Document:

EXHIBIT 10.4
                                                                    ------------

                            STOCK EXCHANGE AGREEMENT
                            ------------------------

     THIS STOCK EXCHANGE AGREEMENT, effective as of June 27, 2003 is hereby
entered into by HomeCom Communications, Inc., a Delaware corporation (the
"Corporation"), and the undersigned holders of the outstanding shares of the
Corporation's Series F Convertible Preferred Stock (the "Stockholders").

                               W I T N E S S E T H

     WHEREAS, the Stockholders currently hold the shares of Series F Convertible
Preferred Stock set forth beside their names on Exhibit A;

     WHEREAS, the Corporation and the Stockholders desire to cancel the
outstanding shares of Series F Preferred Stock (the "Series F Shares") in
exchange for the issuance to the Stockholders of shares of Series H Convertible
Preferred Stock (the "Series H Shares") on a one-for-one basis (the "Share
Exchange") at such time as the issuance of the Series H Shares is authorized by
the filing of the Certificate of Designations, Rights and Preferences of the
Series H Convertible Preferred Stock (the "Series H Certificate of
Designations") in substantially the form attached hereto as Exhibit B;

     NOW THEREFORE, in consideration of the premises and pursuant to the terms
of this Stock Exchange Agreement, the parties hereto hereby agree as follows:

     1. Exchange Transaction. Each Stockholder hereby surrenders to the
Corporation and cancels the Series F Shares set forth beside its name on Exhibit
A as consideration and in exchange for the right to receive the Series H Shares
set forth beside such Stockholder's name on Exhibit A at such time as the
issuance of the Series H Shares is authorized by the filing of the Series H
Certificate of Designations, and each Stockholder hereby agrees to deliver to
the Corporation on the date hereof any and all stock certificates held by such
Stockholder representing such cancelled Series F Shares. Such surrender,
cancellation and issuance shall be recorded on the stock transfer ledger of the
Corporation.

     2. Investment Representations. Each of the undersigned Stockholders
severally (and not jointly) represents and warrants to the Corporation, solely
with respect to each as a Stockholder, that:

          2.1 Accredited Investor. The Stockholder is an "accredited investor"
     (as such term is defined in Rule 501 of Regulation D promulgated under the
     Securities Act of 1933, as amended (the "Securities Act")), and has such
     knowledge and experience in financial business matters that the Stockholder
     is capable of evaluating the merits and risks of the Stock Exchange. The

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     Stockholder's residence or, if other than a natural person, its principal
     office, is located in the jurisdiction indicated in the address of such
     Stockholder given on the signature page hereof.

          2.2 Review of SEC Filings. The Stockholder has had the opportunity to
     review the Corporation's filings with the Securities and Exchange
     Commission.

          2.3 Opportunity for Investigation. The Corporation has given the
     Stockholder the opportunity to meet with the Corporation's directors and
     executive officers for the purpose of asking questions and receiving
     answers concerning the terms and conditions of the Stock Exchange, and to
     obtain any additional information that the Corporation may possess or can
     acquire without unreasonable effort or expense that is necessary to verify
     the accuracy of any information that the Corporation has furnished the
     Stockholder in connection with the Stock Exchange.

          2.4 Restricted Securities. The Stockholder understands and
     acknowledges that the Series H Shares being issued to the respective
     Stockholders in the Stock Exchange are "restricted securities," (as such
     terms is defined in Rule 144(a)(3) under the Securities Act) that the
     certificate or certificates evidencing those shares will bear a legend,
     substantially in the form set forth below, indicating that those shares are
     restricted securities, and that those shares may not be transferred except
     pursuant to an effective registration statement under the Securities Act or
     an available exemption from such registration.

          The legend referred to above will be substantially as follows:

          "These securities have been issued pursuant to an exemption under the
          Securities Act of 1933, as amended, and are restricted securities, and
          neither such securities nor any interest therein may be offered, sold,
          pledged, hypothecated, made the subject of a gift or otherwise
          transferred, for value or otherwise, without the written approval of
          counsel for the issuer making specific reference to this certificate.
          The transfer agents of the issuer have been instructed to register
          transfers of the shares evidenced by this certificate only in
          accordance with the foregoing instructions."

          2.5 Stockholder's Intent. Each Stockholder is acquiring the Series H
     Shares for such Stockholder's own account, for investment purposes, and not
     with a view towards their distribution.

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     3. Further Assurances. Each party shall take all such further actions
reasonably necessary or proper to carry out the transactions contemplated by
this Stock Exchange Agreement.

     4. Governing Law. This Stock Exchange Agreement and the legal relations
between the parties to it is governed by, and shall be construed and enforced in
accordance with, the laws of the State of Delaware.

     5. Counterparts. This Stock Exchange Agreement may be executed in two or
more counterparts, each of which shall be deemed an original.

                          Signatures on following page.

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     DULY EXECUTED AND DELIVERED, by the parties hereto, all on the day and year
first above written.

                                            HOMECOM COMMUNICATIONS, INC.

                                            By:  /s/  Michael Sheppard
                                               --------------------------------
                                            Name:     Michael Sheppard
                                                 ------------------------------
                                            Title:    VP Licensing Division
                                                  ------------------------------

                                            EUROTECH, LTD.

                                            By:  /s/  Carey Naddell
                                               --------------------------------
                                            Name:     Carey Naddell
                                                 ------------------------------
                                            Title:    President and CEO
                                                  -----------------------------

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

                                            GREENFIELD CAPITAL PARTNERS LLC

                                            By:  /s/  Michael Byl
                                               --------------------------------
                                            Name:     Michael Byl
                                                 ------------------------------
                                            Title:    President
                                                  -----------------------------

                                            Address:  90 Grove Street
                                                      Ridgefield, CT 06877
                                                      -------------------------

                                            POLYMATE, LTD.

                                            By:  /s/  Alex Trossman
                                               --------------------------------
                                            Name:     Alex Trossman
                                                 ------------------------------
                                            Title:    General Manager
                                                  -----------------------------

                                            Address:  16 Bnei Brit St.
                                                      Haifa 34752
                                                      Israel
                                                     --------------------------

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                                    EXHIBIT A

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

                                     Shares of Series F     Shares of Series H
                                    Preferred Stock to be     Preferred Stock
     Name of Stockholder               Surrendered             to be Received
     -------------------               -----------             --------------
---------------------------------- ----------------------- --------------------
Eurotech, Ltd.                            11,250                    11,250
---------------------------------- ----------------------- --------------------
Greenfield Capital Partners, L.P.            750                       750
---------------------------------- ----------------------- --------------------
Polymate, Ltd.                             1,500                     1,500
                                           -----                     -----
---------------------------------- ----------------------- --------------------
Total                                     13,500                    13,500
---------------------------------- ----------------------- --------------------

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                                    EXHIBIT B

                      Series H Certificate of Designations

                        Exhibit begins on following page.

