Document:

[LOGO]

                                                                   June 27, 2000

Roger May
Chairman
Advanced Communications Technologies, inc.
19200 Von Karman Avenue, Suite 500
Irvine, CA 92612

Dear Mr. May:

      The purpose of this letter agreement (the "Agreement") is to set forth the
terms and conditions  pursuant to which Ladenburg  Thalmann & Co. Inc.  ("LTCO")
shall serve as exclusive placement agent in connection with the proposed private
offering  (the   "Offering")  of  securities  (the   "Securities")  of  Advanced
Communications  Technologies,  inc. (the "Company"). The gross proceeds from the
Offering will be up to  $1,000,000.  All  references to dollars shall be to U.S.
dollars. The terms of such Offering and the Securities shall be substantially in
the form set  forth in  Exhibit E  hereto,  which  exhibit  is  incorporated  by
reference herein.

      Upon the  terms and  subject  to the  conditions  of this  Agreement,  the
parties hereto agree as follows:

      1. Appointment.  (a) Subject to the terms and conditions of this Agreement
hereinafter  set forth,  the Company hereby retains LTCO. and LTCO hereby agrees
to act as the  Company's  exclusive  placement  agent and  financial  advisor in
connection  with the  Offering,  effective  as of the date  hereof.  The Company
expressly  acknowledges  and agrees that LTCO's  obligations  hereunder are on a
reasonable best efforts basis only and that the execution of this Agreement does
not  constitute a commitment  by LTCO to purchase  the  Securities  and does not
ensure the successful  placement of the Securities or any portion thereof or the
success of LTCO with  respect to securing  any other  financing on behalf of the
Company.

                                       1
<PAGE>

      (b) Except as set forth below in this Section 1, during the  effectiveness
of this Agreement, neither the Company nor any of its subsidiaries or affiliates
shall, directly or indirectly, through any officer, director, employee, agent or
otherwise (including,  without limitation,  through any placement agent, broker,
investment banker,  attorney or accountant retained by the Company or any of its
subsidiaries  or affiliates),  solicit,  initiate or encourage the submission of
any  proposal  or offer  (an  "Investment  Proposal)  from any  person or entity
(including  any of such  person's or entity's  officers,  directors,  employees,
agents and other  representatives)  relating to any issuance of the Company's or
any of its subsidiaries'  equity securities  (including debt securities with any
equity feature) or relating to any other transaction  having a similar effect or
result  on  the  Company's  or  any  of  its  subsidiaries'  capitalization,  or
participate in any  discussions  or  negotiations  regarding,  or furnish to any
other person or entity any information  with respect to, or otherwise  cooperate
in any way with, or assist or participate in, facilitate or encourage any effort
or  attempt  by any  other  person  or  entity  to do or  seek  to do any of the
foregoing.  The Company shall  immediately  cease and cause to be terminated any
and all contacts,  discussions and negotiations with third parties regarding any
Investment  Proposal.  The  Company  shall  promptly  notify  LTCO  if any  such
Investment  Proposal,  or any inquiry or contact  with any person or entity with
respect  thereto,  is  made.  Notwithstanding  the  foregoing,  nothing  in this
Agreement  shall  preclude the Company from (i)  accepting up to  $1,000,000  of
equity financing arranged through National Investment Resources,  Inc., (ii) any
sale of securities  through Gary Bryant for the purpose of funding the Company's
Latin  American  expansion,  (iii) any sale of  securities  by the Company's ACT
(Australia) Pty Ltd.  subsidiary,  or (iv) any sale of securities owned by Roger
May or his affiliates.  The Company shall not provide or release any information
with respect to this  Agreement or the Offering,  including  any press  release,
except as required by law.

      2. Fees and  Compensation.  In consideration  of the services  rendered by
LTCO in  connection  with  the  Offering,  the  Company  agrees  to pay LTCO the
following fees and other compensation:

      (a) A cash fee payable  immediately upon the closing of any portion of the
Offering  and  equal  to 6% of the  aggregate  capital  raised.

      (b) 6% warrant  coverage on the total amount of the  Offering,  payable at
the first closing. Such warrants shall be in the form of Exhibit D.

      (c)  $35,000  non  accountable  expense  allowance,  payable  at the first
closing  (which shall be waived if such fee has already been paid in  connection
with the private  placement of up to  $12,000,000  of the Company's  convertible
securities  by LTCO  pursuant to that other  engagement  agreement  of even date
herewith in connection with such placement).

      (d) Upon the exercise of investor  warrants,  if any, by a holder thereof,
the Company shall promptly  notify LTCO of such exercise,  and shall pay to LTCO
an amount  equal to 6% of the gross  dollar  amount  received  by the Company in
connection with such exercise of the warrants.

                                       2
<PAGE>

      (e)   All  amounts  payable  hereunder  shall  be paid  to LTCO  out of an
            attorney  escrow  account  at the  closing  or by such  other  means
            acceptable to LTCO.

      (f)   Should LTCO provide a qualified  institutional  investor(s)  by July
            31, 2000 reasonably  acceptable to the Company and such  investor(s)
            is willing to invest in the Offering on substantially the same terms
            as  outlined  in the term sheet  marked  Exhibit E, and the  Company
            declines to enter into definitive  agreements with such  investor(s)
            to consummate the Offering,  for reasons other than a breach of this
            Agreement  by  LTCO,  the  Company  will pay  $200,000  to LTCO as a
            "break-up"  fee (which  shall be waived if such fee has already been
            paid in connection  with the private  placement of up to $12,000,000
            of the  Company's  convertible  securities  by LTCO pursuant to that
            other engagement  agreement of even date herewith in connection with
            such placement).

      3. Terms of Retention. (a) Unless extended or terminated in writing by the
parties hereto by written notice to the other in accordance  with the provisions
hereof, this Agreement shall remain in effect until the Termination Date of July
31, 2000.

      (b) Notwithstanding anything herein to the contrary, the obligation to pay
the Fees and  Compensation  and  Expenses  described  in Section 2, if any,  and
paragraphs  2, 5, and 8 of Exhibit A and all of Exhibit B and Exhibit C attached
hereto,  each of which  exhibits  is  incorporated  herein by  reference,  shall
survive  any  termination  or  expiration  of  the  Agreement.  It is  expressly
understood and agreed by the parties hereto that any private financing of equity
or debt or other capital raising activity of the Company within 24 months of the
termination  or expiration of this  Agreement,  with any investors or lenders to
whom the Company was  introduced by LTCO or who was contacted by LTCO while this
Agreement was in effect and disclosed to the Company in writing, shall result in
such fees and compensation due and payable by the Company to LTCO under the same
terms  of  Section  2  above.  Upon  completion  of  the  Offering,  any  future
renegotiation,  restructuring,  revision or other  amendment of such Offering by
and between the Company and the investors in such Offering  which results in the
receipt  of any net new  funds by the  Company  from such  investor(s)  shall be
deemed  to  be  a  new  financing  and  shall  result  in  additional  fees  and
compensation due and payable by the Company to LTCO under the terms of Section 2
above.

      4. Right of First  Refusal.  Upon  completion of the Offering,  LTCO shall
have an  irrevocable  right of first refusal for a period of one year to provide
all private  financing  arrangements  for the Company  (other than  conventional
banking  arrangements,  borrowing  and  commercial  debt  financing and discrete
unrelated transactions of not more than $250,000 where no investment banking fee
is being  paid).  LTCO shall  exercise  such right in  writing  within  five (5)
business  days of  receipt  of a written  term sheet  describing  such  proposed
transaction in reasonable detail.

                                        3
<PAGE>

      5. Information. The Company recognizes and confirms that in completing its
engagement  hereunder,  LTCO  will be  using  and  relying  solely  on  publicly
available  information and on data, material and other information  furnished to
LTCO by the Company or the Company's affiliates and agents. It is understood and
agreed  that in  performing  under  this  engagement,  LTCO  will  rely upon the
accuracy  and  completeness  of,  and is not  assuming  any  responsibility  for
independent  verification of, such publicly available  information and the other
information so furnished.

      6. Offers and Sales Only to Institutional Accredited Investors.

      Offers  and  sales  of the  Securities  will  be made  only  to  qualified
institutional buyers (as defined in Rule 144A) and to "accredited  investors" as
defined in Rule 501(a)  promulgated under the Securities Act of 1933, as amended
(the "Securities Act").

      7.  No  General  Solicitation.  The  Securities  will be  offered  only by
approaching   prospective   purchasers  on  an  individual   basis.  No  general
solicitation or general  advertising in any form will be used in connection with
the offering of the  Securities.  From and after the execution of this Agreement
until the completion of the Offering,  the Company shall  pre-clear any proposed
press release which mentions this Agreement or the Offering with LTCO.

      8.  Miscellaneous.  This Agreement,  together with the attached Exhibits A
though E constitutes the entire  understanding and agreement between the parties
with respect to its subject matter and there are no agreements or understandings
with  respect to the  subject  matter  hereof  which are not  contained  in this
Agreement. This Agreement may be modified only in writing signed by the party to
be charged hereunder.

                                       4
<PAGE>

      If the foregoing  correctly sets forth our agreement,  please confirm this
by signing and returning to us the duplicate copy of this letter.

      We appreciate this opportunity to be of service and are looking forward to
working with you on this matter.

                         Very truly yours,

                         LADENBURG THALMANN & CO. INC.

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

Agreed to and accepted
as of the date first written above:

ADVANCED COMMUNICATIONS TECHNOLOGIES, INC.

By:  /s/ Roger May
   ------------------------------
   Name:  Roger May
   Title: CEO

                                       5
<PAGE>

                                                                       EXHIBIT A

                         STANDARD TERMS AND CONDITIONS

1.    The Company  shall  promptly  provide LTCO with all  relevant  information
      about the Company (to the extent  available  to the Company in the case of
      parties  other than the  Company)  that shall be  reasonably  requested or
      required by LTCO, which  information shall be complete and accurate in all
      material respects at the time furnished.

2.    LTCO  shall  keep  all  information  obtained  from the  Company  strictly
      confidential   except:   (a)  information  which  is  otherwise   publicly
      available,  or previously  known to, or obtained by LTCO  independently of
      the Company and without breach of LTCO's  agreement with the Company;  (b)
      LTCO may disclose such information to its employees and attorneys,  and to
      its other advisors and financial  sources on a need to know basis only and
      shall use best  efforts  to  ensure  that all such  employees,  attorneys,
      advisors  and  financial  sources  will  keep  such  information  strictly
      confidential;  and (c)  pursuant  to any  order  of a court  of  competent
      jurisdiction or other  governmental body (including any subpena) or as may
      otherwise be required by law.

3.    The  Company  recognizes  that in order for LTCO to perform  properly  its
      obligations  in a  professional  manner,  it is  necessary  that  LTCO  be
      informed of and, to the extent  practicable,  participate  in meetings and
      discussions  between the Company and any third party,  including,  without
      limitation,  any prospective purchaser of the securities,  relating to the
      matters covered by the terms of LTCO's engagement.

4.    The Company agrees that any report or opinion, oral or written,  delivered
      to it by LTCO is prepared solely for its confidential use and shall not be
      reproduced,  summarized, or referred to in any public document or given or
      otherwise  divulged  to any other  person  without  LTCO's  prior  written
      consent, except as may be required by applicable law or regulation.

5.    No fee payable to LTCO pursuant to any other agreement with the Company or
      payable by the Company to any agent,  lender or investor  shall  reduce or
      otherwise affect any fee payable by the Company to LTCO hereunder. If LTCO
      engages  any other  broker-dealer  or other  finder to assist  LTCO in the
      placement of the Offering,  then the fees of such other  broker-dealer  or
      finder shall be paid by LTCO.

6.    The Company represents and warrants that; (a) it has full right, power and
      authority  to  enter  into  this  Agreement  and  to  perform  all  of its
      obligations  hereunder:  (b) this  Agreement has been duly  authorized and
      executed by and  constitutes a valid and binding  agreement of the Company
      enforceable  in  accordance  with its  terms;  and (c) the  execution  and
      delivery  of this  Agreement  and  the  consummation  of the  transactions
      contemplated  hereby do not conflict with or result in a breach of (i) the
      Company's certificate of incorporation or by-laws or (ii) any agreement to
      which the Company is a party or by which any of its  property or assets is
      bound.

                                       6
<PAGE>

                                                           EXHIBIT A (CONTINUED)

7.    Nothing  contained in this Agreement  shall be construed to place LTCO and
      the Company in the  relationship of partners or joint  venturers.  Neither
      LTCO  nor the  Company  shall  represent  itself  as the  agent  or  legal
      representative  of the other for any purpose  whatsoever  nor shall either
      have the power to  obligate  or bind the other in any  manner  whatsoever.
      LTCO,  in  performing  its  services  hereunder,  shall at all times be an
      independent contractor.

8.    This Agreement has been and is made solely for the benefit of LTCO and the
      Company and each of the persons, agents,  employees,  officers,  directors
      and  controlling  persons  referred  to in Exhibit B and their  respective
      heirs, executors,  personal  representatives,  successors and assigns, and
      nothing  contained in this  Agreement  shall  confer any rights upon,  nor
      shall this  Agreement be construed to create any rights in, any person who
      is not party to such Agreement, other than as set forth in this paragraph.

