Document:

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                                                                   EXHIBIT 10.13

            [LETTERHEAD OF SANDS BROTHERS & CO., LTD. APPEARS HERE]

                                              October 27, 1999

Telemonde Inc.
40 Portman Square
London, W1H9FH

Attn: Kevin Maxwell
      Chairman

Dear Mr. Maxwell:

     This is to confirm our understanding that Sands Brothers & Co., Ltd.
("Sands Brothers") has been engaged as an non-exclusive financial adviser and
consultant to Telemonde Inc., its successors, assigns, subsidiaries and
affiliates (collectively the "Company") with respect to corporate finance,
merger and acquisition and financial services matters, for a three year period
commencing with your acceptance of this agreement. Upon consummation of the
$15,000,000 of a Bridge Financing or Financing Transaction (as such terms are
hereinafter defined). Sands Brothers shall then be engaged on an "exclusive"
basis as set forth herein commencing on January 1, 2000.

     For purposes of this agreement, the term "Acquisition Transaction" means
(i) any merger, consolidation, reorganization or other business combination
pursuant to which the businesses of a third party are combined with that of the
Company, (ii) the acquisition, directly or indirectly, by the Company of all or
a substantial portion of the assets or common equity of a third party by way of
negotiated purchase or otherwise or (iii) the acquisition, directly or
indirectly, by a third party of all or a substantial portion of the assets or
common equity of the Company by way of negotiated purchase or otherwise. In
addition, for purposes of this agreement, the term "Financing Transaction" means
a public offering, private placement, institutional financing, syndication or
other sale of equity or debt securities of the Company or other on-balance sheet
or off-balance sheet corporate finance transaction of the Company and "Bridge
Financing" shall mean any form of Financing Transaction other than a public
offering.

     For purposes of this agreement, the term "Business Transactions" shall mean
joint ventures, strategic alliances and partnerships, licensing and royalty
arrangements, value added customers and clients and other similar business
enhancing agreements ("Business Transactions" and with Acquisition Transactions,
"Transactions").

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Telemonde Inc.
October 27, 1999
Page 2

A.  Financial Advisory Services

     The Company hereby retains Sands Brothers to perform consulting services
related to corporate finance and financial service matters. In this regard,
Sands Brothers shall devote such business, time and attention to matters on
which the Company shall request its services, as shall be determined by Sands
Brothers in its discretion. All services shall be rendered by Sands Brothers in
New York City unless otherwise determined by Sands Brothers. Anything contained
herein to the contrary notwithstanding, in Sands Brothers' sole discretion, such
fee may be paid in warrants and/or shares of capital of the Company upon such
terms and conditions as may be mutually agreed upon.

     During the term of this agreement, Sands Brothers shall provide the Company
with such regular and customary financial advisory services as is reasonably
requested by the Company, provided that Sands Brothers shall not be required to
undertake duties not reasonably within the scope of the financial advisory
services in which it is generally engaged. In performance of its duties, Sands
Brothers shall provide the Company with the benefits of its best judgment and
efforts. It is understood and acknowledged by the parties that the value of
Sands Brothers' advice is not measurable in a quantitative manner, and Sands
Brothers shall be obligated to render advice, upon the request of the Company,
in good faith, as shall be determined by Sands Brothers, but shall not be
obligated to spend any specific amount of time in doing so. Sands Brothers'
duties may include, but will not necessarily be limited to:

     (i)   advice regarding formation of corporate goals and their
     implementation;

     (ii)  advice regarding the financial structure of the Company, its
     divisions or subsidiaries or any programs and projects undertaken by the
     Company;

     (iii) advice regarding the securing, when necessary and if possible, of
     financing (other than with respect to a Financing Transaction);

     (iv)  advice regarding corporate organization, personnel and selection of
     needed specialty skills; and

     (v)   review of possible joint venture, merger, acquisition or similar
     proposals for the Company (other than with respect to an Acquisition
     Transaction).

     The Company acknowledges that Sands Brothers or its affiliates are in the
business of providing financial advisory services (of all types contemplated by
this agreement) to others. Nothing herein continued shall be construed to limit
or restrict
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Telemonde Inc.
October 27, 1999
Page 3

Sands Brothers in conducting such business with respect to others, or in
rendering such advice to others.

     The Company recognizes and confirms that Sands Brothers in acting pursuant
to this engagement will be using information in reports and other information
provided by others, including, without limitation, information provided by or on
behalf of the Company, and that Sands Brothers does not assume responsibility
for and may rely, without independent verification, on the accuracy and
completeness of any such reports and information. The Company hereby warrants
that any information relating to the Company that is furnished to Sands Brothers
by or on behalf of the Company will be fair, accurate and complete and will not
contain any material omissions or misstatements of fact. The Company agrees that
any information or advice rendered by Sands Brothers or its representatives in
connection with this engagement is for the confidential use of the Company's
Board of Directors only in its evaluation of the matters for which Sands
Brothers has been engaged and, except as otherwise required by law, the Company
will not and will not permit any third party to disclose or otherwise refer to
such advice or information in any manner without Sands Brother's prior written
consent.

