Document:

Execution
      Copy

    STOCKHOLDERS
      AGREEMENT

     

    THIS
      STOCKHOLDERS AGREEMENT (the “Agreement”)
      is
      made as of August 17, 2007, by and among Advanced Communications
      Technologies, Inc., a Florida corporation (the “Company”),
      ACT-DE, LLC, a Delaware limited liability company (“HIG”),
      Fred
      V. Baldwin, an individual resident of the State of Florida (“Baldwin”), Robert
      Coolidge, an individual resident of the State of Florida (“Coolidge”)
      and
      Scott Cameron, an individual resident of the State of Florida (“Cameron”)
      (Baldwin, Coolidge and Cameron each, a “VB
      Investor”
and
      collectively, the “VB
      Investors”),
      and
      any party who from time to time becomes party to this Agreement as a VB
      Shareholder or HIG Shareholder by execution of a Joinder Agreement in
      substantially the form attached hereto as Exhibit
      A.

     

    WHEREAS,
      on the date hereof, (i) the VB Shareholders are acquiring an aggregate of 1,000
      shares of the Company’s Series D Convertible Preferred Stock, par value $0.01
      per share (the “Series
      D Preferred Stock”),
      and
      (ii) Baldwin is acquiring a Convertible Subordinated Promissory Note convertible
      into up to 1,666,666,667 shares of Common Stock (the “Note”),
      pursuant to that certain Stock Purchase Agreement dated as of the date hereof
      (the “VB
      Stock Purchase Agreement”)
      by and
      among the Company, Baldwin and Encompass Group Affiliates, Inc.;

     

    WHEREAS,
      on the date hereof, HIG is purchasing an aggregate of 913.79 shares of the
      Company’s Series C Senior Preferred Stock, par value $0.01 per share (the
“Series C
      Preferred Stock”),
      pursuant to that certain Stock Purchase Agreement dated as of the date hereof
      by
      and among the Company and HIG (the “HIG
      Stock Purchase Agreement”);

     

    WHEREAS,
      in connection with the obligations of the Company under the VB Stock Purchase
      Agreement and a condition to the obligations of HIG under the HIG Stock Purchase
      Agreement that this Agreement be executed and delivered by the parties hereto,
      and the parties are willing to execute and deliver this Agreement and be bound
      by the provisions hereof; and

     

    WHEREAS,
      the parties hereto desire to agree upon the terms on which the securities of
      the
      Company, now or hereafter outstanding and held by them, will be held,
      transferred and voted, as the case may be.

     

    NOW,
      THEREFORE, in consideration of the foregoing and the mutual covenants and
      agreements hereinafter set forth, the parties hereto agree as
      follows:

     

    SECTION
      I - DEFINITIONS

     

    SECTION
      1.1. Construction
      of Terms.
      As used
      herein, the masculine, feminine or neuter gender, and the singular or plural
      number, shall be deemed to be or to include the other genders or number, as
      the
      case may be, whenever the context so indicates or requires.

     

    SECTION
      1.2. Defined
      Terms.
      The
      following capitalized terms, as used in this Agreement, shall have the meanings
      set forth below.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    An
      “Affiliate”
of
      any
      Person means a Person that, directly or indirectly, through one or more
      intermediaries, controls, is controlled by or is under common control with
      the
      first mentioned Person. A Person shall be deemed to control another Person
      if
      such first Person possesses, directly or indirectly, the power to direct, or
      cause the direction of, the management and policies of the second Person,
      whether through the ownership of voting securities, by contract or
      otherwise.

     

    “Board
      of Directors”
means
      the Board of Directors of the Company.

     

    “Charter”
means
      Company’s Certificate of Incorporation, as amended, in effect as of the date
      hereof.

     

    “Code”
means
      the Internal Revenue Code of 1986, as amended.

     

    “Common
      Stock”
      means
      the
      Company’s common stock, no par value per share, and any shares of any other
      class of capital stock of the Company hereafter issued which are (i) not
      preferred as to dividends or assets over any class of stock of the Company,
      (ii)
      not subject to redemption pursuant to the terms thereof, or (iii) issued to
      the
      holders of shares of Common Stock upon any reclassification
      thereof.

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended.

     

    “HIG
      Securities”
means
      the (a) all Shares purchased by, issued to or otherwise acquired by HIG and
      (b)
      all Shares issued with respect thereto by way of stock dividend or stock split
      or in connection with any merger, consolidation, recapitalization or other
      reorganization affecting the Company’s capital stock. HIG Securities will
      continue to be HIG Securities in the hands of any holder and each transferee
      thereof will succeed to the rights and obligations of a holder of HIG Securities
      hereunder, provided that shares of HIG Securities will cease to be HIG
      Securities when transferred (i) to the Company, (ii) a VB Shareholder, (iii)
      pursuant to Rule 144 or (iv) in connection with any sale registered under the
      Securities Act. Notwithstanding the foregoing, in no event shall the term “HIG
      Securities” include shares of Common Stock purchased in the public
      market.

     

    “HIG
      Shareholder”
      means
      any
      Person who holds HIG
      Securities and any other Person to whom HIG Securities are issued or transferred
      for so long as such Person holds any HIG
      Securities.

     

    “Major D Shareholder”
means
      any VB Shareholder initially a party to this Agreement for as long as such
      VB
      Shareholder continues to hold at least 50% of the Series D Preferred Stock
      held
      by such VB Shareholder on the date hereof.

     

    “Person”
means
      an individual, a corporation, an association, a joint venture, a partnership,
      a
      limited liability company, an estate, a trust, an unincorporated organization
      and any other entity or organization, governmental or otherwise.

     

    “Preferred
      Stock”
means
      (a) the Company’s Series C Preferred Stock, $0.01 par value per share (the
“Series C Preferred Stock”), (b) the Company’s Series D Preferred Stock, $0.01
      par value per share, (c) the Company’s Series A-2 Preferred Stock, $0.001 par
      value per share and (d) any capital stock of the Company which is (i) preferred
      as to distributions upon a liquidation of the Company or dividends over any
      other class of stock of the Company, (ii) subject to redemption pursuant to
      the
      terms thereof or (iii) issued to the holders of Preferred Stock upon any
      reclassification thereof.

     

    
      
         

      

      
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    “Public Sale”
means
      any sale of Common Stock pursuant to a sale registered under the Securities
      Act
      or to the public through a broker or market-maker pursuant to the provisions
      of
      Rule 144 (or any successor rule) adopted under the Securities Act.

     

    “Securities
      Act”
means
      the Securities Act of 1933, as amended.

     

    “Shares”
means,
      at any time, shares of (i) Common Stock, (ii) Preferred Stock, and
      (iii) any other equity securities now or hereafter issued by the Company,
      including pursuant to the Note, together with any other shares of stock issued
      or issuable with respect thereto (whether by way of a stock dividend, stock
      split or in exchange for or upon conversion of such shares or otherwise in
      connection with a combination of shares, recapitalization, merger, consolidation
      or other corporate reorganization).

     

    “Shareholders”
means,
      collectively, the HIG Shareholders and the VB Shareholders.

     

    “Transfer”
means
      any direct or indirect transfer, donation, sale, assignment, pledge,
      hypothecation, grant of a security interest in or other disposal or attempted
      disposal of all or any portion of a security, any interest or rights in a
      security, or any rights under this Agreement. “Transferred”
means
      the accomplishment of a Transfer, and “Transferee”
means
      the recipient of a Transfer.

     

    “VB
      Securities”
means
      (a) the Note and all shares of Common Stock issued thereunder, (b) the Series
      D
      Preferred Stock purchased by, issued to or otherwise acquired by any of the
      VB
      Investors and all shares of Common Stock issued upon conversion thereof and
      (C)
      all Shares issued with respect thereto by way of stock dividend or stock split
      or in connection with any merger, consolidation, recapitalization or other
      reorganization affecting the Company’s capital stock. VB Securities will
      continue to be VB Securities in the hands of any holder and each transferee
      thereof will succeed to the rights and obligations of a holder of VB Securities
      hereunder, provided that shares of VB Securities will cease to be VB Securities
      when transferred (i) to the Company, (ii) an HIG Shareholder or (iii) pursuant
      to a Public Sale. Notwithstanding the foregoing, in no event shall the term
“VB
      Securities” include Common Stock purchased in the public market.

     

    “VB
      Shareholder”
      means
      any
      Person who holds VB Securities and any other Person to whom VB Securities are
      issued or transferred for so long as such Person holds any VB
      Securities.

     

    
      
         

      

      
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    SECTION
      II - REPRESENTATIONS
      AND WARRANTIES

     

    SECTION
      2.1. Representations
      and Warranties of the Shareholders

     

    Each
      of
      the Shareholders, individually and not jointly, hereby represents, warrants
      and
      covenants to the Company and each other Shareholder as follows: (a) such
      Shareholder has full authority and power under its charter, by-laws, governing
      partnership agreement or comparable document (if applicable) to enter into
      this
      Agreement and perform its obligations hereunder; (b) this Agreement constitutes
      the valid and binding obligation of such Shareholder enforceable against it
      in
      accordance with its terms, except: (i) as limited by applicable bankruptcy,
      insolvency, reorganization, moratorium and other laws of general application
      affecting enforcement of creditors’ rights generally, (ii) as limited by laws
      relating to the availability of specific performance, injunctive relief, or
      other equitable remedies, and (iii) to the extent the indemnification provisions
      may be limited by applicable federal or state securities laws; and (c) the
      execution, delivery and performance by such Shareholder of this Agreement:
      (1) does not and will not violate any laws, rules or regulations of the
      United States or any state or other jurisdiction applicable to such Shareholder,
      (2) does not and will not require such Shareholder to obtain any approval,
      consent or waiver of, or to make any filing with, any person that has not been
      obtained or made, and (3) does not and will not result in a breach of,
      constitute a default under, accelerate any obligation under or give rise to
      a
      right of termination of any indenture or loan or credit agreement or any other
      agreement, contract, instrument, mortgage, lien, lease, permit, authorization,
      order, writ, judgment, injunction, decree, determination or arbitration award
      to
      which such Shareholder is a party or by which the property of such Shareholder
      is bound or affected, or result in the creation or imposition of any mortgage,
      pledge, lien, security interest or other charge or encumbrance on any of the
      assets or properties of such Shareholder.

     

    SECTION
      2.2. Representations
      and Warranties of the Company

     

    The
      Company hereby represents, warrants and covenants to each of the Shareholders
      as
      follows: (a) the Company has full corporate authority and power to enter
      into this Agreement and perform its obligations hereunder; (b) this
      Agreement constitutes the valid and binding obligation of the Company
      enforceable against it in accordance with its terms, except: (i) as limited
      by
      applicable bankruptcy, insolvency, reorganization, moratorium and other laws
      of
      general application affecting enforcement of creditors’ rights generally, (ii)
      as limited by laws relating to the availability of specific performance,
      injunctive relief, or other equitable remedies, and (iii) to the extent the
      indemnification provisions may be limited by applicable federal or state
      securities laws; and (c) the execution, delivery and performance by the
      Company of this Agreement: (1) does not and will not violate any laws,
      rules or regulations of the United States or any state or other jurisdiction
      applicable to the Company, (2) does not and will not require the Company to
      obtain any approval, consent or waiver of, or to make any filing with, any
      Person that has not been obtained or made other than filings pursuant to
      applicable federal and state securities laws which have been or will be made
      on
      a timely basis, and (3) does not and will not result in a breach of, constitute
      a default under, accelerate any obligation under or give rise to a right of
      termination of any indenture or loan or credit agreement or any other material
      agreement, contract, instrument, mortgage, lien, lease, permit, authorization,
      order, writ, judgment, injunction, decree, determination or arbitration award
      to
      which the Company is a party or by which the property of the Company is bound
      or
      affected, or result in the creation or imposition of any mortgage, pledge,
      lien,
      security interest or other charge or encumbrance on any of the assets or
      properties of the Company.

     

    
      
         

      

      
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    SECTION
      III - RESTRICTIONS
      ON TRANSFER; RIGHT OF REFUSAL; TAG ALONG; DRAG ALONG;
      PRE-EMPTIVE RIGHTS

     

    SECTION
      3.1. Restrictions
      on Transfer

     

    Each
      VB
      Shareholder agrees that such VB Shareholder will not Transfer all or any portion
      of his, her or its VB Securities now owned or hereafter acquired by such VB
      Shareholder, except in connection with, and strictly in compliance with, the
      conditions of this Article III. 