9.    The rights and obligations of either party under this Agreement may not be
      assigned  without the prior written  consent of the other party hereto and
      any other purported assignment shall be null and void.

10.   All  communications  hereunder,  except as may be  otherwise  specifically
      provided herein,  shall be in writing and shall be mailed, hand delivered,
      sent by a recognized overnight courier service such as Federal Express, or
      sent via  facsimile  and  confirmed by letter,  to the party to whom it is
      addressed at the  following  addresses or such other address as such party
      may advise the other in writing:

                To the Company:
                Roger May
                Advanced Communications Technologies, Inc.
                19200 Von Karman Avenue, Suite 500
                Irvine, CA 92612
                Telephone: (949) 622-5566
                Facsimile: (949) 477-8022

                To LTCO:
                Ladenburg Thalmann & Co Inc.
                590 Madison Avenue
                New York, NY 10022
                Attention: Robert J. Kropp
                Telephone: (212) 409-2000
                Facsimile. (212) 409-2169

All notices  hereunder  shall be effective upon receipt by the party to which it
is addressed.

                                       7
<PAGE>

                                                                       EXHIBIT B

                                INDEMNIFICATION

      The Company agrees that it shall  indemnify and hold  harmless,  LTCO, its
stockholders, directors, officers, employees, agents, affiliates and controlling
persons within the meaning of Section 20 of the Securities  Exchange Act of 1934
and Section 15 of the  Securities  Act of 1933,  each as amended (any and all of
whom are referred to as an  "Indemnified  Party"),  from and against any and all
losses, claims,  damages,  liabilities,  or expenses, and all actions in respect
thereof  (including,  but not limited to, all legal or other expenses reasonably
incurred  by  an  Indemnified  Party  in  connection  with  the   investigation,
preparation,  defense or settlement of any claim, action or proceeding,  whether
or not  resulting  in any  liability),  incurred by an  Indemnified  Party:  (a)
arising out of, or in connection  with, any actions taken or omitted to be taken
by the Company, its affiliates,  employees or agents, or any untrue statement or
alleged untrue statement of a material fact contained in any of the financial or
other  information  furnished  to LTCO by or on  behalf  of the  Company  or the
omission or alleged omission of a 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:  or (b) with  respect to,  caused by, or
otherwise arising out of any transaction contemplated by the Agreement or LTCO's
performing the services contemplated hereunder;  provided,  however, the Company
will not be  liable  under  clause  (b)  hereof to the  extent,  and only to the
extent, that any loss, claim, damage, liability or expense is finally judicially
determined to have resulted  primarily from LTCO's gross negligence or bad faith
in performing such services.

      If the indemnification  provided for herein is conclusively determined (by
an  entry  of  final  judgment  by a court  of  competent  jurisdiction  and the
expiration  of the time or denial of the right to appeal) to be  unavailable  or
insufficient  to hold any  Indemnified  Party harmless in respect to any losses,
claims,  damages,  liabilities or expenses referred to herein,  then the Company
shall  contribute  to the amounts paid or payable by such  Indemnified  Party in
such proportion as is appropriate and equitable under all  circumstances  taking
into account the relative  benefits  received by the Company on the one hand and
LTCO on the  other,  from the  transaction  or  proposed  transaction  under the
Agreement or, if allocation on that basis is not permitted under applicable law,
in such  proportion as is appropriate to reflect not only the relative  benefits
received  by the  Company  on the one hand and LTCO on the  other,  but also the
relative fault of the Company and LTCO; provided, however, in no event shall the
aggregate  contribution of LTCO and/or any indemnified Party be in excess of the
net  compensation  actually  received  by LTCO  and/or  such  Indemnified  Party
pursuant to this Agreement.

      The Company  shall not settle or compromise or consent to the entry of any
judgment in or otherwise  seek to terminate  any pending or  threatened  action,
claim.  suit or proceeding in which any Indemnified Party is or could be a party
and as to which  indemnification  or contribution could have been sought by such
Indemnified  Party hereunder  (whether or not such Indemnified  Party is a party
thereto),  unless such consent or termination includes an express  unconditional
release of such Indemnified Party, reasonably satisfactory in form and substance
to such

                                       8
<PAGE>

Indemnified  Party, from all losses,  claims,  damages,  liabilities or expenses
arising out of such action, claim, suit or proceeding.

      In the event any  Indemnified  Party shall incur any  expenses  covered by
this  Exhibit B, the Company  shall  reimburse  the  Indemnified  Party for such
covered  expenses  within  ten (10)  business  days of the  Indemnified  Party's
delivery to the Company of an invoice  therefor,  with receipts  attached.  Such
obligation  of the  Company  to so  advance  funds may be  conditioned  upon the
Company's  receipt of a written  undertaking from the Indemnified Party to repay
such  amounts  within  ten (10)  business  days  after a  final,  non-appealable
judicial   determination  that  such  Indemnified  Party  was  not  entitled  to
indemnification hereunder.

      The foregoing  indemnification and contribution provisions are not in lieu
of,  but in  addition  to, any rights  which any  Indemnified  Party may have at
common law  hereunder  or  otherwise,  and shall remain in full force and effect
following  the  expiration  or  termination  of LTCO's  engagement  and shall be
binding on any successors or assigns of the Company and successors or assigns to
all or substantially all of the Company's business or assets.

                                       9
<PAGE>

                                                                       EXHIBIT C

                                  JURISDICTION

      The  Company  and  LTCO  each  hereby  irrevocably:  (a)  submits  to  the
jurisdiction  of any court of the State of New York or any federal court sitting
in the  State  of New  York  for the  purposes  of any  suit,  action  or  other
proceeding  arising out of the  Agreement  between the Company and LTCO which is
brought by or against the Company or LTCO; (b) agrees that all claims in respect
of any suit, action or proceeding may be heard and determined in any such court;
and (c) to the extent that the Company or LTCO has  acquired,  or hereafter  may
acquire,  any  immunity  from  jurisdiction  of any such court or from any legal
process therein,  the Company an LTCO each hereby waives,  to the fullest extent
permitted  by  law,  such  immunity.  The  prevailing  party  in any  litigation
respecting this Agreement shall be entitled to an award of its costs,  including
reasonable attorneys' fees, in connection therewith.

      The  Company  and LTCO each  waives,  and agrees not to assert in any such
suit,  action or proceeding,  in each case, to the fullest  extent  permitted by
applicable  law,  any  claim  that  (a)  it is  not  personally  subject  to the
jurisdiction of any such court; (b) it is immune from any legal process (whether
through service or notice,  attachment prior to judgment,  attachment in the aid
of execution,  execution or otherwise)  with respect to it or its property;  (C)
any such suit, action or proceeding is brought in an inconvenient forum; (d) the
venue of any such suit, action or proceeding is improper:  or (e) this Agreement
may not be enforced in or by any such court.

      Any process  against the Company or LTCO in, or in  connection  with,  any
suit,  action or proceeding  filed in the United States  District  Court for the
Southern  District  of New York or any  other  court of the  State of New  York,
arising out of or relating to this  Agreement  or any  transaction  or agreement
contemplated  hereby,  may be  served  personally,  or by  first  class  mail or
overnight courier (with the same effect as though served  personally)  addressed
to the party being served at the address set forth in the Agreement  between the
Company and LTCO.

      Nothing  in these  provisions  shall  affect  any  party's  right to serve
process in any manner permitted by law or limit its rights to bring a proceeding
in the competent  courts of any  jurisdiction or  jurisdictions or to enforce in
any  lawful  manner  a  judgment  obtained  in one  jurisdiction  in  any  other
jurisdiction.

      This Agreement  shall be governed by and construed in accordance  with the
laws of the State of New York, without regard to conflicts of law principles.

                                       10
<PAGE>

                                                                       EXHIBIT D

THIS  WARRANT  AND THE SHARES OF COMMON  STOCK  ISSUABLE  UPON  EXERCISE OF THIS
WARRANT HAVE NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE OFFERED, SOLD OR OTHERWISE  TRANSFERRED,  PLEDGED OR HYPOTHECATED
OR  EXERCISED  UNLESS AND UNTIL SUCH  WARRANT  AND/OR  SHARES OF COMMON STOCK IS
REGISTERED  UNDER SUCH ACT OR AN OPINION OF COUNSEL  SATISFACTORY TO THE COMPANY
IS OBTAINED TO THE EFFECT THAT SUCH  REGISTRATION IS NOT REQUIRED.  THIS WARRANT
AND THE SHARES OF COMMON  STOCK  ISSUABLE  UPON  EXERCISE  OF THIS  WARRANT  ARE
SUBJECT TO THE  RESTRICTIONS  ON TRANSFER SET FORTH IN SECTIONS 4 AND 10 OF THIS
WARRANT.

Warrant No. 1                                 Number of Shares:_______________
                                              (subject to adjustment)
Date of Issuance:____________, 2000

                                    [ISSUER]

                         Common Stock Purchase Warrant

                           (Void after [three years])

[Issuer], a _________________  corporation (the "Company"),  for value received,
hereby certifies that Ladenburg  Thalmann & Co. Inc., or its registered  assigns
(the "Registered Holder"), is entitled,  subject to the terms and conditions set
forth below,  to purchase from the Company,  at any time or from time to time on
or after  the  date of  issuance  and on or  before  5:00  p.m.  (Eastern  time)
on________ 200_,  ______________________ shares of Common Stock, of the Company,
at a purchase  price of  $___________  per share.  The shares  purchasable  upon
exercise of this  Warrant,  and the purchase  price per share,  each as adjusted
from time to time pursuant to the  provisions of this Warrant,  are  hereinafter
referred to as the "Warrant Shares" and the "Purchase Price," respectively.

1.    Exercise.

      (a) This Warrant may be exercised by the Registered Holder, in whole or in
part, by  surrendering  this Warrant,  with the purchase form appended hereto as
Exhibit I duly executed by the Registered Holder or by the Registered

                                       11
<PAGE>

Holder's duly authorized attorney, at the principal office of the Company, or at
such other office or agency as the Company may designate, accompanied by payment
in full, in lawful money of the United States,  of the Purchase Price payable in
respect of the number of Warrant Shares purchased upon such exercise.

      (b) The Registered Holder may, at its option,  elect to pay some or all of
the Purchase  Price payable upon an exercise of this Warrant by canceling all or
a portion of this  Warrant.  If the  Registered  Holder  wishes to exercise this
Warrant by this method, the number of Warrant Shares  purchaseable  (which shall
in no event exceed the total  number of Warrant  Shares  purchasable  under this
Warrant as set forth  above),  subject  to  adjustment  under  Section 2 of this
Warrant) shall be determined as follows:

          X=Y[(A-B)/A]; where

X= the number of Warrant Shares to be issued to the Holder.

Y= the  number of Warrant  Shares  with  respect to which this  Warrant is being
exercised.

A= the Fair Market Value of one share of Common Stock.
B= the Purchase Price of
one share of Common Stock.

      The Fair Market  Value per share of Common  Stock shall be  determined  as
follows:

            (i) If the Common Stock is listed on a national securities exchange,
      the Nasdaq National Market or another nationally recognized trading system
      (including, without limitation, the OTC Bulletin Board and, if the average
      daily  trading  volume for the preceding 10 days has been at least 100,000
      shares,  the Pink Sheets) as of the Exercise  Date,  the Fair Market Value
      per share of Common  Stock  shall be deemed to be the  average of the high
      and low  reported  sale  prices per share of Common  Stock  thereon on the
      trading day  immediately  preceding the Exercise Date (provided that if no
      such price is  reported on such day,  the Fair  Market  Value per share of
      Common Stock shall be determined pursuant to clause (ii)).

            (ii) If the  Common  Stock is not  listed on a  national  securities
      exchange,  the Nasdaq  National  Market or another  nationally  recognized
      trading system as of the Exercise Date, the Fair Market Value per share of
      Common Stock shall be deemed to be the amount most recently  determined by
      the Board of Directors to represent the fair market value per share of the
      Common Stock (including without limitation a determination for purposes of
      granting  Common Stock  options or issuing  Common Stock under an employee
      benefit plan of the Company);  and, upon request of the Registered Holder,
      the Board of Directors (or a representative thereof) shall promptly notify
      the Registered  Holder of the Fair Market Value per share of Common Stock.
      Notwithstanding the

                                       12
<PAGE>

      foregoing,  if the Board of  Directors  has not made such a  determination
      within the  three-month  period prior to the Exercise  Date,  then (A) the
      Board of Directors shall make a determination of the Fair Market Value per
      share of the Common  Stock  within 15 days of a request by the  Registered
      Holder  that it do so, and (B) the  exercise of this  Warrant  pursuant to
      this subsection 1(b) shall be delayed until such determination is made.

      (c) Each  exercise of this Warrant  shall be deemed to have been  effected
immediately  prior to the close of  business  on the day on which  this  Warrant
shall have been  surrendered to the Company as provided in subsection 1(a) above
accompanied by payment in full of the Purchase Price (the  "Exercise  Date):  At
such time,  the person or  persons in whose name or names any  certificates  for
Warrant  Shares shall be issuable  upon such  exercise as provided in subsection
1(d) below shall be deemed to have become the holder or holders of record of the
Warrant Shares represented by such certificates.