<PAGE>

                    CERTIFICATE OF DESIGNATIONS, PREFERENCES
                                   AND RIGHTS
                                       OF
                      SERIES H CONVERTIBLE PREFERRED STOCK
                                       OF
                          HOMECOM COMMUNICATIONS, INC.

     HomeCom Communications, Inc. (the "COMPANY"), a corporation organized and
existing under the General Corporation Law of the State of Delaware, does hereby
certify that, pursuant to authority conferred upon the Board of Directors of the
Company by the Certificate of Incorporation of the Company, and pursuant to
Section 151 of the General Corporation Law of the State of Delaware, the Board
of Directors of the Company at a meeting duly held, adopted resolutions (i)
authorizing a series of the Company's authorized preferred stock, $.01 par value
per share, and (ii) providing for the designations, preferences and relative,
participating, optional or other rights, and the qualifications, limitations or
restrictions thereof, of 13,500 shares of Series H Convertible Preferred Stock
of the Company, as follows:

     RESOLVED, that the Company is authorized to issue 13,500 shares of Series H
Convertible Preferred Stock (the "SERIES H PREFERRED SHARES"), $.01 par value
per share, which shall have the following powers, designations, preferences and
other special rights:

     (1) DIVIDENDS. The Series H Preferred Shares shall not bear any dividends
except as provided herein.

     (2) HOLDER'S CONVERSION OF SERIES H PREFERRED SHARES. A holder of Series H
Preferred Shares shall have the right, at such holder's option, to convert the
Series H Preferred Shares into shares of the Company's common stock, $.0001 par
value per share (the "COMMON STOCK"), on the following terms and conditions:

         (a) CONVERSION RIGHT. At any time or times on or after the first date
on which the Company's Certificate of Incorporation is validly amended such that
the number of authorized shares of Common Stock (the "Authorized Common") equals
or exceeds the sum (the "Common Equivalents") of (i) the number of issued and
outstanding shares of Common Stock plus (ii) the aggregate of the number of
shares of Common Stock into which all other issued and outstanding shares of any
class of Company stock are at any time convertible (the period of time beginning
on the date referred to above and continuing for so long as the Authorized
Common equals or exceeds the Common Equivalents shall be referred to herein as
the "Conversion Period"), any holder of Series H Preferred Shares shall be
entitled to convert each Series H Preferred Share, in whole or in part, into
fully paid and nonassessable shares (rounded to the nearest whole share in

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accordance with Section 2(e) below) of Common Stock at a rate, subject to
adjustment as provided herein, of 10,000 Shares of Common Stock for each Series
H Preferred Share (the "Conversion Rate") as and when the creation of such
Common Stock is duly authorized by all necessary corporate action, at the
Conversion Rate; PROVIDED, HOWEVER, that in no event shall any holder be
entitled to convert Series H Preferred Shares in excess of that number of Series
H Preferred Shares which, upon giving effect to such conversion, would cause the
aggregate number of shares of Common Stock beneficially owned by the holder and
its affiliates to exceed 9.9% of the outstanding shares of the Common Stock
following such conversion. For purposes of the foregoing proviso, the aggregate
number of shares of Common Stock beneficially owned by the holder and its
affiliates shall include the number of shares of Common Stock issuable upon
conversion of the Series H Preferred Shares with respect to which the
determination of such proviso is being made, but shall exclude the number of
shares of Common Stock which would be issuable upon conversion of the remaining,
nonconverted Series H Preferred Shares beneficially owned by the holder and its
affiliates. Except as set forth in the preceding sentence, for purposes of this
paragraph, beneficial ownership shall be calculated in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended.

         (b) ADJUSTMENT TO CONVERSION RATE - DILUTION AND OTHER EVENTS. In order
to prevent dilution of the rights granted under this Certificate of
Designations, the Conversion Rate will be subject to adjustment from time to
time as provided in this Section 2(b).

     1.1  ADJUSTMENT OF FIXED CONVERSION RATE UPON SUBDIVISION OR COMBINATION OF
          COMMON STOCK. If the Company at any time subdivides (by any stock
          split, stock dividend, recapitalization or otherwise) one or more
          classes of its outstanding shares of Common Stock into a greater
          number of shares, the Conversion Rate in effect immediately prior to
          such subdivision will be proportionately increased. If the Company at
          any time combines (by combination, reverse stock split or otherwise)
          one or more classes of its outstanding shares of Common Stock into a
          smaller number of shares, the Conversion Rate in effect immediately
          prior to such combination will be proportionately reduced.

          (ii)      REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER, OR
                    SALE. Any recapitalization, reorganization,
                    reclassification, consolidation, merger, sale of all or
                    substantially all of the Company's assets to another Person
                    (as defined below) or other similar transaction which is
                    effected in such a way that holders of Common Stock are
                    entitled to receive (either directly or upon subsequent
                    liquidation) stock, securities or assets with respect to or
                    in exchange for Common Stock is referred to herein as in
                    "Organic Change." Prior to the consummation of any Organic
                    Change, the Company will make appropriate provision to
                    insure that each of the holders of the Series H Preferred
                    Shares will thereafter have the right to acquire and receive
                    in lieu of or in addition to (as the case may be) the shares
                    of Common Stock immediately theretofore acquirable and
                    receivable upon the conversion of such holder's Series H

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                    Preferred Shares, such shares of stock, securities or assets
                    as may be issued or payable with respect to or in exchange
                    for the number of shares of Common Stock immediately
                    theretofore acquirable and receivable upon the conversion of
                    such holder's Series H Preferred Shares had such Organic
                    Change not taken place. In any such case, the Company will
                    make appropriate provision (in form and substance
                    satisfactory to the holders of a majority of the Series H
                    Preferred Shares then outstanding) with respect to such
                    holders' rights and interests to insure that the provisions
                    of this Section 2(b) will thereafter be applicable to the
                    Series H Preferred Shares. The Company will not effect any
                    such consolidation, merger or sale, unless prior to the
                    consummation thereof the successor entity (if other than the
                    Company) resulting from consolidation or merger or the
                    entity purchasing such assets assumes, by written instrument
                    (in form and substance satisfactory to the holders of a
                    majority of the Series H Preferred Shares then outstanding),
                    the obligation to deliver to each holder of Series H
                    Preferred Shares such shares of stock, securities or assets
                    as, in accordance with the foregoing provisions, such holder
                    may be entitled to acquire. For purposes of this Agreement,
                    "PERSON" shall mean an individual, a limited liability
                    company, a partnership, a joint venture, a corporation, a
                    trust, an unincorporated organization and a government or
                    any department or agency thereof.

          (iii)     SPIN OFF. If, at any time prior to a Conversion Date, the
                    Company consummates a spin off or otherwise divests itself
                    of a part of its business or operations or disposes of all
                    or of a part of its assets in a transaction (the "Spin Off")
                    in which the Company does not receive just compensation for
                    such business, operations or assets, but causes securities
                    of another entity (the "Spin Off Securities") to be issued
                    to security holders of the Company, then the Company shall
                    cause (i) to be reserved Spin Off Securities equal to the
                    number thereof which would have been issued to the Holder
                    had all of the holder's Series H Preferred Stock outstanding
                    on the record date (the "Record Date") for determining the
                    amount and number of Spin Off Securities to be issued to
                    security holders of the Company been converted as of the
                    close of business on the trading day immediately before the
                    Record Date (the "Reserved Spin Off Shares"), and (ii) to be
                    issued to the Holder on the conversion of all or any of the
                    outstanding Series H Preferred Stock, such amount of the
                    Reserved Spin Off Shares equal to (x) the Reserved Spin Off
                    Shares multiplied by (y) a fraction, of which (a) the
                    numerator is the principal amount of the outstanding Series

<PAGE>

                    H Preferred Stock then being converted, and (b) the
                    denominator is the principal amount of all the outstanding
                    Series H Preferred Stock.

          (iv)      NOTICES.

                    (A)       Immediately upon any adjustment of the Conversion
                              Rate, the Company will give written notice thereof
                              to each holder of Series H Preferred Shares,
                              setting forth in reasonable detail and certifying
                              the calculation of such adjustment.

                    (B)       The Company will give written notice to each
                              holder of Series H Preferred Shares at least
                              twenty (20) days prior to the date on which the
                              Company closes its books or takes a record (I)
                              with respect to any dividend or distribution upon
                              the Common Stock, (II) with respect to any pro
                              rata subscription offer to holders of Common Stock
                              or (III) for determining rights to vote with
                              respect to any Organic Change, dissolution or
                              liquidation.

                    (C)       The Company will also give written notice to each
                              holder of Series H Preferred Shares at least
                              twenty (20) days prior to the date on which any
                              Organic Change (as defined below), dissolution or
                              liquidation will take place.

          (c) MECHANICS OF CONVERSION. Subject to the Company's ability to fully
satisfy its obligations under a Conversion Notice (as defined below) as provided
for in Section 5 below:

          (i)       HOLDER'S DELIVERY REQUIREMENTS. To convert Series H
                    Preferred Shares into full shares of Common Stock on any
                    date (the "CONVERSION DATE"), the holder thereof shall (A)
                    deliver or transmit by facsimile, for receipt on or prior to
                    11:59 p.m., Eastern Standard Time, on such date, a copy of a
                    fully executed notice of conversion in the form attached
                    hereto as Exhibit I (the "CONVERSION NOTICE") to the Company
                    or its designated transfer agent (the "TRANSFER AGENT"), and
                    (B) surrender to a common carrier for delivery to the
                    Company or the Transfer Agent as soon as practicable
                    following such date, the original certificates representing
                    the Series H Preferred Shares being converted (or an
                    indemnification undertaking with respect to such shares in
                    the case of their loss, theft or destruction) (the
                    "PREFERRED STOCK CERTIFICATES") and the originally executed
                    Conversion Notice.

<PAGE>

          (ii)      COMPANY'S RESPONSE. Upon receipt by the Company of a
                    facsimile copy of a Conversion Notice, the Company shall
                    immediately send, via facsimile, a confirmation of receipt
                    of such Conversion Notice to such holder. Upon receipt by
                    the Company or the Transfer Agent of the Preferred Stock
                    Certificates to be converted pursuant to a Conversion
                    Notice, together with the originally executed Conversion
                    Notice, the Company or the Transfer Agent (as applicable)
                    shall, within five (5) business days following the date of
                    receipt, (A) issue and surrender to a common carrier for
                    overnight delivery to the address as specified in the
                    Conversion Notice, a certificate, registered in the name of
                    the holder or its designee, for the number of shares of
                    Common Stock to which the holder shall be entitled or (B)
                    credit the aggregate number of shares of Common Stock to
                    which the holder shall be entitled to the holder's or its
                    designee's balance account at The Depository Trust Company.

          (iii)     RECORD HOLDER. The person or persons entitled to receive the
                    shares of Common Stock issuable upon a conversion of Series
                    H Preferred Shares shall be treated for all purposes as the
                    record holder or holders of such shares of Common Stock on
                    the Conversion Date.

          (d) NASDAQ LISTING. So long as the Common Stock is listed for trading
on NASDAQ or an exchange or quotation system with a rule substantially similar
to NASDAQ Rule 4460(i) then, notwithstanding anything to the contrary contained
herein if, at any time, the aggregate number of shares of Common Stock then
issued upon conversion of the Series H Preferred Shares (including any shares of
capital stock or rights to acquire shares of capital stock issued by the
Corporation which are aggregated or integrated with the Common Stock issued or
issuable upon conversion of the Series H Preferred Stock for purposes of such
rule) equals 19.99% of the "Outstanding Common Amount" (as hereinafter defined),
the Series H Preferred Stock shall, from that time forward, cease to be
convertible into Common Stock in accordance with the terms hereof, unless the
Corporation (i) has obtained approval of the issuance of the Common Stock upon
conversion of the Series H Preferred Stock by a majority of the total votes cast
on such proposal, in person or by proxy, by the holders of the then-outstanding
Common Stock (not including any shares of Common Stock held by present or former
holders of Series H Preferred Stock that were issued upon conversion of Series H
Preferred Stock (the "STOCKHOLDER APPROVAL"), or (ii) shall have otherwise
obtained permission to allow such issuances from NASDAQ in accordance with
NASDAQ Rule 4460(i). If the Corporation's Common Stock is not then listed on
NASDAQ or an exchange or quotation system that has a rule substantially similar
to Rule 4460(i) then the limitations set forth herein shall be inapplicable and
of no force and effect. For purposes of this paragraph, "OUTSTANDING COMMON
AMOUNT" means (i) the number of shares of the Common Stock outstanding on the
date of issuance of the Series H Preferred Stock pursuant to the Purchase
Agreement plus (ii) any additional shares of Common Stock issued thereafter in
respect of such shares pursuant to a stock dividend, stock split or similar

