STOCK PURCHASE AGREEMENT

      This COMMON STOCK PURCHASE  AGREEMENT  (this  "Agreement")  is dated as of
December 14, 2000 by and between Advanced Communications  Technologies,  Inc., a
Nevada corporation (the "Company"), and Wanquay Limited (the "Purchaser").

      The parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

      Section 1.1. Certain Definitions.

      (a)  "Average  Daily  Price"  shall be the price  based on the VWAP of the
Company on the Principal Market.

      (b) "Draw Down"  shall have the  meaning  assigned to such term in Section
6.1(a) hereof.

      (c) "Draw Down  Pricing  Period"  shall mean a period of  twenty-two  (22)
consecutive Trading Days beginning on the date specified in the Draw Down Notice
(as defined in Section 6.1(e) hereof); provided,  however, the Draw Down Pricing
Period  shall  not  begin  before  the day on which  receipt  of such  notice is
confirmed by the Purchaser.

      (d) "Effective Date" shall mean the date the Registration Statement of the
Company covering the Shares being subscribed for hereby is declared effective.

      (e)  "Investment  Amount" shall have the meaning  assigned to such term in
Section 6.1(e) hereof.

      (f)  "Material  Adverse  Effect"  shall  mean any  adverse  effect  on the
business,  operations,  properties,  prospects  or  financial  condition  of the
Company  that is material  and adverse to the Company and its  subsidiaries  and
affiliates,  taken as a whole and/or any condition,  circumstance,  or situation
that would  prohibit or otherwise  materially  interfere with the ability of the
Company to perform any of its material  obligations  under this Agreement or the
Registration  Rights  Agreement  or to perform its  obligations  under any other
material agreement.

      (g)  "Principal  Market" shall mean  initially the OTC Bulletin  Board and
shall include the American Stock Exchange,  Nasdaq National Market, the New York
Stock Exchange or the Nasdaq SmallCap Market if the Company is listed and trades
on such market or exchange.

      (h) "Purchase  Price" shall mean with respect to Shares  purchased  during
each  applicable  Draw Down Pricing  Period  (excluding  Shares  issued upon the
exercise of


                                       1
<PAGE>

Warrants)  eighty-five  percent (85%) (the "Purchase  Price  Percentage") of the
Average Daily Price on the date in question.

      (i) "Registration  Statement" shall mean the registration  statement under
the  Securities  Act of 1933, as amended,  to be filed with the  Securities  and
Exchange  Commission  for  the  registration  of  the  Shares  pursuant  to  the
Registration  Rights Agreement  attached hereto as Exhibit A (the  "Registration
Rights Agreement).

      (j) "SEC Documents" shall mean the Company's latest Form 10-K or l0-KSB as
of the time in question, all Forms 10-Q or l0-QSB and 8-K filed thereafter,  and
the Proxy  Statement for its latest fiscal year as of the time in question until
such  time  as  the  Company  no  longer  has  an  obligation  to  maintain  the
effectiveness  of a  Registration  Statement  as set  forth in the  Registration
Rights Agreement.

      (k)  "Settlement  Period" shall have the meaning  assigned to such term in
Section 6.1(b).

      (l) "Shares" shall mean,  collectively,  the shares of Common Stock of the
Company being subscribed for hereunder and those shares of Common Stock issuable
to the Purchaser upon exercise of the Warrants.

      (m)  "Threshold  Price" is the lowest  Average Daily Price during any Draw
Down Pricing Period at which the Company will sell its Common Stock with respect
to this Agreement.

      (n) "Trading Day" shall mean any day on which the Principal Market is open
for business.

      (o)  "VWAP"  shall mean the daily  volume  weighted  average  price of the
Company's  Common  Stock  on the  Principal  Market  as  reported  by  Bloomberg
Financial  L.P.  (based on a trading  day from 9:30 am EST to 4:00 pm EST) using
the VAP function on the date in question.

      (p) "Warrants" shall mean the Initial Warrant,  the Effective  Warrant and
the Draw Down Warrants as those terms are defined in Section 5.2(f) hereof.

                                   ARTICLE II

                        PURCHASE AND SALE OF COMMON STOCK

      Section  2.1.  Purchase  and  Sale of  Stock.  Subject  to the  terms  and
conditions  of this  Agreement,  the Company may issue and sell to the Purchaser
and the Purchaser  shall purchase from the Company up to twelve million  dollars
($12,000,000) of the Company's Common Stock (the  "Commitment  Amount"),  no par
value per share (the "Common Stock"),  and the Warrants,  based on Draw Downs of
up to one million dollars ($1,000,000.00) per Draw Down.


                                       2
<PAGE>

      Section 2.2. The Shares.  The Company has  authorized and has reserved and
covenants to continue to reserve,  free of  preemptive  rights and other similar
contractual  rights of stockholders,  a sufficient  number of its authorized but
unissued  shares  of its  Common  Stock to cover  the  Shares  to be  issued  in
connection with all Draw Downs requested under this Agreement.  Anything in this
Agreement to the contrary notwithstanding, the Company may not issue a number of
shares of Common Stock pursuant to a Draw Down to the extent that such number of
shares exceeds 8% of the then outstanding shares of Common Stock.

      Section 2.3.  Purchase  Price and Initial  Closing.  The Company agrees to
issue and sell to the Purchaser and, in consideration of and in express reliance
upon the representations,  warranties,  covenants,  terms and conditions of this
Agreement,  the  Purchaser  agrees to  purchase  that number of the Shares to be
issued in  connection  with each Draw Down.  The delivery of executed  documents
under this Agreement and the other agreements referred to herein and the payment
of the fees set forth in Article II of the Escrow Agreement, attached as Exhibit
B hereto, (the "Initial Closing") shall take place (i) at the offices of Epstein
Becker & Green,  P.C., 250 Park Avenue,  New York, New York 10177 within fifteen
(15) days from the date  hereof,  or (ii) such  other  time and place or on such
date as the  Purchaser  and the  Company  may agree upon (the  "Initial  Closing
Date").  Each party  shall  deliver  all  documents,  instruments  and  writings
required to be delivered by such party pursuant to this Agreement at or prior to
the Initial Closing.

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

      Section 3.1.  Representation  and  Warranties of the Company.  The Company
hereby makes the following representations and warranties to the Purchaser:

      (a)  Organization.  Good Standing and Power.  The Company is a corporation
duly  incorporated  validly  existing and in good standing under the laws of the
State of Nevada and has all  requisite  corporate  authority  to own,  lease and
operate  its  properties  and assets and to carry on its  business  as now being
conducted. Except as set forth on Schedule 3.1(a), the Company does not have any
subsidiaries  and does not own more than fifty  percent  (50%) of or control any
other business  entity except as set forth in the SEC Documents.  The Company is
duly  qualified to do business and is in good standing as a foreign  corporation
in every  jurisdiction in which the nature of the business conducted or property
owned by it makes such  qualification  necessary,  other than those in which the
failure so to qualify would not have a Material  Adverse Effect on the Company's
financial condition.

      (b)  Authorization.   Enforcement.  (i)  The  Company  has  the  requisite
corporate  power  and  corporate   authority  to  enter  into  and  perform  its
obligations under this Agreement,  the Registration Rights Agreement, the Escrow
Agreement and to issue the Draw Down Shares pursuant to their respective  terms,
(ii) the execution,  issuance and delivery of this Agreement,  the  Registration
Rights Agreement and the Escrow Agreement by the Company and the consummation by
it of the transactions contemplated hereby and thereby have been duly authorized
by all necessary corporate action and no further consent or authorization of the


                                       3
<PAGE>

Company or its Board of Directors or  stockholders  is required,  and (iii) this
Agreement,  the Registration Rights Agreement and the Escrow Agreement have been
duly  executed  and  delivered by the Company and at the Initial  Closing  shall
constitute valid and binding  obligations of the Company enforceable against the
Company in accordance  with their terms,  except as such  enforceability  may be
limited  by  applicable  bankruptcy,  insolvency,  reorganization,   moratorium,
liquidation,  conservatorship,  receivership  or similar  laws  relating  to, or
affecting  generally the  enforcement of;  creditors'  rights and remedies or by
other  equitable  principles  of general  application.  The Company has duly and
validly  authorized and reserved for issuance shares of Common Stock  sufficient
in number for the issuance of the Draw Down Shares.

