Document:

Unassociated Document

    EXCHANGE
      AGREEMENT

     

    EXCHANGE
      AGREEMENT,
      dated
      as of August 17, 2007 (this “Agreement”),
      between Advanced Communications Technologies, Inc. (the “Company”)
      and
      the stockholders identified on Schedule
      1
      hereto
      (each a “Stockholder”
and,
      collectively, the “Stockholders”).
      The
      Company and each Stockholder may each be referred to herein as a “Party”
or,
      collectively, as the “Parties.”
      Certain capitalized terms that are used but not otherwise defined in this
      Agreement are defined in Article IV.

     

    WHEREAS,
      the
      Company is entering into a Stock Purchase Agreement (the “Purchase
      Agreement”)
      on the
      date hereof with ACT-DE, LLC (the “Investor”)
      whereby the Investor will purchase preferred stock of the Company to be
      designated as Series C Convertible Preferred Stock, par value $0.01 per share
      (the “Series
      C Shares”);
       

     

    WHEREAS,
      the
      Investor’s purchase of the Series C Shares (the “Investor
      Transaction”)
      is
      conditioned upon the Company entering into the transactions set forth herein;
      

     

    WHEREAS,
      the
      Stockholders hold all of the issued and outstanding shares of (i) Series A
      Convertible Preferred Stock of the Company, par value $0.01 per share (the
      “Series
      A Preferred Stock”),
      (ii)
      Series A-1 Convertible Preferred Stock of the Company, par value $0.01 per
      share
      (the “Series
      A-1 Preferred Stock”)
      and
      (iii) Series B Convertible Preferred Stock of the Company, par value $0.01
      per
      share (the “Series
      B Preferred Stock”,
      and
      collectively with the Series A Preferred Stock and the Series A-1 Preferred
      Stock, the “Transferred
      Shares”);
      and

     

    WHEREAS,
      pursuant
      to the terms hereof, the Stockholders desire to exchange, in the manner set
      forth on Schedule
      1,
      all of
      the Transferred Shares for 8,412.206667 shares (the “Series
      A-2 Shares”)
      of
      Series A-2 Convertible Preferred Stock of the Company, par value $0.01 per
      share, having the rights and privileges set forth in the certificate of
      designation attached as Exhibit
      A
      (the
“Exchange
      Shares”).

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual promises and agreements set forth herein, the
      Parties agree as follows:

     

    ARTICLE
      I

    EXCHANGE
      AND OTHER TRANSACTIONS

     

    1.1.  Exchange
      of Shares.
      Effective immediately upon the consummation of the Investor Transaction, and
      subject to all of the terms and conditions hereof, (i) each Stockholder hereby
      assigns and transfers to the Company, free and clear of any Liens, all of the
      Transferred Shares owned by such Stockholder as set forth on Schedule
      1
      hereto,
      and (ii) in exchange therefor, the Company hereby agrees to issue to each
      Stockholder, free and clear of any Liens, and each Stockholder hereby agrees
      to
      accept from the Company, the number of Exchange Shares set forth opposite such
      Stockholder’s name on Schedule
      1
      hereto.
      All such Transferred Shares are hereby cancelled and shall no longer be issued
      and outstanding shares of the Company.    

     

    1.2.  Consent.
      The
      Stockholder hereby (i) consents to the Investor Transaction, and (ii) waives
      any
      and all rights the Stockholder may have against the Company or the Investor
      with
      respect to the Investor Transaction or otherwise.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      II

    REPRESENTATIONS
      & WARRANTIES OF THE COMPANY

     

    In
      order
      to induce the Stockholders to enter into this Agreement and to accept the
      Exchange Shares, the Company hereby represents and warrants to the Stockholders
      that as of the date hereof:

     

    2.1.  Organization
      and Good Standing.
      The
      Company is duly organized and existing in good standing in its jurisdiction
      of
      incorporation and is duly qualified as a foreign corporation and authorized
      to
      do business in all other jurisdictions in which the nature of its business
      or
      property makes such qualification necessary. The Company has the corporate
      power
      to own its properties and to carry on its business as now conducted and as
      proposed to be conducted.

     

    2.2.  Authorization.
      The
      execution, delivery and performance by the Company of this Agreement, and the
      issuance and exchange by the Company of the Exchange Shares hereunder, (a)
      is
      within the Company’s corporate power and authority, (b) has been duly authorized
      by all necessary corporate proceedings, (c) does not conflict with or result
      in
      any breach of any provision of the Articles of Incorporation or Bylaws of the
      Company or any agreement or instrument to which the Company is a party or by
      which the Company or any of its properties is bound or the creation of any
      Lien
      upon any of the property, and (d) does not require any filing, consent or
      approval pursuant to the Charter or bylaws of the Company or any law or
      regulation (including, without limitation, any applicable environmental
      restrictive transfer law or regulation) or order, judgment, writ, injunction,
      license, permit, agreement or instrument.

     

    2.3.  Enforceability.
      The
      execution and delivery by the Company of this Agreement, and the issuance and
      exchange by the Company of the Exchange Shares hereunder, will result in legally
      binding obligations of the Company, enforceable against the Company in
      accordance with the terms and provisions hereof, except to the extent that
      (a)
      such enforceability is limited by bankruptcy, insolvency, reorganization,
      moratorium or other laws relating to or affecting generally the enforcement
      of
      creditors’ rights and (b) the availability of the remedy of specific performance
      or injunctive or other equitable relief is subject to the discretion of the
      court before which any proceeding therefor may be brought.

     

    2.4.  Capitalization.
      As of
      the Closing Date, and after giving effect to the Investor Transaction and the
      designation, exchange and issuance of the Exchange Shares, the authorized
      capital of the Company consists of (i) 5,000,000,000 shares of Common Stock,
      no
      par value per share (the “Common
      Stock”),
      of
      which 4,997,711,570 shares are issued and outstanding on the date hereof, (ii)
      25,000 shares of Preferred Stock, $0.01 par value per share, of which (A) no
      shares of Preferred Stock designated as Series A Preferred Stock, $0.01 par
      value per share, are issued and outstanding on the date hereof, (B) no shares
      of
      Preferred Stock designated as Series A-1 Preferred Stock, $0.01 par value per
      share, are issued and outstanding on the date hereof, (C) no shares of Preferred
      Stock designated as Series B Preferred Stock, $0.01 par value per share, are
      issued and outstanding on the date hereof, (D) 8,412.206667 shares of Preferred
      Stock designated as Series A-2 Preferred Stock, $0.01 par value per share,
      are
      issued and outstanding on the date hereof, (E) 1,000 shares of Preferred Stock
      designated as Series C Preferred Stock, $0.01 par value per share, are issued
      and outstanding on the date hereof and (F) 1,000 shares of Preferred Stock
      designated as Series D Preferred Stock, $0.01 par value per share, are issued
      and outstanding on the date hereof. Except for this Agreement and as described
      in the accompanying Disclosure Statement (a) there are no outstanding or
      authorized subscriptions, warrants, options or other agreements or rights of
      any
      kind to purchase or otherwise receive or be issued, or securities or obligations
      of any kind convertible into, any capital stock or any other security of the
      Company and (b) there are no outstanding or authorized stock appreciation,
      phantom stock or similar rights with respect to the Company.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    2.5 Holding
      Period for Exchange Shares. The
      Company agrees that, assuming (A) no change in facts and circumstances and
      no
      contrary law or any rule, regulation or instruction of or from the U.S.
      Securities and Exchange Commission (the “SEC”),
      (B)
      that the Stockholder is not, at any relevant time, an “affiliate” of the Company
      as defined in Securities Act Rule 144(a)(1), (C) the Stockholder’s holding
      period for the shares of Series A Preferred Stock as of the date of the exchange
      contemplated hereby, as determined pursuant to Securities Act Rule 144(d),
      is at
      least two years, and (D) that the Stockholder provides a written representation
      to the Company and its counsel that it is not an affiliate of the Company and
      has not been an affiliate of the Company during the preceding 3 months, as
      well
      as other representations customarily given in connection with the removal of
      restrictive legends under Rule 144(k), the Company will rely upon the opinion
      provided to it by Eckert Seamans Cherin & Mellott, LLC contemporaneous with
      consummation of the transactions contemplated hereby, that the holding period
      for the Series A-2 Shares issued to each Stockholder in exchange for such
      Stockholder’s Transferred Shares will include the holding period for such
      Transferred Shares, and that the Company may issue such Series A-2 Shares
      without restrictive legend. Based on such reliance, the Company will instruct
      its transfer agent to issue the Series A-2 shares without restrictive legend.
      Furthermore, assuming (i) no change in relevant facts and circumstances and
      no
      contrary law or rule, regulation or instruction of or from the SEC, (ii) that
      the Stockholder is not, at any relevant time, an “affiliate” of the Company as
      defined in Securities Act Rule 144(a)(1) and (iii) that the Stockholder provides
      a written representation at the time of such conversion that it is not an
      affiliate of the Company and has not been an affiliate within the preceding
      three month period, as well as other representations customarily given in
      connection with the removal of restrictive legends under Rule 144(k), the
      Company will rely on the opinion provided to it by Eckert Seamans Cherin &
Mellott, LLC contemporaneous with consummation of the transactions contemplated
      hereby that no restrictive legend would be required on shares of the Company’s
      Common Stock, no par value (the “Common
      Stock”),
      issued upon conversion of those Series A-2 Shares previously issued to the
      Stockholders in exchange for their shares of Series A Preferred Stock.

     

    2.6 Charter
      Amendment to Increase Authorized Common Stock.
      Promptly following the date hereof, the Company shall use all reasonable
      commercial efforts to cause the Articles of Incorporation of the Company to
      be
      amended in order to increase the authorized number of shares of Common Stock
      to
      an amount reasonably sufficient for the conversion of Series A-2 Preferred
      Stock
      into Common Stock at the Series A-2 Conversion Rate (as defined in the
      Certificate of Designations of the Series A-2 Preferred Stock), including the
      recommendation and submission of a proposal to the stockholders of the Company
      for the approval of such amendment.

     

    ARTICLE
      III

    REPRESENTATIONS
      & WARRANTIES OF THE STOCKHOLDER 

     

    As
      a
      material inducement for the Company to enter into this Agreement and consummate
      the transactions contemplated hereby, each Stockholder hereby represents,
      warrants and acknowledges to the Company on the date hereof as
      follows:

     

    3.1.  Organization
      and Good Standing.
      In the
      case of a Stockholder that is not a natural Person, (i) such Stockholder is
      duly
      organized and existing in good standing in its jurisdiction of incorporation
      or
      formation, and (ii) such Stockholder has the corporate, limited liability
      company, or partnership power to own its properties and to carry on its business
      as now conducted and as proposed to be conducted.

