<SUBMISSION>
<ACCESSION-NUMBER>0000950144-00-011081
<TYPE>S-1/A
<PUBLIC-DOCUMENT-COUNT>10
<FILING-DATE>20000905
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>ABLE TELCOM HOLDING CORP
<CIK>0000826411
<ASSIGNED-SIC>1731
<IRS-NUMBER>650013218
<STATE-OF-INCORPORATION>FL
<FISCAL-YEAR-END>1031
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>S-1/A
<ACT>33
<FILE-NUMBER>333-65991
<FILM-NUMBER>716761
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>1000 HOLCOMB WOODS PARKWAY
<STREET2>SUITE 440
<CITY>ROSWELL
<STATE>GA
<ZIP>30076
<PHONE>7709931570
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>1601 FORUM PLACE
<STREET2>STE 305
<CITY>WEST PALM BEACH
<STATE>FL
<ZIP>33401
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>DELTA VENTURE FUND INC
<DATE-CHANGED>19890312
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>S-1/A
<SEQUENCE>1
<FILENAME>g63952as-1a.txt
<DESCRIPTION>ABLE TELECOM HOLDING CORP.
<TEXT>

<PAGE>   1


    AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 31, 2000
                      REGISTRATION STATEMENT NO. 333-65991
--------------------------------------------------------------------------------
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                 ---------------
                                 AMENDMENT NO. 2
                                       TO
                                    FORM S-1

             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
                                 ---------------
                            ABLE TELCOM HOLDING CORP.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S>                               <C>                            <C>
      STATE OF FLORIDA                        1731                     65-0013218
(State or other jurisdiction of   (Primary Standard Industrial      (I.R.S. Employer
 incorporation or organization)      Classification Number)      Identification Number)
</TABLE>

<TABLE>
<S>                                                                 <C>
                                                                                     BILLY V. RAY, JR.
                                                                                  CHIEF EXECUTIVE OFFICER
            1000 HOLCOMB WOODS PARKWAY, SUITE 440                                ABLE TELCOM HOLDING CORP.
                   ROSWELL, GEORGIA 30076                                  1000 HOLCOMB WOODS PARKWAY, SUITE 440
                       (770) 993-1570                                             ROSWELL, GEORGIA 30076
(Address, including zip code, and telephone number, including        (Name, address, including zip code, and telephone
   area code, of Registrant's principal executive offices)          number, including area code, of agent for services)
</TABLE>

                                    COPIES TO

                               ELIZABETH NOE, ESQ.
                      PAUL, HASTINGS, JANOFSKY & WALKER LLP
                     600 PEACHTREE STREET, N.E., SUITE 2400
                             ATLANTA, GEORGIA 30308
                                  (404)815-2400

                            ------------------------
        APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
    FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT
                   AS DETERMINED BY THE SELLING SHAREHOLDERS.

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

    If any of the securities being registered on this Form are to be offered on
 a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
 1933, other than securities offered only in connection with dividend or
 interest reinvestment plans, check the following box. [x]
    If this Form is filed to register additional securities for an offering
 pursuant to Rule 462(b) under the Securities Act, check the following box and
 list the Securities Act registration statement number of the earlier effective
 registration statement for the same offering. [ ]
    If this Form is a post-effective amendment filed pursuant to Rule 462(c)
 under the Securities Act, check the following box and list the Securities Act
 registration statement number of the earlier effective registration statement
 for the same offering. [ ]
     If this Form is a post-effective amendment filed pursuant to Rule 462(d)
 under the Securities Act, check the following box and list the Securities Act
 registration statement number of the earlier effective registration statement
 for the earlier offering. [ ]
      If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

                         CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
====================================================================================================================
                                                            Proposed
                                                             Maximum
                                                          Offering Price     Proposed Maximum
         Title of Each Class               Amount to be     Per Share       Aggregate Offering        Amount of
  of Securities to be Registered          Registered(1)                            Price          Registration Fee(2)
====================================================================================================================