      (c)  Capitalization.  The authorized capital stock of the Company consists
of 100,000,000  shares of Common Stock of which 82,197,280 shares are issued and
outstanding  and  no  preferred  stock.  All of the  outstanding  shares  of the
Company's Common Stock have been duly and validly  authorized and are fully-paid
and  non-assessable,  except  as set forth in the SEC  Documents.  Except as set
forth in this Agreement and the  Registration  Rights Agreement and as set forth
in the SEC Documents,  or on Schedule  3.1(c) hereto,  no shares of Common Stock
are  entitled  to  preemptive  rights or  registration  rights  and there are no
outstanding  options,   warrants,  scrip,  rights  to  subscribe  to,  calls  or
commitments  of any  character  whatsoever  relating to, or securities or rights
convertible  into,  any shares of  capital  stock of the  Company.  Furthermore,
except as set forth in this  Agreement  and as set forth in the SEC Documents or
on Schedule  3.1(c),  there are no contracts,  commitments,  understandings,  or
arrangements  by which the  Company is or may become  bound to issue  additional
shares of the  capital  stock of the Company or  options,  securities  or rights
convertible into shares of capital stock of the Company.  Except as set forth on
Schedule  3.1(c).  the  Company  is  not  a  party  to  any  agreement  granting
registration  rights to any  person  with  respect  to any of its equity or debt
securities.  Except as set forth on Schedule 3.1(c).  the Company is not a party
to, and it has no knowledge of; any agreement restricting the voting or transfer
of any shares of the capital  stock of the  Company.  Except as set forth in the
SEC Documents or on Schedule  3.1(c)  hereto,  the offer and sale of all capital
stock,  convertible  securities,  rights,  warrants,  or options of the  Company
issued prior to the Initial  Closing  complied with all  applicable  federal and
state  securities  laws, and no stockholder has a right of rescission or damages
with respect thereto which would have a Material Adverse Effect on the Company's
financial condition or operating results.  The Company has made available to the
Purchaser true and correct  copies of the Company's  Charter as in effect on the
date hereof (the  "Charter"),  and the Company's Bylaws as in effect on the date
hereof  (the  "Bylaws").  The  Company  has not  received  any  notice  from the
Principal  Market  questioning  or  threatening  the continued  inclusion of the
Common Stock on such market.

      (d) Issuance of Shares.  The Shares to be issued under this Agreement have
been duly  authorized by all necessary  corporate  action and, when paid for and
issued in accordance  with the terms hereof;  the Shares shall be validly issued
and  outstanding,  fully paid and  non-assessable,  and the  Purchaser  shall be
entitled to all rights accorded to a holder of Common Stock.

      (e)  No  Conflicts.  The  execution,  delivery  and  performance  of  this
Agreement by the Company and the consummation by the Company of the transactions


                                       4
<PAGE>

contemplated  herein  do not and  will  not (i)  violate  any  provision  of the
Company's Charter or Bylaws,  (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default)  under,
or  give to  others  any  rights  of  termination,  amendment,  acceleration  or
cancellation of; any agreement,  mortgage, deed of trust, indenture, note, bond,
license,  lease  agreement,  instrument  or obligation to which the Company is a
party,  (iii) create or impose a lien,  charge or encumbrance on any property of
the Company  under any  agreement  or any  commitment  to which the Company is a
party or by which  the  Company  is  bound  or by  which  any of its  respective
properties  or assets are bound,  or (iv) result in a violation  of any federal,
state,  local or other foreign statute,  rule,  regulation,  order,  judgment or
decree  (including  any  federal  or  state  securities  laws  and  regulations)
applicable to the Company or any of its subsidiaries or by which any property or
asset of the Company or any of its subsidiaries  are bound or affected,  except,
in  all  cases,   for  such  conflicts,   defaults,   termination,   amendments,
accelerations, cancellations and violations as would not, individually or in the
aggregate,  have a Material Adverse Effect.  The business of the Company and its
subsidiaries  is not being  conducted in violation  of any laws,  ordinances  or
regulations of any  governmental  entity,  except for possible  violations which
singularly  or in the  aggregate  do not and will not  have a  Material  Adverse
Effect. The Company is not required under any federal,  state or local law, rule
or  regulation  to obtain any  consent,  authorization  or order of; or make any
filing or registration with, any court or governmental agency in order for it to
execute,  deliver or perform any of its  obligations  under this  Agreement,  or
issue and sell the Shares in  accordance  with the terms hereof  (other than any
filings which may be required to be made by the Company with the  Securities and
Exchange Commission (the "SEC") or state securities administrators subsequent to
the Initial Closing and any  registration  statement which may be filed pursuant
hereto); provided that, for purpose of the representation made in this sentence,
the  Company  is  assuming  and  relying  upon  the  accuracy  of  the  relevant
representations and agreements of the Purchaser herein.

      (f) SEC Documents.  Financial Statements.  The Common Stock of the Company
is registered  pursuant to Section 12(g) of the Securities Exchange Act of 1934,
as amended (the "Exchange  Act"),  and, except as disclosed in the SEC Documents
or on  Schedule  3.1(f)  hereto,  the  Company  has  timely  filed all  reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting  requirements  of the Exchange Act,  including
material  filed  pursuant to Section  13(a) or 15(d) of the Exchange Act (all of
the foregoing including filings incorporated by reference therein being referred
to herein as the "SEC  Documents").  The Company has delivered or made available
to the Purchaser  true and complete  copies of the SEC Documents  filed with the
SEC since  December 31, 1998.  The Company has not provided to the Purchaser any
information which, according to applicable law, rule or regulation,  should have
been  disclosed  publicly by the  Company  but which has not been so  disclosed,
other than with respect to the transactions  contemplated by this Agreement.  As
of their  respective  filing dates,  the SEC Documents  complied in all material
respects with the requirements of the Exchange Act and the rules and regulations
of the SEC promulgated thereunder applicable to such documents, and, as of their
respective  filing  dates,  none  of the  SEC  Documents  contained  any  untrue
statement of a material  fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the  circumstances  under which they were made,  not  misleading.  The financial
statements of the Company included in the SEC Documents comply as to form in all
material  respects with  applicable  accounting  requirements  and the published
rules and regulations of the SEC or other


                                       5
<PAGE>

applicable rules and regulations with respect thereto. Such financial statements
have been prepared in accordance with generally accepted  accounting  principles
("GAAP")  applied on a consistent  basis during the periods involved (except (i)
as may be otherwise indicated in such financial  statements or the notes thereto
or (ii) in the case of unaudited interim statements,  to the extent they may not
include footnotes or may be condensed or summary statements), and fairly present
in all  material  respects  the  financial  position  of  the  Company  and  its
subsidiaries  as of the dates  thereof  and the results of  operations  and cash
flows for the periods then ended (subject,  in the case of unaudited statements,
to normal year-end audit adjustments).

      (g)  Subsidiaries.  The SEC Documents or Schedule 3.1(g) hereto sets forth
each subsidiary of the Company, showing the jurisdiction of its incorporation or
organization  and showing  the  percentage  of the  Company's  ownership  of the
outstanding  stock or other  interests of such  subsidiary.  For the purposes of
this Agreement, "subsidiary" shall mean any corporation or other entity of which
at least a  majority  of the  securities  or other  ownership  interests  having
ordinary voting power (absolutely or contingently) for the election of directors
or other persons  performing similar functions are at the time owned directly or
indirectly  by the  Company  and/or  any of its other  subsidiaries.  All of the
outstanding shares of capital stock of each subsidiary have been duly authorized
and  validly  issued,  and are  fully  paid  and  non-assessable.  There  are no
outstanding  preemptive,  conversion  or  other  rights,  options,  warrants  or
agreements  granted or issued by or binding upon any subsidiary for the purchase
or  acquisition  of any shares of capital  stock of any  subsidiary or any other
securities  convertible  into,  exchangeable  for or  evidencing  the  rights to
subscribe  for any shares of such  capital  stock.  Neither  the Company nor any
subsidiary is subject to any obligation  (contingent or otherwise) to repurchase
or otherwise acquire or retire any shares of the capital stock of any subsidiary
or any convertible securities, rights, warrants or options of the type described
in the preceding sentence. Neither the Company nor any subsidiary is a party to,
nor has any knowledge of; any  agreement  restricting  the voting or transfer of
any shares of the capital stock of any subsidiary.

      (h) No  Material  Adverse  Effect.  Since  September  30, 2000 no Material
Adverse  Effect has occurred or exists with  respect to the  Company,  except as
disclosed in the SEC Documents or on Schedule 3.l(h) hereof.

      (i) No Undisclosed  Liabilities.  Except as disclosed in the SEC Documents
or on Schedule  3.1(i) hereto,  neither the Company nor any of its  subsidiaries
has any  liabilities,  obligations,  claims or  losses  (whether  liquidated  or
unliquidated,  secured or unsecured, absolute, accrued, contingent or otherwise)
that would be required to be disclosed on a balance  sheet of the Company or any
subsidiary  (including the notes thereto) in conformity  with GAAP which are not
disclosed in the SEC Documents, other than those incurred in the ordinary course
of the Company's or its subsidiaries'  respective businesses since such date and
which,  individually  or in the  aggregate,  do not or would not have a Material
Adverse Effect on the Company or its subsidiaries.

      (j) No Undisclosed  Events or Circumstances.  Since September 30, 2000, no
event or circumstance  has occurred or exists with respect to the Company or its
businesses,  properties,  prospects,  operations or financial  condition,  that,
under  applicable  law,  rule  or  regulation,  requires  public  disclosure  or
announcement  prior to the date  hereof by the Company but which has not been so
publicly announced or disclosed in the SEC Documents.


