[Letterhead of The Ashton Technology Group, Inc.]





                                        January 23, 1996



Alliant Techsystems
Advanced Technical Applications
401 Defense Highway
Annapolis, MD  21401

Attention:        Mr. Tom Shelly
                  Manager, Advanced Systems


Subject:          Letter Contract No. ASH-LCO1231

Gentlemen:

     1. Order:  An order is hereby placed with you for the  furnishing to Ashton
Technology  Group, Inc. the design and system  specifications  for an encryption
device (to be known as the Ashton Technology  Encryption Device (ATED)),  as set
forth in Exhibit A (Statement  of Work)  attached  hereto and hereby made a part
hereof. This order shall become a contract (this "Letter Contract") on the terms
and conditions set forth herein upon your  unconditional  acceptance hereof, and
shall be deemed effective as of December 8, 1995.

     2.  Authorization:  You are directed upon your  acceptance of this order to
proceed  immediately  to procure the  necessary  materials  and to commence  the
performance  of the work  called for  herein,  and to pursue  such work with all
diligence to the end that the contracted for Goods.  Documentation  and Services
may be delivered or performed at the time or times specified in Exhibit A.

     3. Consideration:

     (a) Payments  will be made to you pending  execution  of this  contract for
your work expended in accomplishing the tasks defined in Paragraph 1 and Exhibit
A. AlliantTech  will present monthly  invoices for the work performed  detailing
the  number of hours  and labor  categories  for the work  along  with the fully
burdened,  definitized billing rates to be negotiated for this contract.  Ashton
will pay Alliant Tech within 90 days of receipt of invoice.  In the event of the
termination of this Letter  Contract for default or for convenience as set forth
in Article 4.b hereof.

     (b) You are not  authorized  to expend or obligate in  furtherance  of your
performance   hereunder   more   than   U.S.   $75,000.00   in  the   aggregate.
Notwithstanding  any other  provision of this Letter Contract or its exhibits to
the contrary, any expenditure or obligation in excess of that amount shall be at
your own risk and  Ashton  Technology  Group,  Inc.  shall  not in any  event be
obligated to pay more than that amount in the aggregate  hereunder,  whether for
completed work, termination costs, settlement expenses, or otherwise.

     4. Negotiation of Definitive Contract:

     (a) By your  acceptance  of this order,  you agree to enter into good faith
negotiations   immediately  with  Ashton  Technology   Group,   Inc.,  with  the
expectation  of the  execution  of a  definitive  contract  which  will  include
mutually acceptable detailed prices,  delivery schedules and other terms of this
Letter  Contract;  provided,  however,  that the total price for the  definitive
contract shall not exceed U.S. $350,000.00.

     (b) It is expected  that such  definitive  contract will be issued prior to
March 31, 1996. If we fail to agree upon the  definitive  contract by said date,
this Letter Contract shall terminate  automatically  and you will be paid on the
same terms as if this Letter Contract had been  terminated by Ashton  Technology
Group, Inc. for its convenience.

     5. Incorporation of Special Terms and Conditions:

     (a) Payment for completed or partially  completed Goods,  Documentation and
Services:  Ashton  requires  Seller to deliver to Ashton  any  completed  Goods,
Documentation and Services and such partially completed Goods. Documentation and
Services  as  Seller  has  produced  or  acquired  for  the  performance  of any
terminated  portion of this  Contract.  Seller  shall  protect  and  preserve as
property including Intellectual Property in possession of Seller in which Ashton
has or may acquire an interest or right.  The payment which Ashton accepts shall
be the lesser of the following amounts:

     (i) The actual, reasonable direct costs and associated overhead,  including
general  and  administrative  overhead  directly  related to the  direct  costs,
expended by Seller in producing any such completed or partially completed Goods,
Documentation  and Services  which Ashton  requires  Seller to deliver to Ashton
pursuant to the preceding paragraph of this Article and that Ashton accepts: or

     (ii) The amount specified in Paragraph 3.b. of this Letter Contract.

     b. Termination for  Convenience.  Ashton shall pay Seller the lesser of the
following amounts:

     (i) The sum of (1) the  actual,  reasonable  direct  costs  and  associated
overhead,  including  general  administrative  overhead  directly related to the
direct costs, expended by Seller in performance of work under this contract, and
(2) the amount reimbursable under paragraph 4.a. above; or

     (ii) The amount specified in Paragraph 3.b of this Letter Contract.

     6.  Acceptance:  If the foregoing is  satisfactory  to you, please indicate
your  acceptance  hereof by signing and returning the enclosed extra copy.  Such
acceptance  will  constitute  this as a contract on the terms and conditions set
forth herein. Telefacsimile signatures shall be effective as originals.

                                        Very truly yours,







Ashton Technology Group, Inc.

Accepted this 23rd day of January 1996           Alliant Techsystems, Inc.



By: /s/ Raymond T. Tate                          By: /s/ William Labuda
     (Signature)                                    (Signature)

Raymond T. Tate                                  William M. Labuda
President                                        Director


<PAGE>
                                                                      EXHIBIT A

STATEMENT OF WORK:  PHASE I


     1. Study the operational  environment of the UTSo and participate in design
meetings    focusing    on    the    encryption    device    requirements    and
hardware/communication/data flow interfaces.

     2.  Complete  an   Encryption   System   Specification.   Hardware/Software
Requirements Specification and Interface Document.

     3. Prepare a hardware  architecture  and block  diagram  complete with data
storage, sizing, and throughput requirements.

     4. Prepare an encryption device Test Plan.

     5. Prepare a detailed  System  Implementation  Plan  together with cost and
schedule for the number of encryption  devices required for the UTSo system. All
requirements  that cannot be accommodated,  should be noted.  This document will
become the basis for the definitized contract negotiation.

<PAGE>
--------------------------------------------------------------------------------
                [Letterhead of The Ashton Technology Group, Inc.]
--------------------------------------------------------------------------------


                                     March 29, 1996

Alliant Techsystems
Advanced Technical Applications
401 Defense Highway
Annapolis, MD  21401

Attention:        Mr. Tom Shelly
                  Manager, Advanced Systems

                  Subject:          Letter Contract No. ASH-LCO1231
                                    Modification #01

Gentlemen:

     1. Incorporation of Special Terms and Conditions:

     (a) All actual expenses  related to above noted  contract,  as of March 31,
1996, shall be billed to The Ashton  Technology Group, Inc. Payment will be made
to you within 90 days of receipt of invoice.  All additional expenses related to
this contract shall be paid after all contract and deliverable  requirements are
completed.

     (b) Contract cap is $450,000.00

     2. All other  terms and  conditions  remain  in effect  under the  original
Letter Contract No. ASH-LCO 1281, dated January 23, 1996.

     3.  Acceptance:  If the foregoing is  satisfactory  to you, please indicate
your  acceptance  hereof by signing and returning the enclosed extra copy.  Such
acceptance  will  constitute  this as a contract on the terms and conditions set
forth herein. Telefacsimile signatures shall be effective as originals.

                                      Very truly yours,


Ashton Technology Group, Inc.         Accepted this 29th day of March 1996

                                      Alliant Techsystems, Inc.



By:    /s/ Raymond T. Tate            By:  /s/ William Labuda
       (Signature)                        (Signature)

Raymond T. Tate                       William M. Labuda
President                             Director



<PAGE>


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

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

Contract No. ASH-LCO1231, Mod. 2

To:      Alliant Techsystems, Inc.
         Advanced Technical Applications
         401 Defense Highway
         Annapolis, MD  21401

This  Agreement,  made as of August 1, 1996,  between Ashton  Technology  Group,
10420  Little  Patuxent  Parkway,  Suite  490,  Columbia,  MD 21044 and  Alliant
Techsystems, Advanced Technology Application, 401 Defense Highway, Annapolis, MD
21401.

The parties mutually agree as follows:

     1. STATEMENT OF WORK

     Defined as:

     (a) Ashton  Technology  Encryption  Device  (ATED),  delivery  of 100 units
complete  with Phase VI  software  as defined  at the  Ashton  Technical  Review
meeting dated August 27, 1996.

     (b) Integration and test support through November 30, 1996.

     (c) Crypto Administration  Workstation Software, Phase II as defined at the
Ashton Technical Review Meeting dated August 27, 1996.

     2. PERIOD OF PERFORMANCE

     This contract  definitizes letter contract  ASH-LCO1231,  and Mod. 1, dated
January 23, 1996. Alliant  Techsystems shall supply items and services described
herein  accordance  with the terms  hereof  during  the period  1-23-96  through
11-30-96.

     3. PAYMENT

     This is a Fixed  Price  Contract  in the  amount of  $1,283,000.00  for the
delivery  of 100 ATED  units,  integration,  design and  testing  support,  with
monthly milestone billings due and payable Net 30 days from receipt of invoice.

     4. TERMS AND CONDITIONS

     This  contract  is  expressly  contingent  upon  acceptance  of the Alliant
Techsystems general terms and conditions of sale (attached).

     We hereby  acknowledge  and accept this  contract  subject to the terms and
conditions set forth herein.


ASHTON TECHNOLOGY GROUP                      ALLIANT TECHSYSTEMS, INC.


By: /s/ Raymond T. Tate                      By:  /s/ William Labuda
    -----------------------------                 ------------------------------
     Raymond T. Tate                              William Labuda

Title:  President                            Title:  Director/General Manager

Date:   8-1-96                               Date:   8-1-96