<S>                                       <C>             <C>               <C>                   <C>
Common stock, par value $.001(3)             2,000,000        $   7.00           $14,000,000          $  3,696
Common stock, par value $.001(4)               409,505            8.25             3,378,416               892
Common stock, par value $.001(5)(6)          2,932,991         2.59375             7,607,445             2,009
Common stock, par value $.001(7)               200,000          10.125             2,025,000               535
Common stock, par value $.001(7)               370,000           13.50             4,995,000             1,319
</TABLE>


<PAGE>   2


<TABLE>
<CAPTION>
====================================================================================================================
                                                            Proposed
                                                             Maximum
                                                          Offering Price     Proposed Maximum
         Title of Each Class               Amount to be     Per Share       Aggregate Offering        Amount of
  of Securities to be Registered          Registered(1)                            Price          Registration Fee(2)
====================================================================================================================

<S>                                       <C>             <C>               <C>                   <C>
Common stock, par value $.001(6)(8)            600,000         2.59375             1,556,250              411
Common stock, par value $.001(9)             3,750,000            4.00            15,000,000            3,960
Common stock, par value $.001(10)              210,000           10.75             2,257,500              596
Common stock, par value $.001(10)              393,750            6.00             2,362,500              624
Common stock, par value $.001(10)              393,750            8.00             3,150,000              832
Common stock, par value $.001(6)(11)         5,011,511         2.59375            12,998,606            3,432

Total                                       16,271,507              --            69,330,717           18,306(2)
====================================================================================================================
</TABLE>

(1)      In accordance with Rule 416, this Registration Statement includes an
         indeterminable number of shares of common stock, $.001 par value per
         share (the "Common stock") that may be necessary to adjust the number
         of shares to be issued as described in this table as a result of a
         stock split, stock dividend or other anti-dilution rights or similar
         adjustments.

(2)      A registration fee of $28,613.50 was paid in connection with the
         initial filing of this Registration Statement on October 22, 1998.

(3)      Represents shares of common stock underlying an option granted to
         WorldCom, Inc.

(4)      Represents shares of common stock underlying warrants to purchase
         shares of common stock held by John Hancock Mutual Life Insurance
         Company, John Hancock Variable Life Insurance Company and Signature 1A
         (Cayman), Ltd.

(5)      Represents shares of common stock issued or to be issued upon
         conversion or redemption or otherwise to former holders of the
         Company's Series B Preferred Stock.

(6)      In accordance with Rule 457(c), this maximum offering price per share
         has been calculated based upon the average of the high ($2.9375) and
         low ($2.25) trading prices of the common stock as reported by the
         Nasdaq National Market System on August 29, 2000.

(7)      Represents shares of common stock underlying warrants to purchase
         common stock granted to holders of the Company's Series B Preferred
         Stock.

(8)      Represents the maximum number of shares of common stock that may be
         issued upon the exercise of certain SARs granted to WorldCom, Inc.

(9)      Represents shares of common stock underlying the Company's Series C
         Preferred Stock assuming a conversion price of $4.00 per share.

(10)     Represents shares of common stock underlying the warrants granted to
         holders of the Company's Series C Preferred Stock. Because the exercise
         price of these warrants is subject to certain adjustments, the Company
         has agreed to register 105% of the number of shares of common stock
         that would have been received by such holders if all such warrants were
         exercised as of the date of this Registration Statement.

(11)     Represents shares of common stock issuable to Sirit Technologies, Inc.
         pursuant to a Settlement Agreement between Sirit Technologies, Inc. and
         the Company dated July 7, 2000.

 THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
   AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
    FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
         STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
 SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
    SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO
                        SAID SECTION 8(A), MAY DETERMINE.




<PAGE>   3


This information in this prospectus is not complete and may be changed. These
securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.

                  SUBJECT TO COMPLETION, DATED AUGUST ___, 2000

                                   PROSPECTUS
                              16,271,507 SHARES OF
                          COMMON STOCK, PAR VALUE $.001

                            ABLE TELCOM HOLDING CORP.