                                       6
<PAGE>

      (k)  Indebtedness.  The SEC Documents or Schedule 3.1(k) hereto sets forth
as of the date hereof all outstanding secured and unsecured  Indebtedness of the
Company  or any  subsidiary,  or for which the  Company  or any  subsidiary  has
commitments.  For the purposes of this Agreement,  "Indebtedness" shall mean (A)
any  liabilities for borrowed money or amounts owed in excess of $250,000 (other
than trade accounts  payable  incurred in the ordinary course of business),  (B)
all  guaranties,   endorsements   and  contingent   obligations  in  respect  of
Indebtedness  of others,  whether or not the same are or should be  reflected in
the  Company's  balance  sheet  (or the notes  thereto),  except  guaranties  by
endorsement  of  negotiable  instruments  for deposit or  collection  or similar
transactions  in the ordinary  course of business;  and (C) the present value of
any lease  payments  in excess of  $250,000  due  under  teases  required  to be
capitalized in accordance  with GAAP.  Neither the Company nor any subsidiary is
in default with respect to any Indebtedness.

      (1) Title to Assets. Each of the Company and the subsidiaries has good and
marketable title to all of its real and personal  property  reflected in the SEC
Documents, free of any mortgages, pledges, charges, liens, security interests or
other  encumbrances,  except  for those  indicated  in the SEC  Documents  or on
Schedule  3.1(1) hereto or such that do not cause a Material  Adverse  Effect on
the Company's financial  condition or operating results.  All said leases of the
Company and each of its  subsidiaries are valid and subsisting and in full force
and effect.

      (m) Actions Pending.  There is no action,  suit,  claim,  investigation or
proceeding  pending or, to the knowledge of the Company,  threatened against the
Company or any subsidiary  which questions the validity of this Agreement or the
transactions  contemplated  hereby or any action  taken or to be taken  pursuant
hereto  or  thereto.  Except as set forth in the SEC  Documents  or on  Schedule
3.1(m) hereto,  there is no action,  suit,  claim,  investigation  or proceeding
pending or, to the  knowledge of the Company,  threatened,  against or involving
the Company,  any  subsidiary or any of their  respective  properties or assets.
There are no outstanding orders,  judgments,  injunctions,  awards or decrees of
any court,  arbitrator or governmental or regulatory body against the Company or
any subsidiary.

      (n) Compliance with Law. The business of the Company and the  subsidiaries
has been and is presently  being  conducted in  accordance  with all  applicable
federal,  state and local governmental laws, rules,  regulations and ordinances,
except as set forth in the SEC  Documents or on Schedule  3.1(n)  hereto or such
that do not  cause a  Material  Adverse  Effect.  The  Company  and  each of its
subsidiaries  have  all  franchises,   permits,  licenses,  consents  and  other
governmental  or  regulatory  authorizations  and  approvals  necessary  for the
conduct of their respective businesses as now being conducted by them unless the
failure  to possess  such  franchises,  permits,  licenses,  consents  and other
governmental or regulatory authorizations and approvals,  individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.

      (o) Taxes.  Except as set forth on Schedule  3.1(o),  the Company and each
subsidiary  has  filed  all Tax  Returns  which  it is  required  to file  under
applicable  laws;  all such Tax  Returns  are true and  accurate  and have  been
prepared in compliance with all applicable  laws; the Company has paid all Taxes
due and owing by it or any subsidiary (whether or not such Taxes are required to
be shown on a Tax Return) and have withheld and paid over to the


                                       7
<PAGE>

appropriate  taxing  authorities all Taxes which it is required to withhold from
amounts  paid or owing to any  employee,  stockholder,  creditor  or other third
parties;  and since  December 31, 1999,  the charges,  accruals and reserves for
Taxes with respect to the Company  (including any provisions for deferred income
taxes)  reflected  on the books of the  Company  are  adequate  to cover any Tax
liabilities of the Company if its current tax year were treated as ending on the
date hereof.

      No claim has been made by a taxing  authority in a jurisdiction  where the
Company does not file tax returns that the Company or any  subsidiary  is or may
be subject to taxation  by that  jurisdiction.  There are no  foreign,  federal,
state or local tax audits or administrative or judicial  proceedings  pending or
being  conducted with respect to the Company or any  subsidiary;  no information
related to Tax matters has been  requested  by any  foreign,  federal,  state or
local taxing  authority;  and,  except as  disclosed  above,  no written  notice
indicating  an intent to open an audit or other review has been  received by the
Company or any  subsidiary  from any  foreign,  federal,  state or local  taxing
authority.  There are no material unresolved  questions or claims concerning the
Company's  Tax  liability.  The Company (A) has not  executed or entered  into a
closing  agreement  pursuant to ss.  7121 of the  Internal  Revenue  Code or any
predecessor  provision  thereof  or any  similar  provision  of state,  local or
foreign  law;  and (B) has not agreed to or is required to make any  adjustments
pursuant to ss. 481 (a) of the Internal Revenue Code or any similar provision of
state, local or foreign law by reason of a change in accounting method initiated
by the Company or any of its  subsidiaries or has any knowledge that the IRS has
proposed  any  such  adjustment  or  change  in  accounting  method,  or has any
application  pending with any taxing  authority  requesting  permission  for any
changes in  accounting  methods that relate to the business or operations of the
Company.  The  Company  has not  been a  United  States  real  property  holding
corporation  within the meaning of ss.  897(c)(2) of the  Internal  Revenue Code
during the applicable period specified in ss.  897(c)(l)(A)(ii)  of the Internal
Revenue Code.

      The  Company  has not made an election  under ss.  341(f) of the  Internal
Revenue Code.  The Company is not liable for the Taxes of another person that is
not a  subsidiary  of the  Company  under  (A)  Treas.  Reg.  ss.  1.1502-6  (or
comparable  provisions of state,  local or foreign law),  (B) as a transferee or
successor,  (C) by contract or indemnity or (D) otherwise.  The Company is not a
party to any tax sharing  agreement.  The Company has not made any payments,  is
not  obligated to make  payments  nor is it a party to an  agreement  that could
obligate it to make any payments that would not be deductible  under ss. 280G of
the Internal Revenue Code.

      For purposes of this Section 3.1(o):

      "IRS" means the United States Internal Revenue Service.

      "Tax" or "Taxes" means federal,  state, county,  local,  foreign, or other
income, gross receipts, ad valorem, franchise,  profits, sales or use, transfer,
registration, excise, utility, environmental,  communications,  real or personal
property,   capital  stock,   license,   payroll,  wage  or  other  withholding,
employment, social security, severance, stamp, occupation, alternative or add-on
minimum, estimated and other taxes of any kind whatsoever (including, without


                                       8
<PAGE>

limitation, deficiencies, penalties, additions to tax, and interest attributable
thereto) whether disputed or not.

      "Tax Return" means any return,  information  report or filing with respect
to Taxes,  including any schedules  attached thereto and including any amendment
thereof.

      (p)  Certain  Fees.  Except as set forth on Schedule  3.l(p)  hereto,  no
brokers,  finders or financial  advisory fees or commissions  will be payable by
the Company or any subsidiary with respect to the  transactions  contemplated by
this Agreement.

      (q)  Disclosure.  To the best of the  Company's  knowledge,  neither  this
Agreement  or the  Schedules  hereto nor any other  documents,  certificates  or
instruments  furnished  to the  Purchaser  by or on behalf of the Company or any
subsidiary in connection  with the  transactions  contemplated by this Agreement
contain  any untrue  statement  of a material  fact or omits to state a material
fact  necessary in order to make the statements  made herein or therein,  in the
light of the  circumstances  under which they were made  herein or therein,  not
misleading.

      (r) Operation of Business.  The Company and each of the subsidiaries  owns
or possesses all patents,  trademarks,  service marks, trade names,  copyrights,
licenses and authorizations as set forth in the SEC Documents or on Schedule 3.1
(r~ hereto,  and all rights with respect to the  foregoing,  which are necessary
for the conduct of its business as now  conducted  without any conflict with the
rights of others.

      (s)  Regulatory  Compliance.  The  Company  has  all  necessary  licenses,
registrations  and permits to conduct its business as now being conducted in all
states where the Company conducts its business.

      (t) Books and  Records.  The records and  documents of the Company and its
subsidiaries  accurately  reflect  in  all  material  respects  the  information
relating to the business of the Company and the  subsidiaries,  the location and
collection of their assets,  and the nature of all  transactions  giving rise to
the obligations or accounts receivable of the Company or any subsidiary.

      (u) Material Agreements.  Except as set forth in the SEC Documents,  or on
Schedule 3.1(u) hereto, neither the Company nor any subsidiary is a party to any
written or oral contract, instrument, agreement, commitment, obligation, plan or
arrangement,  a copy of which  would be  required to be filed with the SEC as an
exhibit  to a  registration  statement  on Form  S-l or  other  applicable  form
(collectively,  "Material  Agreements")  if the Company or any  subsidiary  were
registering  securities  under  the  Securities  Act of 1933,  as  amended  (the
"Securities Act").  Except as set forth in Schedule 3.1(u), the Company and each
of its subsidiaries has in all material  respects  performed all the obligations
required to be performed by them to date under the  foregoing  agreements,  have
received no notice of default and, to the best of the  Company's  knowledge  are
not in default under any Material  Agreement now in effect,  the result of which
could cause a Material Adverse Effect. No written or oral contract,  instrument,
agreement, commitment,  obligation, plan or arrangement of the Company or of any
subsidiary  limits or shall  limit the  payment of  dividends  on the  Company's
Common Stock.