<PAGE>

event. The maximum number of shares of Common Stock issuable as a result of the
19.99% limitation set forth herein is hereinafter referred to as the "MAXIMUM
SHARE AMOUNT." With respect to each holder of Series H Preferred Stock, the
Maximum Share Amount shall refer to such holder's pro rata share thereof. In the
event that Corporation obtains Stockholder Approval or the approval of NASDAQ,
or by reason of the inapplicability of the rules of NASDAQ or otherwise, the
Corporation concludes that it is able to increase the number of shares to be
issued above the Maximum Share Amount (such increased number being the "NEW
MAXIMUM SHARE AMOUNT"), the references to Maximum Share Amount, above, shall be
deemed to be, instead, references to the greater New Maximum Share Amount. In
the event that Stockholder Approval is obtained and there are insufficient
reserved or authorized shares, or a registration statement covering the
additional shares of Common Stock which constitute the New Maximum Share Amount
is not effective prior to the Maximum Share Amount being issued (if such
registration statement is necessary to allow for the public resale of such
securities), the Maximum Share Amount shall remain unchanged; provided, however,
that the holders of Series H Preferred Stock may grant an extension to obtain a
sufficient reserved or authorized amount of shares or of the effective date of
such registration statement. In the event that (a) the aggregate number of
shares of Common Stock actually issued upon conversion of the outstanding Series
H Preferred Stock represents at least twenty percent (20%) of the Maximum Share
Amount and (b) the sum of (x) the aggregate number of shares of Common Stock
issued upon conversion of Series H Preferred Stock plus (y) the aggregate number
of shares of Common Stock that remain issuable upon conversion of Series H
Preferred Stock and based on the Conversion Price then in effect), represents at
least one hundred percent (100%) of the Maximum Share Amount, the Corporation
will use its best reasonable efforts to seek and obtain Stockholder Approval (or
obtain such other relief as will allow conversions hereunder in excess of the
Maximum Share Amount) as soon as practicable following the Triggering Event and
before the Mandatory Redemption Date.

          (e) FRACTIONAL SHARES. The Company shall not issue any fraction of a
share of Common Stock upon any conversion. All shares of Common Stock (including
fractions thereof) issuable upon conversion of more than one share of the Series
H Preferred Shares by a holder thereof shall be aggregated for purposes of
determining whether the conversion would result in the issuance of a fraction of
a share of Common Stock. If, after the aforementioned aggregation, the issuance
would result in the issuance of a fraction of a share of Common Stock, the
Company shall round such fraction of a share of Common Stock up or down to the
nearest whole share.

          (f) TAXES. The Company shall pay any and all taxes which may be
imposed upon it with respect to the issuance and delivery of Common Stock upon
the conversion of the Series H Preferred Shares.

     (3) REISSUANCE OF CERTIFICATES. In the event of a conversion or redemption
pursuant to this Certificate of Designations of less than all of the Series H
Preferred Shares represented by a particular Preferred Stock Certificate, the

<PAGE>

Company shall promptly cause to be issued and delivered to the holder of such
Series H Preferred Shares a Preferred Stock Certificate representing the
remaining Series H Preferred Shares which have not been so converted or
redeemed.

     (4) RESERVATION OF SHARES. During the Conversion Period, the Company shall,
so long as any of the Series H Preferred Shares are outstanding, reserve and
keep available out of its authorized and unissued Common Stock, solely for the
purpose of effecting the conversion of the Series H Preferred Shares, such
number of shares of Common Stock as shall from time to time be sufficient to
affect the conversion of all of the Series H Preferred Shares then outstanding;
provided that the number of shares of Common Stock so reserved shall at no time
be less than 100% of the number of shares of Common Stock for which the Series H
Preferred Shares are at any time convertible.

     (5) VOTING RIGHTS. The Series H Shares shall have no voting rights except
as otherwise provided herein or in the General Corporation Law of the State of
Delaware.

     (6) LIQUIDATION, DISSOLUTION, WINDING-UP. In the event of any voluntary or
involuntary liquidation, dissolution, or winding up of the Company, the holders
of the Series H Preferred Shares shall be entitled to receive in cash out of the
assets of the Company, whether from capital or from earnings available for
distribution to its stockholders (the "PREFERRED FUNDS"), before any amount
shall be paid to the holders of any of the capital stock of the Company of any
class junior in rank to the Series H Preferred Shares (other than the Series G
Preferred Shares which shall be equal in rank) in respect of the preferences as
to the distributions and payments on the liquidation, dissolution and winding up
of the Company, an amount per Series H Preferred Share equal to $1,000 (such sum
being referred to as the "LIQUIDATION VALUE"); provided that, if the Preferred
Funds are insufficient to pay the full amount due to the holders of Series H
Preferred Shares and holders of shares of other classes or series of preferred
stock of the Company that are of equal rank with the Series H Preferred Shares
as to payments of Preferred Funds (the "PARI PASSU SHARES"), then each holder of
Series H Preferred Shares and Pari Passu Shares shall receive a percentage of
the Preferred Funds equal to the full amount of Preferred Funds payable to such
holder as a liquidation preference, in accordance with their respective
Certificate of Designations, Preferences and Rights, as a percentage of the full
amount of Preferred Funds payable to all holders of Series H Preferred Shares
and Pari Passu Shares. The purchase or redemption by the Company of stock of any
class in any manner permitted by law, shall not for the purposes hereof, be
regarded as a liquidation, dissolution or winding up of the Company. Neither the
consolidation or merger of the Company with or into any other Person, nor the
sale or transfer by the Company of less than substantially all of its assets,
shall, for the purposes hereof, be deemed to be a liquidation, dissolution or
winding up of the Company. No holder of Series H Preferred Shares shall be
entitled to receive any amounts with respect thereto upon any liquidation,
dissolution or winding up of the Company other than the amounts provided for
herein.