      (d) As soon as  practicable  after the exercise of this Warrant in full or
in part, and in any event within 5 business days thereafter, the Company, at its
expense,  will  cause to be  issued  in the  name  of,  and  delivered  to,  the
Registered  Holder,  or as such  Holder  (upon  payment  by such  Holder  of any
applicable transfer taxes) may direct:

            (i) a  certificate  or  certificates  for the number of full Warrant
      Shares to which the Registered Holder shall be entitled upon such exercise
      plus, in lieu of any fractional share to which the Registered Holder would
      otherwise be entitled,  cash in an amount determined pursuant to Section 3
      hereof; and

            (ii)  in case  such  exercise  is in part  only,  a new  warrant  or
      warrants  (dated the date hereof) of like tenor,  calling in the aggregate
      on the face or faces thereof for the number of remaining Warrant Shares.

      2. Adjustments.

      (a) Adjustment for Stock Splits and Combinations.  If the Company shall at
any time or from time to time  after the date on which  this  Warrant  was first
issued (the  "Original  Issue Date")  effect a  subdivision  of the  outstanding
Common  Stock,  the  Purchase  Price  then in  effect  immediately  before  that
subdivision shall be proportionately decreased. If the Company shall at any time
or from time to time after the  Original  Issue  Date  combine  the  outstanding
shares of Common Stock, the Purchase Price then in effect immediately before the
combination  shall be  proportionately  increased.  Any  adjustment  under  this
paragraph  shall  become  effective  at the  close of  business  on the date the
subdivision or combination becomes effective

      (b) Adjustment for Certain Dividends and  Distributions.  In the event the
Company at any time,  or from time to time after the  Original  Issue Date shall
make or issue, or fix a record date for the  determination  of holders of Common
Stock  entitled  to  receive,  a  dividend  or  other  distribution  payable  in
additional  shares of Common  Stock,  then and in each such  event the  Purchase
Price then

                                       13
<PAGE>

in effect  immediately  before such event shall be  decreased  as of the time of
such  issuance or, in the event such a record date shall have been fixed,  as of
the close of business on such record date,  by  multiplying  the Purchase  Price
then in effect by a fraction:

      (1)   the numerator of which shall be the total number of shares of Common
            Stock issued and outstanding  immediately  prior to the time of such
            issuance or the close of business on such record date, and

      (2)   the  denominator  of which  shall be the  total  number of shares of
            Common Stock issued and outstanding immediately prior to the time of
            such  issuance or the close of business on such record date plus the
            number of  shares  of  Common  Stock  issuable  in  payment  of such
            dividend or distribution;

provided,  however,  if such record date shall have been fixed and such dividend
is not fully  paid or if such  distribution  is not fully made on the date fixed
therefor,  the Purchase Price shall be recomputed accordingly as of the close of
business on such record date and thereafter the Purchase Price shall be adjusted
pursuant to this paragraph as of the time of actual payment of such dividends or
distributions.

      (c)  Adjustment  in Number  of  Warrant  Shares.  When any  adjustment  is
required to be made in the Purchase price pursuant to subsections  2(a) or 2(b),
the number of Warrant Shares purchasable upon the exercise of this Warrant shall
be changed to the  number  determined  by  dividing  (i) an amount  equal to the
number of shares issuable upon the exercise of this Warrant immediately prior to
such adjustment, multiplied by the Purchase Price in effect immediately prior to
such  adjustment,  by (ii) the Purchase Price in effect  immediately  after such
adjustment.

      (d) Adjustments for Other  Dividends and  Distributions.  In the event the
Company  at any time or from time to time  after the  Original  Issue Date shall
make or issue, or fix a record date for the  determination  of holders of Common
Stock  entitled  to  receive,  a  dividend  or  other  distribution  payable  in
securities  of the Company  (other  than  shares of Common  Stock) or in cash or
other property (other than cash out of earnings or earned surplus, determined in
accordance with generally accepted accounting principles), then and in each such
event provision  shall be made so that the Registered  Holder shall receive upon
exercise  hereof,  in addition to the number of shares of Common Stock  issuable
hereunder,  the kind and amount of  securities  of the  Company  and/or cash and
other property  which the Registered  Holder would have been entitled to receive
had this Warrant been  exercised into Common Stock on the date of such event and
had the Registered  Holder  thereafter,  during the period from the date of such
event  to  and  including  the  Exercise  Date,  retained  any  such  securities
receivable,  giving application to all adjustments called for during such period
under this Section 2 with respect to the rights of the Registered Holder.

      (e) Adjustment for Mergers or  Reorganizations,  etc. If there shall occur
any reorganization, recapitalization, consolidation or merger involving the

                                       14
<PAGE>

Company in which the Common Stock is converted into or exchanged for securities,
cash or other property  (other than a transaction  covered by subsections  2(a),
2(b) or  2(d)),  then,  following  any  such  reorganization,  recapitalization,
consolidation  or merger,  the  Registered  Holder shall  receive upon  exercise
hereof  the kind and  amount of  securities,  cash or other  property  which the
Registered  Holder would have been entitled to receive if,  immediately prior to
such reorganization,  recapitalization,  consolidation or merger, the Registered
Holder had held the number of shares of Common  Stock  subject to this  Warrant.
Notwithstanding   the  foregoing   sentence,   if  (x)  there  shall  occur  any
reorganization,  recapitalization, consolidation or merger involving the Company
in which the Common Stock is converted into or exchanged for anything other than
solely equity securities, and (y) the common stock of the acquiring or surviving
company  is  publicly  traded,   then,  as  part  of  any  such  reorganization,
recapitalization,  consolidation or merger, (i) the Registered Holder shall have
the right  thereafter to receive upon the exercise  hereof such number of shares
of common  stock of the  acquiring  or  surviving  company as is  determined  by
multiplying  (A) the  number  of shares of Common  Stock  then  subject  to this
Warrant by (B) a fraction,  the  numerator of which is the Fair Market Value per
share  of  Common  Stock  as of the  effective  date  of  such  transaction,  as
determined pursuant to subsection 1(b), and the denominator of which is the fair
market value per share of common stock of the acquiring or surviving  company as
of the effective  date of such  transaction,  as determined in good faith by the
Board of Directors of the Company  (using the principles set forth in subsection
1(b) to the extent applicable),  and (ii) the exercise price per share of common
stock of the acquiring or surviving  company shall be the Purchase Price divided
by the fraction  referred to in clause (B) above. In any such case,  appropriate
adjustment  (as  determined  in good  faith  by the  Board of  Directors  of the
Company)  shall be made in the  application  of the  provisions set forth herein
with respect to the rights and interests thereafter of the Registered Holder, to
the end that the  provisions  set forth in this Section 2 (including  provisions
with respect to changes in and other  adjustments  of the Purchase  Price) shall
thereafter be  applicable,  as nearly as  reasonably  may be, in relation to any
securities,  cash or other property thereafter  deliverable upon the exercise of
this Warrant.

      (e) Certificate as to Adjustments.  Upon the occurrence of each adjustment
or readjustment of the Purchase Price pursuant to this Section 2, the Company at
its expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to the Registered Holder a certificate setting
forth  such  adjustment  or  readjustment  (including  the  kind and  amount  of
securities,  cash or other  property for which this Warrant shall be exercisable
and the  Purchase  Price)  and  showing  in detail  the facts  upon  which  such
adjustment or readjustment is based. The Company shall, upon the written request
at any time of the  Registered  Holder,  furnish or cause to be furnished to the
Registered  Holder a certificate  setting  forth (i) the Purchase  Price then in
effect and (ii) the number of shares of Common Stock and the amount,  if any, of
other  securities,  cash or  property  which  then  would be  received  upon the
exercise of this Warrant

                                       15
<PAGE>

3.  Fractional  Shares.  The Company  shall not be required upon the exercise of
this  Warrant  to issue any  fractional  shares,  but shall  make an  adjustment
therefor  in cash on the  basis of the Fair  Market  Value  per  share of Common
Stock, as determined pursuant to subsection 1(b) above.

4. Requirements for Transfer.

      (a) This Warrant and the Warrant  Shares shall not be sold or  transferred
unless either (i) they first shall have been registered under the Securities Act
of 1933,  as amended  (the  "Act"),  or (ii) the  Company  first shall have been
furnished  with an  opinion of legal  counsel,  reasonably  satisfactory  to the
Company,  to  the  effect  that  such  sale  or  transfer  is  exempt  from  the
registration requirements of the Act.

      (b) Notwithstanding  the foregoing,  no registration or opinion of counsel
shall  be  required  for  (i) a  transfer  by a  Registered  Holder  which  is a
corporation to a wholly owned  subsidiary of such  corporation,  a transfer by a
Registered  Holder which is a partnership to a partner of such  partnership or a
retired  partner of such  partnership  or to the  estate of any such  partner or
retired partner,  a transfer by a Registered Holder which is a limited liability
company to a member of such limited  liability company or a retired member or to
the estate of any such member or retired  member,  or a transfer by a Registered
Holder which is a member of the National  Association of Securities Dealers (the
"NASO") to an officer or employee of the Registered  Holder as permitted by NASD
rules, provided that the transferee in each case agrees in writing to be subject
to the terms of this Section 4, or (ii) a transfer made in accordance  with Rule
144 under the Act.

      (c) Each  certificate  representing  Warrant  Shares  shall  bear a legend
substantially in the following form:

      -The securities  represented by this  certificate have not been registered
      under the Securities Act of 1933, as amended, and may not be offered, sold
      or otherwise  transferred,  pledged or hypothecated  unless and until such
      securities  are  registered  under  such  Act  or an  opinion  of  counsel
      satisfactory   to  the  Company  is  obtained  to  the  effect  that  such
      registration is not required."

The foregoing  legend shall be removed from the  certificates  representing  any
Warrant  Shares,  at the  request  of the holder  thereof,  at such time as they
become  eligible  for  resale  pursuant  to Rule  144(k)  under the Act or if an
effective  registration statement is then in effect permitting the resale of the
Warrant Shares.

      (d) The Registered  Holder shall have "piggyback"  registration  rights to
have the Warrant  Shares  (but not the  Warrants)  registered  for resale on any
registration  statement  which  the  Company  files  for any  purpose  on a form
available for such registration, after the Original Issue Date Such registration
shall be subject to customary  obligations by the  Registered  Holder to provide
information to the Company and by the Company to indemnify the Registered Holder
against Securities Act liabilities.

                                       16
<PAGE>

5. No  Impairment.  The Company will not, by amendment of its charter or through
any  reorganization,  transfer of assets,  consolidation,  merger,  dissolution,
issue or sale of  securities  or any other  voluntary  action,  avoid or seek to
avoid the  observance or  performance  of any of the terms of this Warrant,  but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such action as may be necessary or  appropriate in order to
protect the rights of the holder of this Warrant against impairment.

6. Notices of Record Date, etc. In the event:

      (a) the Company shall take a record of the holders of its Common Stock (or
other stock or  securities  at the time  deliverable  upon the  exercise of this
Warrant) for the purpose of  entitling or enabling  them to receive any dividend
or other distribution,  or to receive any right to subscribe for or purchase any
shares of stock of any class or any other  securities,  or to receive  any other
right; or of any capital  reorganization of the Company, any reclassification of
the Common Stock of the Company, any consolidation or merger of the Company with
or into another  corporation  (other than a consolidation or merger in which the
Company is the surviving  entity and its Common Stock is not  converted  into or
exchanged  for any other  securities  or  property),  or any  transfer of all or
substantially all of the assets of the Company; or

      (b) of the voluntary or involuntary dissolution, liquidation or winding-up
of the Company,

then,  and in each such case, the Company will mail or cause to be mailed to the
Registered Holder a notice  specifying,  as the case may be, (i) the record date
for such dividend,  distribution or right,  and the amount and character of such
dividend,  distribution  or  right,  or (ii) the  effective  date on which  such
reorganization, reclassification,  consolidation, merger, transfer, dissolution,
liquidation or winding-up is to take place, and the time, if any is to be fixed,
as of which  the  holders  of record of  Common  Stock (or such  other  stock or
securities at the time  deliverable  upon the exercise of this Warrant) shall be
entitled  to  exchange  their  shares of Common  Stock (or such  other  stock or
securities)   for   securities   or  other   property   deliverable   upon  such
reorganization, reclassification,  consolidation, merger, transfer, dissolution,
liquidation or  winding-up.  Such notice shall be mailed at least ten days prior
to the record date or effective date for the event specified in such notice.

7.  Reservation  of  Stock.  The  Company  will at all  times  reserve  and keep
available,  solely for issuance and delivery  upon the exercise of this Warrant,
such number of Warrant Shares and other  securities,  cash and/or  property,  as
from time to time shall be issuable upon the exercise of this Warrant.

B, Exchange of Warrants.  Upon the surrender by the Registered Holder,  properly
endorsed,  to the Company at the  principal  office of the Company,  the Company
will,  subject to the  provisions  of Section 4 hereof,  issue and deliver to or
upon the order of such  Holder,  at the  Company's  expense,  a new  Warrant  or
Warrants  of  like  tenor,  in the  name  of  the  Registered  Holder  or as the
Registered  Holder  (upon  payment by the  Registered  Holder of any  applicable
transfer  taxes)  may  direct,  calling  in the  aggregate  on the face or faces
thereof

                                       17
<PAGE>

for the  number  of shares of Common  Stock (or other  securities,  cash  and/or
property) then issuable upon exercise of this Warrant.