                                       9
<PAGE>

      (v) Transactions with Affiliates. Except as set forth in the SEC Documents
or on Schedule 3.1(v) hereto, there are no loans, leases, agreements, contracts,
royalty  agreements,  management  contracts or arrangements or other  continuing
transactions  exceeding $100,000 between (A) the Company,  any subsidiary or any
of their respective customers or suppliers on the one hand, and (B) on the other
hand, any officer,  employee,  consultant or director of the Company,  or any of
its  subsidiaries,  or any person owning any capital stock of the Company or any
subsidiary  or any member of the  immediate  family of such  officer,  employee,
consultant,   director  or  stockholder  or  any  corporation  or  other  entity
controlled by such officer, employee, consultant,  director or stockholder, or a
member of the immediate family of such officer, employee,  consultant,  director
or stockholder.

      (w)  Securities  Laws.  The Company has  complied and will comply with all
applicable  federal  and state  securities  laws in  connection  with the offer,
issuance and sale of the Shares hereunder. Neither the Company nor anyone acting
on its  behalf;  directly  or  indirectly,  has or will  sell,  offer to sell or
solicit  offers to buy the Shares or similar  securities  to, or solicit  offers
with  respect  thereto  from,  or enter into any  preliminary  conversations  or
negotiations relating thereto with, any person (other than the Purchaser), so as
to  bring  the  issuance  and  sale of the  Shares  and/or  Warrants  under  the
registration  provisions of the Securities Act and applicable  state  securities
laws.  Neither the Company nor any of its  affiliates,  nor any person acting on
its or their behalf; has engaged in any form of general  solicitation or general
advertising  (within the meaning of  Regulation D under the  Securities  Act) in
connection with the offer or sale of the Shares.

      (x)  Employees.  Neither the Company nor any subsidiary has any collective
bargaining  arrangements or agreements covering any of its employees,  except as
set forth in the SEC Documents or on Schedule 3.1(x) hereto. Except as set forth
in the SEC Documents or on Schedule  3.1(x) hereto,  neither the Company nor any
subsidiary  is  in  breach  of  any  employment  contract,  agreement  regarding
proprietary information,  noncompetition agreement,  nonsolicitation  agreement,
confidentiality   agreement,  or  any  other  similar  contract  or  restrictive
covenant,  relating to the right of any officer,  employee or  consultant  to be
employed  or engaged by the Company or such  subsidiary.  Except as set forth on
Schedule  3.1(x),  since the date of the Annual Report on the  Company's  latest
Form  10-K,  no  officer,  consultant  or key  employee  of the  Company  or any
subsidiary whose  termination,  either  individually or in the aggregate,  could
have a Material  Adverse  Effect,  has  terminated  or, to the  knowledge of the
Company,  has any present  intention of  terminating  his or her  employment  or
engagement with the Company or any subsidiary

      (y) Absence of Certain  Developments.  Except as provided in SEC Documents
or on Schedule 3.1(y) hereto,  since March 31, 2000, neither the Company nor any
subsidiary has:

            (i) issued any stock,  bonds or other  corporate  securities  or any
rights, options or warrants with respect thereto;

            (ii)  borrowed  any  amount or  incurred  or become  subject  to any
liabilities  (absolute or contingent) except current liabilities incurred in the
ordinary course of


                                       10
<PAGE>

business  which are  comparable in nature and amount to the current  liabilities
incurred in the ordinary course of business during the comparable portion of its
prior fiscal year,  as adjusted to reflect the current  nature and volume of the
Company's or such subsidiary's business;

            (iii)  discharged or satisfied any lien or  encumbrance  or paid any
obligation or liability (absolute or contingent), other than current liabilities
paid in the ordinary course of business;

            (iv) declared or made any payment or  distribution  of cash or other
property to stockholders with respect to its stock, or purchased or redeemed, or
made any agreements so to purchase or redeem, any shares of its capital stock;

            (v) sold,  assigned or  transferred  any other tangible  assets,  or
canceled any debts or claims, except in the ordinary course of business;

            (vi) sold,  assigned or transferred  any patent rights,  trademarks,
trade  names,   copyrights,   trade  secrets  or  other  intangible   assets  or
intellectual   property  rights,  or  disclosed  any  proprietary   confidential
information to any person except to customers in the ordinary course of business
or to the Purchaser or its representatives;

            (vii)  suffered  any  substantial  losses  or waived  any  rights of
material value,  whether or not in the ordinary course of business,  or suffered
the loss of any material amount of prospective business;

            (viii)  made any  changes  in  employee  compensation  except in the
ordinary course of business and consistent with past practices;

            (ix)  made  capital   expenditures  or  commitments   therefor  that
aggregate in excess of $500,000;

            (x) entered into any other material  transaction,  whether or not in
the ordinary course of business;

            (xi) suffered any material  damage,  destruction  or casualty  loss,
whether or not covered by insurance;

            (xii)  experienced any material problems with labor or management in
connection with the terms and conditions of their employment; or

            (xiii)  effected any two or more events of the foregoing  kind which
in the aggregate would be material to the Company or its subsidiaries.

      (aa) Use of  Proceeds.  The  proceeds  from the sale of the Shares will be
used by the Company and its subsidiaries for general corporate purposes.

      (bb)  Acknowledgment  Regarding  Purchaser's  Purchase of Shares.  Company
acknowledges and agrees that Purchaser is acting solely in the capacity of arm's
length   purchaser  with  respect  to  this   Agreement  and  the   transactions
contemplated hereunder. The


                                       11
<PAGE>

Company  further  acknowledges  that the  Purchaser is not acting as a financial
advisor or fiduciary of the Company (or in any similar capacity) with respect to
this Agreement and the transactions  contemplated hereunder and any advice given
by the Purchaser or any of its representatives or agents in connection with this
Agreement and the transactions  contemplated  hereunder is merely  incidental to
the Purchaser's  purchase of the Shares.  The Company further  represents to the
Purchaser  that the  Company's  decision to enter into this  Agreement  has been
based  solely  on  the  independent  evaluation  by  the  Company  and  its  own
representatives and counsel.

      Section  3.2.   Representations  and  Warranties  of  the  Purchaser.  The
Purchaser  hereby makes the  following  representations  and  warranties  to the
Company:

            (a) Organization  and Standing of the Purchaser.  The Purchaser is a
corporation duly  incorporated,  validly existing and in good standing under the
laws of the British Virgin Islands.

            (b)  Authorization  and Power. The Purchaser has the requisite power
and  authority  to enter into and perform  this  Agreement  and to purchase  the
Shares being sold to it hereunder.  The execution,  delivery and  performance of
this  Agreement  by Purchaser  and the  consummation  by it of the  transactions
contemplated hereby have been duly authorized by all necessary corporate action.

            (c) No Conflicts.  The execution,  delivery and  performance of this
Agreement and the consummation by the Purchaser of the transactions contemplated
hereby or relating  hereto do not and will not (i) result in a violation of such
Purchaser's  charter  documents or bylaws or (ii) conflict with, or constitute a
default (or an event  which with notice or lapse of time or both would  become a
default)  under,  or  give to  others  any  rights  of  termination,  amendment,
acceleration or cancellation of any agreement,  indenture or instrument to which
the  Purchaser  is a party,  or  result  in a  violation  of any law,  rule,  or
regulation, or any order, judgment or decree of any court or governmental agency
applicable  to the  Purchaser  or its  properties  (except  for such  conflicts,
defaults and violations as would not,  individually or in the aggregate,  have a
Material  Adverse Effect on Purchaser).  The Purchaser is not required to obtain
any consent, authorization or order of; or make any filing or registration with,
any court or governmental agency in order for it to execute,  deliver or perform
any of its  obligations  under  this  Agreement  or to  purchase  the  Shares in
accordance   with  the  terms   hereof;   provided  that  for  purposes  of  the
representation made in this sentence, the Purchaser is assuming and relying upon
the  accuracy of the  relevant  representations  and  agreements  of the Company
herein.

            (d) Financial Risks. The Purchaser  acknowledges  that it is able to
bear the financial risks associated with an investment in the Shares and that it
has been given full access to such  records of the Company and the  subsidiaries
and to the  officers  of the  Company  and  the  subsidiaries  as it has  deemed
necessary  or  appropriate  to  conduct  its due  diligence  investigation.  The
Purchaser is capable of evaluating  the risks and merits of an investment in the
Shares by virtue of its experience as an investor and its knowledge, experience,
and  sophistication  in  financial  and  business  matters and the  Purchaser is
capable of bearing the entire loss of its investment in the Shares.


                                       12
<PAGE>

            (e) Accredited Investor.  The Purchaser is an "accredited  investor"
as defined in Regulation D promulgated under the Securities Act.

            (f) General.  The Purchaser  understands that the Company is relying
upon the truth and  accuracy  of the  representations,  warranties,  agreements,
acknowledgments and understandings of the Purchaser set forth herein in order to
determine the suitability of the Purchaser to acquire the Shares.

                                   ARTICLE IV

                                    COVENANTS

      The Company covenants with the Purchaser as follows:

      Section 4.1. Securities Compliance.