B. Transactions

     In connection with a proposed Acquisition Transaction, Sands Brothers'
financial advisory services may include the following: (i) assistance in the
evaluation of a third party from a financial point of view, (ii) assistance and
advice with respect to the form and structure of the Acquisition Transaction
and/or the financing thereof, (iii) conducting discussions and negotiations
regarding an Acquisition Transaction and (iv) providing other related financial
advice and assistance as the Company may reasonably request in connection with
an Acquisition Transaction.

     In connection with a proposed Business Transaction, Sands Brothers'
services may include the following: (i) assistance in the location of a third
party to enter into a Business Transaction, (ii) assistance and advice with
respect to the form and structure of the Business Transaction, (iii) conducting
discussions and negotiations regarding a Business Transaction and (iv) providing
other related business advice and assistance as the Company may reasonably
request in connection with a Business Transaction.

     For purpose of this agreement, "Consideration" means the aggregate value,
whether in cash, securities, assumption (or purchase subject to) of debt or
liabilities (including, without limitation, indebtedness for borrowed money,
pension liabilities and guarantees), license fees, royalty fees, joint venture
interests or other property, obligations or services, paid or payable by or to
the Company directly or indirectly (in escrow or otherwise) or otherwise assumed
in connection with a Transaction. The value of such Consideration shall be
determined as follows:
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Telemonde Inc.
October 27, 1999
Page 4

     (a)  the value of securities, liabilities, obligations, property and
     services shall be the fair market value as reasonably determined by Sands
     Brothers at the date of the closing of the Transaction; and

     (b)  the value of indebtedness, including indebtedness assumed, shall be
     the face amount.

     If the Consideration payable in an Transaction includes contingent payments
to be calculated by reference to uncertain future occurrences, such as future
financial or business performance, then any fees of Sands Brothers relating to
such consideration shall be payable at the earlier of (i) the receipt of such
Consideration or (ii) the time that the amount of such Consideration can be
determined.

     In connection with our services, you agree if, during the period Sands
Brothers is retained by you or, within two years thereafter, whether or not this
letter agreement is in effect at such time a Transaction is consummated with a
third party, or the Company enters into a definitive agreement with a third
party, which at any time thereafter results in a Transaction, where either (1)
such third party has been introduced directly or indirectly by Sands Brothers &
Co., Ltd. or (2) for which Sands Brothers has provided financial or business
advisory services or other services contemplated by this Agreement, you will pay
Sands Brothers a transaction fee of an amount equal to five (5%) percent of the
Consideration paid or payable in connection with such Transaction in the form
that such Consideration is paid or payable.

C. Financing Transaction

     The Company and principal shareholders hereby irrevocably grants Sands
Brothers the right of first refusal to purchase for its own account or
underwrite or place Bridge Financing or Financing Transaction (excluding sales
to employees) of the Company, or any subsidiary or successor of the Company,
during the term hereof. It is understood that if such a proposed financing is
offered to Sands Brothers, Sands Brothers shall have thirty (30) days following
receipt of such written notice in which to determine whether or not to accept
such offer. Should Sands Brothers decline such offer, which is subsequently
consummated through a third party. Sands Brothers right of first refusal with
respect to any subsequent offering shall nevertheless remain in full force and
effect during the term hereof.

     In addition, you agree if, during the period Sands Brothers is retained by
you or, within two years thereafter, a Bridge Financing or Financing Transaction
is consummated with a third party financing source ("Financing Source"), or the
Company enters into a definitive agreement with a Financing Source, which at any
time thereafter results in a
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Telemonde Inc.
October 27, 1999
Page 5

Bridge Financing or Financing Transaction, you will pay Sands Brothers a
financing fee of not less ten (10%) percent of the total consideration paid or
payable in connection with the Bridge Financing or Financing Transaction.

     Upon execution hereof, it is agreed between the parties hereto that Sands
Brothers shall assist the Company in organizing a Bridge Financing and/or
Financing Transaction in an aggregate amount approximating $100,000,000 as
follows:

          1.)  $15,000,000 tranche of a Bridge Financing commencing upon
               execution hereof with an anticipated closing of $7,000,000 on or
               before November 11, 1999 and $8,000,000 on or before December 31,
               1999.

          2.)  Up to an additional $10,000,000 tranche of a Bridge Financing
               thereafter.

          3.)  $75,000,000 in a Financing Transaction.

     Sands Brothers shall be entitled to warrants to purchase shares of the
Company's common stock ("Warrant") in an amount equal to 300,000 Warrants for
each $1,000,000 accepted by the Company in any Financing Transaction or Bridge
Transaction.

     Furthermore, in addition to the warrants set forth above and as an
additional consideration to expedite the initial $15,000,000 tranche
contemplated herein. Sands Brothers and/or its designee(s) shall be entitled to
1,750,000 bonus Warrants on the same terms and conditions as set forth above
upon consummation of an initial $15,000,000 accepted by the Company in any
Bridge Transaction and/or Financing Transaction.

     The Warrants will be exercisable for a five year period commencing on the
date hereof (the "Warrant Exercise Term"). The Warrants shall be initially
exercisable at a price per share of Common Stock equal to the lower of $3.50/
share or the offering price of the financing(s) contemplated herein and shall be
exercisable at any time and from time to time, in whole or in part, during the
Warrant Exercise Term.

     The Warrants shall contain such terms and conditions as are satisfactory in
form and substance to Sands Brothers and its counsel, including, without
limitation, anti-dilution and registration provisions.

     At any time during the Warrant Exercise Term, Sands Brothers and/or its
designee(s) (or the then holders of a majority of the Shares underlying the
Warrants) shall have the right to require the Company to prepare and file one
new Registration Statement, if then required under the Securities Act of 1933,
as amended (the "Act"), covering all or any portion of the Warrants and/or the
shares of Common Stock underlying the Warrants (the "Warrant Securities"). The
Company shall bear all expenses incurred in the preparation and filing of such
Registration Statement, except the

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Telemonde Inc.
October 27, 1999
Page 6

holders of the Warrants shall pay any underwriting discounts or commissions and
the expenses of their own legal counsel.

     In addition, if at any time during the five years after date hereof, the
Company shall prepare and file one or more Registration Statements under the
Act, including, without limitation, Form S-8 (but excluding Form S-4 or
successor forms), with respect to a public offering of equity or debt
securities of the Company held by its shareholders or employees and consultants,
the Company will include in any such Registration Statement such information as
may be required to permit a public offering of the Warrants or the shares of
Common Stock underlying the Warrants held by Sands Brothers and/or its
designee(s) as may be requested. The Company shall bear all fees and expenses
incurred by the Company in connection with the preparation and filing of such
Post-Effective Amendment or new Registration Statement. In the event of such a
proposed registration, the Company shall furnish the then holders of the Warrant
Securities with not less than thirty (30) days written notice prior to the
proposed date of filing of such Registration Statement. Such notice shall
continue to be given by the Company to such holders of outstanding Warrant
Securities until such time as all of the Warrant Securities have been
registered. The holders of the Warrant Securities shall exercise the
"piggy-back" rights provided for herein by giving written notice, within twenty
(20) days of the receipt of the Company's notice of its intention to file a
Registration Statement.

D. Board Designation

     For a period of three (3) years from the date hereof, the Company will, at
Sands Brothers' option and if so requested by Sands Brothers, recommend and
use its best efforts (which shall include, without limitation, the solicitation
of proxies) to elect a designee of Sands Brothers, which designee shall be Mark
G. Hollo, at the option of Sands Brothers, either as a member of or a
nonvoting advisor to its Board of Directors: such designee, if elected or
appointed, shall attend meetings of the Board and receive no more or less
compensation than is paid to other non-management directors of the Company and
shall be entitled to receive reimbursement for all reasonable costs incurred in
attending such meetings, including, but not limited to, food, lodging and
transportation.

     To the extent permitted by law, the Company hereby agrees to indemnify
Sands Brothers and its designee for the actions of such designee as a director
of the Company. In the event the Company maintains a liability insurance policy
affording coverage for the acts of its officers and directors, it hereby agrees,
if possible, to include each of Sands Brothers and its designee as an insured
under such policy.
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Telemonde Inc.
October 27, 1999
Page 7

          If Sands Brothers does not exercise its option to designate a member
of or advisor to the Company's Board of Directors, Sands Brothers shall
nonetheless have the right to send a representative (who need not be the same
individual from meeting to meeting) to observe each meeting of the Board of
Directors. In addition, whether or not Sands Brothers exercises its rights to
designate a member, advisor or observer, the Company agrees to give Sands
Brothers notice of each such meeting and to provide Sands Brothers with an
agenda (including any materials accompanying or attached to such agenda),
minutes of the meeting and any materials disseminated at the Board of Directors
meeting, no later than it gives such notice and provides such items to the
directors.

E.   General

          In addition to any fees that may be payable to Sands Brothers under
this agreement, the Company agrees to reimburse Sands Brothers, upon requests
made from time to time, for all of its reasonable out-of-pocket expenses
incurred in connection with its disbursements of its legal counsel in connection
with the preparation and negotiation of this agreement.

          In consideration of Sands Brothers' advisory role, the Company agrees
to indemnify and hold harmless Sands Brothers, its affiliates and their
respective officers, directors, employees, agents and controlling persons
(collectively, the "Indemnified Parties"), from and against any losses, claims,
damages and liabilities, joint or several, related to or arising in any manner
out of any transaction, financing, proposal, or any other matter (collectively,
the "Matters") contemplated by the engagement of Sands Brothers hereunder, and
will promptly reimburse the Indemnified Parties for all expenses (including fees
and expenses of legal counsel) as incurred in connection with the investigation
of, preparation for or defense of any pending or threatened claim related to or
arising in any manner out of any Matter contemplated by the engagement of Sands
Brothers hereunder, or any action or proceeding arising therefrom (collectively,
"Proceedings"), whether or not such Indemnified Party is a formal party to any
such Proceeding. Notwithstanding the foregoing, the Company shall not be liable
in respect of any losses, claims, damages, liabilities or expenses that a court
of competent jurisdiction shall have determined by final judgment resulted
solely from the gross negligence or willful misconduct of an Indemnified Party.
The Company further agrees that it will not without the prior written consent of
Sands Brothers, settle, compromise or consent to the entry of any judgment in
any pending or threatened Proceeding in respect of which indemnification may be
sought hereunder (whether or not Sands Brothers or any Indemnified Party is an
actual or potential party to such Proceeding), unless such settlement,
compromise or consent includes an unconditional release of Sands Brothers and
each other Indemnified Party hereunder from all liability arising out of such
Proceeding.
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Telemonde Inc.
October 27, 1999
Page 8

     The Company agrees that if any indemnification or reimbursement sought
pursuant to this letter were for any reason not to be available to any
Indemnified Party or insufficient to hold it harmless as and to the extent
contemplated by this letter, then the Company shall contribute to the amount
paid or payable by such Indemnified Party in respect of losses, claims, damages
and liabilities in such proportion as is appropriate to reflect the relative
benefits to the Company and its stockholders on the one hand, and Sands Brothers
on the other, in connection with the Matters to which such indemnification or
reimbursement relates or, if such allocation is not permitted by applicable law,
not only such relative benefits, but also the relative faults of such parties to
the Company and/or its stockholders and to Sands Brothers with respect to Sands
Brother's engagement shall be deemed to be in the same proportion as (i) the
total value paid or received or to be paid or received by the Company and/or its
stockholders pursuant to the Matters (whether or not consummated) for which
Sands Brothers is engaged to render financial advisory services bears to (ii)
the fees paid to Sands Brothers in connection with such engagement. In no event
shall the Indemnified Parties contribute or otherwise be liable for an amount in
excess of the aggregate amount of fees actually received by Sands Brothers
pursuant to such engagement (excluding amounts received by Sands Brothers as
reimbursement of expenses).

     The Company further agrees that no Indemnified Party shall have any
liability (whether direct or indirect, in contract or tort or otherwise) to the
Company for or in connection with Sands Brothers engagement here under except
for losses, claims, damages, liabilities or expenses that a court of competent
jurisdiction shall have determined by final judgment resulted solely from the
gross negligence or willful misconduct of such Indemnified Party. The indemnity,
reimbursement and contribution obligations of the Company shall be in addition
to any liability which the Company may otherwise have and shall be binding upon
and inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company or an Indemnified Party.

     The indemnity, reimbursement and contribution provisions set forth herein
shall remain operative and in full force and effect regardless of (i) any
withdrawal, termination or consummation of or failure to initiate or consummate
any Matter referred to herein, (ii) any investigation made by or on behalf of
any party hereto or any person controlling (within the meaning of Section 15 of
the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange
Act of 1934, as amended) any party hereto, (iii) any termination or the
completion or expiration of this letter or Sands Brothers' engagement and (iv)
whether or not Sands Brothers' shall, or shall not be called upon to render any
formal or informal advice in the course of such engagement.

     This letter constitutes the entire understanding of the parties with
respect to the subject matter hereof and may not be altered, amended or
terminated except in writing and signed by both parties. This agreement shall be
governed by and construed under the laws of the State of New York without regard
to principles of conflicts of laws thereof

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Telemonde Inc.
October 27, 1999
Page 9

and the parties agree to submit themselves to the jurisdiction of the courts
located in the State and County of New York, which shall be the sole tribunals
in which any party may institute and maintain a legal proceeding against the
other party arising from any dispute hereunder. Neither the execution and
delivery of this letter by the Company nor the consummation of the transactions
contemplated hereby will, directly or indirectly, with or without the giving of
notice or lapse of time, or both: (i) violate any provisions of the Certificate
of Incorporation or By-laws of the Company; or (ii) violate, or be in conflict
with, or constitute a default under, any agreement, lease, mortgage, debt or
obligation of the Company or require the payment, any prepayment or other
penalty with respect thereto. The Company has all requisite power and authority
to enter into and perform its obligations under this letter and to issue and
deliver the warrants. The execution and delivery of this letter and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary action on the part of the Company. Each of this
letter and the warrants constitutes the valid and binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms.

     This letter shall replace and supersede the October 14, 1999 letter between
the parties hereto in its entirety.

     If the foregoing correctly sets forth the terms of our agreement, kindly so
indicate by signing and returning the enclosed copy of this letter.

                                             Very truly yours,

                                             SANDS BROTHERS & CO., LTD.

                                             By: /s/ Mark G. Hollo
                                                ---------------------------
                                                Mark G. Hollo
                                                Managing Director

Accepted and Agreed
this 27/th/ day of October:

TELEMONDE INC.

By: /s/ Kevin Maxwell
    ---------------------
    Kevin Maxwell
    Chairman

<PAGE>

                                                       October 27, 1999

Telemonde Inc.
40 Portman Square
London, W1H 9FH

Attn: Kevin Maxwell
      Chairman

Re:  Amendment No 1 to Advisory Agreement
     ------------------------------------

Dear Mr. Maxwell:

          The parties hereto, Telemonde Inc., a Delaware corporation (the
"Company") and Sands Brothers & Co., Ltd, a Delaware corporation ("Sands
Brothers") have entered into that certain financial advisory agreement
(hereinafter the "Advisory Agreement") dated as of October 27, 1999.

     In connection therewith, the parties hereto agree that the Advisory
Agreement is hereby amended as follows:

          1. The Paragraph C of the Advisory Agreement is hereby deleted in
its entirety and in its place and stead the following is inserted:

     "C. Financing Transaction
          The Company and principal shareholders hereby irrevocably
     grants Sands Brothers the right of first refusal to purchase for
     its own account, or underwrite or place Bridge Financing or
     Financing Transaction (excluding sales to employees) of the
     Company, or any subsidiary or successor of the Company, during
     the term hereof. It is understood that if such a proposed
     financing is offered to Sands Brothers, Sands Brothers shall have
     thirty (30) days following receipt of such written notice in
     which to determine whether or not to accept such offer. Should
     Sands Brothers decline such offer, which is subsequently
     consummated through a third party, Sands Brothers right of first
     refusal with respect to any subsequent offering shall
     nevertheless remain in full force and effect during the term
     hereof.

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Telemonde Inc.
October 27, 1999
Page 2

     In addition, you agree if, during the period Sands Brothers is retained by
you or, within two years thereafter, a Bridge Financing or Financing Transaction
is consummated with a third party financing source ("Financing Source"), or the
Company enters into a definitive agreement with a Financing Source, which at any
time thereafter results in a Bridge Financing or Financing Transaction, you will
pay Sands Brothers a financing fee of not less ten (10%) percent of the total
consideration paid or payable in connection with the Bridge Financing or
Financing Transaction.

     Upon execution hereof, it is agreed between the parties hereto that Sands
Brothers shall assist the Company in organizing a Bridge Financing and/or
Financing Transaction in an aggregate amount approximating $100,000,000 as
follows:

          1.  Up to $15,000,000 tranche of a Bridge Financing commencing upon
              execution hereof with an anticipated closing on or before December
              31, 1999.

          2.  Up to an additional $10,000,000 tranche of a Bridge Financing
              thereafter.

          3.  $75,000,000 in a Financing Transaction

     Sands Brothers shall be entitled to rights to purchase shares of the
Company's common stock ("Rights") in an amount equal to 200,000 Rights for each
$1,000,000 accepted by the Company in any Financing Transaction or Bridge
Transaction.

     Furthermore, in addition to the rights set forth above and as an additional
consideration to expedite the initial $15,000,000 tranche contemplated herein,
Sands Brothers and/or its designee(s) shall be entitled to 1,750,000 bonus
Rights on the same terms and conditions as set forth above upon consummation of
an initial $15,000,000 accepted by the Company in any Bridge Transaction and/or
Financing Transaction.

     The Rights will be exercisable for a five year period commencing on the
date hereof (the "Rights Exercise Term"). The Rights shall be initially
exercisable at a price per share of Common Stock equal to $.001 and shall be
exercisable at any time and from time to time, in whole or in part, during the
Rights Exercise Term.

     The Rights shall contain such terms and conditions as are satisfactory in
form and substance to Sands Brothers and its counsel, including, without
limitation, anti-dilution and registration provisions.

     At any time during the Rights Exercise Term, Sands Brothers and/or its
designee(s) (or the then holders of a majority of the Shares underlying the
Rights) shall have the right to require the Company to prepare and file one new
Registration Statement, if then required under the Securities Act of 1933, as
amended (the "Act"), covering all or any portion of the Rights and/or the shares
of Common Stock underlying the Rights (the "Rights Securities"). The Company
shall bear all expenses incurred in the preparation and filing of such
Registration Statement, except the holders of the Rights shall pay any
underwriting discounts or commissions and the expenses of their own legal
counsel.

     In addition, if at any time during the five years after date hereof, the
Company shall prepare and file one or more Registration Statements under the
Act, including,
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Telemonde Inc.
October 27, 1999
Page 3

          without limitation, Form S-8 (but excluding Form S-4 or successor
          forms), with respect to a public offering of equity or debt securities
          of the Company held by its shareholders or employees and consultants,
          the Company will include in any such Registration Statement such
          information as may be required to permit a public offering of the
          Rights or the shares of Common Stock underlying the Rights held by
          Sands Brothers and/or its designee(s) as may be requested. The Company
          shall bear all fees and expenses incurred by the Company in connection
          with the preparation and filing of such Post-Effective Amendment or
          new Registration Statement. In the event of such a proposed
          registration, the Company shall furnish the then holders of the Rights
          Securities with not less than thirty (30) days written notice prior to
          the proposed date of filing of such Registration Statement. Such
          notice shall continue to be given by the Company to such holders of
          outstanding Rights Securities until such time as all of the Rights
          Securities have been registered. The holders of the Rights Securities
          shall exercise the "piggy-back" rights provided for herein by giving
          written notice, within twenty (20) days of the receipt of the
          Company's notice of its intention to file a Registration Statement."

     2. Except as set forth herein, the Advisory Agreement shall remain in full
        force and effect.
<PAGE>

Telemonde Inc.
October 27, 1999
Page 4

          IN WITNESS WHEREOF, the Company and Sands Brothers have caused this
Agreement to be executed by its duly authorized representative.

TELEMONDE, INC                          SANDS BROTHERS & CO., LTD.

By: /s/ Kevin Maxwell                   By: /s/ Mark G. Hollo
    ----------------------------            ------------------------------

    Name:  Kevin Maxwell                    Name:  Mark G. Hollo
    Title: Chairman                         Title: Managing Director

Date: 11/10/99                          Date: 11/10/99
      --------------------------              ----------------------------AEROFLEX INCORPORATED
                       1999 STOCK OPTION PLAN, AS AMENDED

SECTION 1.  GENERAL PROVISIONS

1.1. Name and General Purpose

     The name of this plan is the Aeroflex  Incorporated  1999 Stock Option Plan
(hereinafter  called the  "Plan").  The Plan is intended  to be a  broadly-based
incentive  plan which enables  Aeroflex  Incorporated  (the  "Company")  and its
subsidiaries  and  affiliates to foster and promote the interests of the Company
by  attracting  and  retaining   directors,   officers  and  employees  of,  and
consultants  to, the Company who  contribute to the  Company's  success by their
ability, ingenuity and industry, to enable such directors,  officers,  employees
and  consultants  to  participate  in the  long-term  success  and growth of the
Company by giving  them a  proprietary  interest  in the  Company and to provide
incentive  compensation   opportunities  competitive  with  those  of  competing
corporations.

1.2  Definitions

     a.   "Affiliate"  means any person or entity  controlled by or under common
          control  with the  Company,  by  virtue  of the  ownership  of  voting
          securities, by contract or otherwise.

     b.   "Board" means the Board of Directors of the Company.

     c.   "Change in Control"  means a change of control of the  Company,  or in
          any person directly or indirectly controlling the Company, which shall
          mean:

          (a)  a  change  in  control  as such  term  is  presently  defined  in
               Regulation 240.12b-(2) under the Securities Exchange Act of 1934,
               as amended (the "Exchange Act"); or

          (b)  if any "person" (as such term is used in Section  13(d) and 14(d)
               of the  Exchange  Act) other than the Company or any "person" who
               on the date of this  Agreement  is a  director  or officer of the
               Company,  becomes  the  "beneficial  owner"  (as  defined in Rule
               13(d)-3  under the  Exchange  Act)  directly  or  indirectly,  of
               securities of the Company  representing  twenty  percent (20%) or
               more  of the  voting  power  of the  Company's  then  outstanding
               securities; or

          (c)  if during any period of two (2) consecutive years during the term
               of this Plan,  individuals  who at the  beginning  of such period
               constitute  the  Board of  Directors,  cease  for any  reason  to
               constitute at least a majority thereof.

     d.   "Committee"  means the  Committee  referred  to in Section  1.3 of the
          Plan.

     e.   "Common  Stock" means shares of the Common  Stock,  par value $.10 per
          share, of the Company.

     f.   "Company" means Aeroflex  Incorporated,  a corporation organized under
          the laws of the State of Delaware (or any successor corporation).

     g.   "Fair Market Value" means the closing market price of the Common Stock
          on the New York Stock Exchange  consolidated  reporting  system on the
          trading  day prior to the date of the  grant or on any  other  date on
          which the  Common  Stock is to be valued  hereunder.  If no sale shall
          have  been  reported  on the  New  York  Stock  Exchange  consolidated
          reporting  system on such date,  Fair Market Value shall be determined
          by the Committee.

     h.   "Non-Employee Director" shall have the meaning set forth in Rule 16(b)
          promulgated by the Securities and Exchange Commission ("Commission").

     i.   "Option" means any option to purchase  Common Stock under Section 2 of
          the Plan.
<PAGE>
     j.   "Option Agreement" means the option agreement described in Section 2.4
          of the Plan.

     k.   "Participant" means any director,  officer,  employee or consultant of
          the  Company,  a  Subsidiary  or an  Affiliate  who is selected by the
          Committee to participate in the Plan.

     l.   "Subsidiary"  means any  corporation  in which the  Company  possesses
          directly or indirectly 50% or more of the combined voting power of all
          classes of stock of such corporation.

     m.   "Total  Disability"  means accidental  bodily injury or sickness which
          wholly and  continuously  disabled an optionee.  The Committee,  whose
          decisions  shall  be  final,  shall  make  a  determination  of  Total
          Disability.

1.3  Administration of the Plan

     The Plan shall be administered  by the Board or by the Committee  appointed
by the Board consisting of two or more members of the Board all of whom shall be
Non-Employee  Directors.  The Committee shall serve at the pleasure of the Board
and shall have such powers as the Board may, from time to time, confer upon it.

     Subject to this  Section 1.3,  the  Committee  shall have sole and complete
authority to adopt, alter, amend or revoke such administrative rules, guidelines
and  practices  governing  the  operation of the Plan as it shall,  from time to
time, deem advisable, and to interpret the terms and provisions of the Plan.

     The Committee  shall keep minutes of its meetings and of action taken by it
without a meeting.  A majority of the Committee shall  constitute a quorum,  and
the acts of a majority of the  members  present at any meeting at which a quorum
is present,  or acts  approved in writing by all of the members of the Committee
without a meeting, shall constitute the acts of the Committee.

1.4  Eligibility

     Stock Options may be granted only to directors,  officers, employees of, or
consultants  to, the Company or a Subsidiary  or  Affiliate.  Subject to Section
1.5,  any  person  who has been  granted  any  Option  may,  if he is  otherwise
eligible, be granted an additional Option or Options.

1.5  Shares

     The aggregate  number of shares reserved for issuance  pursuant to the Plan
shall be  900,000  shares of Common  Stock,  or the number and kind of shares of
stock or other securities which shall be substituted for such shares or to which
such shares shall be adjusted as provided in Section 1.6. No  individual  may be
granted  Options to purchase  more than an  aggregate  500,000  shares of Common
Stock pursuant to the Plan.

     Such number of shares may be set aside out of the  authorized  but unissued
shares of Common Stock or out of issued shares of Common Stock  acquired for and
held in the Treasury of the Company, not reserved for any other purpose.  Shares
subject to, but not sold or issued under, any Option terminating or expiring for
any reason  prior to its  exercise in full will again be  available  for Options
thereafter granted during the balance of the term of the Plan.

1.6  Adjustments Due to Stock Splits, Mergers, Consolidation, Etc.

     If, at any time,  the  Company  shall  take any  action,  whether  by stock
dividend,  stock split,  combination of shares or otherwise,  which results in a
proportionate  increase  or  decrease  in the  number of shares of Common  Stock
theretofore issued and outstanding,  the number of shares which are reserved for
issuance  under the Plan and the  number  of shares  which,  at such  time,  are
subject to Options shall, to the extent deemed appropriate by the Committee,  be
increased or  decreased  in the same  proportion,  provided,  however,  that the
Company shall not be obligated to issue fractional shares.

     Likewise,  in the event of any change in the  outstanding  shares of Common
Stock by reason of any recapitalization, merger, consolidation,  reorganization,
combination or exchange of shares or other corporate change, the Committee shall
make such substitution or adjustments, if any, as it deems to be appropriate, as
to the number or kind of shares of Common  Stock or other  securities  which are
reserved  for  issuance  under  the  Plan  and the  number  of  shares  or other
securities which, at such time are subject to Options.
<PAGE>
     In the  event  of a  Change  in  Control,  at the  option  of the  Board or
Committee,  (a) all  Options  outstanding  on the date of such Change in Control
shall become  immediately  and fully  exercisable,  and (b) an optionee  will be
permitted to surrender for cancellation within sixty (60) days after such Change
in Control any Option or portion of an Option  which was  granted  more than six
(6) months prior to the date of such surrender, to the extent not yet exercised,
and to receive a cash payment in an amount  equal to the excess,  if any, of the
Fair  Market  Value (on the date of  surrender)  of the  shares of Common  Stock
subject  to the  Option  or  portion  thereof  surrendered,  over the  aggregate
purchase price for such Shares under the Option.

1.7  Non-Alienation of Benefits

     Except as herein  specifically  provided,  no right or unpaid benefit under
the Plan shall be subject to  alienation,  assignment,  pledge or charge and any
attempt to  alienate,  assign,  pledge or charge the same shall be void.  If any
Participant  or other person  entitled to benefits  hereunder  should attempt to
alienate,  assign,  pledge or charge any benefit  hereunder,  then such  benefit
shall, in the discretion of the Committee, cease.

1.8  Withholding or Deduction for Taxes

     If, at any time,  the Company or any  Subsidiary  or Affiliate is required,
under applicable laws and regulations, to withhold, or to make any deduction for
any taxes, or take any other action in connection with any Option exercise,  the
Participant  shall be  required  to pay to the  Company  or such  Subsidiary  or
Affiliate, the amount of any taxes required to be withheld, or, in lieu thereof,
at the option of the Company,  the Company or such  Subsidiary  or Affiliate may
accept a  sufficient  number  of shares  of  Common  Stock to cover  the  amount
required to be withheld.

1.9  Administrative Expenses

  The entire expense of administering the Plan shall be borne by the Company.

1.10 General Conditions

     a.   The Board or the Committee may, from time to time,  amend,  suspend or
          terminate  any or all of the  provisions of the Plan,  provided  that,
          without the Participant's  approval, no change may be made which would
          alter or impair any right theretofore granted to any Participant.

     b.   With the consent of the Participant  affected  thereby,  the Committee
          may  amend  or  modify  any  outstanding  Option  in  any  manner  not
          inconsistent   with  the  terms  of  the  Plan,   including,   without
          limitation,  and  irrespective  of the  provisions  of Section  2.3(c)
          below,  to accelerate  the date or dates as of which an installment of
          an Option becomes exercisable;  provided, that the Committee shall not
          have the right to reprice any outstanding Options,  either by lowering
          the  exercise  price or by  cancelling  and  regranting,  without  the
          affirmative  vote of a majority  of the  stockholders  of the  Company
          voting on the repricing proposal.

     c.   Nothing  contained  in the Plan  shall  prohibit  the  Company  or any
          Subsidiary or Affiliate from establishing  other additional  incentive
          compensation  arrangements  for  employees  of  the  Company  or  such
          Subsidiary or Affiliate.

     d.   Nothing in the Plan shall be deemed to limit, in any way, the right of
          the  Company  or  any   Subsidiary   or   Affiliate   to  terminate  a
          Participant's  employment  with the  Company  (or such  Subsidiary  or
          Affiliate) at any time.

     e.   Any decision or action taken by the Board or the Committee arising out
          of  or  in   connection   with   the   construction,   administration,
          interpretation  and effect of the Plan shall be conclusive and binding
          upon all  Participants  and any person  claiming  under or through any
          Participant.

     f.   No member of the Board or of the Committee shall be liable for any act
          or action,  whether of  commission  or  omission,  (i) by such  member
          except in  circumstances  involving  actual bad faith, nor (ii) by any
          other member or by any officer, agent or employee.
<PAGE>
1.11 Compliance with Applicable Law

     Notwithstanding  any other  provision of the Plan, the Company shall not be
obligated to issue any shares of Common Stock,  or grant any Option with respect
thereto,  unless it is advised by  counsel  of its  selection  that it may do so
without  violation of the  applicable  Federal and State laws  pertaining to the
issuance of  securities  and the Company  may require any stock  certificate  so
issued to bear a legend, may give its transfer agent  instructions  limiting the
transfer  thereof,  and may  take  such  other  steps,  as in its  judgment  are
reasonably required to prevent any such violation.