This is a public offering of common stock of Able Telcom Holding Corp. We are
registering 16,271,507 shares of common stock for sale by selling shareholders
(the "Selling Shareholders"), as follows:

         -        2,000,000 shares of common stock that WorldCom, Inc. may
                  receive upon the exercise in full of an option granted to it
                  by us on April 24, 1998.

         -        600,000 shares of common stock, which is the maximum number of
                  shares of common stock that WorldCom may receive upon the
                  exercise of certain stock appreciation rights ("SARs") granted
                  by us on September 9, 1998.

         -        409,505 shares of common stock that certain holders of
                  warrants may receive upon the exercise of all of these
                  warrants. We issued these warrants in connection with the sale
                  of our 12% Senior Subordinated Notes originally due January 6,
                  2005.

         -        2,932,991 shares of common stock issued or issuable upon the
                  conversion or redemption of securities held by former holders
                  of our Series B Preferred Stock.

         -        570,000 shares of common stock, representing the total amount
                  of common stock that holders of certain warrants may receive
                  upon the exercise of all of their warrants. We issued these
                  warrants at various times in connection with the sale and
                  conversion and exchange of the Series B Preferred Stock.
                  Because the exercise price of and number of shares issuable
                  pursuant to these warrants is subject to adjustment under
                  certain circumstances, this amount does not necessarily
                  represent the actual total number of shares of common stock
                  that these holders may receive if they exercise all of their
                  warrants.

         -        3,750,000 shares of common stock issuable upon the conversion
                  of our Series C Convertible Preferred Stock. This amount
                  represents the number of shares of common stock that would be
                  issued upon the conversion of all outstanding Series C
                  Preferred Stock at a conversion price of $4.00 per share.

         -        997,500 shares of common stock, representing 105% of the total
                  amount of common stock that holders of certain warrants may
                  receive upon the exercise of all of their warrants. We issued
                  these warrants in connection with the sale and amendment of
                  the terms of the Series C Preferred Stock. Because the
                  exercise price of and number of shares issuable pursuant to
                  these warrants is subject to adjustment under certain
                  circumstances, this amount does not necessarily represent the
                  actual total number of shares of common stock that these
                  holders may receive if they exercise all of their warrants.

         -        5,011,511 shares of common stock to be issued to Sirit
                  Technologies, Inc. in settlement of a lawsuit between us and
                  Sirit.

We will not be selling any of the shares of common stock that we register in
this prospectus. No underwriters will be used to sell the shares. We will not
receive any proceeds from the sale of these shares. However, we may receive cash
upon the exercise of the options and warrants described above.

Our common stock is traded on the Nasdaq National Market under the symbol
"ABTE." We intend to list the common stock that we are registering in this
prospectus on the Nasdaq National Market, but this application has not yet been
approved. On August 29, 2000, the last reported sales price of the common stock
was $2.88 per share.



<PAGE>   4


The Selling Shareholders may offer their shares of common stock in public or
private transactions, on or off the Nasdaq National Market, at prevailing market
prices, or at privately negotiated prices.

An investment in our common stock involves a high amount of risk. Before you
invest in our common stock, we strongly recommend that you carefully consider
all of the risks and information contained in this prospectus, including the
information contained in the "Risk Factors" section that begins on page 6.

Our principal executive offices are located at 1000 Holcomb Woods Parkway, Suite
440, Roswell, Georgia 30076, and our telephone number is (770) 993-1570.

     NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
      COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED
      IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
                         CONTRARY IS A CRIMINAL OFFENSE.

                             PROSPECTUS DATED    , 2000

         No dealer, salesperson or other person is authorized to provide any
         oral or written information about us or this offering that is not
         included in this prospectus.