      If applicable, the Company shall notify the NASD, in accordance with their
rules and regulations,  of the transactions  contemplated by this Agreement, and
shall take all other  necessary  action and  proceedings  as may be required and
permitted  by  applicable  law,  rule and  regulation,  for the  legal and valid
issuance of the Shares and the Warrants to the Purchaser or subsequent holders.

      Section 4.2.  Registration and Listing.  The Company will cause its Common
Stock to continue to be registered under Sections 12(b) or 12(g) of the Exchange
Act, will comply in all respects with its reporting and filing obligations under
the Exchange Act, will comply with all requirements  related to any registration
statement filed pursuant to this Agreement, and will not take any action or file
any  document  (whether  or not  permitted  by the  Securities  Act or the rules
promulgated  thereunder)  to  terminate  or  suspend  such  registration  or  to
terminate or suspend its reporting and filing obligations under the Exchange Act
or Securities Act, except as permitted herein.  The Company will take all action
necessary  to  continue  the  listing  or  trading  of its  Common  Stock on the
Principal  Market and will comply in all respects with the Company's  reporting,
filing  and  other  obligations  under  the  bylaws or rules of the NASD and the
Principal   Market  and  shall  provide  the  Purchasers   with  copies  of  any
correspondence  to or from such  Principal  Market which  questions or threatens
delisting of the Common  Stock,  within three (3) Trading Days of the  Company's
receipt thereof,  until the Purchasers have disposed of all of their Registrable
Securities.

      Section 4.3. Escrow Arrangement. The Company and the Purchaser shall enter
into an escrow  arrangemeont  with  Epstein  Becker & Green,  P.C.  (the "Escrow
Agent") in the Form of Exhibit B hereto  respecting  payment against delivery of
the Shares.

      Section 4.4. Re2istration Ri2hts Agreement.  The Company and the purchaser
shall  enter into the  Registration  Rights  Agreement  in the Form of Exhibit A
hereto.  Before the  Purchaser  shall be obligated to accept a Draw Down request
from the Company, the Company shall have caused a sufficient number of shares of
Common  Stock to be  registered  to cover the Shares to be issued in  connection
with such Draw Down.


                                       13
<PAGE>

      Section 4.5. Accuracy of Registration  Statement. On each Settlement Date,
the  Registration  Statement  and the  prospectus  therein shall not contain any
untrue  statement of a material  fact or omit to state any  material  fact to be
required  to be stated  therein  or  necessary  in order to make the  statements
therein not misleading in light of the circumstances under which they were made;
and on such Settlement Date or date of filing of the Registration  Statement and
the prospectus  therein will not include any untrue statement of a material fact
or omit to state a  material  fact  necessary  in  order to make the  statements
therein,  in the light of the  circumstances  under  which they were  made,  not
misleading;   provided,   however,  the  Company  makes  no  representations  or
warranties as to the information  contained in or omitted from the  Registration
Statement and the prospectus therein in reliance upon and in conformity with the
information  furnished in writing to the Company by the  Purchaser  specifically
for inclusion in the Registration Statement and the prospectus therein.

      Section 4.6.  Compliance  with Laws.  The Company shall comply,  and cause
each  subsidiary to comply,  with all applicable  laws,  rules,  regulations and
orders, noncompliance with which could have a Material Adverse Effect.

      Section 4.7.  Keeping of Records and Books of Account.  The Company  shall
keep and cause each subsidiary to keep adequate records and books of account, in
which  complete  entries  will be  made in  accordance  with  GAAP  consistently
applied,   reflecting  all  financial   transactions  of  the  Company  and  its
subsidiaries,  and in which,  for each  fiscal  year,  all proper  reserves  for
depreciation, depletion, obsolescence,  amortization, taxes, bad debts and other
purposes in connection with its business shall be made.

      Section  4.8.  Amendments.  The  Company  shall  not  amend or  waive  any
provision  of the  Articles  or  Bylaws  of the  Company  in any way that  would
adversely  affect the  dividend  rights or voting  rights of the  holders of the
Shares.

      Section  4.9.  Other  Agreements.  The  Company  shall not enter  into any
agreement the terms of which such agreement would restrict or impair the ability
of the Company or any subsidiary to perform under this Agreement.

      Section 4.10. Notice of Certain Events Affecting Registration:  Suspension
of Right to  Request a Draw  Down.  The  Company  will  immediately  notify  the
Purchaser  in writing  upon the  occurrence  of any of the  following  events in
respect of the  Registration  Statement or related  prospectus in respect of the
Shares:  (i) receipt of any request for additional  information  from the SEC or
any  other  federal  or  state  governmental  authority  during  the  period  of
effectiveness of the Registration  Statement the response to which would require
any  amendments  or  supplements  to  the  Registration   Statement  or  related
prospectus;  (ii)  the  issuance  by the  SEC  or any  other  federal  or  state
governmental  authority of any stop order  suspending the  effectiveness  of the
Registration  Statement or the initiation of any  proceedings  for that purpose;
(iii)  receipt  of  any  notification  with  respect  to the  suspension  of the
qualification  or exemption from  qualification of any of the Shares for sale in
any  jurisdiction  or the  initiation or  threatening of any proceeding for such
purpose;  (iv) the happening of any event that makes any  statement  made in the
Registration  Statement or related  prospectus or any document  incorporated  or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in the Registration Statement, related


                                       14
<PAGE>

prospectus or documents so that, in the case of the Registration  Statement,  it
will not contain any untrue  statement  of a material  fact or omit to state any
material fact required to be stated  therein or necessary to make the statements
therein not misleading,  and that in the case of the related prospectus, it will
not  contain  any  untrue  statement  of a  material  fact or omit to state  any
material fact required to be stated  therein or necessary to make the statements
therein,  in the light of the  circumstances  under  which they were  made,  not
misleading; and (v) the Company's reasonable determination that a post-effective
amendment to the  Registration  Statement would be appropriate;  and the Company
will promptly make  available to the Purchaser any such  supplement or amendment
to the related  prospectus.  The Company  shall not deliver to the Purchaser any
Draw Down Notice during the continuation of any of the foregoing events.

      Section 4.11.  Consolidation;  Merger.  The Company shall not, at any time
after the date hereof; effect any merger or consolidation of the Company with or
into, or a transfer of all or substantially all of the assets of the Company to,
another  entity (a  "Consolidation  Event")  unless the  resulting  successor or
acquiring  entity  (if not the  Company)  assumes by  written  instrument  or by
operation of law the obligation to deliver to the Purchaser such shares of stock
and/or  securities  as the  Purchaser  is entitled  to receive  pursuant to this
Agreement.

      Section 4.12.  Limitation on Future  Financing.  The Company  agrees that,
except as set forth below, it will not enter into any sale of its securities for
cash at a discount  to the  current  market  price  until the  earlier of (i) 24
months from the effective date of the Registration  Statement or (ii) sixty (60)
days after the entire  $12,000,000  of Common  Stock has been  purchased  by the
Purchaser. The foregoing shall not prevent or limit the Company from engaging in
any sale of securities (i) in a registered  public offering by the Company which
is underwritten by one or more  established  investment  banks (not including an
equity line type of financing), (ii) in one or more private placements where the
purchasers  do not have  registration  rights,  (iii)  pursuant to any presently
existing or future  employee  benefit plan which plan has been or is approved by
the  Company's  stockholders,  (iv)  pursuant  to any  compensatory  plan  for a
full-time  employee  or key  consultant,  (v)  in  connection  with a  strategic
partnership or other business transaction, the principal purpose of which is not
simply to raise money, or (vi) to which  Purchaser  gives its written  approval.
Further,  the  Purchaser  shall  have a right  of  first  refusal,  to  elect to
participate,  in such  subsequent  transaction in the case of (i), (ii) and (vi)
above. Such right of first refusal must be exercised in writing within seven (7)
Trading Days of the Purchaser's  receipt of notice of the proposed terms of such
financing.

      The Purchaser covenants with the Company as follows:


                                       15
<PAGE>

      Section 4.13. Compliance with Law. The Purchaser's trading activities with
respect to shares of the Company's  Common Stock will be in compliance  with all
applicable  state and federal  securities  laws, rules and regulations and rules
and regulations of the Principal  Market on which the Company's  Common Stock is
listed.  Without limiting the generality of the foregoing,  the Purchaser agrees
that it  will,  whenever  required  by  federal  securities  laws,  deliver  the
prospectus  included in the  Registration  Statement to any  purchaser of Shares
from the Purchaser.

      Section 4.14. No Short Sales.  The Purchaser and its affiliates  shall not
engage in short sales of the  Company's  Common Stock (as defined in  applicable
SEC and NASD rules) during the term of this Agreement.

                                    ARTICLE V

                  CONDITIONS TO INITIAL CLOSING AND DRAW DOWNS

      Section 5.1. Conditions Precedent to the Obligation of the Company to Sell
the Shares. The obligation hereunder of the Company to issue and sell the Shares
to the  Purchaser  is subject to the  satisfaction  or waiver,  at or before the
Initial  Closing,  and as of each  Settlement Date of each of the conditions set
forth below.  These  conditions  are for the  Company's  sole benefit and may be
waived by the Company at any time in its sole discretion.