9. Replacement of Warrants.  Upon receipt of evidence reasonably satisfactory to
the Company of the loss,  theft,  destruction  or mutilation of this Warrant and
(in the case of loss,  theft  or  destruction)  upon  delivery  of an  indemnity
agreement  (with  surety  if  reasonably   required)  in  an  amount  reasonably
satisfactory to the Company,  or (in the case of mutilation)  upon surrender and
cancellation  of this Warrant,  the Company will issue,  in lieu thereof,  a new
Warrant of like tenor.

10. Transfers, etc.

      (a) The Company will maintain a register  containing  the name and address
of the Registered  Holder of this Warrant.  The Registered Holder may change its
or his address as shown on the warrant register by written notice to the Company
requesting such change.

      (b) Subject to the  provisions  of Section 4 hereof,  this Warrant and all
rights hereunder are  transferable,  in whole or in part, upon surrender of this
Warrant with a properly  executed  assignment (in the form of Exhibit II hereto)
at the principal office of the Company.

      (c) Until any  transfer of this  Warrant is made in the warrant  register,
the Company may treat the Registered Holder as the absolute owner hereof for all
purposes;  provided, however, that if and when this Warrant is properly assigned
in blank,  the  Company  may (but  shall not be  obligated  to) treat the bearer
hereof as the absolute owner hereof for all purposes, notwithstanding any notice
to the contrary.

11.  Representations  of the Registered  Holder.  The Registered  Holder of this
Warrant represents and warrants to the Company as follows:

      (a)  Investment.  The Registered  Holder is acquiring this Warrant and the
Warrant Shares  issuable upon the exercise of this Warrant,  for its own account
for  investment  and not with a view to,  or for sale in  connection  with,  any
distribution  thereof, nor with any present intention of distributing or selling
the same, except as otherwise may be permitted under applicable securities laws.

      (b) Authority. The Registered Holder has full power and authority to enter
into and to perform this Warrant in accordance  with its terms.  The  Registered
Holder has not been organized  specifically  for the purpose of investing in the
Company.

      (c) Accredited  Investor The Registered  Holder is an Accredited  Investor
within the definition set forth in Rule 501(a)  promulgated under the Securities
Act.

12.  Mailing of Notices,  etc.  All notices  and other  communications  from the
Company to the  Registered  Holder shall be mailed by  first-class  certified or
registered mail, postage prepaid, to the address last furnished to the Company

                                       18
<PAGE>

in writing by the Registered Holder. All notices and other  communications  from
the Registered  Holder or in connection  herewith to the Company shall be mailed
by first-class  certified or registered mail, postage prepaid, to the Company at
its principal  office set forth below.  If the Company should at any time change
the location of its  principal  office to a place other than as set forth below,
it shall give prompt written notice to the Registered  Holder and thereafter all
references  in this  Warrant  to the  location  of its  principal  office at the
particular time shall be as so specified in such notice.

13. No Rights as Stockholder. Until the exercise of this Warrant, the Registered
Holder shall not have or exercise any rights by virtue  hereof as a  stockholder
of the  Company.  Notwithstanding  the  foregoing,  in the event (i) the Company
effects  a split  of the  Common  Stock by  means  of a stock  dividend  and the
Purchase  Price of and the number of Warrant  Shares are adjusted as of the date
of the  distribution of the dividend (rather than as of the record date for such
dividend),  and (ii) the Registered  Holder  exercises this Warrant  between the
record date and the  distribution  date for such stock dividend,  the Registered
Holder  shall be  entitled  to  receive,  on the  distribution  date,  the stock
dividend with respect to the shares of Common Stock acquired upon such exercise,
notwithstanding  the fact that such shares were not  outstanding as of the close
of business on the record date for such stock dividend.

14. Change or Waiver.  Any term of this Warrant may be changed or waived only by
an instrument in writing  signed by the party against which  enforcement  of the
change or waiver is sought.

15.  Section  Headings.  The  section  headings  in  this  Warrant  are  for the
convenience of the parties and in no way alter, modify, amend, limit or restrict
the contractual obligations of the parties.

16.  Governing Law. This Warrant will be governed by and construed in accordance
with  the  internal  laws of the  State of New York  (without  reference  to the
conflicts of law provisions thereof).

EXECUTED as of the Date of Issuance indicated above.

[ISSUER]

ATTEST:                                 By:
                                           ------------------------------
---------------------------
                                        Title:
                                              ---------------------------

                                       19
<PAGE>

EXHIBIT I

PURCHASE FORM

To:________________                                      Dated:_________________

The  undersigned,  pursuant to the provisions set forth in the attached  Warrant
(No. __), hereby irrevocably elects to purchase (check applicable box):

      0     _____ shares of the Common Stock covered by such Warrant; or

      0     the maximum number of shares of Common Stock covered by such Warrant
            pursuant to the cashless  exercise  procedure set forth in Section 1
            (b)

The  undersigned  herewith  makes  payment of the full  purchase  price for such
shares at the price per share provided for in such Warrant, which is______
Such payment takes the form of (check applicable box or boxes):

      0     $______ in lawful money of the United States; and/or

      0     the  cancellation  of such  portion  of the  attached  Warrant as is
            exercisable  for a total  of  ______  Warrant  Shares  (using a Fair
            Market Value of $_____ per share for purposes of this  calculation);
            and/or

      0     the  cancellation  of such number of Warrant Shares as is necessary,
            in  accordance  with the  formula  set  forth in  Section  1(b),  to
            exercise this Warrant with respect to the maximum  number of Warrant
            Shares  purchasable  pursuant to the cashless exercise procedure set
            forth in Section 1(b).

Signature:
          -------------------------

Address:
        ---------------------------

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

                                       20
<PAGE>

EXHIBIT II

ASSIGNMENT FORM

FOR VALUE RECEIVED,  ________________________________  hereby sells, assigns and
transfers all of the rights of the undersigned under the attached Warrant (No. )
with respect to the number of shares of Common Stock  covered  thereby set forth
below, unto:
Name of Assignee                Address                       No. of Shares

Dated:
      ----------------------

Signature:
          ---------------------

Signature Guaranteed:
                     ----------------
By:
   -------------------------

The signature should be guaranteed by an eligible guarantor  institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved  signature  guarantee  medallion  program)  pursuant to Rule l7Ad-15
under the Securities Exchange Act of 1934.

                                       21
<PAGE>

                                                                       EXHIBIT E

                   Advanced Communications Technologies. Inc.
                                Ticker: ADVC
                                Exchange: OTC BB

                           Proposed Bridge Term Sheet

         Up to $1,000,000 Offering of 9% Convertible Bridge and Warrants

Securities Offered:         9% Convertible Bridge Loan and Warrants.

Use of Proceeds:            [--------------]

Maturity Date:              18 Months from the Closing Date.

Interest:                   9%, payable  quarterly or in full upon redemption or
                            conversion.  The Interest will be paid in cash.  The
                            Interest  shall be reduced  upon the Issuer  meeting
                            certain Milestones.

Milestones:                 (a) The Interest  shall be reduced by two percentage
                            points if the Company files a registration statement
                            for  the  shares  underlying  the  Bridge  and  such
                            registration  statement is declared effective within
                            100 days from the closing Date.

                            (b) The Interest  shall be reduced by one percentage
                            point if the  Convertible  Bridge is redeemed within
                            120 days from the  closing  Date.

Non - Repayment Conversion Schedule:

                            In the event  that the  Company  fails to redeem the
                            Bridge, the Bridge may be converted at the option of
                            the  investor  at the  lessor of (i) 115% of the low
                            three-day average closing bid price of the Company's
                            Common Stock for 22  consecutive  trading days prior
                            to  closing  or  (ii)  at 80% of the  low  three-day
                            average  closing bid price of the  Company's  Common
                            Stock for the 22  consecutive  trading days prior to
                            the trading day on which the notice of conversion is
                            transmitted by the investor.

Warrants:

Term:                       3-year life.

Strike Price of Warrants:   115%  of the  closing  bid  price  of the  Company's
                            Common   Stock  on  the  trading   day   immediately
                            preceding the Closing Date.

Number of Warrants:         If the Bridge is redeemed by Day 120, there shall be
                            33% warrant  coverage  (payable at closing);  if the
                            Bridge is not  redeemed  by Day 120,  there shall be
                            50% warrant  coverage (the  additional  17% shall be
                            delivered by Day 130)

Registration Rights:        The  Company  will  agree  to  file  a  registration
                            statement  under  the  Securities  Act of 1933  with
                            respect to the shares of Common Stock underlying the
                            Convertible  Preferred Stock and the Warrants within
                            30 days of  Closing.  The  Company  will  cause  the
                            registration  statement  to become  effective on the
                            date (the "SEC Effective Date") which will be within
                            the  earlier of 120 days of  Closing or within  five
                            days of SEC  clearance  to request  acceleration  of
                            effectiveness. The Company will

<PAGE>

                            maintain  the  effectiveness  of  such  registration
                            statement for a minimum of four years.

Optional Redemption:        The Company  will have the option of  redeeming  the
                            Convertible  Bridge  either  partially  or  fully by
                            paying cash to the investors as follows:

                            1.  From the  Closing  Date to Day 90 at 105% of the
                            aggregate  face  amount  of the  Convertible  Bridge
                            outstanding plus any accrued but unpaid Interest:

                            2 From  Day 91 to Day 180 at  110% of the  aggregate
                            face amount of the  Convertible  Bridge  outstanding
                            plus any accrued but unpaid Interest.

                            3.  From  Day  181  and  thereafter  at  115% of the
                            aggregate  face  amount  of the  Convertible  Bridge
                            outstanding plus any accrued but unpaid Interest.

Redemption Procedures:      The company  shall not send a  Redemption  Notice to
                            any of the  Investors  unless  it has good and clear
                            funds for a minimum  of the  amount  it  intends  to
                            redeem in an escrow account  controlled by an escrow
                            agent, on behalf of the Investors, The date on which
                            the Investors  are notified of the Company's  intent
                            to redeem the  Convertible  Bridge is defined as the
                            "Redemption Notice Date". The company will then have
                            5 trading days in which to satisify the  redemption.
                            If the  Company  fails  to  satisfy  the  redemption
                            notice  by  the  6th  trading  day   following   the
                            Redemption  Notice  Date,  the  redemption  will  be
                            declared null and void and the Company will lose its
                            redemption rights.

<PAGE>

                  [Letterhead of LADENBURG THALMANN & CO. INC.]

                                                                   June 27, 2000

Roger May
Chairman
Advanced Communications Technologies, Inc.
19200 Von Karman Avenue, Suite 500

Irvine, CA 92812

Dear Mr. May:

The purpose of this letter agreement (the "Agreement") is to set forth the terms
and conditions  pursuant to which Ladenburg  Thalmann & Co. Inc.  ("LTCO") shall
serve as exclusive placement agent in connection with the proposed offering (the
"Offering") of equity securities (the  "Securities") of Advanced  Communications
Technologies,  Inc. (the "Company")  pursuant to a registration  statement.  The
gross  proceeds from the Offering will be up to  $12,000,000.  All references to
dollars shall be to U.S. dollars.  The terms of such Offering and the Securities
shall be substantially in the form set forth in Exhibit E hereto,  which exhibit
is incorporated by reference herein.

      Upon the  terms and  subject  to the  conditions  of this  Agreement,  the
parties hereto agree as follows:

      1. Appointment.  (a) Subject to the terms and conditions of this Agreement
hereinafter  set forth,  the Company hereby retains LTCO, and LTCO hereby agrees
to act as the  Company's  exclusive  placement  agent and  financial  advisor in
connection  with the  Offering,  effective  as of the date  hereof.  The Company
expressly  acknowledges  and agrees that LTCO's  obligations  hereunder are on a
reasonable best efforts basis only and that the execution of this Agreement does
not  constitute a commitment  by LTCO to purchase  the  Securities  and does not
ensure the successful  placement of the Securities or any portion thereof or the
success of LTCO with  respect to securing  any other  financing on behalf of the
Company.

<PAGE>

      (b) Except as set forth below in this Section 1, during the  effectiveness
of this Agreement, neither the Company nor any of its subsidiaries or affiliates
shall, directly or indirectly, through any officer, director, employee, agent or
otherwise (including,  without limitation,  through any placement agent, broker,
investment banker,  attorney or accountant retained by the Company or any of its
subsidiaries  or affiliates),  solicit,  initiate or encourage the submission of
any  proposal  or offer (an  "Investment  Proposal")  from any  person or entity
(including  any of such  person's or entity's  officers,  directors,  employees,
agents and other  representatives)  relating to any issuance of the Company's or
any of its subsidiaries'  equity securities  (including debt securities with any
equity feature) or relating to any other transaction  having a similar effect or
result  on  the  Company's  or  any  of  its  subsidiaries'  capitalization,  or
participate in any  discussions  or  negotiations  regarding,  or furnish to any
other person or entity any information  with respect to, or otherwise  cooperate
in any way with, or assist or participate in, facilitate or encourage any effort
or  attempt  by any  other  person  or  entity  to do or  seek  to do any of the
foregoing.  The Company shall  immediately  cease and cause to be terminated any
and all contacts,  discussions and negotiations with third parties regarding any
Investment  Proposal.  The  Company  shall  promptly  notify  LTCO  if any  such
Investment  Proposal,  or any inquiry or contact  with any person or entity with
respect  thereto,  is  made.  Notwithstanding  the  foregoing,  nothing  in this
Agreement  shall  preclude the Company  from (i)  accepting up to $1 ,000,000 of
equity financing arranged through National Investment Resources,  Inc., (ii) any
sale of securities  through Gary Bryant for the purpose of funding the Company's
Latin  American  expansion,  (iii) any sale of  securities  by the Company's ACT
(Australia) Pty Ltd.  subsidiary,  or (iv) any sale of securities owned by Roger
May or his affiliates.  The Company shall not provide or release any information
with respect to this  Agreement or the Offering,  including  any press  release,
except as required by law.