<PAGE>   5

                                TABLE OF CONTENTS

Where You Can Find Additional Information About Us .........................   1
Forward-Looking Statements .................................................   1
Prospectus Summary .........................................................   2
Summary Consolidated Financial Information .................................   5
Risk Factors ...............................................................   6
Use of Proceeds ............................................................  12
Capitalization .............................................................  13
Market Price of Common Stock and Dividend Policy ...........................  14
Selected Consolidated Financial Data .......................................  15
Management's Discussion and Analysis of Financial Condition and Results
of Operations ..............................................................  17
Quantitative and Qualitative Disclosures about Market Risk .................  26
Business ...................................................................  27
Management .................................................................  40
Principal Shareholders .....................................................  49
Description of Indebtedness ................................................  51
Description of Securities ..................................................  52
Shares Eligible for Future Sale ............................................  57
Selling Shareholders .......................................................  57
Plan of Distribution .......................................................  58
Legal Matters ..............................................................  59
Experts ....................................................................  59
Index to Consolidated Financial Statements ................................. F-1



                                       i
<PAGE>   6


               WHERE YOU CAN FIND ADDITIONAL INFORMATION ABOUT US

We file annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission (the "SEC"). You may
read and copy any document we file at the SEC's public reference room at the
following locations:

         -Main Public Reference Room
         450 Fifth Street, N.W.
         Washington, D.C. 20549

         -Regional Public Reference Room
         75 Park Place, 14th Floor
         New York, New York 10007

         -Regional Public Reference Room
         Northwestern Atrium Center
         500 West Madison Street, Suite 1400
         Chicago, Illinois 60661-2511

You may obtain information on the operation of the SEC's public reference rooms
by calling the SEC at (800) SEC-0330.

We are required to file these documents with the SEC electronically. You can
access the electronic versions of these filings on the Internet at the SEC's
website, located at http://www.sec.gov.

We have included this prospectus in our registration statement that we filed
with the SEC. The registration statement provides additional information that we
are not required to include in the prospectus. You can receive a copy of the
entire registration statement as described above. Please note that the
registration statement also includes complete copies of the documents described
in the prospectus.

                           FORWARD-LOOKING STATEMENTS

We have included "forward-looking statements" throughout this prospectus. These
statements describe our attempt to predict future occurrences. We use the words
"believes," "anticipates," "expects," and similar expressions, to identify
forward-looking statements. Forward-looking statements are subject to a number
of risks, assumptions and uncertainties, such as risks associated with:

         -Our liquidity requirements and existing leverage, including the need
         to obtain additional funds to provide working capital for operations
         and to replace our existing debt facility which is in default;

         -Our ability to satisfy the registration obligations to the holders of
         our Series B Preferred Stock, the holders of our Series C Preferred
         Stock and Sirit Technologies, Inc.;

         -Our ability to comply with contract terms in a timely manner,
         including the terms of our contract with the Regional Consortium for
         Electronic Toll Collection;

         -Our ability to successfully integrate newly acquired businesses into
         existing operations and the risks associated with such newly acquired
         businesses;

         -Changes in laws and regulations, including changes in tax rates,
         accounting standards, environmental laws, and occupational, health and
         safety laws;

         -The effect of, or changes in, general economic conditions;

         -Weather conditions that are adverse to our specific businesses; and

         -The outcome of litigation, claims and assessments involving us.

This list is only an example of some of the risks, uncertainties and assumptions
that may affect our forward-looking statements. If any of these risks or
uncertainties materialize (or fail to materialize), or if the underlying
assumptions prove incorrect, actual results may differ materially from those
projected in the forward-looking statements. You should consider the information
provided in the section "Risk Factors" and the other information in this
prospectus before investing in the common stock.



                                       1
<PAGE>   7


                               PROSPECTUS SUMMARY

         In this section, we have provided you with an overview of some of the
         more important information in this prospectus. However, we caution you
         that this information is not complete. You should read all of the
         information in this prospectus before purchasing any common stock.
         Unless the context otherwise requires, we use the terms "we," "our,"
         "us" and the "Company" to mean Able Telcom Holding Corp. and its
         subsidiaries, including the subsidiaries we acquired in the acquisition
         of the network construction and transportation systems business of
         WorldCom, Inc. on July 2, 1998. We use the term "Able" when we refer to
         Able Telcom Holding Corp. and its subsidiaries prior to this
         acquisition. We sometimes use the term "MFSNT" to refer to MFS Network
         Technologies and its subsidiaries before we acquired them and to refer
         to our subsidiaries that now own the assets and liabilities that we
         acquired from WorldCom, Inc.