      (a)  Accuracy  of the  Purchaser's  Representations  and  Warranties.  The
representations and warranties of the Purchaser shall be true and correct in all
material  respects as of the date when made and as of the Initial Closing and as
of each Settlement Date as though made at that time, except for  representations
and warranties that speak as of a particular date.

      (b)  Performance by the  Purchaser.  The Purchaser  shall have  performed,
satisfied  and complied in all material  respects  with all material  covenants,
agreements and conditions required by this Agreement to be performed,  satisfied
or complied with by the  Purchaser at or prior to the Initial  Closing and as of
each Settlement Date.

      (c) No Injunction. No statute, rule, regulation,  executive order, decree,
ruling or injunction shall have been enacted,  entered,  promulgated or endorsed
by any court or governmental authority of competent jurisdiction which prohibits
the consummation of any of the transactions contemplated by this Agreement.

      Section 5.2.  Conditions  Precedent to the  Obligation of the Purchaser to
Close.  The  obligation  hereunder of the  Purchaser to perform its  obligations
under this  Agreement and to purchase the Shares is subject to the  satisfaction
or waiver, at or before the Initial Closing, of each of the conditions set forth
below.  These  conditions are for the Purchaser's sole benefit and may be waived
by the Purchaser at any time in its sole discretion.

      (a) Accuracy of the Company's Representations and Warranties.  Each of the
representations  and  warranties of the Company shall be true and correct in all
material  respects  as of the date when made and as of the  Initial  Closing  as
though made at that time (except for  representations  and warranties that speak
as of a particular date).


                                       16
<PAGE>

      (b)  Performance  by  the  Company.  The  Company  shall  have  performed,
satisfied  and  complied in all  respects  with all  covenants,  agreements  and
conditions  required by this  Agreement to be  performed,  satisfied or complied
with by the Company at or prior to the Initial Closing.

      (c) No Injunction. No statute, rule, regulation,  executive order, decree,
ruling or injunction shall have been enacted,  entered,  promulgated or endorsed
by any court or governmental authority of competent jurisdiction which prohibits
the consummation of any of the transactions contemplated by this Agreement.

      (d) No Proceedings or Litigation. No action, suit or proceeding before any
arbitrator  or any  governmental  authority  shall have been  commenced,  and no
investigation by any governmental authority shall have been threatened,  against
the  Purchaser  or the  Company  or  any  subsidiary,  or  any of the  officers,
directors or  affiliates of the Company or any  subsidiary  seeking to restrain,
prevent or change the  transactions  contemplated by this Agreement,  or seeking
damages in connection with such transactions.

      (e) Opinion of Counsel.  Etc. At the Initial Closing,  the Purchaser shall
have  received  an  opinion of  counsel  to the  Company,  dated the date of the
Initial Closing, in the form of Exhibit C hereto.

      (f) Warrants.  The Purchaser shall receive (i) at the Initial  Closing,  a
warrant  certificate  to purchase up to a number of shares of Common Stock equal
to $240,000  divided by the VWAP on the Trading Day  immediately  preceding  the
Initial  Closing Date (the "Initial  Warrant"),  (ii) on the  Effective  Date, a
warrant  certificate  to purchase up to a number of shares of Common Stock equal
to $120,000  divided by the VWAP on the Trading Day  immediately  preceding  the
Effective Date (the "Effective  Warrant"),  and (iii) on each Settlement Date, a
warrant  certificate  to purchase up to a number of shares of Common Stock equal
to 1% of the shares purchased at such Settlement (the "Draw Down Warrants"). The
Warrants  shall have a term from its date of  issuance  of three (3) years.  The
exercise price of the Warrants shall be the VWAP on the Trading Day  immediately
prior to such Warrants  issuance.  The Common Stock underlying the Warrants will
be registered in the Registration  Statement  referred to in Section 4.3 hereof.
The Warrants shall be in the form of Exhibit E hereto.

      Section 5.3.  Conditions  Precedent to the  Obligation of the Purchaser to
Accept a Draw Down and  Purchase  the Shares.  The  obligation  hereunder of the
Purchaser to accept a Draw Down request and to acquire and pay for the Shares is
subject to the  satisfaction at or before each  Settlement  Date, of each of the
conditions set forth below.

      (a) Satisfaction of Conditions to Initial Closing.  The Company shall have
satisfied,  or the  Purchaser  shall have  waived at the  Initial  Closing,  the
conditions set forth in Section 5.2 hereof.

      (b)  Effective   Registration   Statement.   The  Registration   Statement
registering  the Shares shall have been declared  effective by the SEC and shall
remain  effective on each Settlement  Date. On the Settlement  Date, the Company
shall prepare and deliver to the


                                       17
<PAGE>

Purchaser a  supplemental  prospectus  pursuant to Rule 424(b) of the Securities
Act relating to the Shares Purchased on the Settlement Date.

      (c) No  Suspension.  Trading in the Company's  Common Stock shall not have
been suspended by the SEC or the Principal  Market (except for any suspension of
trading of limited duration agreed to by the Company,  which suspension shall be
terminated  prior to the  delivery of each Draw Down  Notice),  and, at any time
prior to such Draw Down Notice,  trading in securities  generally as reported on
the Principal Market shall not have been suspended or limited, or minimum prices
shall not have been  established on securities  whose trades are reported on the
Principal  Market unless the general  suspension  or limitation  shall have been
terminated prior to the delivery of such Draw Down Notice.

      (d)  Material   Adverse  Effect.   No  Material   Adverse  Effect  and  no
Consolidation  Event  where the  successor  entity has not agreed to perform the
Company's obligations shall have occurred.

      (e) Opinion of Counsel. The Purchaser shall have received a "down-to-date"
letter from the Company's  counsel,  confirming that there is no change from the
counsel's  previously  delivered opinion,  or else specifying with particularity
the reason for any change and an opinion as to the additional items specified in
Exhibit C hereto and any other items set forth in the Escrow Agreement.

      (f) Future  Financing.  The Company shall have not completed any financing
prohibited  by Section 4.11 unless,  prior to the Company  delivering  the first
Draw Down Notice after any such financing,  the Company pays the Purchaser, as a
condition  to funding the Draw Down and not as  liquidated  damages,  the sum of
$100,000.

                                   ARTICLE VI

                                 DRAW DOWN TERMS

      Section  6.1.  Draw  Down  Terms.  Subject  to  the  satisfaction  of  the
conditions set forth in this Agreement, the parties agree as follows:

      (a) The Company,  may, in its sole  discretion,  issue and exercise a draw
down (a "Draw Down") during each Draw Down Pricing  Period,  which Draw Down the
Purchaser  will be  obligated  to accept  for a period  of 24 months  commencing
immediately after the Effective Date.

      (b) Only one Draw Down shall be allowed in each Draw Down Pricing  Period.
The number of shares of Common Stock  purchased by the Purchaser with respect to
each Draw Down shall be  determined  as set forth in Section  6.1(d)  herein and
settled on, (i) as to the 1St through  the 11th  Trading  Days after a Draw Down
Pricing Period commences (the "First Settlement Period"), on the 13h Trading Day
after a Draw Down Pricing  Period  commences and (ii) as to the 12th through the
22nd  Trading  Days after a Draw Down  Pricing  Period  commences  (the  "Second
Settlement  Period"),  the 24th  Trading Day after a Draw Down  Pricing  Period.
(each,  a  "Settlement  Date"  and  the  First  and  Second  Settlement  Periods
collectively referred to


                                       18
<PAGE>

as "Settlement Periods").  In connection with each Draw Down Pricing Period, the
Company may set the Threshold Price.

      (c) The  minimum  Investment  Amount  shall be  $100,000  and the  maximum
Investment  Amount shall be the lesser of (i)  $1,000,000,  and (ii) 4.5% of the
weighted  average  price for the  Common  Stock  for the three (3) month  period
immediately  prior to the  Commencement  Date (defined below)  multiplied by the
total  trading  volume in respect  of the  Common  Stock for the three (3) month
period immediately prior to the Commencement Date.

      (d) The number of Shares of Common  Stock to be issued on each  Settlement
Date  shall be a number of shares  equal to the sum of the  quotients  (for each
trading day within the Settlement Period) of (x) 1122nd of the Investment Amount
and (y) the  Purchase  Price on each Trading Day within the  Settlement  Period,
subject to the following adjustments:

      (i) if the  Average  Daily  Price on a given  Trading Day is less than the
Threshold price,  then the Investment  Amount will be reduced by 1/22nd and that
day shall be withdrawn from the Settlement Period; and

      (ii) trading of the Common Stock on the Principal  Market is suspended for
more than three (3)  hours,  in the  aggregate,  on any  Trading  Day during the
Settlement Period, the Investment Amount shall be reduced by 1122nd and that day
shall be withdrawn from the applicable Settlement Period.