     

    3.2.  Authorization.
      In the
      case of a Stockholder that is not a natural Person, the execution, delivery
      and
      performance by such Stockholder of this Agreement (a) is within such
      Stockholder’s corporate, limited liability company, or partnership power and
      authority, (b) has been duly authorized by all necessary corporate, limited
      liability company, or partnership or other proceedings, (c) does not conflict
      with or result in any breach of any provision of or the creation of any Lien
      upon any of the property of such Person, and (d) does not require any filing,
      consent or approval pursuant to the Charter or bylaws of such Person or any
      law,
      regulation, order, judgment, writ, injunction, license, permit, agreement or
      instrument. In the case of a Stockholder that is a natural Person, such
      Stockholder has the legal capacity to execute and deliver this Agreement, to
      perform his or her obligations under this Agreement, and to consummate the
      transactions to which he or she is a party.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    3.3.  Enforceability.
      The
      execution and delivery by the Stockholder of this Agreement will result in
      legally binding obligations of the Stockholder, enforceable against such
      Stockholder in accordance with the terms and provisions hereof, except to the
      extent that (a) such enforceability is limited by bankruptcy, insolvency,
      reorganization, moratorium or other laws relating to or affecting generally
      the
      enforcement of creditors’ rights and (b) the availability of the remedy of
      specific performance or injunctive or other equitable relief is subject to
      the
      discretion of the court before which any proceeding therefor may be
      brought.

     

    3.4.  Title
      to Shares.
      The
      Stockholder has, and upon the consummation of the transactions contemplated
      hereby, the Company will have, sole record and beneficial ownership of the
      number of shares of the Transferred Shares set forth opposite such Stockholder’s
      name on Schedule
      1
      hereto,
      free and clear of any Liens.

     

    3.5.  Transferability.
      The
      Stockholder (i) understands that the Exchange Shares have not been registered
      under the Securities Act and cannot be sold unless subsequently registered
      under
      the Securities Act or an exemption from such registration is available, (ii)
      is
      aware that the Exchange Securities may not be sold pursuant to Rule 144 adopted
      under the Securities Act unless certain conditions thereunder are met, and
      (iii)
      acknowledges that any transfer of Exchange Shares (or any common stock issued
      upon the conversion thereof) shall be subject, shall be subject, at the
      Company’s discretion, to the Company’s receipt of an opinion of counsel,
      reasonably acceptable to the Company and its transfer agent in form and
      substance and as to the identity of such counsel, that such transfer may occur
      without registration under the Securities Act.

     

    3.6.  Accredited
      Investor Status.
      The
      Stockholder is an “accredited investor” as such term is described on
Exhibit
      B
      hereto
      and defined in Rule 501 under the Securities Act.

     

    3.7.   Affiliate
      Status.
      The
      Stockholder is not an “Affiliate” of the Company and has not been an “Affiliate”
of the Company at any time during the three months preceding the date hereof.
      As
      used in this Agreement “Affiliate” is any person that directly, or indirectly
      through one or more intermediaries, controls, or is controlled by, or is under
      common control with, the Company, and for the purpose of this definition control
      means the right or power to direct or substantially influence the business
      affairs or actions of the referent person, whether through the ownership of
      voting securities, contract rights or otherwise

     

    3.8.  Information
      and Reliance.
      

     

    (a)  The
      Stockholder acknowledges, agrees and confirms that (i) except as set forth
      in
      Article II of this Agreement, neither the Company nor any of its Affiliates,
      representatives or agents makes, or has made or given, any oral or written
      representations, warranties, certifications or opinions of any kind, express
      or
      implied, with respect to (A) the Company, any of its Affiliates or any of its
      or
      their business, financial condition, risks or prospects, (B) the Exchange
      Shares, (C) the accuracy or completeness of any information provided to the
      Stockholder related to the Company, its Affiliates, or the Exchange Shares
      or
      (D) any other matters relating to the Company, its Affiliates, or the Exchange
      Shares, (ii) in making its decision to accept the Exchange Shares, it has relied
      solely on (A) its own independent review, investigation and analysis of the
      business, financial condition, risks and prospects of the Company and its
      Affiliates and (B) the representations and warranties of the Company set forth
      in Article II of this Agreement, and (iii) it shall have no recourse against
      the
      Company or any of its Affiliates, representatives and agents with respect to
      any
      claims, damages or losses arising from or related to the Exchange Shares or
      its
      purchase thereof pursuant to this Agreement (other than in the case of a breach
      of the Company’s representations and warranties set forth in Article II of this
      Agreement). Except as set forth in Article II of this Agreement, the
      Stockholder, on behalf of itself and its Affiliates, representatives and agents,
      expressly disclaims any and all representations, warranties, certifications
      or
      opinions of any kind or nature expressed or implied (including, but not limited
      to, any relating to the business, financial condition, risks or prospects of
      the
      Company or any of its Affiliates).

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (b)  The
      Stockholder acknowledges that the Company does not currently have a sufficient
      number of shares of authorized but unissued shares of its Common Stock for
      the
      conversion of the Transferred Shares into Common Stock and will not have a
      sufficient number of authorized but unissued shares of Common Stock for the
      Conversion of the Exchange Shares into Common Stock. 

     

    ARTICLE
      IV 

    RELEASE

     

    4.1.  In
      exchange for the Exchange Shares, each Stockholder does hereby, on behalf of
      such Stockholder and such Stockholder’s agents, representatives, attorneys,
      assigns, heirs, executors and administrators (collectively, such Stockholder’s
“Stockholder
      Parties”)
      RELEASE AND FOREVER DISCHARGE the Company and its Subsidiaries and their
      respective Affiliates, parents, joint ventures, officers, directors,
      shareholders, interest holders, members, managers, employees, consultants,
      representatives, successors and assigns, heirs, executors and administrators
      (collectively, the “Company Parties”)
      from
      all causes of action, suits, debts, claims and demands whatsoever known or
      unknown, at law, in equity or otherwise, which such Stockholder or any of its
      Stockholder Parties ever had, now has, or hereafter may have, arising from
      or
      relating in any way to such Stockholder’s status as a stockholder, investor,
      lender or debtor of the Company on or prior to the date hereof, any agreement
      between such Stockholder and the Company or any Affiliate of the Company entered
      into prior to the date hereof, the Stockholder’s purchase of any portion of the
      Company’s capital stock prior to the date hereof, any claims for reasonable
      attorneys’ fees and costs, and including, without limitation, any claims
      relating to fees, penalties, liquidated damages, and indemnification for losses,
      liabilities and expenses and any claims or rights under the Investment Agreement
      dated May 28, 2004, and the related Registration Rights Agreement, but not
      including such claims to payments and other rights provided to such Stockholder
      Party under this Agreement. The release contained in this Section 4.1 is
      effective without regard to the legal nature of the claims raised and without
      regard to whether any such claims are based upon tort, equity, or implied or
      express contract. Except as specifically provided herein, it is expressly
      understood and agreed that this release shall operate as a clear and unequivocal
      waiver by each Stockholder of any such claim whatsoever.

     

    4.2.  Each
      Stockholder, on behalf of itself and its Stockholder Parties, agrees never
      to
      bring (or cause or permit to be brought) any action or proceeding against the
      Company or any other Company Party regarding the Stockholder’s status as
      stockholder, investor, lender or debtor of the Company on or prior to the date
      hereof, agreements with the Company or any Affiliate of the Company that relate
      to the Stockholder’s status as a stockholder, investor, lender or debtor of the
      Company entered into prior to the date hereof, or any claim released pursuant
      to
      Section 4.1. The Stockholder agrees that in the event that any claim, suit
      or
      action released pursuant to Section 4.1 shall be commenced by it or any of
      such
      Stockholder’s Stockholder Parties against the Company or any other Company
      Party, the release contained in Section 4.1 shall constitute a complete defense
      to any such claim, suit or action so instituted.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    4.3.  Each
      Stockholder hereby covenants and agrees, on behalf of such Stockholder and
      its
      Stockholder Parties, that neither such Stockholder nor any of such Stockholder’s
      Stockholder Parties will encourage any Person to file a lawsuit, claim or
      complaint against the Company or any other Company Party relating to the claims
      released pursuant to Section 4.1. Each Stockholder hereby covenants and agrees,
      on behalf of such Stockholder and its Stockholder Parties, that neither such
      Stockholder nor any of its Stockholder Parties will assist any Person who files
      or has filed a lawsuit, claim, or complaint against the Company or any other
      Company Party relating to the claims released pursuant to Section 4.1 unless
      such Stockholder or any of its Stockholder Parties is required to render such
      assistance pursuant to a lawful subpoena or other legal obligation. If any
      Stockholder or any of such Stockholder’s Stockholder Parties is served with any
      such legal subpoena or becomes subject to any such legal obligation, such
      Stockholder shall provide prompt written notice to the Company thereof and
      enclose a copy of the subpoena and any other documents describing the legal
      obligation with such written notice.

     

    4.4.  The
      Parties agree and acknowledge that the release of any asserted or unasserted
      claims against the Company and the other Company Parties pursuant to Section
      4.1
      are not and shall not be construed to be an admission of any violation of any
      Federal, state or local statute or regulation, or of any duty owed by the
      Company or any of the other Company Parties to the Stockholders.

     

    4.5.  Each
      Stockholder acknowledges that there is a risk that after signing this Agreement
      it may discover losses or claims that are released under this Agreement, but
      that are presently unknown to it. Each Stockholder assumes this risk and
      understands that this release shall apply to any such losses and claims. Each
      Stockholder understands that this Agreement includes a full and final release
      covering all known and unknown, suspected or unsuspected injuries, debts, claims
      or damages which have arisen or may have arisen from any matters, acts,
      omissions or dealings released in Section 4.1 above. Each Stockholder
      acknowledges that by accepting the Exchange Shares and other benefits set forth
      in this Agreement, it assumes and waives the risk that the facts and the law
      may
      be other than as such Stockholder understands them to be.

     

    4.6.  Each
      Stockholder certifies and acknowledges that such Stockholder:

     

    (i)  has
      read
      the terms of this Agreement and the release provided hereunder, and that such
      Stockholder understands its terms and effects, including the fact that such
      Stockholder has agreed to RELEASE AND FOREVER DISCHARGE the Company and all
      other Company Parties from any legal action or other liability of any type
      related in any way to the matters released pursuant to Section 4.1;

     

    (ii)  has
      signed this Agreement voluntarily and knowingly in exchange for the
      consideration described herein, which such Stockholder acknowledges is adequate
      and satisfactory to such Stockholder; and

     

    (iii)  has
      been
      and is hereby advised in writing to consult with an attorney prior to signing
      this Agreement.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    ARTICLE
      V 

    DEFINITIONS

     

    5.1.  Defined
      Terms.
      As used
      herein, the following terms have the following respective meanings:

     

    Affiliate.
      Affiliate shall mean, with respect to any Person, any Person directly or
      indirectly controlling, controlled by or under direct or indirect common control
      with such Person and shall include (a) any Person who is a director or
      beneficial holder of at least 10% of the then outstanding capital stock (or
      partnership interests or other shares of beneficial interest) of such Person
      and
      Family Members of any such Person, (b) any Person of which such Person or an
      Affiliate (as defined in clause (a) above) of such Person directly or
      indirectly, either beneficially owns at least 10% of the then outstanding
      capital stock (or partnership interests or other shares of beneficial interest)
      or constitutes at least a 10% equity participant, (c) any Person of which an
      Affiliate (as defined in clause (a) above) of such Person is a partner,
      director, officer or executive employee, and (d) in the case of a specified
      Person who is an individual, Family Members of such Person.

     

    Business
      Day.
      Business Day shall mean any day on which banking institutions in New York,
      New
      York are open for the transaction of banking business.

     

    Charter.
      Charter
      shall include the articles or certificate of incorporation, statute,
      constitution, joint venture or partnership agreement, limited liability company
      operating agreement, or articles or other organizational document of any Person
      other than an individual, each as from time to time amended, restated or
      otherwise modified.

     

    Commission.
      Commission shall mean the Securities and Exchange Commission.

     

    Family Members.
      Family
      Members shall mean, with respect to any individual, any Related Person or Family
      Trust of such individual.

     

    Family Trust.
      Family
      Trust shall mean, with respect to any individual, any trust created for the
      benefit of one or more of such individual’s Related Persons and controlled by
      such individual

     

    Lien.
      Lien
      shall mean any encumbrance, mortgage, pledge, lien, charge or other security
      interest of any kind upon any property or assets of any character, or upon
      the
      income or profits therefrom.

     

    Person.
      Person
      shall mean an individual, partnership, corporation, association, limited
      liability company, trust, joint venture, unincorporated organization, and any
      government, governmental department or agency or political subdivision
      thereof.

     

    Related Persons.
      Related
      Persons shall mean, with respect to any individual, such individual’s parents,
      spouse, children and grandchildren.

     

    Securities
      Act.
      Securities Act shall mean the Securities Act of 1933, as amended, or any
      successor federal statute, and the rules and regulations of the Commission
      thereunder, all as the same shall be in effect at the time.

     

    5.2.  Terms
      Defined Elsewhere in this Agreement.
      For
      purposes of this Agreement, the following terms have meanings set forth in
      the
      sections indicated:

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
      	
              Term

            	
              Section

            
	
              Agreement

            	
              Preamble

            
	
              Company

            	
              Preamble

            
	
              Company
                Parties

            	
              4.1

            
	
              Exchange
                Shares

            	
              Recitals

            
	
              Investor

            	
              Recitals

            
	
              Investor
                Transaction

            	
              Recitals

            
	
              Party

            	
              Preamble

            
	
              Purchase
                Agreement

            	
              Recitals

            
	
              Series
                A Preferred Stock

            	
              Recitals

            
	
              Series
                A-1 Preferred Stock

            	
              Recitals

            
	
              Series
                A-2 Exchange Shares

            	
              Recitals

            
	
              Series
                A-2 Shares

            	
              Recitals

            
	
              Series
                B Preferred Stock

            	
              Recitals 

            
	
              Series
                C Shares

            	
              Recitals

            
	
              Stockholder

            	
              Preamble

            
	
              Stockholder
                Parties

            	
              4.1

            
	
              Transferred
                Shares

            	
              Recitals

            

    

     

    ARTICLE
      VI

    CERTAIN
      COVENANTS 

     

    6.1.  Confidential
      Information.
      Any and
      all confidential or proprietary information disclosed or made available by
      the
      Company to each Stockholder in connection with or as a result of the
      negotiations leading to the execution of this Agreement, or in furtherance
      thereof, shall remain confidential and the property of the Company and shall
      not
      be disclosed by such Stockholder and its employees, advisors, and agents, except
      to the extent that such Party must disclose such information to comply with
      applicable law. Each Stockholder agrees not to divulge or disclose or use for
      its benefit or purposes any information with respect to the Company unless
      such
      information has already become public. The information intended to be protected
      hereby shall include, but not be limited to, financial information, customers,
      sales representatives, and anything else having an economic or pecuniary benefit
      to the Company.

     

    6.2.  Further
      Assurances.
      Each
      Party hereto will cooperate with the other Parties hereto and execute such
      further instruments and documents as any Party shall reasonably request to
      carry
      out the transactions contemplated by this Agreement.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    ARTICLE
      VII 

    GENERAL

     

    7.1.  Term.
      This
      Agreement shall immediately expire if the Investor Transaction has not been
      consummated prior to the close of business on August 31, 2007.

     

    7.2.  Notices.
      All
      notices required or permitted hereunder shall be in writing and shall be deemed
      effectively given: (a) upon personal delivery to the Party to be notified;
      (b)
      when sent by confirmed facsimile if sent during normal business hours of the
      recipient; if not, then on the next business day; (c) five days after having
      been sent by registered or certified mail, return receipt requested, postage
      prepaid; or (d) one Business Day after deposit with a nationally recognized
      overnight courier; specifying next day delivery; with written verification
      of
      receipt. All communications are to be sent to the addresses set forth
      below:

     

    If
      to any
      Stockholder, to such Stockholder’s address set forth on Schedule
      1.

    

    If
      to the
      Company, to:

    

    Advanced
      Communications Technologies, Inc.

    420
      Lexington Avenue, Suite 2378

    New
      York,
      NY 10170

    Attention:
      Wayne I. Danson

    Facsimile:
      646.277.1666

    

    with
      copies to:

    

    Eckert
      Seamans Cherin & Mellott, LLC

    Two
      Liberty Place

    50
      South
      16th
      Street -
      22nd
      Floor

    Philadelphia,
      PA 19102 

    Attention:
      Gary Miller, Esq.

    Facsimile:
      215.851.8472

     

    H.I.G.
      Capital, LLC

    855
      Boylston Street, 11th Floor

    Boston,
      MA 02116

    Attention:
      John Black and William Nolan

    Facsimile:
      267.207.2733

    

    and

     

    Bingham
      McCutchen LLP

    399
      Park
      Avenue

    New
      York,
      New York 10022

    Attention:
      Neil W. Townsend, Esq. 

    Fax:
      212.752.5378

    

    7.3.  Expenses.
      The
      Company shall pay all transfer and sales taxes payable in connection with the
      exchange of his, her or its Exchange Shares. All expenses of the preparation,
      execution and consummation of this Agreement and of the transactions
      contemplated hereby, including, without limitation, attorneys’, accountants’ and
      outside advisers’ fees and disbursements, shall be borne by the Party incurring
      such expenses.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    7.4.  Waivers;
      Amendments.
      (a)  No
      failure or delay by any Party in exercising any right or power hereunder shall
      operate as a waiver thereof, nor shall any single or partial exercise of any
      such right or power, or any abandonment or discontinuance of steps to enforce
      such a right or power, preclude any other or further exercise thereof or the
      exercise of any other right or power. No waiver of any provision of this
      Agreement or consent to any departure by any Party therefrom shall in any event
      be effective unless the same shall be permitted by paragraph (b) of this
      Section, and then such waiver or consent shall be effective only in the specific
      instance and for the purpose for which given. No provision of this Agreement
      may
      be waived, amended or otherwise modified except pursuant to an agreement or
      agreements in writing entered into by all of the Parties.

     

    7.5.  Successors
      and Assigns.
      Neither
      this Agreement nor any of the rights, interests or obligations hereunder may
      be
      assigned by any of the Parties, in whole or in part (whether by operation of
      law
      or otherwise), without the prior written consent of the other Parties, and
      any
      attempt to make any such assignment without such consent shall be null and
      void.
      Subject to the preceding sentence, this Agreement will be binding upon, inure
      to
      the benefit of and be enforceable by the Parties and their respective successors
      and assigns. Nothing in this Agreement, expressed or implied, shall be construed
      to confer upon any Person (other than the Parties) any legal or equitable right,
      remedy or claim under or by reason of this Agreement.

     

    7.6.  Survival.
      All
      covenants, agreements, representations and warranties made by the Parties herein
      and in the other instruments delivered in connection with or pursuant to this
      Agreement shall be considered to have been relied upon by the other Parties
      and
      shall survive the execution and delivery of this Agreement. 

     

    7.7.  Counterparts;
      Integration.
      This
      Agreement may be executed in counterparts (and by different parties hereto
      on
      different counterparts), each of which shall constitute an original, but all
      of
      which when taken together shall constitute a single contract. Delivery of an
      executed counterpart of a signature page of this Agreement by facsimile shall
      be
      effective as delivery of a manually executed counterpart of this Agreement.
      This
      Agreement constitutes the entire contract among the parties relating to the
      subject matter hereof and supersede any and all previous agreements and
      understandings, oral or written, relating to the subject matter
      hereof.

     

    7.8.  Severability.
      Any
      provision of this Agreement held to be invalid, illegal or unenforceable in
      any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such invalidity, illegality or unenforceability without affecting the validity,
      legality and enforceability of the remaining provisions hereof; and the
      invalidity of a particular provision in a particular jurisdiction shall not
      invalidate such provision in any other jurisdiction. 

     

    7.9.  Governing
      Law; Jurisdiction.
      (a)
      THIS
      AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
      WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO ANY
      CONFLICTS OF LAW PROVISION THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF
      ANY
      OTHER JURISDICTION).

     

    (b)  Each
      of
      the Parties hereby irrevocably and unconditionally submits, for itself and
      its
      property, to the nonexclusive jurisdiction of the Supreme Court of the State
      of
      New York sitting in New York County and of the United States District Court
      of
      the Southern District of New York, and any appellate court from any thereof,
      in
      any action or proceeding arising out of or relating to this Agreement, or for
      recognition or enforcement of any judgment, and each of the Parties hereby
      irrevocably and unconditionally agrees that all claims in respect of any such
      action or proceeding may be heard and determined in such New York State or,
      to
      the extent permitted by law, in such Federal court. Each of the Parties agrees
      that a final judgment in any such action or proceeding shall be conclusive
      and
      may be enforced in other jurisdictions by suit on the judgment or in any other
      manner provided by law.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    7.10.  WAIVER
      OF JURY TRIAL.
      EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
      LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
      DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT (WHETHER
      BASED ON CONTRACT, TORT OR ANY OTHER THEORY).

     

    7.11.  Headings.
      Article
      and Section headings used herein are for convenience of reference only, are
      not
      part of this Agreement and shall not affect the construction of, or be taken
      into consideration in interpreting, this Agreement.

     

    [REMAINDER
      OF THIS PAGE INTENTIONALLY LEFT BLANK]

    
 

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, and intending to be legally bound hereby, the parties hereto
      have caused this Agreement to be duly executed and delivered as of the date
      and
      year first above written.

     

    ADVANCED
      COMMUNICATIONS TECHNOLOGIES, INC.

     

    By:
      /s/
      Wayne I. Danson

    Name:
      Wayne I Danson

     

    Title:
      President and Chief Executive Officer

     

    YA
      GLOBAL INVESTMENTS, L.P.

    f/k/a
      Cornell Capital Partners, L.P. 

    

    By:
      Yorkville Advisors, LLC, its Investment Manager 

     

    By:/s/
      Troy Rillo

    Name:
      Troy Rillo

     

    Title:
      Senior Managing Director

     

    /s/
      Connie Benesch

    Connie
      Benesch

     

    /s/
      Barry H. Liben

    Barry
      H.
      Liben

     

    /s/Mary
      Ellen Misiak-Viola

    Mary
      Ellen Misiak-Viola

     

    /s/
      Camille Henry

    Camille
      Henry

     

    /s/Wayne
      I Danson

    Wayne
      I
      Danson

     

    /s/
      John E Donahue

    John
      E
      Donahue

     

    /s/
      Steven J Miller

    Steven
      J
      Miller

     

    /s/
      Anthony Lee

    Anthony
      Lee

     

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    /s/
      Gerald Holland

    Gerald
      Holland

    

      /s/
        Jeffrey Kwit KT Capital, L.P.

      Managing
        Member

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    Schedule
      1

     

    
      	
              Stockholders

            	
              Exchange
                Shares

            	
              Address

            	
              Transferred
                Shares

            
	 	 	 	 
	
              YA
                Global Investments, L.P.

            	
              4,908.87

            	 	
              2,040

            
	
              Connie
                Benesch

            	
              519.44

            	 	
              187

            
	
              Barry
                H. Liben

            	
              905.56

            	 	
              326

            
	
              Mary
                Ellen Misiak-Viola

            	
              1,247.78

            	 	
              449.2

            
	
              Camille
                Henry

            	
              11.11

            	 	
              4

            
	
              Wayne
                I Danson

            	
              104.17

            	 	
              50

            
	
              John
                E Donahue

            	
              156.25

            	 	
              75

            
	
              Steven
                J Miller

            	
              312.50

            	 	
              150

            
	
              Anthony
                Lee

            	
              31.25

            	 	
              15

            
	
              Gerald
                Holland

            	
              104.17

            	 	
              50

            
	
              KT
                Capital, L.P.

            	
              111.11

            	 	
              40

            

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    Exhibit
      A

     

    See
      attached

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CERTIFICATE
      OF DESIGNATION OF THE SERIES A-2 PREFERRED STOCK

    (PAR
      VALUE $0.01 PER SHARE)

     

    OF

     

    ADVANCED
      COMMUNICATIONS TECHNOLOGIES, INC.

     

    
      
        

      

    

     

    The
      undersigned, a duly authorized officer of Advanced Communications Technologies,
      Inc., a Florida corporation (the “Company”),
      in
      accordance with the provisions of Section 607.0602 of the Florida Business
      Corporation Act, does hereby certify that the following resolution was duly
      adopted by the Board of Directors by unanimous written consent pursuant to
      Section 607.0821 of the Florida Business Corporation Act on August 16,
      2007:

     

    RESOLVED,
      that the Board has determined that it is in the best interests of the Company
      to
      provide for the designation and issuance of Series A-2 Convertible Preferred
      Stock, par value of $0.01 per share (the “Series
      A-2 Preferred Stock”),
      to
      consist of up to 8,413 shares, and hereby fixes the powers, designations,
      preferences and relative other special rights of the shares of such Series
      A-2
      Preferred Stock as follows:

     

    SECTION 1

    DESIGNATION
      AND RANK

     

    1.1  Designation.
      This
      resolution shall provide for a series of preferred stock, the designation of
      which shall be “Series
      A-2 Convertible Preferred Stock”,
      par
      value $0.01 per share. The number of authorized shares constituting the Series
      A-2 Preferred Stock is 8,413. 

     

    1.2  Rank.
      With
      respect to the distribution of the assets of the Company upon Liquidation (as
      defined below), the Series A-2 Preferred Stock shall be (i) junior and
      subordinate to the Company’s Series C Convertible Preferred Stock, par value
      $0.01 per share (“Series
      C Preferred Stock”),
      Series D Convertible Preferred Stock, par value $0.01 per share (the
“Series
      D Preferred Stock”)
      and to
      any other series of preferred stock designated by the Board of Directors after
      the date hereof as senior to the Series A-2 Preferred Stock(collectively, the
      “Senior
      Stock”),
      and
      (ii) pari passu with the common stock of the Company, par value $0.01 per share
      (the “Common
      Stock”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SECTION 2

    DIVIDEND
      RIGHTS

     

    2.1  So
      long
      as any shares of Series A-2 Preferred Stock remain outstanding, no dividend
      or
      distribution whatsoever (other than distributions in connection with a
      Liquidation as set forth below) shall be paid or declared in respect of the
      Common Stock unless and until each of the then outstanding shares of Series
      A-2
      Preferred Stock has been paid aggregate dividends equal to $1.00 per share.
      In
      the event that the Company thereafter pays or declares any dividend on the
      Common Stock, then the holders of Series A-2 Preferred Stock shall be entitled
      to receive, on a pari passu basis with the holders of Common Stock, dividends
      as
      if such holders’ Series A-2 Preferred Stock were converted into to Common Stock
      at the Series A-2 Conversion Rate (as defined below) immediately prior to the
      declaration of such dividend (assuming for these purposes that the number of
      authorized shares of Common Stock had been increased to an amount sufficient
      for
      the conversion of the Series A-2 Preferred Stock).

     

    SECTION 3  

    LIQUIDATION
      RIGHTS

     

    3.1  Liquidation
      Preference.

     

    (a)  Upon
      any
      Liquidation (as defined below), subject to the rights of the Senior Stock,
      the
      holders of Series A-2 Preferred Stock shall be entitled to receive out of the
      assets of the Company, whether such assets are capital, surplus or earnings,
      on
      a pari passu basis with the holders of Common Stock, an amount per share of
      Series A-2 Preferred Stock equal to the Assumed Conversion Amount. Thereafter,
      no further distributions shall be made to the holders of Series A-2 Preferred
      Stock in respect of such shares.

     

    (b)  For
      purposes hereof:

     

    (i)  “Liquidation”
means
      (A) a liquidation, dissolution or winding up of the Company, whether voluntary
      or involuntary, (B) a consolidation or merger of the Company with or into any
      other person(s), entity or entities in which less than a majority of the
      outstanding voting power of the surviving person(s), entity or entities is
      held
      by persons or entities who were stockholders of the Company prior to such event
      or (C) a sale or other disposition (whether in a single transaction or a series
      of related transactions) of substantially all of the assets of the
      Company.

     

    (ii)  “Assumed
      Conversion Amount”
means
      the total amount of proceeds that would be payable to the holder of a share
      of
      Series A-2 Preferred Stock on a Liquidation if immediately prior to such
      Liquidation each outstanding share of Series A-2 Preferred Stock were converted
      into a number of shares of Common Stock at the then current Series A-2
      Conversion Rate (assuming for these purposes that the number of authorized
      shares of Common Stock has been increased to an amount sufficient for the
      conversion of the Series A-2 Preferred Stock).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SECTION 4

    CONVERSION

     

    4.1  Charter
      Amendment.
      Promptly following the date hereof, the Company shall use all reasonable
      commercial efforts to cause the Articles of Incorporation of the Company (the
      “Charter
      Amendment”)
      to be
      amended in order to increase the authorized number of shares of Common Stock
      to
      an amount reasonably sufficient for the conversion of Series A-2 Preferred
      Stock
      into Common Stock at the Series A-2 Conversion Rate (as defined below),
      including the recommendation and submission of a proposal to the stockholders
      of
      the Company for the approval of such amendment.

     

    4.2  Automatic
      Conversion.
      Immediately upon the approval of the Charter Amendment and the effective filing
      thereof with the Florida Department of State, each share of Series A-2 Preferred
      Stock shall be automatically converted into 1,000,000 shares of Common (the
      “Series
      A-2 Conversion Rate”)
      without any further action on the part of the Company or the holder
      thereof.

     

    4.3  General.

     

    (a)  Adjustments.
      The
      Series A-2 Conversion Rate as described in Section 4.2 above shall be adjusted
      from time to time in the event of any stock split involving the Common Stock,
      reclassification of the Common Stock or recapitalization involving Common Stock.
      The holders of the Series A-2 Preferred Stock shall thereafter be entitled
      to
      receive, and (if applicable) provision shall be made therefor in any agreement
      or other instrument relating to such stock split, reclassification or
      recapitalization, upon conversion of the Series A-2 Preferred Stock, the kind
      and number of shares of Common Stock or other securities or property (including
      cash) to which such holders of Series A-2 Preferred Stock would have been
      entitled if they had held the number of shares of Common Stock into which the
      Series A-2 Preferred Stock was convertible immediately prior to such
      reclassification or recapitalization; and in any such case appropriate
      adjustment shall be made in the application of the provisions herein set forth
      with respect to the rights and interests thereafter of the holders of the Series
      A-2 Preferred Stock, to the end that the provisions set forth herein shall
      thereafter be applicable, in the reasonable discretion of the Board, in relation
      to any shares, other securities, or property thereafter receivable upon
      conversion of the Series A-2 Preferred Stock. An adjustment made pursuant to
      this subparagraph shall become effective at the time at which such stock split,
      reclassification or recapitalization becomes effective.

     

    (b)  Procedures
      for Conversion.
      The
      holder of any shares of Series A-2 Preferred Stock shall, upon any conversion
      of
      such Series A-2 Preferred Stock in accordance with this Section 4, surrender
      certificates representing the Series A-2 Preferred Stock to the Company, at
      its
      principal office, and specify the name or names in which such holder wishes
      the
      certificate or certificates for shares of Common Stock to be issued. In case
      such holder shall specify a name or names other than that of such holder, such
      notice shall be accompanied by payment of all transfer taxes (if transfer is
      to
      a person or entity other than the holder thereof) payable upon the issuance
      of
      shares of Common Stock in such name or names. As promptly as practicable, and,
      if applicable, after payment of all transfer taxes (if transfer is to a person
      or entity other than the holder thereof), the Company shall deliver or cause
      to
      be delivered certificates representing the number of validly issued, fully
      paid
      and nonassessable shares of Common Stock to which the holder of the Series
      A-2
      Preferred Stock so converted shall be entitled. Upon the automatic conversion
      of
      shares of Series A-2 Preferred Stock pursuant to Section 4.2 above, such shares
      shall cease to constitute shares of Series A-2 Preferred Stock and shall
      represent only a right to receive shares of Common Stock into which they have
      been converted.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SECTION 5

    VOTING
      RIGHTS

     

    5.1  Series
      A-2 Voting Rights.
      The
      holder of each share of Series A-2 Preferred Stock will be entitled to vote
      on
      all matters submitted to the stockholders of the Company. Each share of Series
      A-2 Preferred Stock will entitle the holder thereof to such number of votes
      per
      share equal to the Series A-2 Conversion Rate as of the record date of such
      vote
      (determined assuming that the Charter Amendment has been duly approved and
      effectively filed). Except as otherwise provided herein or as required by
      applicable law, the holders of shares of Series A-2 Preferred Stock shall have
      the right to vote together with the holders of Common Stock and other shares
      of
      the Company's common and preferred stock that, by their terms, vote with the
      Common Stock, as a single class, and not by separate class or series, on all
      matters submitted to a vote or consent of shareholders. The Series A-2 Preferred
      Stock shall have no right to vote as a separate class except as required by,
      and
      cannot be waived under, the Florida Business Corporation Act.

     

    SECTION 6

    MISCELLANEOUS

     

    6.1  Headings
      of Subdivisions.
      The
      headings of the various Sections hereof are for convenience of reference only
      and shall not affect the interpretation of any of the provisions
      hereof.

     

    6.2  Severability
      of Provisions.
      If any
      right, preference or limitation of the Series A-2 Preferred Stock set forth
      herein (as this resolution may be amended from time to time) is invalid,
      unlawful or incapable of being enforced by reason of any rule of law or public
      policy, all other rights, preferences and limitations set forth in this
      resolution (as so amended), which can be given effect without the invalid,
      unlawful or unenforceable right, preference or limitation shall, nevertheless,
      remain in full force and effect, and no right, preference or limitation herein
      set forth shall be deemed dependent upon any other such right, preference or
      limitation unless so expressed herein.

     

    [Remainder
      of page intentionally left blank.]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Company has caused this Certificate of Designation to
      be
      signed, under penalties of perjury, by Wayne Danson, its President.

     

    

     

    
      	
              Dated:
                August 16, 2007

            	
              ADVANCED
                COMMUNICATIONS TECHNOLOGIES, INC.

            
	 	
               

              By:
                ____________________________________     

               

            
	 	 

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      B

     

    

     

    An
      "accredited investor" generally is defined under Regulation D as any person
      or
      entity that, at the time of purchase of the Shares is:

     

    
      	 	
              (1)

            	
              a
                bank or savings and loan association or other institution; a broker
                or
                dealer; an insurance company; and investment company registered under
                the
                Investment Company Act of 1940 or a business development company;
                a Small
                Business Investment Company licensed by the United States Small Business
                Administration; a plan established and maintained by a state, its
                political subdivision or any agency or instrumentality of a state
                or its
                political subdivision for the benefit of its employees, if such plan
                has
                total assets in excess of $5,000,000; an employee benefit plan within
                the
                meaning of the Employee Retirement Income Securities Act of 1974,
                as
                amended, if the investment decision is made by a plan fiduciary that
                is
                either a bank, savings and loan association, insurance company or
                registered investment adviser, or if the employee benefit plan has
                total
                assets in excess of $5,000,000 or, if a self-directed plan, with
                investment decisions made solely by persons who are accredited
                investors;

            

    

     

    
      	 	
              (2)

            	
              a
                private business development
                company;

            

    

     

    
      	 	
              (3)

            	
              an
                organization described in Section 501(c)(3) of the Internal Revenue
                Service Code, a corporation, or a Massachusetts or similar business
                trust
                or partnership, not formed for the specific purpose of acquiring
                the
                securities offered, with total assets in excess of
                $5,000,000;

            

    

     

    
      	 	
              (4)

            	
              a
                director, executive officer or general partner of the issuer of the
                securities being offered or sold, or any director, executive officer
                or
                general partner of a general partner of that
                issuer;

            

    

     

    
      	 	
              (5)

            	
              a
                natural person whose individual net worth, or joint net worth with
                that
                person's spouse, at the time of his or her purchase exceeds $1,000,000.
                Net worth includes personal assets such as homes, vehicles, etc.;
                

            

    

     

    
      	 	
              (6)

            	
              a
                natural person who had an individual income in excess of $200,000
                in each
                of the two most recent years, or joint income with that person's
                spouse in
                excess of $300,000 in each of those years, and who has a reasonable
                expectation of reaching the same income level in the current year;
                

            

    

     

    
      	 	
              (7)

            	
              Any
                trust, with total assets in excess of $5,000,000 not formed for the
                specific purpose of acquiring the securities offered, whose purchase
                is
                directed by a sophisticated person;
                and

            

    

     

    
      	 	
              (8)

            	
              an
                entity (e.g. a corporation or LLC) in which all of the equity owners
                are
                accredited investors. 

            

    

     

    For
      a
      precise legal description of the term "accredited investor," prospective
      Stockholders should refer to Rule 501 of Regulation D.ADVANCED
      COMMUNICATIONS TECHNOLOGIES, INC.

    AMENDED
      AND RESTATED 2005 STOCK PLAN

     

    The
      purpose of the Advanced Communications Technologies, Inc. Amended and Restated
      2005 Stock Plan (the “Plan”) is to provide (i) designated employees of Advanced
      Communications Technologies, Inc. (the “Company”) and its subsidiaries, (ii)
      certain consultants and advisors who perform services for the Company or its
      subsidiaries and (iii) non-employee members of the Board of Directors of the
      Company (the “Board”) with the opportunity to receive grants of incentive stock
      options and nonqualified stock options (collectively, “Options”)
      and
      restricted stock (together with the Options, referred to as “Grants”).
      The Company believes that the Plan will encourage the participants to contribute
      materially to the growth of the Company, thereby benefiting the Company’s
      stockholders, and will align the economic interests of the participants with
      those of the stockholders.

     

    
      	
              1.

            	
              Administration

            

    

     

    (a) Board
      or Committee.
      The
      Plan shall be administered and interpreted by a committee of the Board, which
      may consist of two or more persons who are “outside directors” as defined under
      Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”),
      and related Treasury regulations and “non-employee directors” as defined under
      Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange
      Act”). However, the Board may ratify or approve any grants as it deems
      appropriate. If a committee or an individual administers the Plan, references
      in
      the Plan to the “Board” shall be deemed to refer to the committee.

     

    (b) Board
      Authority.
      The
      Board shall have the sole authority to (i) determine the individuals to whom
      Grants shall be made under the Plan, (ii) determine the type, size and terms
      of
      the Grants to be made to each such individual, (iii) determine the time when
      the
      Grants will be made and the duration of any applicable exercise period,
      including the criteria for exercisability and the acceleration of
      exercisability, (iv) amend the terms of any previously issued Grant and (v)
      deal
      with any other matters arising under the Plan.

     

    (c) Delegation.
      The
      Board may delegate certain of its duties to one or more of its members or to
      one
      or more agents as it may deem advisable. The Board may employ attorneys, agents,
      consultants, accountants or other persons, and shall be entitled to rely upon
      the advice, opinions or valuations of such persons.

     

    (d) Board
      Determinations.
      The
      Board shall have full power and authority to administer and interpret the Plan,
      to make factual determinations and to adopt or amend such rules, regulations,
      agreements and instruments for implementing the Plan and for the conduct of
      its
      business as it deems necessary or advisable, in its sole discretion. The Board’s
      interpretations of the Plan and all determinations made by the Board pursuant
      to
      the powers vested in it hereunder shall be conclusive and binding on all persons
      having any interest in the Plan or in any awards granted hereunder. All powers
      of the Board shall be executed in its sole discretion, in the best interest
      of
      the Company, not as a fiduciary, and in keeping with the objectives of the
      Plan
      and need not be uniform as to similarly situated individuals.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (e) Grants
      Generally.
      Awards
      under the Plan may consist of Options as described in Section 4,
      or
      restricted stock as described in Section 7 (“Restricted Stock”).
      All
      Grants shall be subject to the terms and conditions set forth herein and to
      such
      other terms and conditions consistent with this Plan as the Board deems
      appropriate and as are specified in writing by the Board to the individual
      in a
      Grant instrument or an amendment to the Grant instrument (each an “Option
      Agreement” or “Grant Instrument”). The Board shall approve the form and
      provisions of each Option Agreement or Grant Instrument.

     

    
      	
              2.

            	
              Shares
                Subject to the Plan

            

    

     

    (a) Shares
      Authorized.
      Subject
      to adjustment as described below, the aggregate number of shares of common
      stock
      of the Company (“Company Stock”) that may be issued or transferred under the
      Plan, or upon which awards under the Plan may be granted is 15,000,000,000
      shares, some or all of which may be issued as incentive stock options when
      issued to individuals entitled to receive incentive stock options. The shares
      may be authorized but unissued shares of Company Stock or reacquired shares
      of
      Company Stock, including shares purchased by the Company on the open market
      for
      purposes of the Plan. If and to the extent Options granted under the Plan
      terminate, expire, or are canceled, forfeited, exchanged or surrendered without
      having been exercised or
      if any
      Restricted Stock is forfeited,
      the
      shares subject to such Grants shall again be available for purposes of the
      Plan,
      unless otherwise provided by the Board.

     

    (b) Adjustments.
      If
      there is any change in the number or kind of shares of Company Stock outstanding
      by reason of (i) stock dividend, spinoff, recapitalization, stock split or
      combination or exchange of shares, (ii) merger, reorganization or consolidation,
      (iii) reclassification or change in par value or (iv) any other extraordinary
      or
      unusual event affecting the outstanding Company Stock as a class without the
      Company’s receipt of consideration, or if the value of outstanding shares of
      Company Stock is substantially reduced as a result of a spinoff or the Company’s
      payment of an extraordinary dividend or distribution, the maximum number of
      shares of Company Stock available under the Plan, the maximum number of shares
      of Company Stock that any individual participating in the Plan may be granted
      in
      any year, the number of shares covered by outstanding Grants, the kind of shares
      issued under the Plan, and the price per share or the applicable market value
      of
      such Grants shall be adjusted by the Board as it deems appropriate to reflect
      any increase or decrease in the number of, or change in the kind or value of,
      issued shares of Company Stock to preclude, to the extent practicable, the
      enlargement or dilution of rights and benefits under such Grants; provided,
      however, that any fractional shares resulting from such adjustment shall be
      eliminated. Any adjustments determined by the Board shall be final, binding
      and
      conclusive.

     

    
      	
              3.

            	
              Eligibility
                for Participation

            

    

     

    (a) Eligible
      Persons.
      All
      employees of the Company and its subsidiaries (“Employees”) and members of the
      Board who are not Employees (“Non-Employee Directors”) shall be eligible to
      participate in the Plan. Consultants and advisors who perform services for
      the
      Company or any of its subsidiaries (“Key Advisors”) shall be eligible to
      participate in the Plan if the Key Advisors render bona fide services to the
      Company or its subsidiaries, the services are not in connection with the offer
      and sale of securities in a capital-raising transaction and the Key Advisors
      do
      not directly or indirectly promote or maintain a market for the Company’s
      securities.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (b) Selection
      of Grantees.
      The
      Board shall select the Employees, Non-Employee Directors and Key Advisors to
      receive Grants and shall determine the number of shares of Company Stock subject
      to a particular Grant in such manner as the Board determines. Employees, Key
      Advisors and Non-Employee Directors who receive Grants under this Plan shall
      hereinafter be referred to as “Grantees.”

     

    
      	
              4.

            	
              Granting
                of Options

            

    

     

    (a) Number
      of Shares.
      The
      Board shall determine the number of shares of Company Stock that will be subject
      to each Option.

     

    (b) Type
      of Option and Price.

     

    (i) The
      Board
      may grant Options that are intended to qualify as “incentive stock options”
within the meaning of Section 422 of the Code (“Incentive Stock Options”) or
      Options that are not intended so to qualify (“Nonqualified Stock Options”) or
      any combination of Incentive Stock Options and Nonqualified Stock Options,
      all
      in accordance with the terms and conditions set forth herein. Incentive Stock
      Options may be granted only to Employees of the Company or a parent or
      subsidiary (within the meaning of Section 424(f) of the Code). Nonqualified
      Stock Options may be granted to Employees, Non-Employee Directors and Key
      Advisors. Unless otherwise provided in the Option Agreement, any Option granted
      under this Plan to an Employee is intended to be an Incentive Stock
      Option.

     

    (ii) The
      purchase price (the “Exercise Price”) of Company Stock subject to an Option
      shall be determined by the Board. The Exercise Price of Options shall be equal
      to the Fair Market Value (as defined below) of a share of Company Stock on
      the
      date the Option is granted; provided, however, that an Incentive Stock Option
      may not be granted to an Employee who, at the time of grant, owns stock
      possessing more than ten percent of the total combined voting power of all
      classes of stock of the Company or any parent or subsidiary of the Company,
      unless the Exercise Price per share is not less than 110% of the Fair Market
      Value of Company Stock on the date of grant.

     

    (iii) If
      the
      Company Stock is publicly traded, then the Fair Market Value per share shall
      be
      determined as follows: (x) if the principal trading market for the Company
      Stock
      is a national securities exchange, the closing price thereof on the relevant
      date or (if there were no trades on that date) the latest preceding date upon
      which a sale was reported, or (y) if the Company Stock is not principally traded
      on such exchange or market, the mean between the last reported “bid” and “asked”
prices of Company Stock on the relevant date, as reported on Nasdaq or, if
      not
      so reported, as reported by the NASDAQ OTC Bulletin Board, the National Daily
      Quotation Bureau, Inc. or as reported in a customary financial reporting
      service, as applicable and as the Board determines. If the Company Stock is
      not
      publicly traded or, if publicly traded, is not subject to reported transactions
      or “bid” or “asked” quotations as set forth above, the Fair Market Value per
      share shall be as determined by the Board.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (c) Option
      Term.
      The
      Board shall determine the term of each Option. The term of any Option shall
      not
      exceed ten years from the date of grant, which date of grant is determined
      by
      the Board. However, an Incentive Stock Option that is granted to an Employee
      who, at the time of grant, owns stock possessing more than ten percent of the
      total combined voting power of all classes of stock of the Company, or any
      parent or subsidiary of the Company, may not have a term that exceeds five
      years
      from the date of grant.

     

    (d) Exercisability
      of Options.
      Options
      shall become exercisable in accordance with such terms and conditions,
      consistent with the Plan, as may be determined by the Board and specified in
      the
      Option Agreement. Unless a different vesting schedule is specified by the Board
      in an Option Agreement, Options granted under this Plan shall vest in three
      equal annual installments beginning with the first anniversary of grant. The
      Board may accelerate, and may provide in the Option Agreement for the
      acceleration of, the exercisability of any or all outstanding Options at any
      time for any reason.

     

    (e) Limit
      on Incentive Stock Options.
      Each
      Incentive Stock Option shall provide that, if the aggregate Fair Market Value
      of
      the stock on the date of the grant with respect to which Incentive Stock Options
      are exercisable for the first time by an Grantee during any calendar year,
      under
      the Plan or any other stock option plan of the Company or a parent or
      subsidiary, exceeds $100,000, then the Option, as to the excess, shall be
      treated as a Nonqualified Stock Option.

     

    
      	
              5.

            	
              Termination
                of Employment, Disability or
                Death

            

    

     

    (a) General
      Rule.
      Except
      as provided below, an Option may only be exercised while the Grantee is employed
      by, or providing service to, the Company as an Employee, Key Advisor or member
      of the Board. In the event that a Grantee ceases to be employed by, or provide
      service to, the Company for any reason other than (i) termination by the Company
      without Cause (as defined below), (ii) voluntary termination by the Grantee,
      (iii) Good Reason (as defined below), but only to the extent that a Grantee
      has
      the right to terminate his or her employment with the Company for “Good Reason”
pursuant to such Grantee’s Employment Agreement, (iv) Disability (as defined
      below) or (v) death, any Option held by the Grantee shall terminate immediately
      (unless the Board specifies otherwise). In addition, notwithstanding any other
      provision of this Plan, if the Board determines that the Grantee has engaged
      in
      conduct that constitutes Cause at any time while the Grantee is employed by,
      or
      providing service to, the Company or after the Grantee’s termination of
      employment or service, any Option held by the Grantee shall immediately
      terminate and the Grantee shall automatically forfeit all shares underlying
      any
      exercised portion of an Option for which the Company has not yet delivered
      the
      share certificates, upon refund by the Company of the Exercise Price paid by
      the
      Grantee for such shares. Upon any exercise of an Option, the Company may
      withhold delivery of share certificates pending resolution of an inquiry that
      could lead to a finding resulting in a forfeiture.

     

    (b) Termination
      Without Cause; Voluntary Termination.
      In the
      event that an Grantee ceases to be employed by, or provide service to, the
      Company as a result of (i) termination by the Company without Cause (as defined
      below), (ii) voluntary termination by the Grantee or (iii) termination by the
      Grantee for Good Reason (but only to the extent that a Grantee has the right
      to
      terminate his or her employment with the Company for “Good Reason” pursuant to
      such Grantee’s Employment Agreement), any Option which is otherwise exercisable
      by the Grantee shall terminate unless exercised within 90 days after the date
      on
      which the Grantee ceases to be employed by, or provide service to, the Company
      (or within such other period of time as may be specified by the Board), but
      in
      any event no later than the date of expiration of the Option term. Except as
      otherwise provided by the Board, any of the Grantee’s Options that are not
      otherwise exercisable as of the date on which the Grantee ceases to be employed
      by, or provide service to, the Company shall terminate as of such
      date.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (c) Termination
      Because Disabled.
      In the
      event the Grantee ceases to be employed by, or provide service to, the Company
      because the Grantee is Disabled, any Option which is otherwise exercisable
      by
      the Grantee shall terminate unless exercised within one year after the date
      on
      which the Grantee ceases to be employed by, or provide service to, the Company
      (or within such other period of time as may be specified by the Board), but
      in
      any event no later than the date of expiration of the Option term. Except as
      otherwise provided by the Board, any of the Grantee’s Options which are not
      otherwise exercisable as of the date on which the Grantee ceases to be employed
      by, or provide service to, the Company shall terminate as of such
      date.

     

    (d) Death.
      If the
      Grantee dies while employed by, or providing service to, the Company or within
      90 days after the date on which the Grantee ceases to be employed or provide
      service on account of a termination specified in Section 5(b) above (or within
      such other period of time as may be specified by the Board), any Option that
      is
      otherwise exercisable by the Grantee shall terminate unless exercised within
      one
      year after the date on which the Grantee ceases to be employed by, or provide
      service to, the Company (or within such other period of time as may be specified
      by the Board), but in any event no later than the date of expiration of the
      Option term. Except as otherwise provided by the Board, any of the Grantee’s
      Options that are not otherwise exercisable as of the date on which the Grantee
      ceases to be employed by, or provide service to, the Company shall terminate
      as
      of such date.

     

    (e) Board
      Discretion.
      The
      Board shall have the discretion to vary any of the provisions of the foregoing
      in an Option Agreement, including, without limitation, by providing that the
      Option shall not be affected by the termination of employment or service of
      a
      Grantee.

     

    (f) Definitions.

     

    (i) The
      term
“Company” shall mean the Company and its parent and subsidiary corporations or
      other entities, as determined by the Board.

     

    (ii) “Employed
      by, or provide service to, the Company” shall mean employment or service as an
      Employee, Key Advisor or member of the Board (so that an Grantee shall not
      be
      considered to have terminated employment or service until the Grantee ceases
      to
      be an Employee, Key Advisor and member of the Board), unless the Board
      determines otherwise.

     

    (iii) “Disability”
      shall mean a Grantee’s becoming disabled under the Company’s long-term
      disability plan, or, if the Grantee is not covered under such plan or no such
      plan is maintained, and in the case of an Incentive Stock Option, “Disability”
shall mean an Grantee’s becoming disabled within the meaning of Section 22(e)(3)
      of the Code.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (iv) “Cause”
      shall mean, except to the extent specified otherwise by the Board or set forth
      in any Employment Agreement between a Grantee and the Company or one of its
      Subsidiaries, a finding by the Board that the Grantee has: (i) breached his
      or
      her employment or service contract with the Company; (ii) engaged in disloyalty
      to the Company, including, without limitation, fraud, embezzlement, theft,
      commission of a felony or proven dishonesty in the course of his or her
      employment or service; (iii) disclosed trade secrets or confidential information
      of the Company to persons not entitled to receive such information; (iv)
      breached any written confidentiality, non-competition or non-solicitation
      agreement between the Grantee and the Company; or (v) has engaged in such other
      behavior detrimental to the interests of the Company as the Board
      determines.

     

    (v) To
      the
      extent that a Grantee has the right to terminate his or her employment with
      the
      Company for “Good Reason,” pursuant to such Grantee’s Employment Agreement,
”Good Reason” shall have the meaning ascribed to that term in the Employment
      Agreement between the Grantee and the Company or one of its subsidiaries.

     

    
      	
              6.

            	
              Exercise
                of Options.

            

    

     

    (a) Notice
      of Exercise.
      A
      Grantee may exercise an Option that has become exercisable, in whole or in
      part,
      by delivering a notice of exercise to the Company.

     

    (b) Payment
      of Exercise Price.
      Along
      with the notice of exercise, the Grantee shall pay the Exercise Price for an
      Option as specified by the Board (i) in cash, (ii) with the approval of the
      Board, by delivering shares of Company Stock owned by the Grantee (including
      Company Stock acquired in connection with the exercise of an Option, subject
      to
      such restrictions as the Board deems appropriate) valued at Fair Market Value
      on
      the date of exercise, (iii) with the approval of the Board, by surrender of
      outstanding awards under the Plan or (iv) by such other method as the Board
      may
      approve. Shares of Company Stock used to exercise an Option shall have been
      held
      by the Grantee for the requisite period of time to avoid adverse accounting
      consequences to the Company with respect to the Option.

     

    (c) Payment
      of Tax.
      The
      Grantee shall pay the amount of any withholding tax due at the time of
      exercise.

     

    
      	
              7.

            	
              Restricted
                Stock

            

    

     

    The
      Board
      may grant Restricted Stock to an Employee, Non-Employee Director or Key Advisor,
      upon such terms as the Board deems appropriate. The following provisions are
      applicable to Restricted Stock:

     

    (a) General
      Requirements.
      Shares
      of Company Stock issued or transferred pursuant to a Grant of Restricted Stock
      may be issued or transferred for consideration or for no consideration, and
      subject to restrictions or no restrictions, as determined by the Board. The
      Board may, but shall not be required to, establish conditions under which
      restrictions on Restricted Stock shall lapse over a period of time or according
      to such other criteria as the Board deems appropriate, including, without
      limitation, restrictions based upon the achievement of specific performance
      goals. In addition, the Board may grant restricted stock for which there is
      no
      Restriction Period. The period of time, if any, during which the Restricted
      Stock will remain subject to restrictions will be designated in the Grant
      Instrument as the “Restriction Period.”

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (b) Number
      of Shares.
      The
      Board shall determine the number of shares of Company Stock to be issued or
      transferred and the restrictions applicable to such shares. 

     

    (c) Requirement
      of Employment or Service.
      If the
      Grantee ceases to be employed by, or provide service to, the Company (as defined
      in Section 5(e)) during a period designated in the Grant Instrument as the
      Restriction Period, or if other specified conditions are not met, the Restricted
      Stock shall terminate as to all shares covered by the Grant as to which the
      restrictions have not lapsed, and those shares of Company Stock must be
      immediately returned to the Company. The Board may, however, provide for
      complete or partial exceptions to this requirement as it deems
      appropriate.

     

    (d) Restrictions
      on Transfer and Legend on Stock Certificate.
      During
      the Restriction Period, a Grantee may not sell, assign, transfer, pledge or
      otherwise dispose of the shares of Restricted Stock except to a Successor
      Grantee under Section 11(a). A stock certificate representing the shares of
      Restricted Stock shall be registered in the Grantee’s name but shall be held in
      the custody of the Company for the Grantee’s account.

     

    (e) Right
      to Vote.
      Unless
      the Board determines otherwise, during the Restriction Period, the Grantee
      shall
      have the right to vote shares of Restricted Stock.

     

    (f) Lapse
      of Restrictions. All restrictions imposed on Restricted Stock shall lapse
      upon the expiration of the applicable Restriction Period and the satisfaction
      of
      all conditions imposed by the Board. The Board may determine, as to any or
      all
      Restricted Stock, that the restrictions shall lapse without regard to any
      Restriction Period.

     

    
      	
              8.

            	
              Withholding
                of Taxes.

            

    

     

    (a) Required
      Withholding.
      All
      Grants under the Plan shall be subject to applicable federal (including FICA),
      state and local tax withholding requirements. The Company shall have the right
      to deduct from any amounts paid to the Grantee, any federal, state or local
      taxes required by law to be withheld with respect to such Grants. The Company
      may require that the Grantee or other person receiving or exercising Grants
      pay
      to the Company the amount of any federal, state or local taxes that the Company
      is required to withhold with respect to such Grants, or the Company may deduct
      from other wages paid by the Company the amount of any withholding taxes due
      with respect to such Grants.

     

    (b) Election
      to Withhold Shares.
      If the
      Board so permits, a Grantee may elect, in the form and manner prescribed by
      the
      Board, to satisfy the Company’s income tax withholding obligation with respect
      to Options or Restricted Stock paid in Company Stock by having shares withheld
      up to an amount that does not exceed the Grantee’s minimum applicable
      withholding tax rate for federal (including FICA), state and local tax
      liabilities.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
              9.

            	
              Transferability
                of Grants

            

    

     

    (a) Nontransferability
      of Grants.
      Except
      as provided below, only the Grantee may exercise rights under an Option during
      the Grantee’s lifetime. A Grantee may not transfer those rights except (i) by
      will or by the laws of descent and distribution or (ii) with respect to
      Nonqualified Stock Options, if permitted in any specific case by the Board,
      pursuant to a domestic relations order or otherwise as permitted by the Board.
      When an Grantee dies, the personal representative or other person entitled
      to
      succeed to the rights of the Grantee (“Successor Grantee”) may exercise such
      rights. A Successor Grantee must furnish proof satisfactory to the Company
      of
      his or her right to receive the Option under the Grantee’s will or under the
      applicable laws of descent and distribution.

     

    (b) Transfer
      of Nonqualified Stock Options.
      Notwithstanding the foregoing, the Board may provide, in an Option Agreement,
      that an Grantee may transfer Nonqualified Stock Options to family members,
      or
      one or more trusts or other entities for the benefit of or owned by family
      members, consistent with the applicable securities laws, according to such
      terms
      as the Board may determine; provided that the Grantee receives no consideration
      for the transfer of an Option and the transferred Option shall continue to
      be
      subject to the same terms and conditions as were applicable to the Option
      immediately before the transfer.

     

    
      	
              10.

            	
              Change
                of Control of the Company

            

    

     

    As
      used
      herein, a “Change of Control” shall be deemed to have occurred if:

     

    (a) Unless
      the Board approves such acquisition, any “person” (as such term is used in
      Sections 13(d) and 14(d) of the Exchange Act) becomes a “beneficial owner” (as
      defined in Rule 13d-3 under the Exchange Act), directly or indirectly, in a
      single transaction, of securities of the Company representing more than 50
      percent of the voting power of the then outstanding securities of the Company;
      provided that a Change of Control shall not be deemed to occur as a result
      of a
      change of ownership resulting from the death of a stockholder, and a Change
      of
      Control shall not be deemed to occur as a result of a transaction in which
      the
      Company becomes a subsidiary of another corporation and in which the
      stockholders of the Company, immediately prior to the transaction, will
      beneficially own, immediately after the transaction, shares entitling such
      stockholders to more than 50 percent of all votes to which all stockholders
      of
      the parent corporation would be entitled in the election of directors (without
      consideration of the rights of any class of stock to elect directors by a
      separate class vote);

     

    (b) Unless
      the Board approves such acquisition, if in any series of acquisitions any
“person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
      becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
      directly or indirectly, of securities of the Company representing more than
      2/3
      of the voting power of the then outstanding securities of the Company; provided
      that a Change of Control shall not be deemed to occur as a result of a change
      of
      ownership resulting from the death of a stockholder, and a Change of Control
      shall not be deemed to occur as a result of a transaction in which the Company
      becomes a subsidiary of another corporation and in which the stockholders of
      the
      Company, immediately prior to the transaction, will beneficially own,
      immediately after the transaction, shares entitling such stockholders to more
      than 2/3 of all votes to which all stockholders of the parent corporation would
      be entitled in the election of directors (without consideration of the rights
      of
      any class of stock to elect directors by a separate class vote); or

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (c) The
      consummation of (i) a merger or consolidation of the Company with another
      corporation where the stockholders of the Company, immediately prior to the
      merger or consolidation, will not beneficially own, immediately after the merger
      or consolidation, shares entitling such stockholders to more than 50 percent
      of
      all votes to which all stockholders of the surviving corporation would be
      entitled in the election of directors (without consideration of the rights
      of
      any class of stock to elect directors by a separate class vote), (ii) a sale
      or
      other disposition of all or substantially all of the assets of the Company
      or
      (iii) a liquidation or dissolution of the Company.

     

    (d) Notwithstanding
      the foregoing, a Public Offering of the Company’s stock shall not be deemed to
      result in a Change of Control, nor shall any other event or events, so long
      as
      HIG Capital L.L.C. and its affiliates continue to own after such event or events
      securities entitled to more than 50 percent of all votes to which all
      stockholders of the Company or surviving corporation or its direct or indirect
      parent corporation would be entitled in the election of directors (without
      consideration of the rights of any class of stock to elect directors by a
      separate class vote).

     

    
      	
              11.

            	
              Consequences
                of a Change of Control

            

    

     

    (a) Notice
      and Acceleration.
      Upon a
      Change of Control, unless the Board determines otherwise, all outstanding
      Options shall become exercisable in full and
      all
      restrictions on all outstanding Restricted Stock shall lapse.
      The
      Board shall provide notice to Grantees of the Change of Control as soon as
      practicable prior to the Change of Control.

     

    (b) Assumption
      of Grants.
      Upon a
      Change of Control where the Company is not the surviving corporation (or
      survives only as a subsidiary of another corporation), unless the Board
      determines otherwise, all outstanding Options that are not exercised shall
      be
      assumed by, or replaced with comparable options or rights by, the surviving
      corporation (or a parent or subsidiary of the surviving
      corporation).

     

    (c) Other
      Alternatives.
      Notwithstanding the foregoing, subject to subsection (d) below, in the event
      of
      a Change of Control, the Board may take one or both of the following actions
      with respect to any or all outstanding Options: (i) the Board may require that
      Grantees surrender their outstanding Options in exchange for a payment by the
      Company, in cash or Company Stock as determined by the Board, in an amount
      equal
      to the amount by which the then Fair Market Value of the shares of Company
      Stock
      subject to the Grantee’s unexercised Options exceeds the Exercise Price of the
      Options; or (ii) the Board may, after giving Grantees an opportunity to exercise
      their outstanding Options, terminate any or all unexercised Options at such
      time
      as the Board deems appropriate. Such surrender or termination or settlement
      shall take place as of the date of the Change of Control or such other date
      as
      the Board may specify.

     

    (d) Limitations.
      Notwithstanding anything in the Plan to the contrary, in the event of a Change
      of Control, the Board shall not have the right to take any actions described
      in
      the Plan (including without limitation actions described in subsection (c)
      above) that would make the Change of Control ineligible for pooling of interests
      accounting treatment or that would make the Change of Control ineligible for
      desired tax treatment if, in the absence of such right or action, the Change
      of
      Control would qualify for such treatments and the Company intends to use such
      treatments with respect to the Change of Control.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
              12.

            	
              Requirements
                for Issuance or Transfer of
                Shares

            

    

     

    (a) Stockholder’s
      Agreement.
      The
      Board may require that an Grantee execute a stockholder’s agreement, with such
      terms as the Board deems appropriate, with respect to any Company Stock issued
      or distributed before a Public Offering pursuant to this Plan.

     

    (b) Limitations
      on Issuance or Transfer of Shares.
      No
      Company Stock shall be issued or transferred in connection with any Grant
      hereunder unless and until all legal requirements applicable to the issuance
      or
      transfer of such Company Stock have been complied with to the satisfaction
      of
      the Board. The Board shall have the right to condition any Grant made to any
      Grantee hereunder on such Grantee’s undertaking in writing to comply with such
      restrictions on his or her subsequent disposition of such shares of Company
      Stock as the Board shall deem necessary or advisable, and certificates
      representing such shares may be legended to reflect any such restrictions.
      Certificates representing shares of Company Stock issued or transferred under
      the Plan will be subject to such stop-transfer orders and other restrictions
      as
      may be required by applicable laws, regulations and interpretations, including
      any requirement that a legend be placed thereon.

     

    (c) Lock-Up
      Period.
      If so
      requested by the Company or any representative of the underwriters (the
“Managing Underwriter”) in connection with any underwritten offering of
      securities of the Company under the Securities Act of 1933, as amended (the
      “Securities Act”), an Grantee (including any successors or assigns) shall not
      sell or otherwise transfer any shares or other securities of the Company during
      the 30-day period preceding and the 180-day period following the effective
      date
      of a registration statement of the Company filed under the Securities Act for
      such underwritten offering (or such shorter period as may be requested by the
      Managing Underwriter and agreed to by the Company) (the “Market Standoff
      Period”). The Company may impose stop-transfer instructions with respect to
      securities subject to the foregoing restrictions until the end of such Market
      Standoff Period.

     

    
      	
              13.

            	
              Cancellation
                and Rescission of Options or Restricted
                Stock

            

    

     

    (a) Unless
      the Option Agreement specifies otherwise, the Board may cancel, rescind,
      suspend, withhold or otherwise limit or restrict any unexpired, unpaid or
      deferred Options or Restricted Stock at any time if the Grantee is not in
      compliance with all applicable provisions of the Grant Instrument and the Plan,
      or if the Grantee engages in any “Detrimental Activity.” For purposes of this
      Section, “Detrimental Activity” shall include: (i) the rendering of services for
      any organization or engaging directly or indirectly in any business which is
      or
      becomes competitive with the Company, or which organization or business, or
      the
      rendering of services to such organization or business, is or becomes otherwise
      prejudicial to or in conflict with the interests of the Company; (ii) the
      disclosure to anyone outside the Company, or the use in other than the Company’s
      business, without prior written authorization from the Company, of any
      confidential information or material, in violation of the Company’s applicable
      agreement with the Grantee or of the Company’s applicable policy regarding
      confidential information and intellectual property; (iii) the failure or refusal
      to disclose promptly and to assign to the Company, pursuant to the Company’s
      applicable agreement with the Grantee or to the Company’s applicable policy
      regarding confidential information and intellectual property, all right, title
      and interest in any invention or idea, patentable or not, made or conceived
      by
      the Grantee during employment by the Company, relating in any manner to the
      actual or anticipated business, research or development work of the Company,
      or
      the failure or refusal to do anything reasonably necessary to enable the Company
      to secure a patent where appropriate in the United States and in other
      countries; (iv) activity that results in termination of the Grantee’s employment
      for cause; (v) a violation of any rules, policies, procedures or guidelines
      of
      the Company, including (but not limited to) the Company’s business conduct
      guidelines; (vi) any attempt (directly or indirectly) to induce any employee
      of
      the Company to be employed or perform services elsewhere or any attempt
      (directly or indirectly) to solicit the trade or business of any current or
      prospective customer, supplier or partner of the Company; (vii) the Grantee’s
      being convicted of, or entering a guilty plea with respect to, a crime, whether
      or not connected with the Company; or (viii) any other conduct or act determined
      to be injurious, detrimental or prejudicial to any interest of the
      Company.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (b) Upon
      exercise, payment or delivery pursuant to a Grant, the Grantee shall certify
      in
      a manner acceptable to the Company that he or she is in compliance with the
      terms and conditions of the Plan. In the event an Grantee fails to comply with
      the provisions of paragraphs (a)(i)-(viii) of this Section prior to, or during
      the six months after, any exercise, payment or delivery pursuant to a Grant,
      such exercise, payment or delivery may be rescinded within two years thereafter.
      In the event of any such rescission, the Grantee shall pay to the Company the
      amount of any gain realized or payment received as a result of the rescinded
      exercise, payment or delivery, in such manner and on such terms and conditions
      as may be required, and the Company shall be entitled to set-off against the
      amount of any such gain any amount owed to the Grantee by the
      Company.

     

    (c) The
      Board, in its sole discretion, may grant to an Grantee, in exchange for the
      surrender and cancellation of a Grant previously granted to the Grantee, a
      new
      Grant in the same or different form and containing such terms, including without
      limitation a price that is higher or lower than any price provided in the award
      so surrendered or cancelled.

     

    
      	
              14.

            	
              Amendment
                and Termination of the Plan

            

    

     

    (a) Amendment.
      The
      Board may amend the Plan at any time; provided, however, that the Board shall
      not amend the Plan without stockholder approval if such approval is required
      in
      order to comply with the Code or applicable laws, or to comply with applicable
      stock exchange requirements.

     

    (b) Termination
      of Plan.
      No
      Incentive Stock Option may be granted more than ten years from the Plan’s
      effective date. The Plan may be terminated by the Board at any
      time.

     

    (c) Termination
      and Amendment of Outstanding Grants.
      A
      termination or amendment of the Plan that occurs after an Grant is made shall
      not materially impair the rights of an Grantee unless the Grantee consents
      or
      unless the Board acts under Section 20(b). The termination of the Plan shall
      not
      impair the power and authority of the Board with respect to an outstanding
      Grant. Whether or not the Plan has terminated, an outstanding Grant may be
      terminated or amended under Section 20(b) or may be amended by agreement of
      the
      Company and the Grantee consistent with the Plan.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (d) Governing
      Document.
      The
      Plan shall be the controlling document. No other statements, representations,
      explanatory materials or examples, oral or written, may amend the Plan in any
      manner. The Plan shall be binding upon and enforceable against the Company
      and
      its successors and assigns.

     

    
      	
              15.

            	
              Funding
                of the Plan

            

    

     

    This
      Plan
      shall be unfunded. The Company shall not be required to establish any special
      or
      separate fund or to make any other segregation of assets to assure the payment
      of any Options under this Plan. In no event shall interest be paid or accrued
      on
      any Option, including unpaid installments of Grants.

     

    
      	
              16.

            	
              Rights
                of Participants

            

    

     

    Nothing
      in this Plan shall entitle any Employee, Key Advisor, Non-Employee Director
      or
      other person to any claim or right to be granted a Grant under this Plan.
      Neither this Plan nor any action taken hereunder shall be construed as giving
      any individual any rights to be retained by or in the employ of the Company
      or
      any other employment rights.

     

    
      	
              17.

            	
              No
                Fractional Shares

            

    

     

    No
      fractional shares of Company Stock shall be issued or delivered pursuant to
      the
      Plan or any Grant. The Board shall determine whether cash, other awards or
      other
      property shall be issued or paid in lieu of such fractional shares or whether
      such fractional shares or any rights thereto shall be forfeited or otherwise
      eliminated.

     

    
      	
              18.

            	
              Headings

            

    

     

    Section
      headings are for reference only. In the event of a conflict between a title
      and
      the content of a Section, the content of the Section shall control.

     

    
      	
              19.

            	
              Effective
                Date of the Plan

            

    

     

    (a) Effective
      Date.
      Subject
      to approval by the Company’s stockholders, the Plan shall be effective on August
      __, 2007.

     

    
      	
              20.

            	
              Miscellaneous

            

    

     

    (a) Grants
      in Connection with Corporate Transactions and Otherwise.
      Nothing
      contained in this Plan shall be construed to (i) limit the right of the Board
      to
      make Grants under this Plan in connection with the acquisition, by purchase,
      lease, merger, consolidation or otherwise, of the business or assets of any
      corporation, firm or association, including Grants to employees thereof who
      become Employees of the Company, or for other proper corporate purposes, or
      (ii)
      limit the right of the Company to grant stock options or make other awards
      outside of this Plan. Without limiting the foregoing, the Board may make an
      Option to an employee of another corporation who becomes an Employee by reason
      of a corporate merger, consolidation, acquisition of stock or property,
      reorganization or liquidation involving the Company or any of its subsidiaries
      in substitution for a stock option or stock awards grant made by such
      corporation. The terms and conditions of the substitute Grants may vary from
      the
      terms and conditions required by the Plan and from those of the substituted
      stock incentives. The Board shall prescribe the provisions of the substitute
      grants.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (b) Compliance
      with Law.
      The
      Plan, the exercise of Grants and the obligations of the Company to issue or
      transfer shares of Company Stock under Grants shall be subject to all applicable
      laws and to approvals by any governmental or regulatory agency as may be
      required. With respect to persons subject to Section 16 of the Exchange Act,
      it
      is the intent of the Company that all transactions under the Plan comply with
      all applicable provisions of Rule 16b3 or its successors under the Exchange
      Act.
      In addition, it is the intent of the Company that the Plan and applicable Grants
      under the Plan comply with the applicable provisions of Sections 162(m), 409A
      and 422 of the Code. To the extent that any legal requirement of Section 16
      of
      the Exchange Act or Section 162(m) or 422 of the Code as set forth in the Plan
      ceases to be required under Section 16 of the Exchange Act or Section
      162(m) or 422 of the Code, that Plan provision shall cease to apply. The Board
      may revoke any Grant if it is contrary to law or modify an Grant to bring it
      into compliance with any valid and mandatory government regulation. The Board
      may also adopt rules regarding the withholding of taxes on payments to Grantees.
      The Board may, in its sole discretion, agree to limit its authority under this
      Section.

     

    (c) Governing
      Law.
      The
      validity, construction, interpretation and effect of the Plan and Grant
      Instruments issued under the Plan shall be governed and construed by and
      determined in accordance with the laws of the State of Florida, without giving
      effect to the conflict of laws provisions thereof. Any Grant Instruments issued
      under the Plan shall be governed and construed by and determined in accordance
      with governing law provision thereof, without giving effect to the conflict
      of
      laws provisions thereof.

     

    
      
        
        

      

      
        13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}]]