     

    SECTION
      3.2. Permitted
      Transfers

     

    Notwithstanding
      anything herein to the contrary, the provisions of Section
      3
      shall
      not apply to the Transfers listed below, provided
      that in
      the case of items (a) and (b) below the Transferee shall have entered into
      a
      Joinder Agreement in substantially the form attached hereto as Exhibit
      A
      providing that all VB Securities so Transferred shall continue to be subject
      to
      all provisions of this Agreement as if such VB Securities were still held by
      the
      VB Shareholder, except that (other than in the case of item (c) below) no
      further Transfer shall thereafter be permitted hereunder except in compliance
      with this Article III:

     

    (a) Transfers
      by any VB Shareholder to the spouse, children or siblings of such VB Shareholder
      or to a trust, a family limited liability company or family limited partnership
      for the sole benefit of any of them (including such VB
      Shareholder);

     

    (b) Transfers
      upon the death of a VB Shareholder to such VB Shareholder’s heirs, executors or
      administrators or to a living or testamentary trust created by such VB
      Shareholder, or Transfers between such VB Shareholder and such VB Shareholder’s
      guardian or conservator; 

     

    (c) Transfers
      to any other VB Shareholder; 

     

    (d) Transfers
      permitted by Section 4.1; and

     

    (e) Transfers
      pursuant to a Public Sale.

     

    Notwithstanding
      anything to the contrary in this Agreement or any failure by a Transferee under
      this Section
      3.2
      to
      execute a Joinder Agreement, such Transferee shall take any VB Securities so
      Transferred subject to all provisions of this Agreement as if such VB Securities
      were still held by the VB Shareholder making such Transfer, whether or not
      they
      so agree in writing.

     

    SECTION
      3.3. Tag
      Along Right of VB Shareholders

     

    (a) If
      the
      HIG Shareholders desire to effect any sale of more than 20% of the original
      number of shares of Series C Preferred Stock to any Person other than an
      Affiliate of any HIG Shareholder at a price per share in excess of the Series
      C
      Preference Amount (as defined in the Charter) plus all accrued and unpaid
      dividends thereon (a “Tag
      Along Transaction”),
      the
      HIG Shareholders shall give written notice to each VB Shareholder offering
      the
      VB Shareholders the option to participate in such Tag Along Transaction, which
      shall set forth the material terms of the proposed Tag Along Transaction and
      identify the contemplated transferee.

     

    
      
         

      

      
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    (b) Each
      VB
      Shareholder may, by written notice to the HIG Shareholders (a “Tag
      Along Notice”),
      delivered within ten (10) business days after the date notice of the Tag Along
      Transaction was delivered to such VB Shareholder (the “Tag
      Along Election Period”),
      elect
      to sell in such Tag Along Transaction, pursuant to the terms thereof, shares
      of
      Series D Preferred Stock held by such VB Shareholder that are then convertible
      into a number of shares of Common Stock equal to (i) the total number of shares
      of Common Stock then issuable upon conversion of all of the shares of Series
      D
      Preferred Stock held by the VB Shareholder multiplied by (ii) a fraction (A)
      the
      numerator of which is the total number of share of Common Stock issuable upon
      conversion of the shares of Series C Preferred Stock being sold in the Tag
      Along
      Transaction and (B) the denominator of which is the total number of share of
      Common Stock issuable upon conversion of all of the shares of Series C Preferred
      Stock then outstanding. The price per share of Series D Preferred Stock to
      be
      paid to each such electing VB Shareholder shall be equal to the total number
      of
      shares of Common Stock issuable upon conversion of such share multiplied by
      the
      Series C Converted Price. The “Series
      C Converted Price”
means
      the price per share of Series C Preferred Stock to be paid in such transaction
      divided by the number of shares of Common Stock into which the Series C
      Preferred Stock is then convertible.

     

    (c) If
      a VB
      Shareholder does not deliver a Tag Along Notice in a timely manner, the HIG
      Shareholders may thereafter consummate the Tag Along Transaction without the
      participation of such VB Shareholder on terms and conditions not materially
      more
      favorable to the sellers than those set forth in the notice described in
      subsection (a) above. If the Tag Along Transaction is not consummated on or
      before 180 calendar days after the later of (i) the expiration of the
      Tag Along Election Period and (ii) the satisfaction of related all
      governmental approval or filing requirements, the offer described in subsection
      (a) above shall be deemed to lapse, and the HIG Shareholders shall be obligated
      to once again comply with the provisions of this Section 3.3.
      

     

    (d) In
      the
      event any VB Shareholder exercises its right to participate in a Tag Along
      Transaction in accordance with this Section 3.3,
      it
      shall be liable to the transferee in such Tag Along Transaction only to same
      extent as the transferring HIG Shareholders with respect to representations
      and
      warranties regarding the Company or its business, on a several basis for such
      VB
      Shareholder’s pro
      rata
      portion
      of the total sale proceeds; provided,
      however,
      that
      such VB Shareholder’s liability with respect to such representations and
      warranties shall not exceed the value of the proceeds received by the VB
      Shareholder upon the consummation of the Tag Along Transaction and, provided further
      that the
      VB Shareholder shall not be required to make any other representations or
      warranties or to provide any indemnities in connection therewith (other
      than with respect to representations and warranties with respect to
      enforceability of such Shareholder’s obligations and title to
      Shares).

     

    
      
         

      

      
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    SECTION
      3.4. Drag-Along

     

    (a) Notwithstanding
      any other provision of this Agreement, with respect to any Approved Sale, each
      VB Shareholder hereby agrees to (i) vote for and/or consent to and raise no
      objection to such Approved Sale (and hereby waives, to the extent permitted
      by
      law, all rights to object to or dissent from such Approved Sale), (ii) otherwise
      cooperate fully in such Approved Sale and not take any action prejudicial to
      or
      inconsistent with such Approved Sale. The
      obligations of the VB Shareholders with respect to any Approved Sale are subject
      to the satisfaction of the conditions that (A) upon the consummation of such
      Approved Sale, all of the sellers of Common Stock and of each series of
      Preferred Stock, respectively, will receive (I) the amount of consideration
      to
      which such sellers are entitled pursuant to a Liquidation under the Charter
      and
      (II) the same form and amount of consideration per share of Common Stock or
      Preferred Stock of such series, as applicable, or if any such sellers are given
      an option as to the form and amount of consideration to be received per share
      of
      Common Stock or Preferred Stock of such series, all holders of Common Stock
      and
      Preferred Stock of such series, as applicable, will be given the same option,
      (B) the representations and warranties to be made by any VB Shareholder shall
      be
      limited to enforceability of its obligations and title to its Shares, (C) any
      indemnification obligations of a VB Shareholder shall be several, not joint,
      and
      shall (other than with respect to representations and warranties with respect
      to
      enforceability of such Shareholder’s obligations and title to Shares) be pro
      rata based on the value of the proceeds received by the sellers in connection
      with such Approved Sale, and (D) the aggregate liability of a VB Shareholder
      with respect to indemnification obligations in connection with such Approved
      Sale shall be limited to the proceeds paid to such VB Shareholder in connection
      with such Approved Sale.

     

    (b) Each
      VB
      Shareholder hereby appoints the Company as such VB Shareholder’s true and lawful
      proxy and attorney in connection with any Approved Sale satisfying the
      conditions set forth in this Section 3.4 herein, with full power of
      substitution, to vote all Shares owned by such VB Shareholder or over which
      such
      VB Shareholder has voting control to effectuate the agreements set forth in
      this
      Section 3.4 in the event of any breach by such VB Shareholder of its obligations
      under this Section 3.4. The proxies and powers granted by each VB Shareholder
      pursuant to this Section 3.4 are coupled with an interest and are given to
      secure the performance of such VB Shareholder’s duties under this Section 3.4.
      Such proxies are irrevocable for so long as this Section 3.4 remains in effect
      and will survive the death, incompetence or disability of any VB Shareholder
      who
      is an individual and the merger, liquidation or dissolution of any Shareholder
      that is a corporation, limited liability company, partnership or other
      entity.

     

    (c) The
      term
“Approved
      Sale”
means
      any of the following transactions that are approved by the Board of Directors:
      (i) a consolidation or merger of the Company with or into any other person(s),
      entity or entities in which less than a majority of the outstanding voting
      power
      of the surviving person(s), entity or entities is held by persons or entities
      who were stockholders of the Company prior to such event or (ii) a sale, lease,
      exchange or disposition of all, or substantially all, of the property (with
      or
      without the good will) of the Company otherwise than in its usual and regular
      course of business.

     

    
      
         

      

      
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    SECTION
      3.5. Limited
      First Refusal Rights

     

    (a) Pre-emptive
      Rights.
      If the
      Company authorizes the issuance and sale of any Preferred Stock, except to
      the
      extent such Preferred Stock is issued (a) pursuant to a Public Sale, (b) as
      part
      of the consideration paid for the acquisition of all or any substantial portion
      of the assets or all or any portion of the capital stock of any Person, (c)
      upon
      conversion or exercise of any instrument convertible into Preferred Stock,
      (d)
      as compensation to any employee, director, officer or consultant of the Company
      or any of its Subsidiaries, (e) as partial consideration for any debt financing
      extended to the Company or any of its Subsidiaries, (f) in connection with
      any
      joint venture or strategic relationship approved by the Board of Directors
      (and
      not issued for cash in connection therewith) or (g) pursuant to any right of
      first refusal or right of first offer granted by the Company to any of its
      credit financing sources or their affiliates, the Company will first offer
      to
      sell to each Major D Shareholder a pro rata portion of such securities equal
      to
      the percentage determined by dividing (i) the number of shares of Common Stock
      held by such Major D Shareholder (determined on a fully diluted basis), by
      (ii)
      the number of shares of Common Stock then outstanding (determined on a fully
      diluted basis). Each such Major D Shareholder will be entitled to purchase
      all
      or part of such stock or securities at the same price and on the same terms
      as
      such stock or securities are to be offered to any other Persons.

     

    (b) Major
      D Shareholders’ Exercise of Right.
      Each
      Major D Shareholder entitled to purchase securities under this Section 5 must
      exercise such Major D Shareholder’s purchase rights hereunder within 10 business
      days after receipt of written notice from the Company describing in reasonable
      detail the stock or securities being offered, the purchase price thereof, the
      payment terms and such Major D Shareholder’s percentage allotment.

     

    (c) Company’s
      Exercise of Right.
      Upon
      expiration of the offering period described above, the Company will be free
      to
      sell such stock or securities which the Major D Shareholders entitled to
      purchase such stock or securities have not elected to purchase during the 180
      days following such expiration on terms and conditions no more favorable to
      the
      purchasers thereof, in the aggregate, than those offered to such Major D
      Shareholders. Any stock or securities offered or sold by the Company after
      such
      180-day period must be re-offered to the Major D Shareholders entitled to
      purchase such stock or securities pursuant to the terms of this Section
      5.

     

    (d) Fully
      Diluted Basis.
      All
      references herein to calculations of the Company’s equity or any type, class or
      series thereof “on a fully diluted basis” or as “fully diluted” or similar terms
      shall mean such equity or type, class or series thereof at any date as diluted
      by the issuance of all shares of such equity or type, class or series thereof
      then issuable upon the exercise or conversion of all then outstanding and
      exercisable warrants, options or convertible securities pursuant to which the
      Company is then obligated to issue such equity or type, class or series thereof
      (in all cases, determined assuming that the Company has sufficient authorized
      but unissued shares of Common Stock for the exercise or conversion of all such
      securities), but specifically excluding all shares issuable under warrants,
      options or convertible securities (other than Series D Preferred Stock) which
      are not then exercisable or convertible unless the inability to convert arises
      solely from the lack of authorized shares of common stock.

     

    
      
         

      

      
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    SECTION
      3.6. Effect
      of Prohibited Transfers

     

    If
      any
      Transfer is made or attempted contrary to the provisions of this Agreement,
      such
      purported Transfer shall be void ab
      initio;
      the
      Company and the other parties hereto shall have, in addition to any other legal
      or equitable remedies which they may have, the right to enforce the provisions
      of this Agreement by actions for specific performance (to the extent permitted
      by law), and the Company shall have the right to refuse to recognize any
      Transferee as one of its stockholders for any purpose. In the event of any
      such
      breach of this Agreement, commencing immediately upon the date of such attempted
      Transfer (a) such Transfer shall be void and of no effect, (b) no dividend
      of
      any kind or any distribution pursuant to any liquidation, redemption or
      otherwise shall be paid by the Company to the purported transferee in respect
      of
      such Shares (all such rights to payment by the transferring stockholder and/or
      the purported transferee being deemed waived), (c) the voting rights of such
      Shares, if any, shall terminate, and (d) neither the transferring stockholder
      nor the purported transferee shall be entitled to exercise any rights with
      respect to such Shares until such Transfer in breach of this Agreement has
      been
      rescinded.

     

    SECTION
      IV - Option
      to Purchase

     

    SECTION
      4.1. Option
      to Purchase Upon Conversion

     

    (a) In
      the
event
      that the
      VB Shareholder(s) (the “Converting Shareholder(s)”) exercise the right to
      convert the shares of Series D Preferred Stock to Common Stock pursuant to
      the
      Charter, except in the case of automatic conversion pursuant to Section
      4.2(a)(ii) of the Certificate of Designation of the Series D Preferred Stock,
      the Converting Shareholder(s) shall give written notice to the Company and
      HIG
      of such conversion (such notice, the “Company Offer Notice”). The Company or, in
      accordance herewith, HIG (or its designees) shall have the option to purchase
      all or a portion of the shares of Common Stock issuable upon such conversion
      (the “Conversion Shares”) at a price per share equal to the
      Purchase Price (as defined below).
      At any
      time within 15 days after receipt by the Company of the Company Offer Notice
      (the “Company Option Period”), the Company may elect to purchase any or all of
      the Conversion Shares and shall give written notice of such election (the
“Company Acceptance Notice”) to the Converting Shareholder and HIG within the
      Company Option Period, which notice shall indicate the maximum number of shares
      of Common Stock that the Company desires to purchase. The Company Acceptance
      Notice shall constitute a valid, legally binding and enforceable agreement
      for
      the sale and purchase of the Conversion Shares covered by the Company Acceptance
      Notice. If no Company Acceptance Notice has been delivered, or a Company
      Acceptance Notice has been delivered for less than all of the Conversion Shares,
      then HIG may, at any time within 15 days after the end of the Company Option
      Period (the “HIG Option Period”), elect (on behalf of itself and/or any other
      HIG Shareholders) to purchase some or all of the Conversion Shares that were
      not
      so purchased by the Company and shall give written notice of such election
      (the
“HIG Acceptance Notice”) to the Converting Shareholder within the HIG Option
      Period, which notice shall indicate the maximum number of shares of Common
      Stock
      that HIG (and/or any designated HIG Shareholders) desire to purchase. The HIG
      Acceptance Notice shall constitute a valid, legally binding and enforceable
      agreement for the sale and purchase of the Conversion Shares covered by the
      HIG
      Acceptance Notice. 

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    (b) For
      purposes hereof, the term “Purchase Price” means (i) average
      final closing price per share for the ten (10) trading days immediately
      preceding the date of the conversion (as reported by Bloomberg L.P., or any
      organization succeeding to its function of reporting prices)
      or (ii)
      if the Converting Shareholder has received from a third party a bona fide
      written offer to purchase all of the Conversion Shares for cash, (in which
      case
      the Company Offer Notice shall include a copy of such written offer) the price
      at which such third party has offered to pay for the Conversion
      Shares.

     

    (c) In
      the
      case of a Company Offer Notice for which the Purchase Price is determined
      pursuant to subpart (ii) in the immediately preceding sentence, if neither
      the
      Company nor HIG exercise their purchase rights hereunder in respect of such
      Company Offer Notice, the Converting Shareholder may sell such Conversion Shares
      to the third party offeror (a “Third Party Sale”) for a price equal to or more
      than such Purchase Price at any time within sixty (60) days after the end of
      the
      HIG Option Period. If the Third Party Sale is not completed on or prior to
      the
      end of such sixty day period, the Converting Shareholder shall be deemed to
      have
      issued a new Company Offer Notice on such date and the Company and HIG shall
      have the right to purchase such Conversion Shares at the Purchase Price
      determined pursuant to subpart (i) of the definition thereof in accordance
      with
      the provisions of Section 4.1(a) above.

     

    SECTION
      V - MISCELLANEOUS
      PROVISIONS

     

    SECTION
      5.1. Survival
      of Covenants

     

    Each
      of
      the parties hereto agrees that each covenant and agreement made by it in this
      Agreement or in any certificate, instrument or other document delivered pursuant
      to this Agreement is material, shall be deemed to have been relied upon by
      the
      other parties and shall remain operative and in full force and effect after
      the
      date hereof, regardless of any investigation, without limitation unless
      otherwise specifically provided in this Agreement. This Agreement shall not
      be
      construed so as to confer any right or benefit upon any Person other than the
      parties hereto and their respective successors and permitted assigns to the
      extent contemplated herein.

     

    SECTION
      5.2. Legend
      on Securities

     

    The
      VB
      Shareholders acknowledge and agree that in addition to any other legend on
      the
      certificates representing VB Securities held by them, substantially the
      following legend shall be typed on each certificate evidencing any of the VB
      Securities:

     

    THE
      SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE PROVISIONS OF A CERTAIN
      STOCKHOLDERS AGREEMENT, DATED AS OF AUGUST 17, 2007, INCLUDING CERTAIN
      RESTRICTIONS ON TRANSFER SET FORTH THEREIN. A COMPLETE AND CORRECT COPY OF
      SUCH
      AGREEMENT IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE COMPANY
      AND
      WILL BE FURNISHED UPON WRITTEN REQUEST AND WITHOUT CHARGE.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    SECTION
      5.3. Amendment
      and Waiver

     

    Any
      party
      may waive any provision hereof intended for its benefit in writing. No failure
      or delay on the part of any party hereto in exercising any right, power or
      remedy hereunder shall operate as a waiver thereof. The remedies provided for
      herein are cumulative and are not exclusive of any remedies that may be
      available to any party hereto at law or in equity or otherwise. This Agreement
      or any provisions hereof may be amended or waived with the prior written
      approval of the Company, Baldwin (for as long as he owns VB Securities), the
      holders of a majority of the Shares held by the VB Shareholders (taken
      together), and the holders of a majority of the Shares held by the HIG
      Shareholders. Any approval given as provided in the preceding sentence shall
      be
      binding on all VB Shareholders and HIG Shareholders; provided that,
      any
      amendment or waiver that would materially and adversely affect any VB
      Shareholder or any HIG Shareholder disproportionately more than any other VB
      Shareholder or HIG Shareholder shall not be effective against such VB
      Shareholder or HIG Shareholder, as the case may be, without the consent of
      such
      VB Shareholder or HIG Shareholder, as the case may be, with respect
      thereto.

     

    SECTION
      5.4. Notices

     

    All
      notices and other communications provided for herein shall be in writing and
      shall be deemed to have been duly given, delivered and received (a) if delivered
      personally or (b) if sent by facsimile, registered or certified mail (return
      receipt requested) postage prepaid, or by courier guaranteeing next day
      delivery, in each case to the party to whom it is directed, which if to the
      Company, shall be at:

     

    Advanced
      Communication Advanced Communications Technologies, Inc.

    420
      Lexington Avenue, Suite 2739

    New
      York,
      NY 10170

    Attention:
      Wayne I. Danson, Chief Executive Officer

    Facsimile:
      646.227.1666

    

    and
      if to
      any HIG Shareholder, at the addresses set forth below such party’s signature
      hereto and with respect to any VB Shareholder, at the address set forth below
      such parties’ signature hereto (or at such other address for any party as shall
      be specified by notice given in accordance with the provisions hereof,
provided
      that
      notices of a change of address shall be effective only upon receipt thereof).
      Notices delivered personally or sent by facsimile shall be effective on the
      day
      so delivered, notices sent by registered or certified mail shall be effective
      three days after mailing, and notices sent by courier guaranteeing next day
      delivery shall be effective on the earlier of the second business day after
      timely delivery to the courier or the day of actual delivery by the
      courier.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    SECTION
      5.5. Headings

     

    The
      Article and Section headings used or contained in this Agreement are for
      convenience of reference only and shall not affect the construction of this
      Agreement. The parties have participated jointly in the negotiation and drafting
      of this Agreement and the other agreements, documents and instruments executed
      and delivered in connection herewith with counsel sophisticated in investment
      transactions. In the event an ambiguity or question of intent or interpretation
      arises, this Agreement and the agreements, documents and instruments executed
      and delivered in connection herewith shall be construed as if drafted jointly
      by
      the parties and no presumption or burden of proof shall arise favoring or
      disfavoring any party by virtue of the authorship of any provisions of this
      Agreement and the agreements, documents and instruments executed and delivered
      in connection herewith.

     

    SECTION
      5.6. Counterparts

     

    This
      Agreement may be executed in one or more counterparts and by the parties hereto
      in separate counterparts, each of which when so executed shall be deemed to
      be
      an original and all of which together shall be deemed to constitute one and
      the
      same agreement.

     

    SECTION
      5.7. Remedies;
      Severability

     

    It
      is
      specifically understood and agreed that any breach of the provisions of this
      Agreement by any Person subject hereto will result in irreparable injury to
      the
      other parties hereto, that the remedy at law alone will be an inadequate remedy
      for such breach, and that, in addition to any other legal or equitable remedies
      which they may have, such other parties may enforce their respective rights
      by
      actions for specific performance (to the extent permitted by law) and the
      Company may refuse to recognize any unauthorized Transferee as one of its
      stockholders for any purpose, including, without limitation, for purposes of
      dividend and voting rights, until the relevant party or parties have complied
      with all applicable provisions of this Agreement.

     

    In
      the
      event that any one or more of the provisions contained herein, or the
      application thereof in any circumstances, is held invalid, illegal or
      unenforceable in any respect for any reason, the validity, legality and
      enforceability of any such provision in every other respect and of the remaining
      provisions contained herein shall not be in any way impaired thereby, it being
      intended that all of the rights and privileges of the parties hereto shall
      be
      enforceable to the fullest extent permitted by law.

     

    SECTION
      5.8. Entire
      Agreement

     

    This
      Agreement is intended by the parties as a final expression of their agreement
      and intended to be complete and exclusive statement of the agreement and
      understanding of the parties hereto in respect of the subject matter contained
      herein.

     

    SECTION
      5.9. Adjustments

     

    All
      references to share prices and amounts herein shall be equitably adjusted to
      reflect stock splits, stock dividends, recapitalizations and similar changes
      affecting the capital stock of the Company.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    SECTION
      5.10. Law
      Governing

     

    (a) THIS
      AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE
      INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF THE
      STATE OF FLORIDA WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
      The
      parties hereby irrevocably submit to the jurisdiction of the Federal courts
      of
      the United States of America and the state courts located in Miami-Dade County
      in the State of Florida solely in respect of the interpretation and enforcement
      of the provisions of this Agreement and of the documents referred to in this
      Agreement, and in respect of the transactions contemplated hereby, and hereby
      waive, and agree not to assert, as a defense in any action, suit or proceeding
      for the interpretation or enforcement hereof or of any such document, that
      it is
      not subject thereto or that such action, suit or proceeding may not be brought
      or is not maintainable in said courts or that the venue thereof may not be
      appropriate or that this Agreement or any such document may not be enforced
      in
      or by such courts, and the parties hereto irrevocably agree that all claims
      with
      respect to such action or proceeding shall be heard and determined in such
      a
      Federal or state court. The parties hereby consent to and grant any such court
      jurisdiction over the Person of such parties and over the subject matter of
      such
      dispute and agree that mailing of process or other papers in connection with
      any
      such action or proceeding in the manner provided in this Agreement or in such
      other manner as may be permitted by law, shall be valid and sufficient service
      thereof.

     

    (b) EACH
      PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS
      AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE
      EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH
      PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
      INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS
      CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT
      (i)
      NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
      EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
      LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY
      UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH
      SUCH
      PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED
      TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
      CERTIFICATIONS IN THIS SECTION

     

    SECTION
      5.11. Successors
      and Assigns

     

    This
      Agreement shall be binding upon and inure to the benefit of the respective
      successors and permitted assigns of the parties hereto as contemplated herein,
      and any successor to the Company by way of merger or otherwise shall
      specifically agree to be bound by the terms hereof as a condition of such
      successor. The rights of the Shareholders hereunder shall be assignable to
      Transferees of their Shares as contemplated herein. This Agreement may not
      be
      assigned by any Shareholder except as provided herein (including Section 3.2
      hereof) without the prior written consent of the Company, Baldwin (for as long
      as he owns VB Securities), the holders of a majority of the Shares held by
      the
      VB Shareholders (taken together), and the holders of a majority of the Shares
      held by the HIG Shareholders, and without such prior written consent any
      attempted Transfer shall be null and void.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    SECTION
      5.12. Vote
      to Increase Authorized Shares

     

    (a) The
      HIG
      Shareholder hereby covenants and agrees that it will vote all of the HIG
      Securities held by it in favor of the Charter Amendments referenced in the
      Certificates of Designation for the Series C Preferred Stock, Series D Preferred
      Stock and Series A-2 Preferred Stock at any shareholder meeting, or pursuant
      to
      any written consent, pursuant to which such Charter Amendments have been
      submitted for approval.

     

    (b) The
      Company agrees to file a proxy or information statement relating to shareholder
      approval of the Charter Amendments within 90 days after the date of this
      Agreement. In the event the proxy or information statement is reviewed by the
      SEC, the Company agrees to effect the Charter Amendments within 30 days after
      completion of SEC review of an information statement or within 50 days after
      completion of SEC review of a proxy statement. In the event the proxy statement
      or information statement is not reviewed by the SEC, the Company agrees to
      effect the Charter Amendments within 75 days after filing.

     

    [SIGNATURE
      PAGE IMMEDIATELY FOLLOWS]

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Stockholder Agreement
      to be
      duly executed as of the date first set forth above.

    
      	 	 	 
	
              COMPANY:

            	 	 
	 	
              ADVANCED
                COMMUNICATIONS TECHNOLOGIES, INC.

              a
                Delaware corporation

            
	 
 	 
 	 
 
	
            	By:  	
              /s/
                Wayne Danson

            
	 	
              

              Name:
                Wayne Danson

            
	 	
              Title:
                President and Chief Executive
                Officer

            

    

    
      	 	 	 
	 	 
	
              HIG
                SHAREHOLDER:

            	
              ACT-DE,
                LLC

            
	 
 	 
 	 
 
	
            	By:  	
              /s/
                William Nolan

            
	 	
              

              Name:
                William Nolan

            
	 	
              Title:
                Executive Vice President

            

    

     

    *The
      address for each HIG Shareholder is:

    

    VB
      SHAREHOLDERS:

    

    

    /s/
      Fred
      V. Baldwin 

    
      

    

    Name: 
      Fred V.
      Baldwin

    Address:  

    
 

    /s/
      Robert Coolidge

    
      

    

    Name: 
      Robert
      Coolidge

    Address:  

    
 

    /s/
      Scott
      Cameron

    
      

    

    Name: Scott
      Cameron

    Address:  

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    SCHEDULE
      A

    

    List
      of HIG Shareholders, VB Shareholders 

    

    
      	
              HIG
                Shareholders

            	 	
              Number
                of Shares of Series C Preferred Stock

            	 	
              Number
                of Shares of Series D Preferred Stock

            	 	
              Number
                of Shares of Common Stock

            
	 	 	 	 	 	 	 
	
              ACT-DE,
                LLC

            	 	
              913.79

            	 	
              —

            	 	
              —

            
	 	 	 	 	 	 	 
	
              VB
                Shareholders

            	 	
              —

            	 	
              1,000

            	 	
              —

            
	 	 	 	 	 	 	 
	
              Fred
                V. Baldwin

               

              Tel:
                

              Fax:
                

            	 	
              —

            	 	
              312.5

            	 	
              —

            
	 	 	 	 	 	 	 
	
              Robert
                Coolidge

               

              Tel:

              Fax:

            	 	
              —

            	 	
              562.5

            	 	
              —

            
	 	 	 	 	 	 	 
	
              Scott
                Cameron

               

              Tel:

              Fax:

            	 	
              —

            	 	
              125

            	 	
              —

            

    

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
      A

     

    Form
      of Joinder Agreement

     

    The
      undersigned hereby agrees, effective as of the later date indicated below,
      to
      become a party to that certain Shareholders Agreement (the “Agreement”)
      dated
      as of July __, 2007, by and among Advanced Communications Technologies, Inc.
      (the “Company”)
      and
      the parties named therein; and for all purposes of the Agreement, the
      undersigned shall be included within the term [“HIG Shareholder”] [“VB
      Shareholder”]. The undersigned further confirms that the representations and
      warranties contained in Section II of the Agreement are true and correct as
      to
      the undersigned as of the date hereof. The address and facsimile number to
      which
      notices may be sent to the undersigned is as set forth below the undersigned’s
      signature.

     

    __________________________________________

    Name: 

     

    Date:_____________________

     

    Address
      for Notices:

     

    ________________________________

     

    
      ________________________________

       

    

    
      ________________________________

       

    

    Facsimile
      No.______________________

     

    

    ACCEPTED
      AND AGREED:

    

    ADVANCED
      COMMUNICATIONS TECHNOLOGIES, INC.

    

    

    By:______________________________

    Name:

    Title:

    

    Date:_____________________________Execution
        Copy

       

    

    PURCHASE
      AGREEMENT

     

    THIS
      PURCHASE AGREEMENT (the “Agreement”)
      is
      dated as of August 17, 2007, by and among ACT-DE LLC, a Delaware limited
      liability company (“HIG”),
      the
      other “Buyer” parties identified on Schedule 1 hereto (collectively with HIG,
      the “Buyers”),
      and
      ADVANCED COMMUNICATIONS TECHNOLOGIES, INC., a Florida corporation (the
“Company”).

     

    RECITALS:

     

    The
      parties have reached an agreement pursuant to which the Buyers shall make an
      investment in the Company, and the Company shall issue and sell to the Buyer
      shares of Series C Convertible Preferred Stock, par value $0.01 per share (the
      “Series C Preferred Stock”),
      all
      in accordance with the terms hereof.

     

    AGREEMENT:

     

    NOW,
      THEREFORE, in consideration of the mutual premises herein set forth and certain
      other good and valuable consideration, the receipt and sufficiency of which
      is
      hereby acknowledged, the parties hereto agree as follows:

     

    1. ISSUANCE
      OF SHARES AND RELATED TRANSACTIONS.

     

    1.1. Issuance
      of Shares.
      At
      Closing (as defined below), subject to the terms, restrictions and conditions
      of
      this Agreement, the Buyers shall purchase from the Company, and the Company
      shall sell, issue and deliver to the Buyers an aggregate 1,000 shares of Series
      C Preferred Stock (the “Buyer Stock”)
      to be
      purchased by each Buyer as set forth on Schedule 1 hereto, which shall have
      the
      rights and designations set forth in the Certificate of Designation attached
      hereto as Exhibit A (the “Certificate of Designation”).
      The
      Buyer Stock shall be sold by the Company to the Buyers free and clear of all
      liens, claims, pledges, mortgages, restrictions, obligations, security interests
      and encumbrances of any kind, nature and description (collectively,
“Encumbrances”).

     

    1.2. Purchase
      Price.
      The
      aggregate purchase price (the “Purchase
      Price”)
      for
      the Buyer Stock shall be $6,300,000 and shall be paid by the Buyers to the
      Company in immediately available funds on the Closing Date (as set forth in
      Section 1.3 hereof).

     

    1.3. Closing.
      The
      parties to this Agreement shall consummate the transactions contemplated by
      this
      Agreement at a closing (the “Closing”)
      to be
      held no later than August 21, 2007. The date of Closing is referred to herein
      as
      the “Closing Date.”
The
      Closing shall take place at the offices of counsel to HIG, or at such other
      place as may be mutually agreed upon by the Buyers and the Company. At the
      Closing:

     

    (a) The
      Company shall deliver to the Buyers a filed copy of the Certificate of
      Designation certified by the Florida Department of State.

     

    (b) The
      Company shall deliver to each Buyer certificates representing the Buyer Stock
      (as set forth on Schedule
      1),
      free
      and clear of any Encumbrances.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c) The
      Buyers shall pay to the Seller the Purchase Price by wire transfer of
      immediately available funds to an account to be designated by the
      Purchaser.

     

    (d) The
      Buyers, the Company and certain other stockholders of the Company shall execute
      and deliver the Stockholder Agreement and Registration Rights Agreement attached
      hereto as Exhibits B-1 and B-2 (the “Investor Rights Agreements”).

     

    (e) The
      Company shall have delivered to the Buyers (i) filed copies of the Certificates
      of Designations attached as Exhibits C-1, C-2 and C-3 (for the Company’s newly
      designated Series A-2 Convertible Preferred Stock and Series D Convertible
      Preferred Stock, and collectively with the Series C Preferred Stock, the
“Preferred Stock”)
      certified by the Florida Department of State and (ii) evidence reasonably
      satisfactory to the Buyer confirming that the transactions contemplated by
      the
      Exchange Agreements have been completed in accordance with the terms of the
      “Exchange Agreements”
      identified on Schedule
      1.3(e)
      hereto.

     

    Jon
      Lichtman, Randall Prouty and Dr. Michael Finch shall resign as members of the
      Board of Directors of the Company and the Board of Directors of the Company
      shall adopt resolutions increasing the number of Directors to seven (7) and
      electing John Black, William Nolan, J.G. (Pete) Ball, Gerald E. Wedren and
      Thomas R. Kettteler to serve as Directors, effective immediately following
      the
      Closing after giving effect to the transactions set forth in this Section 1.3.
      

     

    (f) The
      Board
      of Directors of the Company shall have adopted an amendment to the By-laws
      of
      the Company, in a form reasonably satisfactory to HIG, confirming the voting
      rights of the Preferred Stock. 

     

    2. ADDITIONAL
      COVENANTS.

     

    2.1. Public
      Announcements.
      The
      parties will consult with each other before issuing any press releases or
      otherwise making any public statement with respect to this Agreement or any
      of
      the transactions contemplated hereby and no party will issue any such press
      release or make any such public statement without the prior written consent
      of
      the other party, except as may be required by law or by the rules and
      regulations of any governmental authority or securities exchange.

     

    2.2. Access
      and Inspection, Etc.
      The
      Company shall allow the Buyers and their authorized representatives full access
      during normal business hours from and after the date hereof and prior to the
      Closing Date to all of the properties, books, contracts, commitments and records
      of the Company for the purpose of making such investigations as the Buyers
      may
      reasonably request in connection with the transactions contemplated hereby,
      and
      shall cause the Company to furnish any Buyer with such information concerning
      its affairs as such Buyer may reasonably request. The Company has caused and
      shall cause its personnel to assist the Buyers in making such investigation
      and
      shall use their best efforts to cause the counsel, accountants and other
      non-employee representatives of the Company to be reasonably available to Buyers
      for such purposes.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    2.3. Further
      Assurances.
      The
      parties shall deliver any and all other instruments or documents required to
      be
      delivered pursuant to, or necessary or proper in order to give effect to, the
      provisions of this Agreement, including, without limitation, to issue the Buyer
      Stock and to consummate the transactions contemplated by this
      Agreement.

     

    2.4. Notification.
      Each
      party to this Agreement shall promptly notify the other parties in writing
      of
      the occurrence, or threatened occurrence, of any event that would constitute
      a
      breach or violation of this Agreement by any party or that would cause any
      representation or warranty made by the notifying party in this Agreement to
      be
      false or misleading in any respect. The Company will promptly notify the Buyers
      of any event that could have a material adverse effect on the business, assets,
      financial condition or prospects of the Company. The Company shall have the
      right to update the Schedules to this Agreement immediately prior to Closing;
      provided, that if such update discloses any breach of a representation,
      warranty, covenant or obligation of the Company, then the Buyers shall have
      the
      right to then exercise its available rights and remedies hereunder.

     

    3. REPRESENTATIONS,
      COVENANTS AND WARRANTIES OF THE COMPANY.

     

    To
      induce
      Buyers to enter into this Agreement and to consummate the transactions
      contemplated hereby, the Company represents and warrants to and covenants with
      the Buyers, as of the Closing, as follows:

     

    3.1. Organization;
      Compliance.
      The
      Company and each Subsidiary (as defined below) is a corporation or limited
      liability company duly organized, validly existing and in good standing under
      the laws of its jurisdiction of organization. The Company and each Subsidiary
      is: (a) entitled to own or lease its properties and to carry on its business
      in
      all material respects as and in the places where such business is now conducted,
      and (b) duly licensed and qualified in all jurisdictions where the character
      of
      the property owned by it or the nature of the business transacted by it makes
      such license or qualification necessary.

     

    3.2. Capitalization
      and Related Matters.

     

    (a) The
      Company has an authorized capital consisting of 5,000,000,000 shares of Common
      Stock and 25,000 shares of Preferred Stock, of which 4,997,711,570 shares of
      Common Stock and 15,950 shares of Preferred Stock are issued and outstanding
      as
      of the date hereof (after giving effect to the transactions contemplated hereby)
      as set forth on Schedule
      3.2(a)
      hereto.
      All of the outstanding shares of the Company’s capital stock are, and
      immediately after the Closing will be, validly issued and outstanding, fully
      paid and non-assessable. No such stock (i) was issued in violation of the
      preemptive rights of any shareholder or (ii) is held as treasury stock. All
      of
      the outstanding capital stock of the Company was issued in compliance with
      all
      applicable federal and state securities or “blue sky” laws and
      regulations.

     

    (b) Except
      as
      set forth on Schedule 3.2 hereto, there are no outstanding securities
      convertible into Common Stock or any other capital stock of the Company nor
      any
      rights to subscribe for or to purchase, or any options for the purchase of,
      or
      any agreements providing for the issuance (contingent or otherwise) of, or
      any
      calls, commitments or claims of any character relating to, such capital stock
      or
      securities convertible into such capital stock (collectively, “Securities Rights”).
      Except as set forth on Schedule 3.2 hereto the Company (i) is not subject to
      any
      obligation (contingent or otherwise) to repurchase or otherwise acquire or
      retire any of its capital stock; or (ii) has no liability for dividends or
      other
      distributions declared or accrued, but unpaid, with respect to any capital
      stock.

     

    
      
        
        

      

      
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    (c) Except
      as
      set forth on Schedule 3.2, the Company is not a party to any agreement,
      understanding or arrangement, direct or indirect, relating to any class or
      series of the Company’s capital stock, including, without limitation, any voting
      agreement, restriction on resale, shareholder agreement or registration rights
      agreement.