      (e) The  Company  must  inform the  Purchaser  by  delivering  a draw down
notice, in the form of Exhibit D hereto (the "Draw Down Notice"),  via facsimile
transmission  in  accordance  with Section 9.4 as to the amount of the Draw Down
(the "Investment Amount") the Company wishes to exercise before the first day of
the Draw Down Pricing Period (the "Commencement Date"). If the Commencement Date
is to be the  date of the  Draw  Down  Notice,  the  Draw  Down  Notice  must be
delivered  to and receipt  confirmed  by the  Purchaser at least one hour before
trading  commences on such date.  At no time shall the  Purchaser be required to
purchase  more than the maximum  Draw Down amount for a given Draw Down  Pricing
Period so that if the Company chooses not to exercise the maximum permitted Draw
Down in a given Draw Down Pricing  Period the  Purchaser is not obligated to and
shall not purchase more than the scheduled  maximum amount in a subsequent  Draw
Down Pricing Period.

      (f) On or  before  each  Settlement  Date,  the  Shares  purchased  by the
Purchaser  shall be  electronically  delivered to The  Depository  Trust Company
("DTC") on the Purchaser's  behalf. Upon the Company  electronically  delivering
whole  shares  of  Common  Stock  to the  Purchaser  or its  designees  via  The
Depository Trust Company's  ("DTC") Fast Automated  Securities  Transfer program
through its Deposit  Withdrawal Agent Commission system ("DWAC") by 1:00 pm EST,
the Purchaser shall wire transfer  immediately  available funds to the Company's
designated account on such day. Upon the Company electronically delivering whole
shares of Common Stock to the  Purchaser or its designees via DWAC after 1:00 pm
EST, the Purchaser shall wire transfer next day available funds to the Company's
designated  account on such day.  In the event the  Purchaser  elects to use the
Escrow Agent, the


                                       19
<PAGE>

Shares  shall be credited by the  Company to the DTC account  designated  by the
Purchaser upon receipt by the Escrow Agent of payment for the Draw Down into the
Escrow  Agent's  trust account as provided in the Escrow  Agreement.  The Escrow
Agent shall be directed to pay the purchase  price to the Company,  net of seven
hundred  fifty  dollars  ($750)  as  escrow  expenses  to the  Escrow  Agent per
Settlement and any brokerage or placement  agent fees as set forth in the Escrow
Agreement.  The  delivery  of the Shares  into the  Purchaser's  DTC  account in
exchange for payment therefor shall be referred to herein as "Settlement".

                                   ARTICLE VII

                                   TERMINATION

      Section 7.1. Term. The term of this  Agreement  shall be twenty-four  (24)
months from the Effective Date.

      Section 7.2. Other Termination.

            (a) This Agreement shall terminate upon one (1) Trading Day's notice
if (i) an event  resulting in a Material  Adverse Effect has occurred,  (ii) the
Common Stock is delisted from the Principal  Market unless such de-listing is in
connection with the listing of the Common Stock on the Nasdaq  National  Market,
Nasdaq  SmallCap  Market,  the  American  Stock  Exchange  or the New York Stock
Exchange,  or (iii) the Company files for protection  from  creditors  under any
applicable law.

            (b) The Company may terminate  this  Agreement  upon one (1) Trading
Day's notice if the Purchaser shall fail to fund more than one properly  noticed
Draw Down within three (3) Trading Days of a Settlement Date.

      Section 7.3.  Effect of  Termination.  In the event of  termination by the
Company or the Purchaser, written notice thereof shall forthwith be given to the
other  party  and the  transactions  contemplated  by this  Agreement  shall  be
terminated  without  further  action  by  either  party.  If this  Agreement  is
terminated as provided in Section 7.1 or 7.2 herein, this Agreement shall become
void and of no further  force and effect,  except for  Sections 9.1 and 9.2, and
Article VIII herein.  Nothing in this Section 7.3 shall be deemed to release the
Company or the Purchaser from any liability for any breach under this Agreement,
or to impair the rights of the  Company  and the  Purchaser  to compel  specific
performance by the other party of its obligations under this Agreement.

                                  ARTICLE VIII

                                 INDEMNIFICATION

      Section 8.1. General  Indemnity.  The Company agrees to indemnify and hold
harmless  the  Purchaser  (and  its  directors,  officers,  affiliates,  agents,
successors  and  assigns)  from and  against  any and all  losses,  liabilities,
deficiencies,  costs,  damages  and  expenses  (including,  without  limitation,
reasonable attorneys' fees, charges and disbursements) incurred by the


                                       20
<PAGE>

Purchaser  as a result of any  inaccuracy  in or breach of the  representations,
warranties or covenants  made by the Company  herein.  The  Purchaser  agrees to
indemnify and hold harmless the Company and its directors, officers, affiliates,
agents, successors and assigns from and against any and all losses, liabilities,
deficiencies,  costs,  damages  and  expenses  (including,  without  limitation,
reasonable attorneys fees, charges and disbursements) incurred by the Company as
result of any  inaccuracy  in or breach of the  representations,  warranties  or
covenants made by the Purchaser herein. Notwithstanding anything to the contrary
herein,  the  Purchaser  shall be liable  under this  Section  8.1 for only that
amount as does not exceed the net proceeds to such  Purchaser as a result of the
sale of Shares pursuant to the Registration Statement.

      Section   8.2.   Indemnification   Procedure.   Any  party   entitled   to
indemnification  under this  Article  VIII (an  "Indemnified  Party")  will give
written notice to the  indemnifying  party of any matters giving rise to a claim
for  indemnification;  provided,  that the  failure  of any  party  entitled  to
indemnification  hereunder  to give notice as provided  herein shall not relieve
the indemnifying  party of its obligations under this Article VIII except to the
extent that the  indemnifying  party is actually  prejudiced  by such failure to
give  notice.  In case any  action,  proceeding  or claim is brought  against an
Indemnified Party in respect of which  indemnification is sought hereunder,  the
indemnifying  party  shall be  entitled  to  participate  in and,  unless in the
reasonable  judgment of counsel to the Indemnified  Party a conflict of interest
between it and the  indemnifying  party may exist with  respect of such  action,
proceeding  or claim,  to assume the defense  thereof  with  counsel  reasonably
satisfactory to the Indemnified  Party. In the event that the indemnifying party
advises  an   Indemnified   Party  that  it  will   contest  such  a  claim  for
indemnification  hereunder,  or fails, within thirty (30) days of receipt of any
indemnification  notice to notify,  in writing,  such person of its  election to
defend,  settle  or  compromise,  at its sole  cost  and  expense,  any  action,
proceeding or claim (or  discontinues its defense at any time after it commences
such defense),  then the Indemnified Party may, at its option, defend, settle or
otherwise compromise or pay such action or claim. In any event, unless and until
the  indemnifying  party  elects in  writing  to assume  and does so assume  the
defense of any such claim,  proceeding or action, the Indemnified  Party's costs
and expenses  arising out of the defense,  settlement  or compromise of any such
action,   claim  or  proceeding  shall  be  losses  subject  to  indemnification
hereunder.  The Indemnified  Party shall  cooperate fully with the  indemnifying
party in  connection  with any  settlement  negotiations  or defense of any such
action or claim by the indemnifying  party and shall furnish to the indemnifying
party all  information  reasonably  available  to the  Indemnified  Party  which
relates  to such  action  or  claim.  The  indemnifying  party  shall  keep  the
Indemnified Party fully apprised at all times as to the status of the defense or
any settlement  negotiations  with respect thereto.  If the  indemnifying  party
elects to defend any such action or claim,  then the Indemnified  Party shall be
entitled to  participate  in such defense with counsel of its choice at its sole
cost and expense.  The indemnifying party shall not be liable for any settlement
of any action,  claim or proceeding  effected without its prior written consent.
Notwithstanding  anything in this Article VIII to the contrary, the indemnifying
party shall not, without the Indemnified  Party's prior written consent,  settle
or compromise  any claim or consent to entry of any judgment in respect  thereof
which imposes any future  obligation on the Indemnified  Party or which does not
include,  as an  unconditional  term thereof,  the giving by the claimant or the
plaintiff to the Indemnified Party of a release from all liability in respect of
such claim. The  indemnification  required by this Article VIII shall be made by
periodic  payments of the amount thereof during the course of  investigation  or
defense, as and when bills are received or expense, loss, damage or liability is
incurred, within ten (10) Trading Days of


                                       21
<PAGE>

written  notice  thereof to the  indemnifying  party so long as the  Indemnified
Party irrevocably agrees to refund such moneys if it is ultimately determined by
a  court  of  competent  jurisdiction  that  such  party  was  not  entitled  to
indemnification.  The indemnity agreements contained herein shall be in addition
to (a) any cause of action or similar  rights of the  Indemnified  Party against
the indemnifying party or others, and (b) any liabilities the indemnifying party
may be subject to.

                                   ARTICLE IX

                                  MISCELLANEOUS

      Section 9.1.  Fees and  Expenses.  Each party agrees to pay all of its own
fees and expenses  related to the  transactions  contemplated by this Agreement;
provided, however, that the Company shall pay all attorneys' and escrow fees and
expenses (inclusive of disbursements and out-of-pocket expenses) as set forth in
the Escrow Agreement in connection with the preparation,  negotiation, execution
and delivery of this Agreement and the transactions  contemplated  hereunder. In
addition, the Company shall pay all reasonable fees and expenses incurred by the
Purchaser in connection with any subsequent amendments, modifications or waivers
of this Agreement,  the Escrow Agreement or the Registration Rights Agreement or
incurred  in  connection  with the  enforcement  of this  Agreement,  the Escrow
Agreement and the Registration Rights Agreement,  including, without limitation,
all reasonable  attorneys fees and expenses.  The Company shall pay all stamp or
other similar taxes and duties levied in connection  with issuance of the Shares
pursuant hereto.