      2. Fees and  Compensation.  In consideration  of the services  rendered by
LTCO in  connection  with  the  Offering,  the  Company  agrees  to pay LTCO the
following fees and other compensation:

      (a)   1)    6% warrant  coverage as a  commitment  fee payable on the date
                  that the Company and the investor shall execute the definitive
                  agreements with respect to the Offering,  which warrants shall
                  be in the form of Exhibit D; and

            2)    a cash fee  payable  upon  the  initial  and  each  subsequent
                  closing equal to 6% of the amount drawn down by the Company at
                  each such closing; and

      (b)   $35,000  non-accountable expense allowance (which shall be waived if
            such fee has  already  been  paid in  connection  with  the  private
            placement  of  up  to  $1,000,000   of  the  Company's   convertible
            securities by LTCO pursuant to that other engagement

                                       2
<PAGE>

            agreement of even date herewith in connection with such placement).

      (c)   Upon the exercise of investor warrants, if any, by a holder thereof,
            the Company shall promptly  notify LTCO of such exercise,  and shall
            pay to  LTCO  an  amount  equal  to 6% of the  gross  dollar  amount
            received  by the  Company in  connection  with such  exercise of the
            warrants.

      (d)   All  amounts  payable  hereunder  shall  be paid  to LTCO  out of an
            attorney  escrow  account  at the  closing  or by such  other  means
            acceptable to LTCO

      (e)   Should LTCO provide a qualified institutional  investor(s) within 60
            days after the date hereof, reasonably acceptable to the Company and
            such   investor(s)   is  willing  to  invest  in  the   Offering  on
            substantially  the same terms as outlined  in the term sheet  marked
            Exhibit  E,  and the  Company  declines  to  enter  into  definitive
            agreements  with such  investor(s)  to  consummate  the Offering for
            reasons other than a breach of this  Agreement by LTCO,  the Company
            will pay $200,000 to LTCO as a "break-up" fee (which shall be waived
            if such fee has  already  been paid in  connection  with the private
            placement  of  up  to  $1,000,000   of  the  Company's   convertible
            securities  by LTCO pursuant to that other  engagement  agreement of
            even date herewith in connection with such placement).

      3. Terms of Retention. (a) Unless extended or terminated in writing by the
parties hereto by written notice to the other in accordance  with the provisions
hereof, this Agreement shall remain in effect until the Termination Date of July
2,  2001.  If LTCO does not locate an  investor  willing  to  contract  with the
Company on the terms set forth in Exhibit E by September  30, 2000,  the Company
may terminate this Agreement by written notice to LTCO.

      (b) Notwithstanding anything herein to the contrary, the obligation to pay
the Fees and Compensation  and Expenses  described in Section 2, if any, and the
provisions  of  paragraphs  2, 5, and 8 of  Exhibit  A and all of  Exhibit B and
Exhibit C attached  hereto,  each of which  exhibits is  incorporated  herein by
reference,  shall survive any  termination  or expiration of the Agreement It is
expressly understood and agreed by the parties hereto that any private financing
of equity or debt or other  capital  raising  activity of the Company  within 24
months of the termination or expiration of this Agreement, with any investors to
whom the Company was  introduced by LTCO or who was contacted by LTCO while this
Agreement was in effect and disclosed to the Company in writing, shall result in
such fees and  compensation  being due and  payable by the Company to LTCO under
the same terms of Section 2 above.  Upon completion of the Offering,  any future
renegotiation,  restructuring,  revision or other amendment of the terms of such
Offering by and between the Company and any of the  investors  in such  Offering
which  results  in the  receipt  of any net new funds by the  Company  from such
investor(s) shall be deemed to be a new financing and

                                       3
<PAGE>

shall result in additional fees and compensation becoming due and payable by the
Company to LTCO under the terms of Section 2 above.

      4. Right of First  Refusal.  Upon  completion of the Offering,  LTCO shall
have an  irrevocable  right of first refusal for a period of one year to provide
all financing  arrangements  for the Company  (other than  conventional  banking
arrangements,  borrowing and commercial  debt  financing and discrete  unrelated
transactions of not more than $250,000 where no investment  banking fee is being
paid).  LTCO shall  exercise such right in writing within five (5) business days
of receipt of a written  term sheet  describing  such  proposed  transaction  in
reasonable detail.

      5. Information. The Company recognizes and confirms that in completing its
engagement  hereunder,  LTCO  will be  using  and  relying  solely  on  publicly
available  information and on data, material and other information  furnished to
LTCO by the Company or the Company's affiliates and agents. It is understood and
agreed  that in  performing  under  this  engagement,  LTCO  will  rely upon the
accuracy  and  completeness  of,  and is not  assuming  any  responsibility  for
independent  verification of, such publicly available  information and the other
information so furnished.  Notwithstanding the foregoing,  it is understood that
LTCO will conduct a due diligence  investigation  of the Company and the Company
will cooperate in all respects with such  investigation as a condition of LTCO's
obligations hereunder.

      6.  Registration.  The Company  shall  prepare and,  following  review and
approval by LTCO's  counsel,  file with the SEC a registration  statement.  From
time to time in connection with any particular  sale of Securities,  the Company
will, at its own expense,  obtain any registration or qualification  required to
sell any Securities under the Blue Sky laws of any applicable jurisdictions,  as
reasonably  requested by LTCO or the  investor(s)  and shall pay any filing fees
required by NASD  Regulation,  Inc. in connection with their review of the terms
of this Agreement, if so required.

      7.  No  General  Solicitation.  The  Securities  will be  offered  only by
approaching   prospective   purchasers  on  an  individual   basis.  No  general
solicitation or general  advertising in any form will be used in connection with
the offering of the  Securities.  From and after the execution of this Agreement
until the completion of the Offering,  the Company shall  pre-clear any proposed
press release which mentions this Agreement or the Offering with LTCO.

      8. Closing.  The closing of the sale of the Securities shall be subject to
customary closing conditions,  including the provision at closing by the Company
to LTCO and the  investor(s) of customary  Officers'  certificates,  opinions of
counsel and "cold comfort" letters from the Company's auditors.

      9.  Miscellaneous.  This Agreement  together with the attached  Exhibits A
through E constitutes the entire understanding and agreement

                                       4
<PAGE>

between  the  parties  with  respect  to its  subject  matter  and  there are no
agreements or understandings with respect to the subject matter hereof which are
not contained in this Agreement.  This Agreement may be modified only in writing
signed by the party to be charged hereunder.

      If the foregoing  correctly sets forth our agreement,  please confirm this
by signing and returning to us the duplicate copy of this letter.

      We appreciate this opportunity to be of service and are looking forward to
working with you on this matter.

                                                   Very truly yours,

                                                   LADENBURG THALMANN & CO. INC.

                                                   By: _________________________
                                                       Name:
                                                       Title:

Agreed to and accepted
as of the date first written above:

ADVANCED COMMUNICATIONS TECHNOLOGIES INC.

By: /s/ Roger May
    -----------------
    Name:  Roger May
    Title: CEO

                                       5
<PAGE>

                                                                       EXHIBIT A
                                                                       ---------

                          STANDARD TERMS AND CONDITIONS

1.    The Company  shall  promptly  provide LTCO with all  relevant  information
      about the Company (to the extent  available  to the Company in the case of
      parties  other than the  Company)  that shall be  reasonably  requested or
      required by LTCO, which  information shall be complete and accurate in all
      material respects at the time furnished.

2.    LTCO  shall  keep  all  information  obtained  from the  Company  strictly
      confidential   except:   (a)  information  which  is  otherwise   publicly
      available,  or previously  known to, or obtained by LTCO  independently of
      the Company and without breach of LTCO's  agreement with the Company:  (b)
      LTCO may disclose such information to its employees and attorneys,  and to
      its other advisors and financial  sources on a need to know basis only and
      shall use best  efforts  to  ensure  that all such  employees,  attorneys,
      advisors  and  financial  sources  will  keep  such  information  strictly
      confidential;  and (c)  pursuant  to any  order  of a court  of  competent
      jurisdiction or other  governmental body (including any subpena) or as may
      otherwise be required by law.

3.    The  Company  recognizes  that in order for LTCO to perform  properly  its
      obligations  in a  professional  manner,  it is  necessary  that  LTCO  be
      informed of and, to the extent  practicable,  participate  in meetings and
      discussions  between the Company and any third party,  including,  without
      limitation,  any prospective purchaser of the securities,  relating to the
      matters covered by the terms of LTCO's engagement.

4.    The Company agrees that any report or opinion, oral or written,  delivered
      to it by LTCO is prepared solely for its confidential use and shall not be
      reproduced,  summarized, or referred to in any public document or given or
      otherwise  divulged  to any other  person  without  LTCO's  prior  written
      consent, except as may be required by applicable law or regulation.

5.    No fee payable to LTCO pursuant to any other agreement with the Company or
      payable by the Company to any agent,  lender or investor  shall  reduce or
      otherwise affect any fee payable by the Company to LTCO hereunder. IF LTCO
      engages  any other  broker-dealer  or other  finder to assist  LTCO in the
      placement of the Offering,  then the fees of such other  broker-dealer  or
      finder shall be paid by LTCO.

6.    The Company represents and warrants that: (a) it has full right, power and
      authority  to  enter  into  this  Agreement  and  to  perform  all  of its
      obligations  hereunder:  (b) this  Agreement has been duly  authorized and
      executed by and  constitutes a valid and binding  agreement of the Company
      enforceable  in  accordance  with its  terms;  and (c) the  execution  and
      delivery  of this  Agreement  and  the  consummation  of the  transactions
      contemplated  hereby do not conflict with or result in a breach of (i) the
      Company's certificate of

                                       6
<PAGE>

                                                             EXHIBIT A CONTINUED
                                                             -------------------

      incorporation  or by-laws or (ii) any  agreement to which the Company is a
      party or by which any of its property or assets is bound.

7.    Nothing  contained in this Agreement  shall be construed to place LTCO and
      the Company in the  relationship of partners or joint  venturers.  Neither
      LTCO  nor the  Company  shall  represent  itself  as the  agent  or  legal
      representative  of the other for any purpose  whatsoever  nor shall either
      have the power to  obligate  or bind the other in any  manner  whatsoever.
      LTCO,  in  performing  its  services  hereunder,  shall at all times be an
      independent contractor.

8.    This Agreement has been and is made solely for the benefit of LTCO and the
      Company and each of the persons, agents,  employees,  officers,  directors
      and  controlling  persons  referred  to in Exhibit B and their  respective
      heirs, executors,  personal  representatives,  successors and assigns, and
      nothing  contained in this  Agreement  shall  confer any rights upon,  nor
      shall this  Agreement be construed to create any rights in, any person who
      is not party to such Agreement, other than as set forth in this paragraph.

9.    The rights and obligations of either party under this Agreement may not be
      assigned  without the prior written  consent of the other party hereto and
      any other purported assignment shall be null and void.

10.   All  communications  hereunder,  except as may be  otherwise  specifically
      provided herein,  shall be in writing and shall be mailed, hand delivered,
      sent by a recognized overnight courier service such as Federal Express, or
      sent via  facsimile  and  confirmed by letter,  to the party to whom it is
      addressed at the  following  addresses or such other address as such party
      may advise the other in writing:

                                      To the Company:
                                      Roger May
                                      Advanced Communications Technologies, Inc.
                                      19200 Von Karman Avenue, Suite 500
                                      Irvine, CA 92612
                                      Telephone: (949) 622-5566
                                      Facsimile: (949) 477-8022

                                      To LTCO:
                                      Ladenburg Thalmann & Co. Inc.
                                      690 Madison Avenue
                                      New York, NY 10022
                                      Attention:  Robert J. Kropp
                                      Telephone:  (212) 409-2000

                                       7
<PAGE>

                                      Facsimile:  (212) 409-2169

All notices  hereunder  shall be effective upon receipt by the party to which it
is addressed.