<PAGE>

     (7) PREFERRED RATE. All shares of Common Stock shall be of junior rank to
all Series H Preferred Shares in respect to the preferences as to distributions
and payments upon the liquidation, dissolution, and winding up of the Company.
The rights of the Series H Preferred Shares shall be subject to the Preferences
and relative rights of the Series B Convertible Preferred Stock, Series C
Convertible Preferred Stock, Series D Convertible Preferred Stock, and Series E
Convertible Preferred Stock. Without the prior express written consent of the
holders of not less than a majority of the then outstanding Series H Preferred
Shares, the Company shall not hereafter authorize or issue additional or other
capital stock (other than the Series G Preferred Shares which shall be equal in
rank) that is of senior or equal rank to the Series H Preferred Shares in
respect of the preferences as to distributions and payments upon the
liquidation, dissolution and winding up of the Company. Without the prior
express written consent of the holders of not less than a majority of the then
outstanding Series H Preferred Shares, the Company shall not hereafter authorize
or make any amendment to the Company's Certificate of Incorporation or bylaws,
or make any resolution of the board of directors with the Delaware Secretary of
State containing any provisions, which would materially and adversely affect or
otherwise impair the rights or relative priority of the holders of the Series H
Preferred Shares relative to the holders of the Common Stock or the holders of
any other class of capital stock. In the event of the merger or consolidation of
the Company with or into another corporation, the Series H Preferred Shares
shall maintain their relative powers, designations, and preferences provided for
herein and no merger shall result inconsistent therewith.

     (8) RESTRICTION ON DIVIDENDS. If any Series H Preferred Shares are
outstanding, without the prior express written consent of the holders of not
less than a majority of the then outstanding Series H Preferred Shares, the
Company shall not directly or indirectly declare, pay or make any dividends or
other distributions upon any of the Common Stock so long as written notice
thereof has not been given to holders of the Series H Preferred Shares at least
30 days prior to the earlier of (a) the record date taken for or (b) the payment
of any such dividend or other distribution. Notwithstanding the foregoing, this
Section 8 shall not prohibit the Company from declaring and paying a dividend in
cash with respect to the Common Stock so long as the Company: (i) pays
simultaneously to each holder of Series H Preferred Shares an amount in cash
equal to the amount such holder would have received had all of such holder's
Series H Preferred Shares been converted to Common Stock pursuant to Section 2
hereof one business day prior to the record date for any such dividend, and (ii)
after giving effect to the payment of any dividend and any other payments
required in connection therewith including to the holders of the Series H
Preferred Shares, the Company has in cash or cash equivalents an amount equal to
the aggregate of: (A) all of its liabilities reflected on its most recently
available balance sheet, (B) the amount of any indebtedness incurred by the
Company or any of its subsidiaries since its most recent balance sheet and (C)
120% of the amount payable to all holders of any shares of any class of
preferred stock of the Company assuming a liquidation of the Company as the date
of its most recently available balance sheet.

<PAGE>

     (9) VOTE TO CHANGE THE TERMS OF SERIES H PREFERRED SHARES. The affirmative
vote at a meeting duly called for such purpose, or the written consent without a
meeting of the holders of not less than 66-2/3% of the then outstanding Series H
Preferred Shares, shall be required for any change to this Certificate of
Designations or the Company's Certificate of Incorporation which would amend,
alter, change or repeal any of the powers, designations, preferences and rights
of the Series H Preferred Shares.

     (10) LOST OR STOLEN CERTIFICATES. Upon receipt by the Company of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Preferred Stock Certificates representing the Series H Preferred Shares, and, in
the case of loss, theft or destruction, of any indemnification undertaking by
the holder to the Company and, in the case of mutilation, upon surrender and
cancellation of the Preferred Stock Certificate(s), the Company shall execute
and deliver new preferred stock certificate(s) of like tenor and date; provided,
however, the Company shall not be obligated to re-issue preferred stock
certificates if the holder contemporaneously requests the Company to convert
such Series H Preferred Shares into Common Stock.

     (11) WITHHOLDING TAX OBLIGATIONS. Notwithstanding anything herein to the
contrary, to the extent that the Company receives advice in writing from its
counsel that there is a reasonable basis to believe that the Company is required
by applicable federal laws or regulations and delivers a copy of such written
advice to the holders of the Series H Preferred Shares so effected, the Company
may reasonably condition the making of any distribution (as such term is defined
under applicable federal tax law and regulations) in respect of any Series H
Preferred Share on the holder of such Series H Preferred Shares depositing with
the Company an amount of cash sufficient to enable the Company to satisfy its
withholding tax obligations (the "WITHHOLDING TAX") with respect to such
distribution. Notwithstanding the foregoing or anything to the contrary, if any
holder of the Series H Preferred Shares so effected receives advice in writing
from its counsel that there is a reasonable basis to believe that the Company is
not so required by applicable federal laws or regulations and delivers a copy of
such written advice to the Company, the Company shall not be permitted to
condition the making of any such distribution in respect of any Series H
Preferred Share on the holder of such Series H Preferred Shares depositing with
the Company any Withholding Tax with respect to such distribution, PROVIDED,
HOWEVER, the Company may reasonably condition the making of any such
distribution in respect of any Series H Preferred Share on the holder of such
Series H Preferred Shares executing and delivering to the Company, at the
election of the holder, either: (i) if applicable, a properly completed Internal
Revenue Service Form 4224, or (a) an indemnification agreement in reasonably
acceptable form, with respect to any federal tax liability, penalties and
interest that may be imposed upon the Company by the Internal Revenue Service as
a result of the Company's failure to withhold in connection with such
distribution to such holder.

<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Certificate of Designations
to be signed by ___________________, its ____________________, as of the ______
day of _____________, 2003.

                                            HOMECOM COMMUNICATIONS, INC.

                                            By:________________________________

<PAGE>

                                    EXHIBIT I

                          HOMECOM COMMUNICATIONS, INC.
                                CONVERSION NOTICE

Reference is made to the Certificate of Designations, Preferences and Rights of
HomeCom Communications, Inc. (the "CERTIFICATE OF DESIGNATIONS"). In accordance
with and pursuant to the Certificate of Designations, the undersigned hereby
elects to convert the number of shares of Series H Convertible Preferred Stock,
$.01 par value per share (the "Series H PREFERRED SHARES"), of HomeCom
Communications, Inc., a Delaware corporation (the "COMPANY"), indicated below
into shares of Common Stock, $.0001 par value per share (the "COMMON STOCK"), of
the Company, by tendering the stock certificate(s) representing the share(s) of
Series H Preferred Shares specified below as of the date specified below.

The undersigned acknowledges that any sales by the undersigned of the securities
issuable to the undersigned upon conversion of the Series H Preferred Shares
shall be made only pursuant to (i) a registration statement effective under the
Securities Act of 1933, as amended (the "ACT"), or (ii) advice of counsel that
such sale is exempt from registration required by Section 5 of the Act.

                                Date of Conversion:

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

                                Number of Series H
                                Preferred Shares to be converted
                                ---------------------------------------------

                                Stock certificate no(s). of Series H
                                Preferred Shares to be converted:
                                ---------------------------------------------

Please confirm the following information:

                                Number of shares of Common Stock to be issued:

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

<PAGE>

please issue the Common Stock into which the Series H Preferred Shares are being
converted in the following name and to the following address:

                                Issue to:(1)

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

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

                                Facsimile Number:

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

                                Authorization:

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

                                By:

                                   ------------------------------------------
                                Title:

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

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

ACKNOWLEDGED AND AGREED:

HOMECOM COMMUNICATIONS, INC.

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

Date:
     ----------------

--------

     (1) If other than to the record holder of the Series H Preferred Shares,
any applicable transfer tax must be paid by the undersigned.EXHIBIT 10.5
                                                                    ------------

                                 AMENDMENT NO. 1

                                       TO

                                LICENSE AGREEMENT

     THIS AMENDMENT NO. 1 TO LICENSE AGREEMENT, effective as of June 27, 2003
(this "Amendment"), is made by and between HomeCom Communications, Inc., a
Delaware corporation (the "HomeCom"), and Eurotech, Ltd., a District of Columbia
corporation ( "Eurotech").

     WHEREAS, HomeCom and Eurotech wish to amend that certain License Agreement,
dated as of May 22, 2003, by and among HomeCom and Eurotech (the "Agreement")
upon the terms and subject to the conditions set forth in this Amendment;

     NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements set forth in this
Amendment, the parties hereto agree as follows:

     1. Defined Terms; Definitions. Capitalized terms that are used but not
defined in this Amendment shall have the meanings ascribed to such terms in the
Agreement.

     2. Effective Time of Amendment. This Amendment and the terms and provisions
hereof shall be effective as of the Effective Date.

     3. Amendment to Section 1.11. Section 1.11 of the Agreement is hereby
amended by deleting clause (ii) of Section 1.11 and replacing such clause (ii)
with the following clause (ii):

        "(ii) claimed, covered or disclosed in any Patent, trademark, copyright
        or application relating to the technologies and/or products described on
        Exhibit B, including, without limitation, the Patents, trademarks,
        copyrights and applications identified on Exhibit A."

     4. Amendment to Section 8.4. Section 8.4 of the Agreement is hereby amended
by deleting Subsection 8.4(a) and replacing Subsection 8.4(a) with the following
language:

        "(a) Intentionally omitted."

     5. Amendment to Exhibit B. Exhibit B of the Agreement is hereby amended by
deleting Exhibit B and replacing Exhibit B with the Exhibit B that is attached
to this Amendment.

     6. Binding Effect. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their heirs, executors, administrators,
successors and permitted assigns. The Agreement, as amended by this Amendment,
shall remain in full force and effect following the effectiveness of this
Amendment in accordance with Section 2 hereof.

     7. Restatement of Agreement. The terms and provisions of this Amendment may
be incorporated into an amended and restated version of the Agreement that
restates, but does not further amend, the Agreement as amended by this
Amendment.

<PAGE>

     8. Counterparts. This Amendment may be executed simultaneously in two or
more counterparts, any one of which need not contain the signatures of more than
one party, but all of such counterparts taken together shall constitute one and
the same Amendment.

     9. Governing Law. This Amendment shall be deemed to be made in, and in all
respects shall be interpreted, construed and governed by and in accordance with,
New York law without regard to the conflict of law principles thereof, except
that matters related to the corporate governance of HomeCom shall be governed by
Delaware law.

                            [signature pages follow]

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Amendment as of the date first written above.

                                            HOMECOM:

                                            HOMECOM COMMUNICATIONS, INC.

                                            By:  /s/  Michael Sheppard
                                               --------------------------------
                                            Name:     Michael Sheppard
                                            Title:    Vice President

                                            EUROTECH:

                                            EUROTECH, LTD.

                                            By:  /s/  Carey Naddell
                                               --------------------------------
                                            Name:     Carey Naddell
                                            Title:    President and CEO

<PAGE>

                                    EXHIBIT B
                                    ---------

                           Please see following page.

<PAGE>

1.      EKOR

     a. Description. EKOR is a family of non-toxic advanced composite polymer
materials that provides for effective and unique means of containment of nuclear
and hazardous materials and prevents radioactive contaminants from spreading.
EKOR is available as a coating or sealing agent with varying viscosity and as
flexible or rigid foam. EKOR is a highly radiation and corrosion-resistant
material. It has been engineered for use in a wide variety of applications in
low to high level radiation and other environmentally challenging settings in
which other known encapsulants are not performing with the same efficacy. EKOR
applications range from in-situ stabilization, containment and encapsulation to
transportation and final storage and disposal. EKOR can also assist in resolving
the special challenges faced by operating reactors in nuclear power plants and
research facilities, uranium/thorium and other mining venues, nuclear medicine
and the chemical industry. EKOR products and services have been developed under
a Quality Assurance Plan that meets the requirements of NQA-1. Each formulation
has completed or is in the process of completing performance testing conducted
by certified independent laboratories.

     b. Products/Applications. EKOR is manufactured as EKOR Sealer, Sealer Plus
(spray), Grout, Matrix and with a Foam product under development.

     c. Further descripition attached.

2.      EMR/AC

     a. Description. Electromagnetic Radiography ("EMR") and Acoustic Core
("AC") provide integrated remote sensing capabilities that produce 3D images of
subsurface contaminants with a high degree of discrimination and precision. They
offer large area coverage at high resolution and are significantly more cost
effective than monitoring methods currently used for environmental assessments.
EMR is a non-intrusive sensing technology suitable for land and marine
applications. This technology is capable of detecting contaminants in
concentrations as low as upper parts per billion to lower parts per million. It
utilizes a proprietary electromagnetic signature analysis process to
differentiate and classify the unique electromagnetic signature of subsurface
contaminants. The AC and EMR technologies provide integrated remote sensing
capabilities. These technologies produce 3D images of subsurface features. The
AC technology utilizes a proprietary acoustic signature analysis process to
differentiate and classify the unique acoustic signatures of marine subsurface
contaminants.

     b. Products/Applications. Idaho National Engineering and Environmental
Laboratory and Oak Ridge National Laboratory have utilized EMR to detect and
characterize subsurface mercury and diesel fuel. The AC technology has
demonstrated applications in marine environmental assessment, including
detections of polychlorinated biphenyls. The Environmental Protection Agency and
US Army Corps of Engineers have used prototype equipment to detect
polychlorinated biphenyls in the Great Lakes. Eurotech is developing these
technologies in the nuclear remediation, marine dredging and oil exploration
markets.

<PAGE>

     c. Further descripition attached.

3.      Hybrid Nonisocyanate Polyurethane ("HNIPU")

     a. Description. HNIPU is a technology intended to improve upon conventional
monolithic polyurethanes, which have good mechanical properties, but are porous,
with poor hydrolytic stability and moderate permeability. In addition,
conventional polyurethanes require highly toxic components in their manufacture,
such as isocyanates, rendering production extremely toxic and dangerous and
HNIPU is not using such toxic components. HNIPU is a proven non-toxic process of
making polyurethane by modifying the structure of the urethane polymer while
staying in the same price range. This results in increased hydrolytic stability
and improvement of other properties. HNIPU is modified polyurethane with lower
permeability, increased chemical resistance properties and material synthesis
that has superior environmental characteristics to conventional polyurethanes.
Conventional polyurethanes have unstable bonds that are easily hydrolyzed making
the material very vulnerable to environmental degradation. An intramolecular
hydrogen bond is formed during HNIPU synthesis that improves hydrolytic
stability above conventional polyurethanes. Materials that contain
intramolecular hydrogen bonds display chemical resistance 1.5 to 2 times greater
than materials of similar chemical structure without such bonds. HNIPUs exhibit
resistance properties to chemical degradation 30-50 percent better over
conventional polyurethanes and have significantly reduced permeability of three
to four times less. HNIPUs form into a material with practically no pores and
therefore, do not absorb moisture on the surface or in fillers during formation.

     b. Products/Applications. Certain versions of Epoxy HNIPU are finished and
Acrylic HNIPU and HNIPU Foam are under development.

     c. Further descripition attached.

4. Rad-X.

     a. Description attached.

5.  Firesil

     a. Description attached.

6.  LEM

     a. Description attached.

7.  Rapidly Biodegradable Hydrophobic Material (RBHM)

     a. Description attached.

<PAGE>

        ========================================================================

        HNIPU

        Summary/Applications/Properties/MSDS/Brochure

        Summary

        Conventional monolithic polyurethanes have good mechanical properties;
        however, they are porous, with poor hydrolytic stability and moderate
        permeability. In addition, conventional polyurethanes require highly
        toxic components in their manufacture, such as isocyanates, rendering
        production extremely toxic and dangerous. The limitations and dangers of
        conventional polyurethanes raise the need for modified materials and
        processes.

        By modifying the structure of the urethane polymer, a promising new
        method for increasing hydrolytic stability resulted in hybrid
        nonisocyanate polyurethane (HNIPU). HNIPU is modified polyurethane with
        lower permeability, increased chemical resistance properties and
        material synthesis that has superior environmental characteristics to
        conventional polyurethanes.

        Conventional polyurethanes have unstable bonds that are easily
        hydrolyzed making the material very vulnerable to environmental
        degradation. An intramolecular hydrogen bond is formed during NIPU
        synthesis that improves hydrolytic stability well above that of
        conventional polyurethanes. Materials that contain intramolecular
        hydrogen bonds display chemical resistance 1.5 to 2 times greater than
        materials of similar chemical structure without such bonds.

        HNIPUs exhibit superior resistance properties to chemical degradation:
        30-50 percent better over conventional polyurethanes and have
        significantly reduced permeability: three to four times less. Unlike
        conventional polyurethanes - with a porous structure - NIPUs form into a
        material with practically no pores. Therefore, they do not absorb
        moisture on the surface or in fillers during formation.

        Synthesis of HNIPU is safe and easy. HNIPU hardens at ambient
        temperatures without the using toxic components in the synthesis

        ========================================================================

        RAD-X

        Summary/Applications/Properties/Product Comparison/MSDS/Brochure

        [GRAPHIC OMITTED]

        Summary

        Rad-X(TM) is a water-based compound engineered to fix radioactive or
        hazardous contaminants to a variety of surfaces. Its properties include
        excellent thermal stability, superior fire-resistance, and good adhesion
        to practically every material of construction, even if wet or dirty.
        Rad-X does not peel back during dismantlement processes, such as
        shearing, mechanical cutting or even torch cutting.

        Rad-X also functions as an intumescent coating that swells to form an
        insulating layer when exposed to open flame or high temperatures. This
        layer binds contamination and minimizes potential airborne contamination
        during any fire event.

<PAGE>

        Additionally, Rad-X reduces heat-transfer and provides extended
        protection for flammable or temperature-sensitive substrate materials.
        This results in increased fire-retardant properties that enhance
        workplace safety by providing an added resistance to flame/smoke spread
        and extended evacuation times for controlled areas requiring full dress
        out.

        Rad-X is non-toxic, does not contain volatile organics or hazardous
        solvents, and has no explosive hazard for confined space use.

================================================================================

FIRESIL

Summary/Properties/ASB-MSDS/EXT-MSDS/Brochure

Summary

Firesil(TM) is an organo-mineral fire-protecting coating for wood and other
materials. Firesil has good adhesion properties to hydrophilic and hydrophobic
surfaces, excellent fire-resistance and thermostability, and good
water-resistance.

Under exposure to fire, the Firesil coating swells to form a layer that reduces
heat-transfer and prevents wood from igniting and insulates metal surfaces

Firesil does not contain greenhouse-gasses, volatile organic chemicals, or
hazardous solvents.

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

LEM

Summary/Applications/Properties/Brochure

Summary

Liquid Ebonite Mixtures (LEM) are protective lining products that function
superiorly relative to rubber products that they replace. Liquid Ebonite
Mixtures are a cost-effective and functional solution for rubber-coating
applications. Conventional rubber coatings of polychloropropene (Neoprene),
polysulfide (Thiokol), polyurethane and other rubber materials lack the ability
to provide reliable protection over extended periods of time. In addition, these
coatings require adhesive substrates commonly considered unsafe due to the
organic solvents present in the compounds.

With value-added design and engineering flexibility, LEM have the ability to
effectively cover hard to reach places, successfully coating the complex
surfaces of such areas as the mesh of sieves otherwise considered impossible to
coat with conventional rubber sheets. With increased chemical resistance, LEM
maintain material integrity by assuring long-term durability and effective
corrosion protection. In addition to high performance properties, material
production of LEM meet environmental safety standards further elevating LEM as
advanced products that outperform conventional rubber coatings and coverings.

<PAGE>

LEM offer cost-benefit factors based on anticorrosion reliability and
application functionality that satisfy the demands of the high-performance
coating industry.

 RADEMATE Ltd developed cellulose-based a rapid biodegradable hydrophobic
 material (RBHM). RBHM is a new, hydrophobic, strong, cheap and completely
 biodegradable composite material that is environmentally friendly. RBHM has
 shown great promise in improving the properties of both paper and plastics
 packaging materials. Due to its biodegradable nature, Rapid Biodegradable
 Hydrophobic Material is ideal to be applied for the disposable loose fill bags
 and packages. The material can be used as a commodity in trade, industry and
 agriculture for a wide range of applications.

 To date, most attempts to produce biodegradable products for consumers focused
 on developing plastics that could biodegrade. RBHM approaches biodegradable
 products from the other direction - making cellulose-based material with the
 same physical properties as plastic, except the material biodegrades completely
 in the same time as regular paper bags.

 Summary

 NETS's premier product line is EKOR(TM), a family of advanced materials for
 nuclear and hazardous waste containment. EKOR(TM) is an advanced silicone
 polymer composite that is the most effective means of preventing radioactive
 contaminants from spreading.

 EKOR(TM) is available as a coating or sealing agent with varying viscosity and
 as flexible or rigid foam. EKOR(TM) properties are easily customized to meet
 customer requirements and constraints.

 EKOR(TM) is a highly radiation and corrosion-resistant material. It has been
 engineered for use in a wide variety of applications in low to high level
 radiation and other environmentally challenging settings. EKOR(TM) applications
 range from in-situ stabilization, D & D, containment and encapsulation to
 transportation and final storage and disposal. EKOR(TM) can also assist in
 resolving the special challenges faced by operating reactors in nuclear power
 plants and research facilities, uranium/thorium and other mining venues,
 nuclear medicine and the chemical industry.

 NETS also provides the services necessary for the successful application of
 EKOR(TM), including application equipment, project management, engineering
 support and training.

 EKOR(TM) products and services have been developed under a Quality Assurance
 Plan that meets the requirements of NQA-1. Each formulation has completed or is
 in the process of completing performance testing conducted by certified
 independent laboratories.

================================================================================
SUMMARY

Electromagnetic Radiography

Summary/Application

Summary

Electromagnetic Radiography(TM) (EMR) and Acoustic Core(TM) (AC) provide
integrated remote sensing capabilities. These technologies produce 3D images of
subsurface contaminants with a high degree of discrimination and precision .
They offer large area coverage at high resolution and are significantly more
cost effective than monitoring methods currently used for environmental
assessments.

<PAGE>

================================================================================

Electromagnetic Radiography

Summary/Application

[GRAPHIC OMITTED]                             [GRAPHIC OMITTED]
Summary                          2D Sub-Surface ace Plume Cross-Section
3D Sub-Syrface Plume

EMR is a non-intrusive sensing technology suitable for land and marine
applications. For example, potentially contaminated Department of Energy (DOE)
sites such as the Hanford nuclear site can utilize EMR to detect and
characterize subsurface plumes of organic and inorganic constituents. Idaho
National Engineering and Environmental Laboratory (INEEL) and Oak Ridge National
Laboratory (ORNL) have utilized EMR to detect and characterize subsurface
mercury and diesel fuel.

This technology is capable of detecting contaminants in concentration fuel. as
low as upper parts per billion to lower parts per million. It utilizes a
proprietary electromagnetic signature analysis process to differentiate and
classify the unique electromagnetic signature of subsurface contaminants.

Summary

The Acoustic Core(TM) (AC) and Electromagnetic Radiography(TM) (EMR)
technologies provide integrated remote sensing capabilities. These technologies
produce 3D images of subsurface contaminants with a high degree of
discrimination and precision. They offer the potential to develop remote sensing
products that can provide large area coverage at high resolution and which are
significantly more cost effective than current monitoring methods used for
environmental assessments.

AC technology has demonstrated applications in marine environmental assments.
The Environmental Protection Agency (EPA) and US Army Corps of Engineers
(USACOE) have used prototype equipment to detect polyclorinated (PCBs) in the
Great Lakes. The technology utilizes a proprietary acoustic signature analysis
process to differentiate and classify the unique acoustic signatures of marine
subsurface contaminants. With the combination of EMR and AC, Eurotech should be
able to develop remote sensing products that detect and characterize
contaminants that have migrated from land to water in environmental assessment
projects.

After almost a decade of intensive laboratory and field research, AC technology
is poised to enter the security marketplace to fill high-priority Homeland
Security needs. AC has unique primary screening capabilities that are suitable
for the development of remote screening products for many security applications.
Because AC technology can utilize the unique and independent acoustic signatures
of illicit materials, products can be developed and programmed to detect a large
array of harmful substances, including explosive, bio-hazardous and radioactive
compounds.

<PAGE>

The technology appears capable of supporting the development of a variety of new
products for computerized automatic screening of containers, vehicles and humans
for a broad range of illicit material at high rates of speed and with low rates
of false alarms. It uses low-frequency acoustic energy that is safe for human
exposure and is ideal for screening large volumes of containers or humans
quickly and accurately.

AC appears capable of automatically screening large containers while they are in
motion. A proposed configuration of the equipment would permit screening of
these containers while they are being transported by cranes, trucks, or
railcars. Primary screening of containers in this manner can allow segregation
of suspicious containers for secondary by a handheld versions of the remote
sensing products. Future AC products should be usable in conjunction with
current secondary screening methods to provide fully integrated inspection and
screening systems.

The AC technology can be utilized to develop products that can automatically
screen luggage for plastic explosives by retrofitting AC technology based
sensors into existing carry-on luggage inspection systems. The technology is
very flexible and can be used to safely screen humans for explosives when
incorporated into existing entry portal systems such as metal detectors,
eliminating the need to these systems. Additionally, AC technology based
products can be developed that can be installed in the floor space of airline
passenger entry portals to detect explosives in footwear.

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