      Section  9.2.  Specific   Enforcement.   The  Company  and  the  Purchaser
acknowledge and agree that irreparable  damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance  with their
specific terms or were  otherwise  breached.  It is accordingly  agreed that the
parties  shall be entitled to an injunction  or  injunctions  to prevent or cure
breaches of the  provisions of this  Agreement and to enforce  specifically  the
terms and  provisions  hereof or  thereof;  this being in  addition to any other
remedy to which any of them may be entitled by law or equity.

      Section 9.3. Entire Agreement:  Amendment.  This Agreement,  together with
the Registration  Rights Agreement and the Escrow Agreement  contains the entire
understanding  of the parties  with respect to the matters  covered  hereby and,
except as specifically  set forth herein,  neither the Company nor the Purchaser
makes any  representations,  warranty,  covenant or undertaking  with respect to
such matters. No provision of this Agreement may be waived or amended other than
by a written instrument signed by the party against whom enforcement of any such
amendment or waiver is sought and no condition to closing any Draw Down in favor
of the Purchaser may be waived by the Purchaser.

      Section  9.4.  Notices.  Any  notice,  demand,  request,  waiver  or other
communication  required or permitted to be given  hereunder  shall be in writing
and shall be  effective  (a) upon hand  delivery or  facsimile at the address or
number  designated  below (if delivered on a business day during normal business
hours where such notice is to be received),  or the first business day following
such delivery (if delivered  other than on a business day during normal business
hours where such notice is to be received) or (b) on the second business day


                                       22
<PAGE>

following  the date of  mailing  by  express  courier  service,  fully  prepaid,
addressed to such address,  or upon actual  receipt of such  mailing,  whichever
shall first occur. The addresses for such communications shall be:

If to the Company:             19200 Von Karmen Ave., Suite 500
                               Irvine, California 92612
                               Attn:  Roger May
                               Tel:   (949) 622-5566
                               Fax:   (949) 477-8022

With copies to:                Halperin & Associates
notice):                       317 Madison Avenue, Suite 1421
                               New York, New York 10017-5201
                               Telephone:     (212) 378-1200 Ext. 105
                               Facsimile:     (212) 378-1299


If to Purchaser:               c/o Michon de Reya Solicitors
                               21 Southhampton Row
                               London WC1B5HS England
                               Attn:  Kevin Gold
                               Fax:   011-441-171-4045982

with copies to:                Epstein Becker & Green P.C.
                               250 Park Avenue
                               New York, New York 10177-1211
                               Telephone:     (212) 351-3771
                               Fax:   (212) 661-0989
                               Attention:     Robert F. Charron

      Any party  hereto may from time to time  change its address for notices by
giving  written  notice of such  changed  address to the other  party  hereto in
accordance herewith.

      Section  9.5.  Waivers.  No  waiver by either  party of any  default  with
respect to any provision,  condition or  requirement of this Agreement  shall be
deemed  to be a  continuing  waiver  in the  future  or a  waiver  of any  other
provisions,  condition or requirement hereof; nor shall any delay or omission of
any party to exercise any right  hereunder in any manner  impair the exercise of
any such right accruing to it thereafter.

      Section 9.6.  Headings.  The article,  section and subsection  headings in
this Agreement are for convenience  only and shall not constitute a part of this
Agreement  for any other  purpose and shall not be deemed to limit or affect any
of the provisions hereof.

      Section 9.7. Successors and Assigns.  This Agreement shall be binding upon
and inure to the benefit of the parties and their  successors  and assigns.  The
parties  hereto  may not amend  this  Agreement  or any  rights  or  obligations
hereunder without the prior written consent of the Company and each Purchaser to
be affected by the amendment. After Initial


                                       23
<PAGE>

Closing,  the  assignment by a party to this  Agreement of any rights  hereunder
shall not affect the obligations of such party under this Agreement.

      Section 9.8. No Third Party Beneficiaries.  This Agreement is intended for
the benefit of the parties hereto and their respective  permitted successors and
assigns and is not for the benefit of; nor may any provision  hereof be enforced
by, any other person.

      Section 9.9. Governing  Law/Arbitration.  This Agreement shall be governed
by and construed in accordance  with the internal laws of the State of New York,
without  giving effect to the choice of law  provisions.  Any dispute under this
Agreement or any Exhibit attached hereto shall be submitted to arbitration under
the American Arbitration Association (the "AAA") in New York City, New York, and
shall be finally  and  conclusively  determined  by the  decision  of a board of
arbitration  consisting  of three (3)  members  (hereinafter  referred to as the
"Board of  Arbitration")  selected as according to the rules  governing the AAA.
The Board of  Arbitration  shall meet on  consecutive  business days in New York
City, New York,  and shall reach and render a decision in writing  (concurred in
by a majority of the members of the Board of  Arbitration)  with  respect to the
amount,  if any, which the losing party is required to pay to the other party in
respect of a claim filed. In connection with rendering its decisions,  the Board
of Arbitration  shall adopt and follow the laws of the State of New York. To the
extent  practical,  decisions of the Board of  Arbitration  shall be rendered no
more than thirty (30) calendar days following  commencement of proceedings  with
respect thereto. The Board of Arbitration shall cause its written decision to be
delivered to all parties involved in the dispute. The Board of Arbitration shall
be  authorized  and is  directed to enter a default  judgment  against any party
refusing to participate in the arbitration  proceeding within thirty days of any
deadline for such  participation.  Any decision made by the Board of Arbitration
(either  prior to or after the  expiration  of such  thirty  (30)  calendar  day
period)  shall be final,  binding and  conclusive on the parties to the dispute,
and entitled to be enforced to the fullest  extent  permitted by law and entered
in any court of competent  jurisdiction.  The prevailing  party shall be awarded
its costs,  including  attorneys' fees, from the non-prevailing party as part of
the arbitration  award. Any party shall have the right to seek injunctive relief
from any  court of  competent  jurisdiction  in any case  where  such  relief is
available.  The prevailing party in such injunctive  action shall be awarded its
costs, including attorney's fees, from the non-prevailing party.

      Section 9.10.  Counterparts.  This Agreement may be executed in any number
of  counterparts,  all of which taken together shall constitute one and the same
instrument and shall become effective when counterparts have been signed by each
party and delivered to the other parties  hereto,  it being  understood that all
parties need not sign the same counterpart. Execution may be made by delivery by
facsimile.

      Section 9.11. Publicity. Prior to the Initial Closing, neither the Company
nor the  Purchaser  shall issue any press  release or otherwise  make any public
statement or  announcement  with respect to this  Agreement or the  transactions
contemplated  hereby or the  existence  of this  Agreement.  After  the  Initial
Closing,  the  Company  may issue a press  release  or  otherwise  make a public
statement or  announcement  with respect to this  Agreement or the  transactions
contemplated hereby or the existence of this Agreement;  provided, however, that
prior to issuing any such press  release,  making any such public  statement  or
announcement,  the Company  obtains the prior  consent of the  Purchaser,  which
consent shall not be unreasonably withheld or delayed.


                                       24
<PAGE>

      Section 9.12. Severability. The provisions of this Agreement are severable
and,  in the  event  that any court or  officials  of any  regulatory  agency of
competent jurisdiction shall determine that any one or more of the provisions or
part of the provisions  contained in this Agreement  shall,  for any reason,  be
held to be invalid,  illegal or unenforceable  in any respect,  such invalidity,
illegality or unenforceability shall not affect any other provision or part of a
provision of this Agreement and this  Agreement  shall be reformed and construed
as if such  invalid  or  illegal  or  unenforceable  provision,  or part of such
provision,  had never been contained  herein,  so that such provisions  would be
valid,  legal and  enforceable to the maximum extent  possible,  so long as such
construction does not materially  adversely effect the economic rights of either
party hereto.

      Section  9.13.  Further  Assurances.  From  and  after  the  date  of this
Agreement, upon the request of the Purchaser or the Company, each of the Company
and the  Purchaser  shall  execute and deliver such  instruments,  documents and
other writings as may be reasonably  necessary or desirable to confirm and carry
out and to effectuate fully the intent and purposes of this Agreement.

      Section 9.14.  Effectiveness  of Agreement.  This  Agreement  shall become
effective  only upon  satisfaction  of the  conditions  precedent to the Initial
Closing set forth in Article I of the Escrow Agreement.


                                       25
<PAGE>

      IN WITNESS  WHEREOF,  the parties  hereto have caused this Agreement to be
duly  executed  by their  respective  authorize  officer  as of this l4th day of
December, 2000.

                                        Advanced Communications Technologies,
                                        Inc.

                                        By:
                                           ------------------------------------
                                             Roger May, Chief Executive Officer

                                        Wanquay Limited

                                        By:
                                           ------------------------------------
                                             Name:
                                             Title: