of this Warrant to the Company or at the office of its stock transfer
agent or warrant agent, with the Assignment Form annexed hereto duly executed by
a bona fide officer or director of the Holder and funds sufficient to pay any
transfer or other tax payable in respect thereof, the Company shall, without
charge, execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees named in such instrument of assignment and, if the
Holder's entire interest is not being assigned, in the name of the Holder, and
this Warrant shall promptly be canceled.

         (b) Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant, and (in the case of loss,
theft or destruction) of indemnification satisfactory to the Company, and upon
surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.

         Section 5. Rights of the Holder. The Holder shall not, by virtue
hereof, be entitled to any rights of a shareholder in the Company, either at law
or equity, and the rights of the Holder are limited to those set forth in this
Warrant. Nothing contained in this Warrant shall be construed as conferring upon
the Holder hereof the right to vote or to consent or to receive notice as a
shareholder of the Company on any matters or with respect to any rights
whatsoever as a shareholder of the Company. No dividends or interest shall be
payable or accrued in respect of this Warrant or the interest represented hereby
or the Warrant Shares purchasable hereunder until, and only to the extent that,
this Warrant shall have been exercised or exchanged in accordance with its
terms. Notwithstanding the foregoing, the Holder shall have the right to
participate pro rata (i.e., in proportion to the total number of Warrants
granted hereby to the number of fully diluted shares of Common Stock prior to
the subscription or rights offering) in any subscription or rights offering.

         Section 6. Adjustment of Exercise Price and Number of Shares. In the
event of an adjustment of exercise price or number of shares, the Company shall
be required to provide the Holder with notice of such adjustment. Such notice
shall be in accordance with Section 11 hereof. The number and kind of securities
purchasable upon the exercise or exchange of this Warrant and the Exercise Price
shall be subject to adjustment from time to time upon the occurrence of certain
events, as follows:

         (a) Adjustment for Change in Capital Stock. If at any time after the
Warrant Date, the Company:

             (A) pays a dividend or makes a distribution on its Common Stock, in
                 either case in shares of its Common Stock;



                                       3
<PAGE>

             (B) subdivides its outstanding shares of Common Stock into a
                 greater number of shares;

             (C) combines its outstanding shares of Common Stock into a smaller
                 number of shares; or

             (D) makes a distribution on its Common Stock in shares of its
                 capital stock other than Common Stock;

then the Exercise Price in effect immediately prior to such action shall be
adjusted so that the Holder may receive, upon exercise or exchange of this
Warrant and payment of the same aggregate consideration, the number of shares of
capital stock of the Company which the Holder would have owned immediately
following such action if the Holder had exercised or exchanged the Warrant
immediately prior to such action.

         The adjustment shall become effective immediately after the record date
in the case of a dividend or distribution and immediately after the effective
date in the case of a subdivision, combination or reclassification.

         (b) Adjustment for Other Distributions. If at any time after the
Warrant Date, the Company distributes to all of its Common Stock holders any of
its assets, equity securities or debt securities, the Holder shall be entitled,
without additional consideration, to the same distribution as it would have
received if it had been a holder of the Warrant Shares.

         This subsection does not apply to cash dividends or cash distributions
paid out of consolidated current or retained earnings as shown on the books of
the Company and paid in the ordinary course of business.

         (c) Adjustment for Common Stock Issue. If at any time after the Warrant
Date, the Company issues shares of Common Stock for consideration per share less
than the Exercise Price per share on the date the Company fixes the offering
price of such additional shares, the Exercise Price shall be adjusted in
accordance with the following formula:

                                             O + P
                                                 -
                               E' = E x          E
                                             -----
                                               A
where:            E' =   the adjusted Exercise Price.

                  E  =   the Exercise Price immediately prior to the adjustment.

                  O  =   the number of shares outstanding immediately prior to
                         the issuance of such additional shares.

                  P  =   the aggregate consideration received for the issuance
                         of such additional shares.

                  A  =   the number of shares outstanding immediately after the
                         issuance of such additional shares.



                                       4
<PAGE>

         The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.

         This subsection (c) does not apply to (i) any of the transactions
described in subsections (b) and (d), (ii) Common Stock issued pursuant to
options, warrants, convertible preferred stock and other rights to purchase
shares of Common Stock outstanding on the Warrant Date, (iii) Common Stock
issued to shareholders of any non-affiliated person which merges into or with
the Company, or any subsidiary of the Company, in proportion to their stock
holdings of such person immediately prior to such merger, upon such merger, or
(iv) Common Stock issued to directors or employees of, or consultants to, the
Company upon the exercise of warrants, rights or options which (A) are issued
pursuant to stock option plans, employee benefit plans, employment agreements or
consulting agreements, in each case approved by the Company's Board of Directors
or an appropriate committee of the Company's Board of Directors, and (B) have an
exercise price not less than 70% of the Market Price (as defined in Section 6(g)
hereof) of the Company's Common Stock at the time of issuance of such warrants,
rights or options.

         (d) Adjustment for Convertible Securities Issue. If at any time after
the Warrant Date, the Company issues for consideration any securities
convertible into or exchangeable or exercisable for Common Stock (other than
securities issued in transactions described in subsection 6(a) above) for
consideration per share of Common Stock initially deliverable upon conversion,
exchange or exercise of such securities less than the Exercise Price per share
on the date of issuance of such securities, the Exercise Price shall be adjusted
in accordance with the following formula:

                                             O + P
                                                 -
                               E' = E x          E
                                             -----
                                             O + D


where:            E' =   the adjusted Exercise Price.

                  E  =   the then current Exercise Price.

                  O  =   the number of shares outstanding immediately prior to
                         the issuance of such securities.

                  P  =   the aggregate consideration received for the issuance
                         of such securities.

                  D  =   the maximum number of shares deliverable upon
                         conversion, exchange or exercise of such securities at
                         the initial conversion, exchange or exercise rate.



                                       5
<PAGE>



         The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance. If all of the
Common Stock deliverable upon conversion, exchange or exercise of such
securities has not been issued when such securities are no longer outstanding,
then the Exercise Price shall promptly be readjusted to the Exercise Price which
would then be in effect had the adjustment upon the issuance of such securities
been made on the basis of the actual number of shares of Common Stock issued
upon conversion, exchange or exercise of such securities.

         This subsection (d) does not apply to (i) any of the transactions
described in subsections (b) and (c) above, (ii) securities convertible into or
exchangeable or exercisable for Common Stock issued to shareholders of any
non-affiliated person which merges into or with the Company, or any subsidiary
of the Company, in proportion to their stock holdings of such person immediately
prior to such merger, upon such merger, or (iii) warrants, rights or options
which (A) are issued pursuant to stock option plans, employee benefit plans,
employment agreements or consulting agreements, in each case approved by the
Company's Board of Directors or an appropriate committee of the Company's Board
of Directors, and (B) have an exercise price of not less than 70% of the Market
Price (as defined in Section 6(g) hereof) of the Company's Common Stock at the
time of issuance of such warrants, rights or options.

         (e) Deferral of Issuance or Payment. In any case in which an event
covered by this Section 6 shall require that an adjustment in the Exercise Price
be made effective as of a record date, the Company may elect to defer until the
actual occurrence of such event (i) issuing to the Holder, if this Warrant is
exercised after such record date, the shares of Common Stock and other capital
stock of the Company, if any, issuable upon such exercise over and above the
shares of Common Stock or other capital stock of the Company, if any, issuable
upon such exercise on the basis of the Exercise Price in effect prior to such
adjustment, and (ii) paying to the Holder by check any amount in lieu of the
issuance of fractional shares pursuant to Section 3.

         (f) When No Adjustment Required. No adjustment need be made for a
change in the par value of the Common Stock.

         (g) Market Price. The "Market Price" per share of Common Stock is the
closing price of the Common Stock on the last trade date prior to the date of
exercise, as reported at 4:00 p.m. E.S.T. by Nasdaq, or the primary national
securities exchange on which the Common Stock is then quoted; provided, however,
that if quotes for the Common Stock are not reported by Nasdaq and the Common
Stock is neither traded on the Nasdaq National Market, on a national securities
exchange, on the Nasdaq Small Cap Market nor on the OTC Electronic Bulletin
Board, the price referred to above shall be the price reflected in the
over-the-counter market as reported by the National Quotation Bureau, Inc. or
any organization performing a similar function, and provided, further, that if
the Common Stock is not then publicly traded, the Market Price shall equal the
Conversion Price.

         (h) No Adjustment Upon Exercise of Warrants. No adjustments shall be
made under any Section herein in connection with the issuance of Warrant Shares
upon exercise or exchange of the Warrants.


                                       6
<PAGE>


         (i) Common Stock Defined. Whenever reference is made in Section 6(a) to
the issue of shares of Common Stock, the term "Common Stock" shall include any
equity securities of any class of the Company hereinafter authorized which shall
not be limited to a fixed sum or percentage in respect of the right of the
thereof to participate in dividends or distributions of assets upon the
voluntary or involuntary liquidation, dissolution or winding up of the Company.
Subject to the provisions of Section 8 hereof, however, shares issuable upon
exercise or exchange hereof shall include only shares of the class designated as
Common Stock of the Company as of the date hereof or shares of any class or
classes resulting from any reclassification or reclassifications thereof or as a
result of any corporate reorganization as provided for in Section 8 hereof.

         Section 7. Officers' Certificate. Whenever the Exercise Price shall be
adjusted as required by the provisions of Section 6, the Company shall forthwith
file in the custody of its secretary or an assistant secretary at its principal
office an officers' certificate showing the adjusted Exercise Price determined
as herein provided, setting forth in reasonable detail the facts requiring such
adjustment and the manner of computing such adjustment. Each such officers'
certificate shall be signed by the chairman, president or chief financial
officer of the Company and by the secretary or any assistant secretary of the
Company. Each such officers' certificate shall be made available at all
reasonable times for inspection by the Holder or any holder of a Warrant
executed and delivered pursuant to Section 6 hereof.

         Section 8. Reclassification, Reorganization, Consolidation or Merger.
In the event of any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the Company (other than a subdivision or
combination of the outstanding Common Stock and other than a change in the par
value of the Common Stock) or in the event of any consolidation or merger of the
Company with or into another corporation (other than a merger in which merger
the Company is the continuing corporation and that does not result in any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the class issuable upon exercise or exchange of this Warrant)
or in the event of any sale, lease, transfer or conveyance to another
corporation of the property and assets of the Company as an entirety or
substantially as an entirety, the Company shall use its best efforts to cause
effective provisions to be made so that the Holder shall have the right
thereafter, by exercising this Warrant, to purchase the kind and amount of
shares of stock and other securities and property (including cash) receivable
upon such reclassification, capital reorganization and other change,
consolidation, merger, sale or conveyance by a holder of the number of shares of
Common Stock that would have been received upon exercise or exchange of this
Warrant immediately prior to such reclassification, capital reorganization,
change, consolidation, merger, sale or conveyance. Any such provision shall
include provisions for adjustments in respect of such shares of stock and other
securities and property that shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Warrant. The foregoing provisions of
this Section 8 shall similarly apply to successive reclassifications, capital
reorganizations and changes of shares of Common Stock and to successive
consolidations, mergers, sales or conveyances.


                                       7
<PAGE>


         Section 9. Transfer to Comply with the Securities Act of 1933;
Registration Rights.

         9.1 No sale, transfer, assignment, hypothecation or other disposition
of this Warrant or of the Warrant Shares shall be made unless any such transfer,
assignment or other disposition will comply with the rules and statutes
administered by the Securities and Exchange Commission and (i) a Registration
Statement under the Act including such Shares is currently in effect, or (ii) in
the written opinion of counsel, which counsel and which opinion shall be
reasonably satisfactory to the Company, a current registration Statement is not
required for such disposition of the shares. Each stock certificate representing
Warrant Shares issued upon exercise or exchange of this Warrant shall bear a
legend in substantially the following form (unless, in the opinion of counsel,
which counsel and which opinion shall be reasonably satisfactory to the Company,
such legend is not required):

         "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES
         LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
         TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
         AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
         PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF THESE
         SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
         SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
         RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
         SECURITIES LAWS."

         9.2 The Company agrees that during the term of this Warrant, the Holder
shall have the right, pursuant to the terms of any Registration Rights Agreement
among the Company and certain purchasers of the Company's Common Stock, to
require the Company to register the Warrant Shares under the circumstances and
in the manner set forth in the Registration Rights Agreement.

         Section 10. Modification and Waiver. Except as otherwise provided
herein, any term of this Warrant may be amended, and the observance of any term
of this Warrant may be waived (either generally or in a particular instance,
either retroactively or prospectively, and either for a specified period of time
or indefinitely), with the written consent of the Company and the written
consent of a bona fide officer or director of the Holder of this Warrant. Any
amendment or waiver effected in accordance with this section shall be binding
upon each future Holder of this Warrant and the Company.

         Section 11. Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
upon personal delivery, or by facsimile (with proof of receipt), or on the first
business day following mailing by overnight courier, or on the fifth day
following mailing by registered or certified mail, return receipt requested,
postage prepaid, addressed to the Company at the address indicated therefor in
the first paragraph of this Warrant and the Holder at its address as shown on
the books of the Company; provided, however, that presentation of a Purchase
Form and payment of any Exercise Price shall be effective only upon receipt by
the Company.



                                       8
<PAGE>

         Section 12. Descriptive Headings and Governing Law. The titles of the
paragraphs and subparagraphs of this Warrant are for convenience of reference
only and are not to be considered in construing this Warrant. This Warrant shall
be governed by and construed under the laws of the Commonwealth of Pennsylvania
without regard to any otherwise applicable principles of conflicts of laws.

         Section 13. Entire Agreement. This Warrant and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement among the parties with regard to the subjects hereof and no party
shall be liable or bound to any other party in any manner by any
representations, warranties, covenants or agreements except as specifically set
forth herein or therein. Nothing in this Warrant, express or implied, is
intended to confer upon any party, other than the parties hereto and their
respective successors and assigns, any rights, remedies, obligations, or
liabilities under or by reason of this Warrant, except as expressly provided
herein.

         Section 14. Severability. In the event that any provision of this
Warrant shall be invalid, illegal or unenforceable, it shall, to the extent
practicable, be modified so as to make it valid, legal and enforceable and to
retain as nearly as practicable the intent of the parties, and the validity,
legality, and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby. To the extent permitted by law, the parties hereto
waive the benefit of any provision of law that renders any provision of this
Warrant invalid or unenforceable in any respect.

         Section 15. No Waiver. No waiver by any party to this Warrant of any
one or more defaults by any other party or parties in the performance of any of
the provisions hereof shall operate or be construed as a waiver of any future
default or defaults, whether of a like or different nature. Except as expressly
provided herein, no failure or delay on the part of any party in exercising any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy.

         IN WITNESS WHEREOF, the Company has duly caused this Warrant to be
signed by its duly authorized officer and to be dated as of this March 15, 2002.

                             AM COMMUNICATIONS, INC.



                             By:_________________________________________
                             Name:_______________________________________
                             Title:______________________________________

[CORPORATE SEAL]


                                       9
<PAGE>



                                  PURCHASE FORM


                                                                   [INSERT DATE]

                  The undersigned hereby irrevocably elects to exercise the
within Warrant to purchase ________ shares of Common Stock and hereby makes
payment of $___________________ in payment of the exercise price thereof.




                                            -----------------------------------
                                            Signature of Warrant Holder

                                            -----------------------------------
                                            Print Name of Warrant Holder




                                       10
<PAGE>


                                 ASSIGNMENT FORM


                                                                   [INSERT DATE]


         FOR VALUE RECEIVED,__________________hereby sells, assigns and
transfers unto _______________________________________________(the "Assignee"),
________________________________________________________________________________
                                    [INSERT ADDRESS]

its right to purchase up to _____ shares of Common Stock represented by this
Warrant and does hereby irrevocably constitute and appoint ___________________
Attorney, to transfer the same on the books of the Company, with full power of
substitution in the premises.


                                     -----------------------------------
                                     Signature of Warrant Holder


                                     -----------------------------------
                                     Print Name of Warrant Holder


1050404


                                       11