                                       8
<PAGE>

                                                                       EXHIBIT B

                                 INDEMNIFICATION

      The Company agrees that it shall  indemnify and hold  harmless,  LTCO, its
stockholders, directors, officers, employees, agents, affiliates and controlling
persons within the meaning of Section 20 of the Securities  Exchange Act of 1934
and Section 15 of the  Securities  Act of 1933,  each as amended (any and all of
whom are referred to as an  "Indemnified  Party"),  from and against any and all
losses, claims,  damages,  liabilities,  or expenses, and all actions in respect
thereof  (including,  but not limited to, all legal or other expenses reasonably
incurred  by  an  Indemnified  Party  in  connection  with  the   investigation,
preparation,  defense or settlement of any claim, action or proceeding,  whether
or not  resulting  in any  liability),  incurred by an  Indemnified  Party:  (a)
arising out of, or in connection  with, any actions taken or omitted to be taken
by the Company, its affiliates,  employees or agents, or any untrue statement or
alleged untrue statement of a material fact contained in any of the financial or
other  information   contained  in  the  registration   statement  and/or  final
prospectus  furnished  to LTCO by or on behalf of the Company or the omission or
alleged  omission of a 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;  or (b) with  respect to,  caused by, or  otherwise
arising  out  of  any  transaction  contemplated  by  the  Agreement  or  LTCO's
performing the services contemplated hereunder;  provided,  however, the Company
will not be  liable  under  clause  (b)  hereof to the  extent,  and only to the
extent, that any loss, claim, damage, liability or expense is finally judicially
determined to have resulted  primarily from LTCO's gross negligence or bad faith
in performing such services.

      If the indemnification  provided for herein is conclusively determined (by
an  entry  of  final  judgment  by a court  of  competent  jurisdiction  and the
expiration  of the time or denial of the right to appeal) to be  unavailable  or
insufficient  to hold any  Indemnified  Party harmless in respect to any losses,
claims,  damages,  liabilities or expenses referred to herein,  then the Company
shall  contribute  to the amounts paid or payable by such  Indemnified  Party in
such proportion as is appropriate and equitable under all  circumstances  taking
into account the relative  benefits  received by the Company on the one hand and
LTCO on the  other,  from the  transaction  or  proposed  transaction  under the
Agreement or, if allocation on that basis is not permitted under applicable law,
in such  proportion as is appropriate to reflect not only the relative  benefits
received  by the  Company  on the one hand and LTCO on the  other,  but also the
relative fault of the Company and LTCO; provided, however, in no event shall the
aggregate  contribution of LTCO and/or any Indemnified Party be in excess of the
net  compensation  actually  received  by LTCO  and/or  such  Indemnified  Party
pursuant to this Agreement

      The Company  shall not settle or compromise or consent to the entry of any
judgment in or otherwise  seek to terminate  any pending or  threatened  action,
claim,  suit or proceeding in which any Indemnified Party is or could be a party
and as to which  indemnification  or contribution could have been sought by such
Indemnified

                                       9
<PAGE>

Party  hereunder  (whether or not such  Indemnified  Party is a party  thereto),
unless such consent or termination includes an express  unconditional release of
such Indemnified  Party,  reasonably  satisfactory in form and substance to such
Indemnified  Party, from all losses,  claims,  damages,  liabilities or expenses
arising out of such action, claim, suit or proceeding.

      In the event any  Indemnified  Party shall incur any  expenses  covered by
this  Exhibit B, the Company  shall  reimburse  the  Indemnified  Party for such
covered  expenses  within  ten (10)  business  days of the  Indemnified  Party's
delivery to the Company of an invoice  therefor,  with receipts  attached.  Such
obligation  of the  Company  to so  advance  funds may be  conditioned  upon the
Company's  receipt of a written  undertaking from the Indemnified Party to repay
such  amounts  within  ten (10)  business  days  after a  final,  non-appealable
judicial   determination  that  such  Indemnified  Party  was  not  entitled  to
indemnification hereunder.

      The foregoing  indemnification and contribution provisions are not in lieu
of,  but in  addition  to, any rights  which any  lndemnified  Party may have at
common law  hereunder  or  otherwise,  and shall remain in full force and effect
following  the  expiration  or  termination  of LTCO's  engagement  and shall be
binding on any successors or assigns of the Company and successors or assigns to
all or substantially all of the Company's business or assets.

                                       10
<PAGE>

                                                                       EXHIBIT C

                                  JURISDICTION

      The  Company  and  LTCO  each  hereby  irrevocably:  (a)  submits  to  the
jurisdiction  of any court of the State of New York or any federal court sitting
in the  State  of New  York  for the  purposes  of any  suit,  action  or  other
proceeding  arising out of the  Agreement  between the Company and LTCO which is
brought by or against the Company or LTCO; (b) agrees that all claims in respect
of any suit, action or proceeding may be heard and determined in any such court;
and (c) to the extent that the Company or LTCO has  acquired,  or hereafter  may
acquire,  any  immunity  from  jurisdiction  of any such court or from any legal
process therein,  the Company and LTCO each hereby waives, to the fullest extent
permitted  by  law,  such  immunity.  The  prevailing  party  in any  litigation
respecting this Agreement shall be entitled to an award of its costs,  including
reasonable attorneys' fees, in connection therewith.

      The  Company  and LTCO each  waives,  and agrees not to assert in any such
suit,  action or proceeding,  in each case, to the fullest  extent  permitted by
applicable  law,  any  claim  that  (a)  it is  not  personally  subject  to the
jurisdiction of any such court; (b) it is immune from any legal process (whether
through service or notice,  attachment prior to judgment,  attachment in the aid
of execution,  execution or otherwise)  with respect to it or its property;  (c)
any such suit, action or proceeding is brought in an inconvenient forum; (d) the
venue of any such suit,  action or proceeding is improper, or (e) this Agreement
may not be enforced in or by any such court.

      Any process  against the Company or LTCO in, or in  connection  with,  any
suit,  action or proceeding  filed in the United States  District  Court for the
Southern District  of New  York or any  other  court of the  State of New  York,
arising out of or relating to this  Agreement  or any  transaction  or agreement
contemplated  hereby,  may be  served  personally,  or by  first  class  mail or
overnight courier (with the same effect as though served  personally)  addressed
to the party being served at the address set forth in the Agreement  between the
Company and LTCO.

      Nothing  in these  provisions  shall  affect  any  party's  right to serve
process in any manner permitted by law or limit its rights to bring a proceeding
in the competent  courts of any  jurisdiction or  jurisdictions or to enforce in
any  lawful  manner  a  judgment  obtained  in one  jurisdiction  in  any  other
jurisdiction.

      This Agreement  shall be governed by and construed in accordance  with the
laws of the State of New York, without regard to conflicts of law principles.

                                       11
<PAGE>

                                                                       EXHIBIT D

THIS  WARRANT  AND THE SHARES OF COMMON  STOCK  ISSUABLE  UPON  EXERCISE OF THIS
WARRANT HAVE NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE OFFERED, SOLD OR OTHERWISE  TRANSFERRED,  PLEDGED OR HYPOTHECATED
OR  EXERCISED  UNLESS AND UNTIL SUCH  WARRANT  AND/OR  SHARES OF COMMON STOCK IS
REGiSTERED  UNDER SUCH ACT OR AN OPINION OF COUNSEL  SATISFACTORY TO THE COMPANY
IS OBTAINED TO THE EFFECT THAT SUCH  REGISTRATION IS NOT REQUIRED.  THIS WARRANT
AND THE SHARES OF COMMON  STOCK  ISSUABLE  UPON  EXERCISE  OF THIS  WARRANT  ARE
SUBJECT TO THE  RESTRICTIONS  ON TRANSFER SET FORTH IN SECTIONS 4 AND 10 OF THIS
WARRANT,

Warrant No. 1                                          Number of Shares: _______
                                                       (subject to adjustment)

Date of Issuance: ________________, 2000

                                    [ISSUER]

                          Common Stock Purchase Warrant

                           (Void after (three years])

(Issuer), a _________________  corporation (the "Company"),  for value received,
hereby certifies that Ladenburg Thalmann & Co. Inc., or its registered,  assigns
(the "Registered Holder"), is entitled,  subject to the terms and conditions set
forth below,  to purchase from the Company,  at any time or from time to time on
or after  the  date of  issuance  and on or  before  5:00  p.m.  (Eastern  time)
on_______, 200_,  ______________________ shares of Common Stock, of the Company,
at a purchase  price of  $___________  per share.  The shares  purchasable  upon
exercise of this  Warrant,  and the purchase  price per share,  each as adjusted
from time to time pursuant to the  provisions of this Warrant,  are  hereinafter
referred to as the "Warrant Shares" and the "Purchase Price," respectively.

1. Exercise.

      (a) This Warrant may be exercised by the Registered Holder, in whole or in
part, by  surrendering  this Warrant,  with the purchase form appended hereto as
Exhibit I duly executed by the Registered  Holder or by the Registered  Holder's
duly authorized  attorney,  at the principal  office of the Company,  or at such
other office or agency as the Company may  designate,  accompanied by payment in
full,  in lawful money of the United  States,  of the Purchase  Price payable in
respect of the number of Warrant Shares purchased upon such exercise.

                                       12
<PAGE>

      (b) The Registered Holder may, at its option,  elect to pay some or all of
the Purchase  Price payable upon an exercise of this Warrant by canceling all or
a portion of this  Warrant.  If the  Registered  Holder  wishes to exercise this
Warrant by this method, the number of Warrant Shares  purchaseable  (which shall
in no event exceed the total  number of Warrant  Shares  purchasable  under this
Warrant as set forth  above),  subject  to  adjustment  under  Section 2 of this
Warrant) shall be determined as follows:

            X-Y[(A-B)/A]; where

X= the number of Warrant Shares to be issued to the Holder.

Y= the  number of Warrant  Shares  with  respect to which this  Warrant is being
exercised.

A= the Fair Market Value of one share of Common Stock.

B= the Purchase Price of one share of Common Stock.

      The Fair Market  Value per share of Common  Stock shall be  determined  as
follows:

            (i) If the Common Stock is listed on a national securities exchange,
      the Nasdaq National Market or another nationally recognized trading system
      (including, without limitation, the OTC Bulletin Board and, if the average
      daily  trading  volume for the preceding 10 days has been at least 100,000
      shares,  the Pink Sheets) as of the Exercise  Date,  the Fair Market Value
      per share of Common  Stock  shall be deemed to be the  average of the high
      and low  reported  sale  prices per share of Common  Stock  thereon on the
      trading day  immediately  preceding the Exercise Date (provided that if no
      such price is  reported on such day,  the Fair  Market  Value per share of
      Common Stock shall be determined pursuant to clause (ii)).

            (ii) If the  Common  Stock is not  listed on a  national  securities
      exchange,  the Nasdaq  National  Market or another  nationally  recognized
      trading system as of the Exercise Date, the Fair Market Value per share of
      Common Stock shall be deemed to be the amount most recently  determined by
      the Board of Directors to represent the fair market value per share of the
      Common Stock (including without limitation a determination for purposes of
      granting  Common Stock  options or issuing  Common Stock under an employee
      benefit plan of the Company);  and, upon request of the Registered Holder,
      the Board of Directors (or a representative thereof) shall promptly notify
      the Registered  Holder of the Fair Market Value per share of Common Stock.
      Notwithstanding the foregoing, If the Board of Directors has not made such
      a determination  within the three-month period prior to the Exercise Date,
      then (A) the Board of  Directors  shall make a  determination  of the Fair
      Market Value

                                       13
<PAGE>

      per  share  of the  Common  Stock  within  15  days  of a  request  by the
      Registered  Holder  that it do so, and (B) the  exercise  of this  Warrant
      pursuant to this subsection 1(b) shall be delayed until such determination
      is made.

      (c) Each  exercise of this Warrant  shall be deemed to have been  effected
immediately  prior to the close of  business  on the day on which  this  Warrant
shall have been  surrendered to the Company as provided in subsection 1(a) above
accompanied by payment in full of the Purchase Price (the "Exercise  Date").  At
such time,  the person or  persons in whose name or names any  certificates  for
Warrant  Shares shall be issuable  upon such  exercise as provided in subsection
1(d) below shall be deemed to have become the holder or holders of record of the
Warrant Shares represented by such certificates.

      (d) As soon as  practicable  after the exercise of this Warrant in full or
in part, and in any event within 5 business days thereafter, the Company, at its
expense,  will  cause to be  issued  in the  name  of,  and  delivered  to,  the
Registered  Holder,  or as such  Holder  (upon  payment  by such  Holder  of any
applicable transfer taxes) may direct:

            (i) a  certificate  or certificates  for the number of full  Warrant
      Shares to which the Registered Holder shall be entitled upon such exercise
      plus, in lieu of any fractional share to which the Registered Holder would
      otherwise be entitled,  cash in an amount determined pursuant to Section 3
      hereof; and

            (ii)  in case  such  exercise  is in part  only,  a new  warrant  or
      warrants  (dated the date hereof) of like tenor,  calling in the aggregate
      on the face or faces thereof for the number of remaining Warrant Shares.

2. Adjustments.

      (a) Adjustment for Stock Splits and Combinations.  If the Company shall at
any time or from time to time  after the date on which  this  Warrant  was first
issued (the  "Original  Issue Date")  effect a  subdivision  of the  outstanding
Common  Stock,  the  Purchase  Price  then in  effect  immediately  before  that
subdivision shall be proportionately decreased. If the Company shall at any time
or from time to time after the  Original  Issue  Date  combine  the  outstanding
shares of Common Stock, the Purchase Price then in effect immediately before the
combination  shall be  proportionately  increased.  Any  adjustment  under  this
paragraph  shall  become  effective  at the  close of  business  on the date the
subdivision or combination becomes effective.

      (b) Adjustment for Certain Dividends and  Distributions.  In the event the
Company at any time,  or from time to time after the  Original  Issue Date shall
make or issue, or fix a record date for the  determination  of holders of Common
Stock  entitled  to  receive,  a  dividend  or  other  distribution  payable  in
additional  shares of Common  Stock,  then and in each such  event the  Purchase
Price then

                                       14
<PAGE>

in effect  immediately  before such event shall be  decreased  as of the time of
such  issuance or, in the event such a record date shall have been fixed,  as of
the close of business on such record date,  by  multiplying  the Purchase  Price
then in effect by a fraction:

            (1) the  numerator  of which shall be the total  number of shares of
      Common Stock issued and outstanding  immediately prior to the time of such
      issuance or the close of business on such record date, and

            (2) the  denominator of which shall be the total number of shares of
      Common Stock issued and outstanding  immediately prior to the time of such
      issuance  or the close of  business on such record date plus the number of
      shares  of  Common  Stock   issuable  in  payment  of  such   dividend  or
      distribution;

provided,  however,  if such record date shall have been fixed and such dividend
is not fully  paid or if such  distribution  is not fully made on the date fixed
therefor,  the Purchase Price shall be recomputed accordingly as of the close of
business on such record date and thereafter the Purchase Price shall be adjusted
pursuant to this paragraph as of the time of actual payment of such dividends or
distributions.

      (c)  Adjustment  in Number  of  Warrant  Shares.  When any  adjustment  is
required to be made in the Purchase Price  pursuant to subsections 2(a) or 2(b),
the number of Warrant Shares purchasable upon the exercise of this Warrant shall
be changed to the  number  determined  by  dividing  (i) an amount  equal to the
number of shares issuable upon the exercise of this Warrant immediately prior to
such adjustment, multiplied by the Purchase Price in effect immediately prior to
such  adjustment,  by (ii) the Purchase Price in effect  immediately  after such
adjustment.

      (d) Adjustments for Other  Dividends and  Distributions.  In the event the
Company  at any time or from time to time  after the  Original  Issue Date shall
make or issue, or fix a record date for the  determination  of holders of Common
Stock  entitled  to  receive,  a  dividend  or  other  distribution  payable  in
securities  of the Company  (other  than  shares of Common  Stock) or in cash or
other property (other than cash out of earnings or earned surplus, determined in
accordance with generally accepted accounting principles), then and in each such
event provision  shall be made so that the Registered  Holder shall receive upon
exercise  hereof,  in addition to the number of shares of Common Stock  issuable
hereunder,  the kind and amount of  securities  of the  Company  and/or cash and
other property  which the Registered  Holder would have been entitled to receive
had this Warrant been  exercised into Common Stock on the date of such event and
had the Registered  Holder  thereafter,  during the period from the date of such
event  to  and  including  the  Exercise  Date,  retained  any  such  securities
receivable,  giving application to all adjustments called for during such period
under this Section 2 with respect to the rights of the Registered Holder

                                       15
<PAGE>

      (e)  Adjustment for Mergers or  Reorganizations  etc. If there shall occur
any  reorganization,  recapitalization,  consolidation  or merger  involving the
Company in which the Common Stock is converted into or exchanged for securities,
cash or other property  (other than a transaction  covered by subsections  2(a),
2(b) or  2(d)),  then,  following  any  such  reorganization,  recapitalization,
consolidation  or merger,  the  Registered  Holder shall  receive upon  exercise
hereof  the kind and  amount of  securities,  cash or other  property  which the
Registered  Holder would have been entitled to receive if,  immediately prior to
such reorganization,  recapitalization,  consolidation or merger, the Registered
Holder had held the number of shares of Common  Stock  subject to this  Warrant.
Notwithstanding   the  foregoing   sentence,   if  (x)  there  shall  occur  any
reorganization,  recapitalization, consolidation or merger involving the Company
in which the Common Stock is converted into or exchanged for anything other than
solely equity securities, and (y) the common stock of the acquiring or surviving
company  is  publicly  traded,   then,  as  part  of  any  such  reorganization,
recapitalization,  consolidation or merger, (i) the Registered Holder shall have
the right  thereafter to receive upon the exercise  hereof such number of shares
of common  stock of the  acquiring  or  surviving  company as is  determined  by
multiplying  (A) the  number  of shares of Common  Stock  then  subject  to this
Warrant by (B) a fraction,  the  numerator of which is the Fair Market Value per
share  of  Common  Stock  as of the  effective  date  of  such  transaction,  as
determined pursuant to subsection 1(b), and the denominator of which is the fair
market value per share of common stock of the acquiring or surviving  company as
of the effective  date of such  transaction,  as determined in good faith by the
Board of Directors of the Company  (using the principles set forth in subsection
1(b) to the extent applicable),  and (ii) the exercise price per share of common
stock of the acquiring or surviving  company shall be the Purchase Price divided
by the fraction  referred to in clause (B) above. In any such case,  appropriate
adjustment  (as  determined  in good  faith  by the  Board of  Directors  of the
Company)  shall be made in the  application  of the  provisions set forth herein
with respect to the rights and interests thereafter of the Registered Holder, to
the end that the  provisions  set forth in this Section 2 (including  provisions
with respect to changes in and other  adjustments  of the Purchase  Price) shall
thereafter be  applicable,  as nearly as  reasonably  may be, in relation to any
securities,  cash or other property thereafter  deliverable upon the exercise of
this Warrant.

      (e) Certificate as to Adjustments.  Upon the occurrence of each adjustment
or readjustment of the Purchase Price pursuant to this Section 2, the Company at
its expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to the Registered Holder a certificate setting
forth  such  adjustment  or  readjustment  (including  the  kind and  amount  of
securities,  cash or other  property for which this Warrant shall be exercisable
and the  Purchase  Price)  and  showing  in detail  the facts  upon  which  such
adjustment or readjustment is based. The Company shall, upon the written request
at any time of the  Registered  Holder,  furnish or cause to be furnished to the
Registered Holder a certificate setting forth (i) the Purchase

                                       16
<PAGE>

Price  then in effect  and (ii) the  number  of  shares of Common  Stock and the
amount,  if any,  of other  securities,  cash or  property  which  then would be
received upon the exercise of this Warrant.

3.  Fractional  Shares.  The Company  shall not be required upon the exercise of
this  Warrant  to issue any  fractional  shares,  but shall  make an  adjustment
therefor  in cash on the  basis of the Fair  Market  Value  per  share of Common
Stock, as determined pursuant to subsection 1(b) above.

4. Requirements for Transfer.

      (a) This Warrant and the Warrant  Shares shall not be sold or  transferred
unless either (i) they first shall have been registered under the Securities Act
of 1933,  as amended  (the  "Act"),  or (ii) the  Company  first shall have been
furnished  with an  opinion of legal  counsel,  reasonably  satisfactory  to the
Company,  to  the  effect  that  such  sale  or  transfer  is  exempt  from  the
registration requirements of the Act.

      (b) Notwithstanding  the foregoing,  no registration or opinion of counsel
shall  be  required  for  (i) a  transfer  by a  Registered  Holder  which  is a
corporation to a wholly owned  subsidiary of such  corporation,  a transfer by a
Registered  Holder which is a partnership to a partner of such  partnership or a
retired  partner of such  partnership  or to the  estate of any such  partner or
retired partner,  a transfer by a Registered Holder which is a limited liability
company to a member of such limited  liability company or a retired member or to
the estate of any such member or retired  member,  or a transfer by a Registered
Holder which is a member of the National  Association of Securities Dealers (the
"NASD") to an officer or employee of the Registered  Holder as permitted by NASD
rules, provided that the transferee in each case agrees in writing to be subject
to the terms of this Section 4, or (ii) a transfer made in accordance  with Rule
144 under the Act.

      (c) Each  certificate  representing  Warrant  Shares  shall  bear a legend
substantially in the following form:

      "The securities  represented by this  certificate have not been registered
      under the Securities Act of 1933, as amended, and may not be offered, sold
      or otherwise  transferred,  pledged or hypothecated  unless and until such
      securities  are  registered  under  such  Act  or an  opinion  of  counsel
      satisfactory   to  the  Company  is  obtained  to  the  effect  that  such
      registration is not required."

The foregoing  legend shall be removed from the  certificates  representing  any
Warrant  Shares,  at the  request  of the holder  thereof,  at such time as they
become  eligible  for  resale  pursuant  to Rule  144(k)  under the Act or if an
effective  registration statement is then in effect permitting the resale of the
Warrant Shares.

                                       17
<PAGE>

      (d) The Registered  Holder shall have "piggyback"  registration  rights to
have the Warrant  Shares  (but not the  Warrants)  registered  for resale on any
registration  statement  which  the  Company  files  for any  purpose  on a form
available for such registration, after the Original Issue Date Such registration
shall be subject to customary  obligations by the  Registered  Holder to provide
information to the Company and by the Company to indemnify the Registered Holder
against Securities Act liabilities.

5. No  Impairment.  The Company will not, by amendment of its charter or through
any  reorganization,  transfer of assets,  consolidation,  merger,  dissolution,
issue or sale of  securities  or any other  voluntary  action,  avoid or seek to
avoid the  observance or  performance  of any of the terms of this Warrant,  but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such action as may be necessary or  appropriate in order to
protect the rights of the holder of this Warrant against impairment.

6. Notices of Record Date, etc. In the event:

      (a) the Company shall take a record of the holders of its Common Stock (or
other stock or  securities  at the time  deliverable  upon the  exercise of this
Warrant) for the purpose of  entitling or enabling  them to receive any dividend
or other distribution,  or to receive any right to subscribe for or purchase any
shares of stock of any class or any other  securities,  or to receive  any other
right; or of any capital  reorganization of the Company, any reclassification of
the Common Stock of the Company, any consolidation or merger of the Company with
or into another  corporation  (other than a consolidation or merger in which the
Company is the surviving  entity and its Common Stock is not  converted  into or
exchanged  for any other  securities  or  property),  or any  transfer of all or
substantially all of the assets of the Company; or

      (b) of the voluntary or involuntary dissolution, liquidation or winding-up
of the Company,

then,  and in each such case, the Company will mail or cause to be mailed to the
Registered Holder a notice  specifying,  as the case may be, (i) the record date
for such dividend,  distribution or right,  and the amount and character of such
dividend,  distribution  or  right,  or (ii) the  effective  date on which  such
reorganization, reclassification,  consolidation, merger, transfer, dissolution,
liquidation or winding-up is to take place, and the time, if any is to be fixed,
as of which  the  holders  of record of  Common  Stock (or such  other  stock or
securities at the time  deliverable  upon the exercise of this Warrant) shall be
entitled  to  exchange  their  shares of Common  Stock (or such  other  stock or
securities)   for   securities   or  other   property   deliverable   upon  such
reorganization, reclassification,  consolidation, merger, transfer, dissolution,
liquidation or  winding-up.  Such notice shall be mailed at least ten days prior
to the record date or effective date for the event specified in such notice

                                       18
<PAGE>

7.  Reservation  of  Stock.  The  Company  will at all  times  reserve  and keep
available,  solely for issuance and delivery  upon the exercise of this Warrant,
such number of Warrant Shares and other  securities,  cash and/or  property,  as
from time to time shall be issuable upon the exercise of this Warrant.

8. Exchange of Warrants.  Upon the surrender by the Registered Holder,  properly
endorsed,  to the Company at the  principal  office of the Company,  the Company
will,  subject to the  provisions  of Section 4 hereof,  issue and deliver to or
upon the order of such  Holder,  at the  Company's  expense,  a new  Warrant  or
Warrants  of  like  tenor,  in the  name  of  the  Registered  Holder  or as the
Registered  Holder  (upon  payment by the  Registered  Holder of any  applicable
transfer  taxes)  may  direct,  calling  in the  aggregate  on the face or faces
thereof  for the  number of shares of Common  Stock (or other  securities,  cash
and/or property) then issuable upon exercise of this Warrant.

9. Replacement of Warrants.  Upon receipt of evidence reasonably satisfactory to
the Company of the loss,  theft,  destruction  or mutilation of this Warrant and
(in the case of loss,  theft  or  destruction)  upon  delivery  of an  indemnity
agreement  (with  surety  if  reasonably   required)  in  an  amount  reasonably
satisfactory to the Company,  or (in the case of mutilation)  upon surrender and
cancellation  of this Warrant,  the Company will issue,  in lieu thereof,  a new
Warrant of like tenor.

10. Transfers, etc.

      (a) The Company will maintain a register  containing  the name and address
of the Registered  Holder of this Warrant.  The Registered Holder may change its
or his address as shown on the warrant register by written notice to the Company
requesting such change.

      (b) Subject to the  provisions  of Section 4 hereof,  this Warrant and all
rights hereunder are  transferable,  in whole or in part, upon surrender of this
Warrant with a properly  executed  assignment (in the form of Exhibit II hereto)
at the principal office of the Company.

      (c) Until any  transfer of this  Warrant is made in the warrant  register,
the Company may treat the Registered Holder as the absolute owner hereof for all
purposes;  provided, however, that if and when this Warrant is properly assigned
in blank,  the  Company  may (but  shall not be  obligated  to) treat the bearer
hereof as the absolute owner hereof for all purposes, notwithstanding any notice
to the contrary.

11.  Representations  of the Registered  Holder.  The Registered  Holder of this
Warrant represents and warrants to the Company as follows:

      (a)  Investment.  The Registered  Holder is acquiring this Warrant and the
Warrant Shares  issuable upon the exercise of this Warrant,  for its own account
for investment and not with a view to, or for sale in connection with, any

                                       19
<PAGE>

distribution  thereof, nor with any present intention of distributing or selling
the same, except as otherwise may be permitted under applicable securities laws.

      (b) Authority. The Registered Holder has full power and authority to enter
into and to perform this Warrant in accordance  with its terms.  The  Registered
Holder has not been organized  specifically  for the purpose of investing in the
Company.

      (c) Accredited  Investor.  The Registered Holder is an Accredited Investor
within the definition set forth in Rule 501(a)  promulgated under the Securities
Act.

12.  Mailing of Notices,  etc.  All notices  and other  communications  from the
Company to the  Registered  Holder shall be mailed by  first-class  certified or
registered mail,  postage prepaid,  to the address last furnished to the Company
in writing by the Registered Holder. All notices and other  communications  from
the Registered  Holder or in connection  herewith to the Company shall be mailed
by first-class  certified or registered mail, postage prepaid, to the Company at
its principal  office set forth below.  If the Company should at any time change
the location of its  principal  office to a place other than as set forth below,
it shall give prompt written notice to the Registered  Holder and thereafter all
references  in this  Warrant  to the  location  of its  principal  office at the
particular time shall be as so specified in such notice.

13. No Rights as Stockholder. Until the exercise of this Warrant, the Registered
Holder shall not have or exercise any rights by virtue  hereof as a  stockholder
of the  Company.  Notwithstanding  the  foregoing,  in the event (i) the Company
effects  a split  of the  Common  Stock by  means  of a stock  dividend  and the
Purchase  Price of and the number of Warrant  Shares are adjusted as of the date
of the  distribution of the dividend (rather than as of the record date for such
dividend),  and (ii) the Registered  Holder  exercises this Warrant  between the
record date and the  distribution  date for such stock dividend,  the Registered
Holder  shall be  entitled  to  receive,  on the  distribution  date,  the stock
dividend with respect to the shares of Common Stock acquired upon such exercise,
notwithstanding  the fact that such shares were not  outstanding as of the close
of business on the record date for such stock dividend.

14. Change or Waiver.  Any term of this Warrant may be changed or waived only by
an instrument in writing  signed by the party against which  enforcement  of the
change or waiver is sought.

15.  Section  Headings.  The  section  headings  in  this  Warrant  are  for the
convenience of the parties and in no way alter, modify, amend, limit or restrict
the contractual obligations of the parties.

16.  Governing Law. This Warrant will be governed by and construed in accordance
with  the  internal  laws of the  State of New York  (without  reference  to the
conflicts of law provisions thereof).

                                       20
<PAGE>

      EXECUTED as of the Date of Issuance indicated above.

                                                    (ISSUER]

                                                    By: ________________________

                                                    Title: _____________________

ATTEST;
________________________

                                       21
<PAGE>

EXHIBIT I

PURCHASE FORM

To: ___________________                               Dated: ___________________

The  undersigned,  pursuant to the provisions set forth in the attached  Warrant
(No. ), hereby irrevocably elects to purchase (check applicable box):

      o     ____ shares of the Common Stock covered by such Warrant; or

      o     ____ the maximum  number of shares of Common  Stock  covered by such
            Warrant  pursuant to the cashless  exercise  procedure  set forth in
            Section 1(b).

The  undersigned  herewith  makes  payment of the full  purchase  price for such
shares at the price per share provided for in such Warrant,  which is $_________
Such payment takes the form of (check applicable box or boxes):

      o     $______ in lawful money of the United States; and/or

      o     the  cancellation  of such  portion  of the  attached  Warrant as is
            exercisable  for a total  of  ______  Warrant  Shares  (using a Fair
            Market  Value of $     per share for purposes of  this calculation);
            and/or

      o     the  cancellation  of such number of Warrant Shares as is necessary,
            in  accordance  with the  formula  set  forth in  Section  1(b),  to
            exercise this Warrant with respect to the maximum  number of Warrant
            Shares  purchasable  pursuant to the cashless exercise procedure set
            forth in Section 1(b).

                                      Signature: _______________________________

                                      Address:
                                              __________________________________

                                              __________________________________

                                       22
<PAGE>

EXHIBIT II

ASSIGNMENT FORM

FOR VALUE RECEIVED,  _________________________________ hereby sells, assigns and
transfers all of the rights of the undersigned under the attached Warrant (No. )
with respect to the number of shares of Common Stock  covered  thereby set forth
below, unto:
Name of Assignee                        Address             No. of Shares

Dated: ________________

Signature: ___________________________

Signature Guaranteed:

By: ___________________

The   signature    should   be
guaranteed   by  an   eligible
guarantor  institution (banks,
stockbrokers, savings and loan
associations and credit unions
with membership in an approved
signature  guarantee medallion
program)   pursuant   to  Rule
l7Ad-15  under the  Securities
Exchange Act of 1934.

                                       23
<PAGE>

                                                                       EXHIBIT E
                                                                       ---------

                   Advanced Communications Technologies, Inc.
                   ------------------------------------------

                               Ticker:      ADVC
                               Exchange:    OTC BB

             Up to $12,000,000 Underwritten Offering of Common Stock
             -------------------------------------------------------

Securities                    Common Stock

Total Draw Down Commitment:   up to $12,000,000

Draw Down Amount:             up to $500,000

use of Proceeds:              [                ]

Draw Down Terms:

      (a)         The Company may, in its sole discretion,  issue and exercise a
                  draw down (a "Draw Down")  during a Draw Down  Pricing  Period
                  (which  shall  mean a period of 22  consecutive  trading  days
                  preceding a Draw Down Exercise Date, as defined below),  which
                  Draw Down the Investor will be obligated to accept.

      (b)         Only one Draw Down shall be allowed in each Draw Down  Pricing
                  Period.  The Draw Down shall  occur on the first  trading  day
                  following  the end of the Draw Down Pricing  Period (the "Draw
                  Down Exercise Date"),  based on the Average Daily Price during
                  the Draw Down Pricing Period.

      (c)         There  shall be a maximum of 24 Draw Downs  during the term of
                  this Facility.

      (d)         Each Draw Down will expire on the  calendar day after the Draw
                  Down Exercise Date.

      (e)         The  Company   must   inform  the   Investor   via   facsimile
                  transmission  as to the  amount of the Draw  Down the  Company
                  wishes  to  exercise  before  the  first  day of the Draw Down
                  Pricing Period (the "Draw Down Notice").  At no time shall the
                  Investor be required to purchase more than the scheduled  Draw
                  Down  amount for a given Draw Down  Pricing  Period so that if
                  the Company  chooses not to exercise  the Draw Down in a given
                  Draw Down  Pricing  Period the  Investor is not  obligated  to
                  purchase more than the scheduled  amount in a subsequent  Draw
                  Down Pricing Period.

Pricing:

      (a)         Commencing on the Effective Date of the Registration Statement
                  and  continuing  for a period  of 24  months  thereafter,  the
                  Investor  agrees to honor Draw Down  requests from the Company
                  for a total of up to $12,000,000 of the Company's Common Stock
                  based  upon Draw Downs of up to  $500,000  per Draw Down and a
                  per share  purchase  price equal to 85% of the  Average  Daily
                  Price for the Draw Down Pricing Period.

<PAGE>

      (b)         If the Average Daily Price on a given trading day is less than
                  the Threshold  Price then the  Investor's  payment  obligation
                  under the Draw Down will be reduced by 1/22nd for such trading
                  day and the  corresponding  portion  of the Draw  Down  amount
                  shall be withdrawn from the Draw Down Pricing Period.

Conditions:

      (a)         The Company shall cause to be filed a Registration  Statement.
                  which Registration Statement shall provide for the sale of the
                  Common   Stock   purchased  by  and  issued  to  the  Investor
                  hereunder,  Before the Investor shall be obligated to accept a
                  Draw Down  request from the  Company,  the Company  shall have
                  caused a  sufficient  number of  shares of common  Stock to be
                  registered to cover the shares of Common Stock to be issued in
                  connection with such Draw Down.

      (b)         Such Common  Stock  shall be placed in a mutually  agreed upon
                  escrow account before the issuance of a Draw Down request. The
                  shares of Common  Stock  shall be  settled  on a weekly  basis
                  through the DTC system.

      (c)         The  Investor  may  terminate  this  Draw Down  facility  if a
                  Material  Adverse Effect or a Material change of Ownership has
                  occurred.

      (d)         The  Company  shall pay all fees and  expenses  related to the
                  transactions contemplated by this Agreement. The Company shall
                  pay at the Closing all attorneys fees and expenses incurred by
                  the Investor of up to $35,000.

Limitation on
  Short Sales:    The investors  will agree not to enter into a "short sale" (as
                  such term as defined in Rule 3b-3 of the  Securities  Exchange
                  Act  of  1934)  of  the  Company's   Common  Stock  until  the
                  termination of the Agreement.

Limitation on
  Issuance:       The  Company  shall not issue  more than 20% of common  shares
                  outstanding without shareholder approval.

Confidentiality:  The  Company  agrees that it will not  disclose,  and will not
                  include in any public  announcement,  the name or names of the
                  Investor, unless expressly agreed to by the Investor or unless
                  and until such  disclosure  is required by law or  regulation,
                  and then only to the extent of such requirement.

Documentation:    The definitive documentation shall contain such additional and
                  supplementary   provisions,   including  without   limitation,
                  representations,   warranties,   covenants,   agreements   and
                  remedies,  as are  appropriate  to  preserve  and  protect the
                  economic  benefits  intended to be  conveyed  to the  Investor
                  pursuant hereto.

Certain Definitions:

      (a)         "Average  Daily Price" shall be the price based on the VWAP of
                  the Company's Common Stock.

      (b)         "Average  Price"  shall be the  average of the  Average  Daily
                  Price for the applicable Draw Down Pricing Period.

      (c)         "Draw  Down  Pricing   Period"  shall  mean  a  period  of  22
                  consecutive trading days preceding a Draw Down Exercise Date.

      (d)         "Material  Adverse  Effect"  shall  mean  any  effect  on  the
                  business, operations, properties or financial condition of the
                  Company  that is  material  and adverse to the Company and its
                  subsidiaries and affiliates, taken as a whole and/or any

                                        2
<PAGE>

                        condition, circumstance or situation that would prohibit
                        or otherwise  interfere  with the ability of the Company
                        to enter into and perform any of its  obligations  under
                        the  Purchase  Agreement  or  the  Registration   Rights
                        Agreement in any material respect.

      (e)               "Material  Change  in  Ownership"  shall  mean  that the
                        officers  and  directors  of the Company  shall own less
                        than  ___%  of  the  outstanding  Common  Stock  of  the
                        Company.

      (f)               "Threshold  Price"  is the  lowest  price at  which  the
                        Company will issue new shares of Common Stock.

      (g)               "VWAP"  shall  mean the daily  volume  weighted  average
                        price  of the  Company's  Common  Stock as  reported  by
                        Bloomberg Financial using the AQR function.

                                       3STOCK PURCHASE AGREEMENT

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

      The parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

      Section 1.1. Certain Definitions.

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

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

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

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

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

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

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

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

                                       1
<PAGE>

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

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

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

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

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

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

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

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

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

                                   ARTICLE II

                        PURCHASE AND SALE OF COMMON STOCK

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

                                       2
<PAGE>

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

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

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

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

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

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

                                       3
<PAGE>

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

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

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

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

                                       4
<PAGE>

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

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

                                       5
<PAGE>

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

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

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

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

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

                                       6
<PAGE>

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

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

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

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

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

                                       7
<PAGE>

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

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

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

      For purposes of this Section 3.1(o):

      "IRS" means the United States Internal Revenue Service.

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

                                       8
<PAGE>

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

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

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

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

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

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

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

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

                                       9
<PAGE>

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

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

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

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

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

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

                                       10
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       11
<PAGE>

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

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

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

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

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

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

                                       12
<PAGE>

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

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

                                   ARTICLE IV

                                    COVENANTS

      The Company covenants with the Purchaser as follows:

      Section 4.1. Securities Compliance.

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

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

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

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

                                       13
<PAGE>

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

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

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

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

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

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

                                       14
<PAGE>

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

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

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

      The Purchaser covenants with the Company as follows:

                                       15
<PAGE>

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

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

                                    ARTICLE V

                  CONDITIONS TO INITIAL CLOSING AND DRAW DOWNS

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

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

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

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

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

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

                                       16
<PAGE>

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

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

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

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

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

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

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

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

                                       17
<PAGE>

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

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

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

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

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

                                   ARTICLE VI

                                 DRAW DOWN TERMS

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

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

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

                                       18
<PAGE>

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

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

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

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

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

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

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

                                       19
<PAGE>

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

                                   ARTICLE VII

                                   TERMINATION

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

      Section 7.2. Other Termination.

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

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

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

                                  ARTICLE VIII

                                 INDEMNIFICATION

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

                                       20
<PAGE>

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

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

                                       21
<PAGE>

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

                                   ARTICLE IX

                                  MISCELLANEOUS

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

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

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

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

                                       22
<PAGE>

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

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

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

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

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

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

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

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

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

                                       23
<PAGE>

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

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

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

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

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

                                       24
<PAGE>

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

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

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

                                       25
<PAGE>

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

                                        Advanced Communications Technologies,
                                        Inc.

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

                                        Wanquay Limited

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

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