1.12 Effective Dates

     The Plan was adopted by the Board on August 11,  1999,  subject to approval
by the  stockholders  of the  Company.  The Plan  was  amended  by the  Board on
November 18, 1999. The Plan shall terminate on August 10, 2009.

SECTION 2. OPTION GRANTS

2.1  Authority of Committee

     Subject to the  provisions of the Plan,  the Committee  shall have the sole
and complete  authority to determine (i) the  Participants to whom Options shall
be granted;  (ii) the number of shares to be covered by each  Option;  and (iii)
the  conditions  and  limitations,  if any,  in  addition  to those set forth in
Section 2 hereof,  applicable  to the exercise of an Option,  including  without
limitation,  the nature and duration of the restrictions,  if any, to be imposed
upon the sale or other  disposition  of  shares  acquired  upon  exercise  of an
Option.

     Stock Options granted under the Plan shall be non-qualified stock options.

     The Committee shall have the authority to grant Options.

2.2  Option Exercise Price

     The price of stock purchased upon the exercise of Options granted  pursuant
to the Plan  shall be not less than the Fair  Market  Value  thereof at the time
that the Option is granted.

     The  purchase  price  is to be  paid in full  in  cash,  certified  or bank
cashier's  check or, at the option of the  Company,  Common  Stock valued at its
Fair Market Value on the date of exercise,  or a combination  thereof,  when the
Option is exercised and stock  certificates  will be delivered only against such
payment.

2.3  Option Grants

     Each Option will be subject to the following provisions:

     a. Term of Option

     An Option  will be for a term of not more  than ten years  from the date of
     grant.

     b. Exercise

     (i) By an Employee:

     Unless  otherwise  provided  by the  Committee  and  except  in the  manner
     described below upon the death of the optionee,  an Option may be exercised
     only in  installments  as follows:  up to one-half of the subject shares on
     and  after  the first  anniversary  of the date of grant,  up to all of the
     subject shares on and after the second such  anniversary of the date of the
     grant of such Option but in no event later than the  expiration of the term
     of the Option.

     An Option shall be exercisable  during the optionee's  lifetime only by the
     optionee and shall not be exercisable by the optionee unless,  at all times
     since the date of grant and at the time of  exercise,  such  optionee is an
     employee of or providing services to the Company, any parent corporation of
     the Company or any Subsidiary or Affiliate,  except that, upon  termination
     of all such employment or provision of services (other than by death, Total
     Disability,  or by Total Disability  followed by death in the circumstances
<PAGE>
     provided below), the optionee may exercise an Option at any time within two
     years  thereafter  but only to the extent such Option is exercisable on the
     date of such termination.

     Upon termination of all such employment by Total  Disability,  the optionee
     may  exercise  such Options at any time within five years  thereafter,  but
     only  to the  extent  such  Option  is  exercisable  on the  date  of  such
     termination.

     In the  event of the  death of an  optionee  (i)  while an  employee  of or
     providing services to the Company, any parent corporation of the Company or
     any Subsidiary or Affiliate,  or (ii) within two years after termination of
     all such  employment  or  provision  of  services  (other  than  for  Total
     Disability)  or (iii)  within  five years after  termination  on account of
     Total  Disability  of all such  employment  or provision of services,  such
     optionee's  estate or any person who  acquires  the right to exercise  such
     option by bequest or  inheritance or by reason of the death of the optionee
     may exercise such  optionee's  Option at any time within the period of five
     years from the date of death.  In the case of clauses (i) and (iii)  above,
     such  Option  shall be  exercisable  in full for all the  remaining  shares
     covered  thereby,  but in the case of  clause  (ii)  such  Option  shall be
     exercisable  only to the  extent  it was  exercisable  on the  date of such
     termination of employment.

     (ii) By Persons other than Employees:

     If the optionee is not an employee of the Company or the parent corporation
     of the  Company  or any  Subsidiary  or  Affiliate,  the  vesting  of  such
     optionee's   right  to  exercise  his  Options  shall  be  established  and
     determined  by the Committee in the Option  Agreement  covering the Options
     granted to such optionee.

     Notwithstanding  the  foregoing  provisions  regarding  the  exercise of an
     Option  in the event of  death,  Total  Disability,  other  termination  of
     employment  or  provision  of services or  otherwise,  in no event shall an
     Option  be  exercisable  in whole or in part  after  the  termination  date
     provided in the Option Agreement.

     c.   Transferability

     An Option granted under the Plan shall not be  transferable  otherwise than
by will or by the laws of descent and  distribution,  or to the extent permitted
by the Board or the  Committee  to (i) a member  or  members  of the  optionee's
family,  (ii) a trust,  (iii) a family  limited  partnership  or (iv) a  similar
estate planning vehicle primarily for members of the optionee's family.

2.4  Agreements

     In  consideration  of any Options granted to a Participant  under the Plan,
each such  Participant  shall  enter into an Option  Agreement  with the Company
providing,  consistent  with the  Plan,  such  terms as the  Committee  may deem
advisable.

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