     

    3.3. Subsidiaries
      and Investments.

     

    (a) Schedule
      3.3(a) sets forth, with respect to each Subsidiary (as defined below), (i)
      its
      name, (ii) the jurisdiction of its organization, the number of its authorized
      shares or other equity interests, (iii) the number of its outstanding shares
      or
      other equity interests of each class or series and (iv) the name of the owner
      and the number and percentage of outstanding shares or other equity interests
      of
      each class or series of such Subsidiary owned of record and, if different,
      owned
      beneficially by the Company and any other person. All of the outstanding capital
      stock and other equity interests of each of the Subsidiaries is validly issued,
      fully paid and nonassessable and was issued in compliance with all applicable
      federal and state securities or “blue sky” laws and regulations. There are no
      Securities Rights relating to any shares of capital stock, other equity
      interests or other securities of any of the Subsidiaries. The Company and the
      Subsidiaries have good, marketable and exclusive title to the shares or other
      equity interests disclosed on Schedule 3.3(a) as being owned by each of them,
      free and clear of all Encumbrances. All rights and powers to vote such shares
      or
      other equity interests are held exclusively by the Company, directly or
      indirectly through one or more of the Subsidiaries, as the case may be. For
      the
      purposes hereof, a “Subsidiary”
means
      any corporation, limited liability company, partnership, joint venture or other
      entity in which the Company owns, directly or indirectly, more than 50% of
      the
      outstanding voting securities or equity interests.

     

    (b) Except
      as
      disclosed on Schedule 3.3(a), the Company does not own, nor since January 1,
      2004 has it ever owned, any equity interest in any corporation, limited
      liability company, partnership, joint venture or other entity.

     

    3.4. Execution;
      No Inconsistent Agreements; Etc.

     

    (a) This
      Agreement is a valid and binding agreement of the Company, enforceable in
      accordance with its terms, except as such enforcement may be limited by
      bankruptcy or similar laws affecting the enforcement of creditors’ rights
      generally, and the availability of equitable remedies.

     

    (b) The
      execution and delivery of this Agreement by the Company does not, and the
      consummation of the transactions contemplated hereby will not, constitute a
      breach or violation of the charter or bylaws of the Company, or a default under
      any of the terms, conditions or provisions of (or an act or omission that would
      give rise to any right of termination, cancellation or acceleration under)
      any
      note, bond, mortgage, lease, indenture, agreement or obligation to which the
      Company is a party, pursuant to which the Company otherwise receives benefits,
      or to which any of the properties of the Company is subject.

     

    
      
        
        

      

      
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    3.5. Corporate
      Records.
      The
      statutory records, including the stock register and minute books of the Company,
      fully reflect all issuances, transfers and redemptions of its capital stock,
      correctly show and will correctly show the total number of shares of its capital
      stock issued and outstanding on the Closing Date, the charter or other
      organizational documents and all amendments thereto, and bylaws as amended
      and
      currently in force. Copies of all such materials have been previously delivered
      to the Buyers by or on behalf of the Company.

     

    3.6. Financial
      Statements; SEC Reporting.

     

    (a) Schedule
      3.6(a) contains (i) the consolidated audited balance sheet of the Company and
      the Subsidiaries, and the consolidated audited profit and loss statement of
      the
      Company
      and the
      Subsidiaries
      for the
      fiscal year ended June 30, 2006 as reported on the Company’s Form 10K/A and (ii)
      the consolidated unaudited balance sheet of the Company and the Subsidiaries
      as
      of March 31, 2007 and the consolidated unaudited profit and loss statement
      of
      the Company and the Subsidiaries for the nine months ended March 31, 2007 (the
      balance sheet as of March 31, 2007 is hereinafter referred to as the
“Company Balance Sheet”).
      All
      the foregoing financial statements are referred to herein collectively as the
      “Company Financial Statements.”

     

    (b) The
      Company Financial Statements have been and will be prepared in accordance with
      U.S. GAAP, applied on a consistent basis (except that the unaudited statements
      do not contain all the disclosures required by GAAP), and fairly reflect and
      will reflect in all material respects the financial condition of the Company
      and
      the Subsidiaries as of the dates thereof and the results of the operations
      of
      the Company and the Subsidiaries for the periods then ended. The Company and
      its
      Subsidiaries (i) make and keep and, for all periods covered by the Company
      Financial Statements, have made and kept books, records and accounts which,
      in
      reasonable detail, accurately and fairly reflect the transactions and
      dispositions of the assets of the Company and its Subsidiaries, and (ii)
      maintain and, for all periods covered by the Financial Statements, have
      maintained a system of internal accounting controls sufficient to provide
      reasonable assurances that transactions are recorded as necessary to permit
      preparation of financial statements in conformity with GAAP. The Company’s and
      its Subsidiaries’ auditors have not notified the Company or any of its
      Subsidiaries of any deficiencies in the design or operation of the Company’s or
      any of its Subsidiaries’ internal controls in connection with its audits of the
      Company Financial Statements.

     

    (c) Except
      as
      set forth on Schedule 3.6(c), since January 1, 2004, the Company has timely
      filed all reports, schedules, forms, statements and other documents (the
“SEC Reports”)
      required to be filed by it with the United States Securities and Exchange
      Commission (the “Commission”)
      pursuant to reporting requirements under the Exchange Act of 1934, as amended
      (the “Exchange Act”).
      Except as set forth on Schedule 3.6(c), as of their respective dates, the SEC
      Reports complied in all material respects with the requirements of the Exchange
      Act and the rules and regulations of the Commission promulgated thereunder.
      The
      SEC Reports, as of their respective dates, did not contain any untrue statement
      of material fact or omit any material fact required to be stated therein or
      necessary to make the statements therein, in light of the circumstances under
      which they were made, not misleading.

     

    
      
        
        

      

      
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    3.7. Liabilities.
      Neither
      the Company nor any Subsidiary has any material debt, liability or obligation
      of
      any kind, whether accrued, absolute, contingent or otherwise, except: (a) those
      reflected on the Company Balance Sheet, including the notes thereto, and (b)
      liabilities incurred in the ordinary course of business and in connection with
      the transactions contemplated by this Agreement, including the acquisition
      of
      Vance Baldwin, Inc., since the date of the Company Balance Sheet, none of which
      have had or will have a material adverse effect on the financial condition
      of
      the Company or any Subsidiary.

     

    3.8. Absence
      of Changes.
      Except
      as described in Schedule 3.8 and in the other Schedules to this Agreement,
      from
      the date of the Company Balance Sheet to the date of this
      Agreement:

     

    (a) there
      has
      not been any adverse change in the business, assets, liabilities, results of
      operations or financial condition of the Company or any Subsidiary or in each
      of
      their relationships with suppliers, customers, employees, lessors or others
      other than changes in the ordinary course of business, none of which, singularly
      or in the aggregate, have had or will have a material adverse effect on the
      business, properties or financial condition of the Company or any Subsidiary,
      except for the incurrence of additional accrued expenses in connection with
      the
      transactions contemplated by this Agreement, including the acquisition of Vance
      Baldwin, Inc. (all of which have been paid as of the date hereof);
      and

     

    (b) the
      Company and each Subsidiary has complied with the covenants and restrictions
      set
      forth in Section 5 to the same extent as if this Agreement had been executed
      on,
      and had been in effect since, the date of the Company Balance
      Sheet.

     

    3.9. Title
      to Properties.
      The
      Company and each Subsidiary has good and marketable title to all of its
      properties and assets, real and personal, including, but not limited to, those
      reflected in the Company Balance Sheet (except as since sold or otherwise
      disposed of in the ordinary course of business, or as expressly provided for
      in
      this Agreement), free and clear of all Encumbrances of any kind or character
      except: (a) those securing liabilities of the Company or any Subsidiary incurred
      in the ordinary course (with respect to which no material default exists);
      and
      (b) imperfections of title and Encumbrances, if any, which, in the aggregate
      (i)
      are not substantial in amount; (ii) do not detract from the value of the
      property subject thereto or impair the operations of the Company or any
      Subsidiary; and (iii) do not have a material adverse effect on the business,
      properties or assets of the Company or any Subsidiary.

     

    3.10. Compliance
      With Law.
      The
      business and activities of the Company and each Subsidiary has at all times
      since July 31, 2002 been conducted in accordance with its charter and bylaws
      (or
      other governing documents) and any applicable law, regulation, ordinance, order,
      License (defined below), permit, rule, injunction or other restriction or ruling
      of any court or administrative or governmental agency, ministry, or body,
      including, without limitation, the Exchange Act, the Securities Act of 1933,
      the
      Sarbanes-Oxley Act of 2002 and the rules and regulations of the Commission
      promulgated under those Acts, except where the failure to do so would not result
      in a material adverse effect on the Company or any Subsidiary.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    3.11. Taxes.
      The
      Company and each Subsidiary has duly filed all material federal, state, local
      and foreign tax returns and reports, and all returns and reports of all other
      governmental units having jurisdiction with respect to taxes imposed on it
      or on
      its income, properties, sales, franchises, operations or employee benefit plans
      or trusts, all such returns were complete and accurate when filed, and all
      taxes
      and assessments payable by the Company or any Subsidiary have been paid to
      the
      extent that such taxes have become due. All taxes accrued or payable by the
      Company or any Subsidiary for all periods through June 30, 2006 have been
      accrued or paid in full, whether or not due and payable and whether or not
      disputed. The Company and each Subsidiary has withheld proper and accurate
      amounts from its employees for all periods in full compliance with the tax
      withholding provisions of applicable foreign, federal, state and local tax
      laws.
      There are no waivers or agreements by the Company or any Subsidiary for the
      extension of time for the assessment of any taxes. The tax returns of the
      Company and each Subsidiary have never, since July 31, 2002, been examined
      by
      any authority or other administrative body or court of any state or country.
      There are not now any examinations of the income tax returns of the Company
      or
      any Subsidiary pending, or to the Company’s knowledge any proposed deficiencies
      or assessments against the Company or any Subsidiary of additional taxes of
      any
      kind. The Company and each Subsidiary shall duly and timely prepare and file
      all
      material federal, state, local and foreign tax returns and reports for 2006,
      and
      all returns and reports of all other governmental units having jurisdiction
      with
      respect to taxes imposed on the Company or on its income, properties, sales,
      franchises, operations or employee benefit plans or trusts, and all such returns
      will be complete and accurate when filed.

     

    3.12. Real
      Properties.
      Neither
      the Company nor any Subsidiary has an interest in any real property, except
      for
      the Leases (as defined below).

     

    3.13. Leases
      of Real Property.
      All
      leases pursuant to which the Company or any Subsidiary is lessee or lessor
      of
      any real property (the “Leases”)
      are
      listed on Schedule 3.13 and are valid and enforceable in accordance with their
      terms. There is not under any of such Leases (a) any material default or any
      claimed material default by the Company or any Subsidiary or any event of
      default or event which with notice or lapse of time, or both, would constitute
      a
      material default by the Company or any Subsidiary and in respect to which the
      Company or such Subsidiary has not taken adequate steps to prevent a default
      on
      its part from occurring or (b) to the knowledge of the Company, any material
      default by any lessee of the Company or any Subsidiary or any event of default
      or event which with notice or lapse of time, or both, would constitute a
      material default by any such lessee. The copies of the Leases heretofore
      furnished to Buyers are true, correct and complete, and such Leases have not
      been modified in any respect since the date they were so furnished, and are
      in
      full force and effect in accordance with their terms. The Company and each
      Subsidiary is lawfully in possession of all real properties of which it is
      a
      lessee (the “Leased Properties”).

     

    3.14. Contingencies.
      Except
      as disclosed on Schedule 3.14, there are no actions, suits, claims or
      proceedings pending, or to the knowledge of the Company threatened against,
      by
      or affecting, the Company or any Subsidiary in any court or before any
      arbitrator or governmental agency that may have a material adverse effect on
      the
      Company or any Subsidiary or which could materially and adversely affect the
      right or ability of the Company to consummate the transactions contemplated
      hereby. To the knowledge of the Company, there is no valid basis upon which
      any
      such action, suit, claim, or proceeding may be commenced or asserted against
      it.
      There are no unsatisfied judgments against the Company or any Subsidiary and
      no
      consent decrees or similar agreements to which the Company or any Subsidiary
      is
      subject and which could have a material adverse effect on the Company or any
      Subsidiary.

     

    
      
        
        

      

      
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    3.15. Products
      Liability; Warranties; Insurance.
      Neither
      the Company nor any Subsidiary has incurred any unpaid loss, damage, liability,
      fine, penalty, cost or expense (each, a “Liability”)
      that
      is not fully covered by insurance relating to any product manufactured,
      distributed or sold by the Company or any Subsidiary prior to the Closing,
      pursuant to a claim or potential claim that such products are or were defective
      or improperly designed or manufactured or are in breach of any express or
      implied product warranty.

     

    3.16. Intellectual
      Property Rights.

     

    (a) The
      Company and each Subsidiary owns and possesses all right, title and interest
      in
      and to, or has a valid license to use, all of its Proprietary Rights (as defined
      below) necessary for the operation of its business as presently conducted and
      none of such Proprietary Rights have been abandoned;

     

    (b) No
      claim
      by any third party contesting the validity, enforceability, use or ownership
      of
      any such Proprietary Rights has been made, is currently outstanding or, to
      the
      knowledge of the Company, is threatened, and to the knowledge of the Company
      there is no reasonable basis for any such claim.

     

    (c) Neither
      the Company, any Subsidiary nor any registered agent of any of the foregoing
      has
      received any notice of, nor is the Company aware of any reasonable basis for
      an
      allegation of, any infringement or misappropriation by, or conflict with, any
      third party with respect to such Proprietary Rights, nor has the Company, any
      Subsidiary or any registered agent of any of them received any claim of
      infringement or misappropriation of or other conflict with any Proprietary
      Rights of any third party.

     

    (d) Neither
      the Company nor any Subsidiary has infringed, misappropriated or otherwise
      violated any Proprietary Rights of any third parties, and the Company is not
      aware of any infringement, misappropriation or conflict which will occur as
      a
      result of the continued operation of the Company or any Subsidiary as presently
      operated and as contemplated to be operated or as a result of the consummation
      of the transactions contemplated hereby.

     

    (e) All
      employees who have contributed to or participated in the conception and/or
      development of all or any part of the Proprietary Rights which are not licensed
      to the Company or a Subsidiary from a third party either (i) have been party
      to
      a “work-for-hire” arrangement or agreement with the Company or the Subsidiary,
      in accordance with applicable federal and state law, that has accorded the
      Company or the Subsidiary full, effective, exclusive, and original ownership
      of
      all tangible and intangible property thereby arising or (ii) have executed
      appropriate instruments of assignment in favor of the Company or the Subsidiary
      as assignee that have conveyed to the Company or the Subsidiary full, effective
      and exclusive ownership of all tangible and intangible property thereby
      arising.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (f) The
      consummation of the transactions contemplated by this Agreement will not
      adversely affect the right of the Company or any Subsidiary to continue to
      use
      the Proprietary Rights. To the extent that the registration of any Proprietary
      Right is required by law, such Proprietary Right has been duly and validly
      registered or filed, and any fees that are necessary to maintain in force any
      Proprietary Rights or registrations thereof have been paid. Schedule 3.16(f)
      sets forth a list and description of the copyrights, trademarks, service marks,
      trade dress, trade names and domain names used or held by the Company or any
      Subsidiary and, where appropriate, the date, serial or registration number,
      and
      place of any registration thereof.

     

    (g) As
      used
      herein, the term “Proprietary Rights”
means
      all proprietary information of the Company or any Subsidiary, as the case may
      be, including all patents, patent applications, patent disclosures and
      inventions (whether or not patentable and whether or not reduced to practice),
      all trademarks, service marks, trade dress, trade names, corporate names, domain
      names, copyrights, all trade secrets, confidential information, ideas, formulae,
      compositions, know-how, processes and techniques, drawings, specifications,
      designs, logos, plans, improvements, proposals, technical and computer data,
      documentation and software, financial, business and marketing plans, and related
      information and all other proprietary, industrial or intellectual property
      rights relating to the business of the Company or any Subsidiary.

     

    3.17. Material
      Contracts.
      Schedule 3.17 contains a complete list of all contracts of the Company and
      its
      Subsidiaries that (i) involve consideration in excess of the equivalent of
      $50,000, (ii) have a term of one year or more, (iii) is a collective bargaining
      or similar agreement, (iv) is a tax sharing or similar agreement or (iv)
      materially restricts a Company from engaging in any business activity anywhere
      in the world (the “Material Contracts”).
      Except as disclosed on Schedule 3.17, (a) the Company or the applicable
      Subsidiary has performed all material obligations to be performed by them under
      all such contracts, and is not in material default thereof, (b) no condition
      exists or has occurred which with the giving of notice or the lapse of time,
      or
      both, would constitute a material default by the Company or the Subsidiary
      or
      accelerate the maturity of, or otherwise modify, any such contract, and (c)
      all
      such contracts are in full force and effect. No material default by any other
      party to any of such contracts is known or claimed by the Company or any
      Subsidiary to exist.

     

    3.18. Employee
      Benefit Matters.

     

    (a) Except
      as
      disclosed on Schedule 3.18, the Company and the Subsidiaries do not provide,
      nor
      are any of them obligated to provide, directly or indirectly, any benefits
      for
      employees other than salaries, sales commissions and bonuses, including, but
      not
      limited to, any pension, profit sharing, stock option, retirement, bonus,
      hospitalization, insurance, severance, vacation or other employee benefits
      (including any housing or social fund contributions) under any practice,
      agreement or understanding.

     

    (b) Each
      employee benefit plan maintained by or on behalf of the Company, any Subsidiary
      or any other party (including any terminated pension plans) which covers or
      covered any employees or former employees of the Company or any Subsidiary
      (collectively, the “Employee Benefit Plan”)
      is
      listed on Schedule 3.18. The Company has delivered to Buyers true and complete
      copies of all such plans and any related documents. With respect to each such
      plan (a) no litigation, administrative or other proceeding or claim is pending,
      or to the knowledge of the Company, threatened or anticipated involving such
      plan; (b) there are no outstanding requests for information by participants
      or
      beneficiaries of such plan; and (c) such plan has been administered in
      compliance in all material respects with all applicable laws and
      regulations.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (c) The
      Company, or the applicable Subsidiary, has timely made payment in full of all
      contributions to all of the Employee Benefit Plans which the Company, or the
      applicable Subsidiary, was obligated to make prior to the date hereof; and
      there
      are no contributions declared or payable by the Company, or the applicable
      Subsidiary, to any Employee Benefit Plan which, as of the date hereof, have
      not
      been paid in full.

     

    3.19. Possession
      of Franchises, Licenses, Etc.
      The
      Company and each Subsidiary (a) possesses all material franchises, certificates,
      licenses, permits and other authorizations (collectively, the “Licenses”)
      from
      governmental authorities, political subdivisions or regulatory authorities
      that
      are necessary for the ownership, maintenance and operation of its business
      in
      the manner presently conducted; (b) is not in violation of any provisions
      thereof, except to the extent that such violations, in the aggregate would
      not
      have a material adverse effect on the Company; and (c) has maintained and
      amended, as necessary, all Licenses and duly completed all filings and
      notifications in connection therewith.

     

    3.20. Environmental
      Matters.
      Except
      as set forth on Schedule 3.20, (i) neither the Company nor any Subsidiary is
      in
      violation, in any material respect, of any Environmental Law (as defined below);
      (ii) the Company and each Subsidiary has received all permits and approvals
      with
      respect to emissions into the environment and the proper collection, storage,
      transport, distribution or disposal of Wastes (as defined below) and other
      materials required for the operation of its business at present operating
      levels; and (iii) neither the Company nor any Subsidiary is liable or
      responsible for any material clean up, fines, liability or expense arising
      under
      any Environmental Law, as a result of the disposal of Wastes or other materials
      in or on the property of the Company (whether owned or leased), or in or on
      any
      other property, including property no longer owned, leased or used by the
      Company or any Subsidiary. As used herein, (a) “Environmental Laws”
means,
      collectively, the Comprehensive Environmental Response, Compensation and
      Liability Act of 1980, as amended, the Superfund Amendments and Reauthorization
      Act of 1986, the Resource Conservation and Recovery Act, the Toxic Substances
      Control Act, as amended, the Clean Air Act, as amended, the Clean Water Act,
      as
      amended, any other “Superfund” or “Superlien” law or any other federal, or
      applicable state or local statute, law, ordinance, code, rule, regulation,
      order
      or decree (foreign or domestic) regulating, relating to, or imposing liability
      or standards of conduct concerning, Wastes, or the environment; and (b)
“Wastes”
means
      and includes any hazardous, toxic or dangerous waste, liquid, substance or
      material (including petroleum products and derivatives), the generation,
      handling, storage, disposal, treatment or emission of which is subject to any
      Environmental Law.

     

    3.21. Agreements
      and Transactions with Related Parties.
      Except
      as disclosed on Schedule 3.21, neither the Company nor any Subsidiary is, and
      since the date of the Company Balance Sheet has not been, a party to any
      contract, agreement, lease or transaction with, or any other commitment to,
      (a)
      a shareholder, (b) any person related by blood, adoption or marriage to
      shareholder, (c) any director or officer of the Company or any Subsidiary,
      (d)
      any corporation or other entity in which any of the foregoing parties has,
      directly or indirectly, at least five percent (5%) beneficial interest in the
      capital stock or other type of equity interest in such corporation or other
      entity, or (e) any partnership in which any such party is a general partner
      or a
      limited partner having a five percent (5%) or more interest therein (any or
      all
      of the foregoing being herein referred to as a “Related Party”
and
      collectively as the “Related Parties”).
      Without limiting the generality of the foregoing, except as set forth on
      Schedule 3.21, (a) no Related Party, directly or indirectly, owns or controls
      any assets or properties which are or have since the date of the Company Balance
      Sheet been used in the business of the Company or any Subsidiary and (b) no
      Related Party, directly or indirectly, engages in or has any significant
      interest in or connection with any business: (i) which is or which within the
      last two (2) years has been a competitor, customer or supplier of, or has done
      business with, the Company or any Subsidiary or (ii) which as of the date hereof
      sells or distributes products or provides services which are similar or related
      to the products or services of the Company or any Subsidiary.

     

    
      
        
        

      

      
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    3.22. Business
      Practices.
      Except
      as set forth in Schedule 3.22, neither the Company nor any Subsidiary has,
      at
      any time, directly or indirectly, made any contributions or payment, or provided
      any compensation or benefit of any kind, to any municipal, county, state,
      federal or foreign governmental officer or official, or any other person charged
      with similar public or quasi-public duties, or any candidate for political
      office. The Company’s and the Subsidiaries’ books, accounts and records
      (including, without limitation, customer files, product packaging and invoices)
      accurately describe and reflect, in all material respects, the nature and amount
      of the Company’s products, purchases, sales and other transactions. Without
      limiting the generality of the foregoing, neither the Company nor any Subsidiary
      has engaged, directly or indirectly, in: (a) the practice known as
“double-invoicing” or the use or issuance of pro-forma or dummy invoices; or (b)
      the incorrect or misleading labeling, marketing or sale of refurbished goods
      as
      new goods.

     

    3.23. Shareholder
      Matters.
      None of
      the transactions or matters contemplated by this Agreement require the approval
      of the Company’s shareholders, other than the requirement for shareholder
      approval of an increase in authorized common stock sufficient for issuance
      upon
      conversion of the Buyer Stock.

     

    3.24. Full
      Disclosure.
      No
      representation or warranty of the Company contained in this Agreement, and
      none
      of the statements or information concerning the Company or any of its
      Subsidiaries contained in this Agreement and the Schedules, when taken together
      as a whole, contains or will contain any untrue statement of a material fact
      nor
      will such representations, warranties, covenants or statements taken as a whole
      omit 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.

     

    4. REPRESENTATIONS
      AND WARRANTIES OF BUYER.

     

    To
      induce
      the Company to enter into this Agreement and to consummate the transactions
      contemplated hereby, each Buyer represents and warrants, severally and not
      jointly, to and covenants with the Company as follows:

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    4.1. Organization.
      The
      Buyer is a corporation, limited liability company or limited partnership duly
      organized, validly existing and in good standing under the laws of its
      jurisdiction. The Buyer has all requisite power and authority to execute,
      deliver and carry out the terms of this Agreement and the consummation of the
      transactions contemplated herein.

     

    4.2. Execution;
      No Inconsistent Agreements; Etc.

     

    (a) The
      execution and delivery of this Agreement and the performance of the transactions
      contemplated hereby have been duly and validly authorized and approved by the
      Buyer and this Agreement is a valid and binding agreement of the Buyer,
      enforceable against the Buyer in accordance with its terms, except as such
      enforcement may be limited by bankruptcy or similar laws affecting the
      enforcement of creditors’ rights generally, and the availability of equitable
      remedies.

     

    (b) The
      execution and delivery of this Agreement by the Buyer does not, and the
      consummation of the transactions contemplated hereby will not, constitute a
      breach or violation of the charter or bylaws of the Buyer, or a default under
      any of the terms, conditions or provisions of (or an act or omission that would
      give rise to any right of termination, cancellation or acceleration under)
      any
      material note, bond, mortgage, lease, indenture, agreement or obligation to
      which the Buyer is a party, pursuant to which any of them otherwise receive
      benefits, or by which any of their properties may be bound.

     

    4.3. Investment
      Representations.

     

    (a) The
      Buyer
      is purchasing the Series C Preferred Stock for investment purposes and not
      with
      a view to the sale or distribution, by public or private sale or other
      disposition, and the Buyer has no present intention of selling, granting any
      participation in or otherwise distributing or disposing of any of the Series
      C
      Preferred Stock.

     

    (b) The
      Buyer
      has been offered the opportunity to ask questions of, and receive answers from
      the Company’s management, and the Buyer has been given full and complete access
      to all available information and data relating to the business and assets of
      the
      Company and has obtained such additional information about the Company as the
      Buyer has deemed necessary in order to evaluate the opportunities, both
      financial and otherwise, with respect to the Company and, except as set forth
      herein, has not relied on any representation, warranty or other statement
      concerning the Company and its evaluation of the decision to consummate the
      transactions contemplated herein. In its judgment, the Buyer is sufficiently
      familiar with the Company to enable the Buyer to proceed with the transactions
      contemplated hereby.

     

    (c) The
      Buyer
      is an “accredited investor,” as such term is defined in Rule 501 of Regulation D
      promulgated under the Securities Act of 1933, as amended (the “Securities
      Act”).

     

    (d) The
      Buyer
      is a sophisticated investor familiar with the type of risks inherent in the
      acquisition of securities such as the shares of the Company and the Buyer’s
      financial position is such that the Buyer can afford to retain its shares of
      Company Series C Preferred Stock for an indefinite period of time without
      realizing any direct or indirect cash return on its investment.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    5. RESERVED.

     

    6. CONDITIONS
      TO OBLIGATIONS OF ALL PARTIES.

     

    The
      obligation of Buyers and the Company to consummate the transactions contemplated
      by this Agreement are subject to the satisfaction, on or before the Closing,
      of
      each of the following conditions; any or all of which may be waived in whole
      or
      in part by the joint agreement of Buyers and the Company: 

     

    6.1. Absence
      of Actions.
      No
      action or proceeding shall have been brought or threatened before any court
      or
      administrative agency to prevent the consummation or to seek damages in a
      material amount by reason of the transactions contemplated hereby, and no
      governmental authority shall have asserted that the within transactions (or
      any
      other pending transaction involving Buyers or the Company when considered in
      light of the effect of the within transactions) shall constitute a violation
      of
      law or give rise to material liability on the part of the Company or the
      Buyers.

     

    6.2. Governmental
      Consents.
      All
      applicable notices, approvals and consents to or from all governmental
      authorities and self regulatory organizations that are required to be made
      or
      obtained in connection with the consummation of the transactions contemplated
      by
      this Agreement, shall have been made or obtained.

     

    7. CONDITIONS
      TO OBLIGATIONS OF THE BUYER.

     

    All
      obligations of the Buyers to consummate the transactions contemplated by this
      Agreement are subject to the fulfillment and satisfaction of each and every
      of
      the following conditions on or prior to the Closing, any or all of which may
      be
      waived in whole or in part by Buyers:

     

    7.1. Representations
      and Warranties.
      The
      representations and warranties contained in Section 3 of this Agreement and
      in
      any certificate, instrument, schedule, agreement or other writing delivered
      by
      or on behalf of the Company in connection with the transactions contemplated
      by
      this Agreement shall be true, correct and complete in all material respects
      (except for representations and warranties which are by their terms qualified
      by
      materiality, which shall be true, correct and complete in all respects) as
      of
      the date when made and shall be deemed to be made again at and as of the Closing
      Date and shall be true, correct and complete at and as of the Closing Date
      in
      all material respects (except for representations and warranties which are
      by
      their terms qualified by materiality, which shall be true, correct and complete
      in all respects).

     

    7.2. Compliance
      with Agreements and Conditions.
      The
      Company shall have performed and complied with all material agreements and
      conditions required by this Agreement to be performed or complied with by it
      prior to or on the Closing Date.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    7.3. Absence
      of Material Adverse Changes.
      No
      material adverse change in the business, assets, financial condition, or
      prospects of the Company and its Subsidiaries (taken as a whole) shall have
      occurred, no substantial part of the assets of the Company or any Subsidiary
      not
      substantially covered by insurance shall have been destroyed due to fire or
      other casualty, and no event shall have occurred which has had or could
      reasonably be expected to have a material adverse effect on the business,
      assets, financial condition or prospects of the Company and its Subsidiaries
      (taken as a whole).

     

    7.4. Closing
      Covenants.
      The
      Company shall have taken all of the actions required to be taken by it at or
      prior to the Closing pursuant to Section 1.3 herein.

     

    7.5. Certificates
      of Designation; Exchange Agreements.
      The
      Company shall have delivered to the Buyers (i) filed copies of the Certificates
      of Designations attached as Exhibits C-1, C-2 and C-3 (for the Company’s newly
      designated Series A-2 Convertible Preferred Stock, Series D Convertible
      Preferred Stock and Series C Preferred Stock) certified by the Florida
      Department of State and (ii) evidence reasonably satisfactory to the Buyers
      confirming that the transactions contemplated by the Exchange Agreements have
      been completed in accordance with the terms of the Exchange
      Agreements.

     

    7.6. Vance
      Acquisition.
      The
      Company (or one of its wholly owned Subsidiaries) shall have entered into
      definitive purchase agreements, in form and substance satisfactory to the
      Buyers, with the shareholder of Vance Baldwin Electronics, Inc. pursuant to
      which the Company (or one of its wholly owned Subsidiaries) will purchase all
      of
      the capital stock of such entities substantially simultaneously with the
      Closing.

     

    7.7. HIG
      Agreements.
      The
      Company shall have executed and delivered the Management Agreement and the
      Investment Advisory Agreement with H.I.G. Capital L.L.C, and such agreements
      shall be in full force and effect.

     

    7.8. Proceedings
      and Documents Satisfactory.
      The
      Company shall have delivered to the Buyers such other documents and instruments
      as the Buyers deem reasonably necessary or desirable to consummate the
      transactions contemplated hereby. All proceedings in connection with the
      transactions contemplated by this Agreement and all certificates and documents
      delivered to the Buyers in connection with the transactions contemplated by
      this
      Agreement shall be satisfactory in all reasonable respects to the Buyers, and
      the Buyers shall have received the originals or certified or other copies of
      all
      such records and documents as the Buyers may reasonably request. The Buyers
      shall have completed its due diligence investigation of the Company and shall
      be
      satisfied, in its sole discretion, with the results of such
      investigation.

     

    8. CONDITIONS
      TO OBLIGATIONS OF THE COMPANY.

     

    All
      of
      the obligations of the Company to consummate the transactions contemplated
      by
      this Agreement are subject to the fulfillment and satisfaction of each and
      every
      of the following conditions on or prior to the Closing, any or all of which
      may
      be waived in whole or in part by the Company:

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    8.1. Representations
      and Warranties.
      The
      representations and warranties contained in Section 4 of this Agreement and
      in
      any certificate, instrument, schedule, agreement or other writing delivered
      by
      or on behalf of Buyers in connection with the transactions contemplated by
      this
      Agreement shall be true and correct in all material respects (except for
      representations and warranties which are by their terms qualified by
      materiality, which shall be true, correct and complete in all respects) when
      made and shall be deemed to be made again at and as of the Closing Date and
      shall be true at and as of the Closing Date in all material respects (except
      for
      representations and warranties which are by their terms qualified by
      materiality, which shall be true, correct and complete in all
      respects).

     

    8.2. Compliance
      with Agreements and Conditions.
      The
      Buyers shall have performed and complied with all material agreements and
      conditions required by this Agreement to be performed or complied with by the
      Buyers prior to or on the Closing Date.

     

    9. INDEMNITY.

     

    9.1. Indemnification
      by the Company.
      The
      Company shall defend, indemnify and hold harmless the Buyers, each of their
      direct and indirect parent corporations, subsidiaries and affiliates, and each
      of their officers, members, directors, employees, attorneys and agents
      (hereinafter collectively called “Buyer Indemnitees”)
      against and in respect of any and all loss, damage, liability, fine, penalty,
      cost and expense, including reasonable attorneys’ fees and amounts paid in
      settlement (collectively, “Buyer Losses”),
      suffered or incurred by any Buyer Indemnitee by reason of, or arising out
      of:

     

    (a) any
      misrepresentation, breach of warranty or breach or nonfulfillment of any
      covenant, obligation or agreement of the Company contained in this Agreement
      or
      in any certificate, schedule, instrument or document delivered to the Buyers
      by
      or on behalf of the Company pursuant to the provisions of this Agreement
      (without regard to materiality thresholds contained therein); and

     

    (b) any
      action instituted against a Buyer or a Buyer Indemnitee relating to any of
      the
      transactions contemplated by this Agreement (unless such action is based upon
      a
      breach of the Buyer’s representations, warranties or covenants under this
      Agreement or any violations by the Buyer of state or federal securities laws
      or
      any conduct by Buyer which constitutes fraud or willful
      misconduct).

     

    9.2. Defense
      of Claims.

     

    (a) A
      Buyer
      Indemnitee seeking indemnification hereunder: (i) shall provide the Company
      written notice of any claim or action by a third party for which the Company
      may
      be liable under the terms of this Agreement, within thirty (30) days after
      such
      claim or action arises and is known to the Buyer Indemnitee, and (ii) shall
      give
      the Company a reasonable opportunity to participate in any proceedings and
      to
      settle or defend any such claim or action. The expenses of all proceedings,
      contests or lawsuits with respect to such claims or actions shall be borne
      by
      the Company. If the Company wishes to assume the defense of such claim or
      action, the Company shall give written notice to the Buyer Indemnitee within
      ten
      (10) days after notice from the Buyer Indemnitee of such claim or action, and
      the Company shall thereafter assume the defense of any such claim or liability,
      through counsel reasonably satisfactory to the Buyer Indemnitee, provided that
      the Buyer Indemnitee may participate in such defense at their own expense,
      and
      the Company shall, in any event, have the right to control the defense of the
      claim or action. The failure of the Buyer Indemnitee to give any notice required
      by this Section shall not affect any of such party’s rights under this Section
      or otherwise, except and to the extent that such failure is actually prejudicial
      to the rights or obligations of the Company.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (b) If
      the
      Company shall not assume the defense of, or if after so assuming it shall fail
      to defend, any such claim or action, the Buyer Indemnitee may defend against
      any
      such claim or action in such manner as they may deem appropriate and the Buyer
      Indemnitee may settle such claim or litigation on such terms as they may deem
      appropriate but subject to the Company’s approval, such approval not to be
      unreasonably withheld; provided, however, that any such settlement shall be
      deemed approved by the Company if the Company fails to object thereto, by
      written notice to the Buyer Indemnitee, within fifteen (15) days after the
      Company’s receipt of a written summary of such settlement. The Company shall
      promptly reimburse the Buyer Indemnitee for the amount of all expenses, legal
      and otherwise, incurred by the Buyer Indemnitee in connection with the defense
      and settlement of such claim or action.

     

    (c) If
      a
      non-appealable judgment is rendered against any Buyer Indemnitee in any action
      covered by the indemnification hereunder, or any lien attaches to any of the
      assets of any of the Buyer Indemnitees, the Company shall immediately upon
      such
      entry or attachment pay such judgment in full or discharge such lien unless,
      at
      the expense and direction of the Company, an appeal is taken under which the
      execution of the judgment or satisfaction of the lien is stayed. If and when
      a
      final judgment is rendered in any such action, the Company shall forthwith
      pay
      such judgment or discharge such lien before any Buyer Indemnitee is compelled
      to
      do so.

     

    9.3. Waiver.
      The
      failure of any Buyer Indemnitee to give any notice or to take any action
      hereunder shall not be deemed a waiver of any of the rights of such Buyer
      Indemnitee hereunder, except to the extent that the Company is actually
      prejudiced by such failure. The Company hereby acknowledges and agrees that
      the
      Buyer Indemnitees are third party beneficiaries of this Agreement for purposes
      of this Section 9.

     

    10. RESERVED.

     

    11. DEFINED
      TERMS

     

    11.1. Definitions.
      Definitions for the terms listed below can be found in the following
      sections:

     

    
      	
              Defined
                Term

            	 	
              Section
                Reference

            
	
              Agreement

            	 	
              Recitals

            
	
              Buyers

            	 	
              Recitals

            
	
              Company

            	 	
              Recitals

            
	
              Series
                C Preferred Stock

            	 	
              Recitals

            
	
              Buyer
                Stock

            	 	
              1.1

            
	
              Certificate
                of Designation

            	 	
              1.1

            

    

     

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

     

    
      	
              Defined
                Term

            	 	
              Section
                Reference

            
	
              Encumbrances

            	 	
              1.1

            
	
              Purchase
                Price

            	 	
              1.2

            
	
              Closing

            	 	
              1.3

            
	
              Closing
                Date

            	 	
              1.3

            
	
              Investor
                Rights Agreements

            	 	
              1.3(d)

            
	
              Preferred
                Stock

            	 	
              1.3(e)

            
	
              Exchange
                Agreements

            	 	
              1.3(e)

            
	
              Securities
                Rights

            	 	
              3.2(b)

            
	
              Subsidiary
                

            	 	
              3.3(a)

            
	
              Company
                Balance Sheet

            	 	
              3.6(a)

            
	
              Company
                Financial Statements

            	 	
              3.6(a)

            
	
              SEC
                Reports

            	 	
              3.6(c)

            
	
              Commission

            	 	
              3.6(c)

            
	
              Exchange
                Act

            	 	
              3.6(c)

            
	
              Leases

            	 	
              3.13

            
	
              Leased
                Properties

            	 	
              3.13

            
	
              Liability

            	 	
              3.15

            
	
              Proprietary
                Rights

            	 	
              3.16(g)

            
	
              Material
                Contracts

            	 	
              3.17

            
	
              Employee
                Benefit Plan

            	 	
              3.18(b)

            
	
              Licenses

            	 	
              3.19

            
	
              Environmental
                Laws

            	 	
              3.20

            
	
              Wastes

            	 	
              3.20

            
	
              Related
                Party

            	 	
              3.21

            
	
              Securities
                Act

            	 	
              4.3(c)

            
	
              Buyer
                Indemnitees

            	 	
              9.1

            
	
              Buyer
                Losses

            	 	
              9.1

            

    

     

    12. MISCELLANEOUS.

     

    12.1. Notices.

     

    (a) All
      notices, requests, demands, or other communications required or permitted
      hereunder shall be in writing and shall be deemed to have been duly given upon
      receipt if delivered in person or by facsimile, or upon the expiration of one
      (1) days after the date sent, if sent by federal express (or similar overnight
      courier service) to the parties at the following addresses:

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (i) If
      to a
      Buyer other than HIG, the address set forth on Schedule 1 hereto. If to
      HIG:

     

    c/o
      H.I.G. Capital Management, Inc.

    855
      Boylston Street, 11th
      Floor

    Boston,
      MA 02116

    Attention:
      John Black, William Nolan

    Telephone:
      617-262-8455

    Telecopy:
      617-262-1505

     

    with
      a
      copy to:

     

    Bingham
      McCutchen LLP

    399
      Park
      Avenue

    New
      York,
      NY 10022

    Attention:
      Neil W. Townsend, Esq.

    Telephone:
      212-705-7722

    Telecopy:
      212-702-3644

     

    (ii) If
      to the
      Company:

     

    Advanced
      Communications Technologies, Inc.

    420
      Lexington Avenue, Suite 2739

    New
      York,
      New York 10170

    Attention: Wayne
      Danson

    Telephone: (646)
      227-1600

    Facsimile: (646)
      227-1666

     

    With
      a
      copy to:

     

    Eckert
      Seamans Cherin & Melott, LLC

    Two
      Liberty Place

    50
      South
      16th Street, 21st Floor

    Philadelphia,
      PA 19102

    Attention:
      Gary A. Miller

    Telephone: (215)
      851-8472

    Facsimile: (215)
      851-8383

    

    (b) Notices
      may also be given in any other manner permitted by law, effective upon actual
      receipt. Any party may change the address to which notices, requests, demands
      or
      other communications to such party shall be delivered or mailed by giving notice
      thereof to the other parties hereto in the manner provided herein.

     

    12.2. Survival.
      The
      representations, warranties, agreements and indemnifications of the parties
      contained in this Agreement or in any writing delivered pursuant to the
      provisions of this Agreement shall survive any investigation heretofore or
      hereafter made by the parties and the consummation of the transactions
      contemplated herein and shall continue in full force and effect after the
      Closing.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    12.3. Counterparts;
      Interpretation.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed an original, and all of which shall constitute one and the same
      instrument. This Agreement supersedes all prior discussions and agreements
      between the parties with respect to the subject matter hereof, and this
      Agreement contains the sole and entire agreement among the parties with respect
      to the matters covered hereby. All Schedules hereto shall be deemed a part
      of
      this Agreement. This Agreement shall not be altered or amended except by an
      instrument in writing signed by or on behalf of all of the parties hereto.
      No
      ambiguity in any provision hereof shall be construed against a party by reason
      of the fact it was drafted by such party or its counsel. For purposes of this
      Agreement: “herein”, “hereby”, “hereunder”, “herewith”, “hereafter” and
“hereinafter” refer to this Agreement in its entirety, and not to any particular
      subsection or paragraph. References to “including” means including without
      limiting the generality of any description preceding such term. Nothing
      expressed or implied in this Agreement is intended, or shall be construed,
      to
      confer upon or give any person other than the parties hereto any rights or
      remedies under or by reason of this Agreement.

     

    12.4. Governing
      Law.
      This
      Agreement shall be governed by and interpreted in accordance with the laws
      of
      the State of New York without regard to the principles of conflict of laws.
      The
      parties further agree that any action between them shall be heard exclusively
      in
      the Borough of Manhattan, New York, New York, and expressly consent to the
      jurisdiction and venue of the state and federal courts therein, for the
      adjudication of any civil action asserted pursuant to this paragraph. Each
      party
      hereby irrevocably waives, to the fullest extent it may effectively do so,
      the
      defense of an inconvenient forum to the maintenance of any such action in the
      forum selected hereby.

     

    12.5. Successors
      and Assigns; Assignment.
      This
      Agreement shall be binding upon and shall inure to the benefit of the parties
      hereto and their respective heirs, executors, legal representatives, and
      successors; provided, however, that the Company may not assign this Agreement
      or
      any rights hereunder, in whole or in part.

     

    12.6. Partial
      Invalidity and Severability.
      All
      rights and restrictions contained herein may be exercised and shall be
      applicable and binding only to the extent that they do not violate any
      applicable laws and are intended to be limited to the extent necessary to render
      this Agreement legal, valid and enforceable. If any terms of this Agreement
      not
      essential to the commercial purpose of this Agreement shall be held to be
      illegal, invalid or unenforceable by a court of competent jurisdiction, it
      is
      the intention of the parties that the remaining terms hereof shall constitute
      their agreement with respect to the subject matter hereof and all such remaining
      terms shall remain in full force and effect. To the extent legally permissible,
      any illegal, invalid or unenforceable provision of this Agreement shall be
      replaced by a valid provision which will implement the commercial purpose of
      the
      illegal, invalid or unenforceable provision.

     

    12.7. Waiver.
      Any
      term or condition of this Agreement may be waived at any time by the party
      which
      is entitled to the benefit thereof, but only if such waiver is evidenced by
      a
      writing signed by such party. No failure on the part of a party hereto to
      exercise, and no delay in exercising, any right, power or remedy created
      hereunder, shall operate as a waiver thereof, nor shall any single or partial
      exercise of any right, power or remedy by any such party preclude any other
      future exercise thereof or the exercise of any other right, power or remedy.
      No
      waiver by any party hereto to any breach of or default in any term or condition
      of this Agreement shall constitute a waiver of or assent to any succeeding
      breach of or default in the same or any other term or condition
      hereof.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    12.8. Headings.
      The
      headings as to contents of particular paragraphs of this Agreement are inserted
      for convenience only and shall not be construed as a part of this Agreement
      or
      as a limitation on the scope of any terms or provisions of this
      Agreement.

     

    12.9. Expenses.
      At the
      Closing, the Company shall reimburse the Buyers for up to $3,000,000 in fees
      and
      expenses of the Buyers incurred in connection with its due diligence
      investigation of the Company and Vance (and certain other potential targets)
      prior to the Closing and the negotiation of this Agreement and the transactions
      contemplated hereby (including, without limitation, the fees, expenses and
      disbursements of the Buyers’ legal, accounting and other professional advisors).
      The Company shall also promptly reimburse the Buyers for or pay any and all
      costs and expenses (including, without limitation, the fees, expenses and
      disbursements of the Buyers’ legal, accounting and other professional advisors)
      incurred by the Buyers in connection with (A) the waiver of, enforcement of,
      or
      the preservation of any rights under, this Agreement or the Company’s Articles
      of Incorporation or other governing documents; (B) any stamp and other taxes
      (other than income taxes) payable with respect to this Agreement or the Buyer
      Shares; and (C) any filing required by applicable law, rule or regulation with
      any governmental authority or self regulatory organization with respect to
      a
      Buyer’s purchase or holding of the Buyer Stock. Without duplication of any other
      obligation of the Company to reimburse a Buyer for expenses, the Company shall
      reimburse each Buyer and its representatives for all reasonable travel expenses
      incurred in connection with attending any management meeting or any board
      meetings or board committee meetings. Any fees and expenses to be paid pursuant
      to this Section 12.9 (other than those to be paid or reimbursed at the Closing)
      shall be paid or reimbursed within five (5) business days of having been
      invoiced for such amounts. The Company shall pay the fees and expenses of its
      advisers, counsel, accountants and other experts, if any, and all other expenses
      incurred by such party incident to the negotiation, preparation, execution,
      delivery and performance of this Agreement.

     

    12.10. Finder’s
      Fees.
      The
      Buyers represent to the Company that no broker, agent, finder or other party
      has
      been retained by it in connection with the transactions contemplated hereby
      and
      that no other fee or commission has been agreed by the Buyers to be paid for
      or
      on account of the transactions contemplated hereby. The Company represents
      to
      the Buyer that, other than Janney Montgomery Scott (the fees and expenses of
      whom shall be paid by the Company), no broker, agent, finder or other party
      has
      been retained by the Company in connection with the transactions contemplated
      hereby and that no other fee or commission has been agreed by the Company to
      be
      paid for or on account of the transactions contemplated hereby.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    12.11. Gender.
      Where
      the context requires, the use of the singular form herein shall include the
      plural, the use of the plural shall include the singular, and the use of any
      gender shall include any and all genders.

     

    12.12. Acceptance
      by Fax.
      This
      Agreement shall be accepted, effective and binding, for all purposes, when
      the
      parties shall have signed and transmitted to each other, by telecopier, email
      or
      otherwise, copies of the signature pages hereto.

     

    12.13. Charter
      Amendment.
      Promptly
      following the date hereof, the Company shall use all reasonable commercial
      efforts to cause the Articles of Incorporation of the Company to be amended
      in
      order to increase the authorized number of shares of Common Stock to an amount
      reasonably sufficient for the conversion of Series C Preferred Stock into Common
      Stock, including the recommendation and submission of a proposal to the
      stockholders of the Company for the approval of such amendment.

     

    12.14. NO
      JURY TRIAL.
      THE
      PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY
      OF
      THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON
      OR
      ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY DOCUMENT
      CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT,
      COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
      PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES’ ACCEPTANCE OF
      THIS AGREEMENT.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

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

     

    
      	 	 	 
	 	
              COMPANY:

               

              ADVANCED
                COMMUNICATIONS TECHNOLOGIES, INC.

            
	 
 	 
 	 
 
	
            	By:  	/s/ Wayne Danson
	 	
              
Name:
              Wayne Danson
	 	Title: Chief Executive
              Officer

    

     

    
      	 	 	 
	 	
              BUYERS:

               

              ACT-DE
                LLC

            
	 
 	 
 	 
 
	
            	By:  	/s/ William Nolan
	 	
              
Name:
              William Nolan
	 	Title: Executive Vice
              President

    

    
    

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	
              PROSPECT HARBOR CREDIT

              PARTNERS,
                L.P.

            
	 
 	 
 	 
 
	
            	By:  	/s/ Stuart Davies
	 	
              
Name:
              Stuart Davies
	 	Title: Managing Director

      	 	 	 
	 	SANKATY CREDIT OPPORTUNITIES II,
              L.P.
	 
 	 
 	 
 
	
            	By:  	/s/ Stuart Davies
	 	
              
Name:
              Stuart Davies
	 	Title: Managing Director

    

     

    
      	 	 	 
	 	SANKATY CREDIT OPPORTUNITIES III,
              L.P.
	 
 	 
 	 
 
	
            	By:  	/s/ Stuart Davies
	 	
              
Name:
              Stuart Davies
	 	Title: Managing Director

    

     

    
      	 	 	 
	 	RGIP, LLC
	 
 	 
 	 
 
	
            	By:  	/s/ R.B. Malt
	 	
              
Name:
              R. B. Malt
	 	Title: Managing
              Member

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    
      Execution
        Copy

       

    

    Schedule
      1

     

    
      	
              Buyer

            	 	
              Shares

            	 	
              Purchase
                Price ($)

            	 
	
              ACT-DE
                LLC 

            	 	 	
              913.79

            	 	 	
              5,756,897

            	 
	
              Prospect
                Harbor Credit Partners, L.P. 

            	 	 	
              8.93

            	 	 	
              56,250

            	 
	
              Sankaty
                Credit Opportunities II, L.P.

            	 	 	
              17.64

            	 	 	
              111,098

            	 
	
              Sankaty
                Credit Opportunities III, L.P.

            	 	 	
              58.78

            	 	 	
              370,325

            	 
	
              RGIP,
                LLC 

            	 	 	
              0.86

            	 	 	
              5,430

            	 
	 	 	 	
              1,000

            	 	 	
              6,300,000

            	 

    

    

     

    
      
         

      

      
        24

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