THE COMPANY

We develop, build and maintain communications systems for companies and
government authorities. We have five main organizational groups. Each group is
comprised of subsidiaries of the Company with each group having local executive
management functioning in a decentralized operating environment. We completed
operational restructuring of our subsidiaries during fiscal 1999. As a result,
we now have fourteen subsidiaries, eleven of which are wholly owned. We own at
least 80% of each of the remaining three subsidiaries.

         The services provided by each group are as follows:

<TABLE>
<CAPTION>
Organizational Group                     Service Provided
--------------------                     ----------------

<S>                                    <C>
Network Service ..................     Design, development, engineering, installation,
                                       construction, operation and maintenance services for
                                       telecommunications systems.

Network Development ..............     Own, operate and maintain local and regional
                                       telecommunication networks.

Transportation Services ..........     Design, development, integration, installation,
                                       construction, project management, maintenance and
                                       operation of automated toll collection systems.

Construction .....................     Design, development, installation, construction,
                                       maintenance and operation of electronic traffic management
                                       and control systems, and road signage and telcom
                                       infrastructure construction.

Communications Development .......     Design, installation and maintenance services to foreign
                                       telephone companies in South America.
</TABLE>

In conjunction with our reorganization, much of our executive management has
changed. We have replaced several senior executives and Group Presidents and
have added other senior people to our executive staff.

As reflected above, we reorganized our subsidiaries into five main operating
groups. Additionally, as part of our ongoing efforts to strategically align the
profitable portions of our business, we took the following steps during the
fiscal year ended October 31, 1999 to discontinue the operations of, merge,
and/or manage unprofitable subsidiaries:

         -        We assigned control of certain of our previously independent
                  operating subsidiaries (Patton Management Corp. and Able
                  Telecommunications & Power) to the Construction Group.

         -        We merged several of our previously independent operating
                  subsidiaries into Construction Group subsidiaries.

         -        As a result of significant turnover and a deterioration of
                  underlying contracts, we discontinued the operations of two
                  subsidiaries, which together used cash flows from operations
                  of approximately $7.4 million and $3.8 million during the
                  fiscal years ended October 31, 1998 and 1999.

The Company was originally incorporated in 1987 as a Colorado corporation under
the name "Delta Venture Fund, Inc." We adopted our current name in 1989 and
became a Florida corporation in 1991. Our principal executive offices are
located at 1000 Holcomb Woods Parkway, Suite 440, Roswell, Georgia 30076 and our
telephone number is (770) 993-1570.



                                       2
<PAGE>   8


MATERIAL DEVELOPMENTS

BRACKNELL MERGER. On August 24, 2000, we announced that we had entered into an
agreement to merge with Bracknell Corporation of Toronto in a stock-for-stock
transaction with a conversion rate of 0.6 shares of Bracknell's common stock for
each share of our common stock. The completion of this merger is conditioned
upon a number of items, including the receipt of regulatory and shareholder
approval, the receipt by Bracknell of appropriate financing and the absence of a
material adverse change as to us. Bracknell is a leading provider of value-added
facilities and structure services to businesses across North America, servicing
customers in the technology, telecommunications, industrial and commercial
sectors. If the merger is consummated, we will become a wholly owned subsidiary
of Bracknell and our stock will no longer be publicly traded. However, our
shareholders will receive shares of Bracknell's common stock, which is traded on
the Toronto Stock Exchange. There can be no assurance that the merger with
Bracknell will be consummated.

In connection with our signing the merger agreement with Bracknell, and to
comply with terms of our settlement with Sirit which is described below, we
entered into a new Master Services Agreement with WorldCom which extends the
term of that agreement and provides for a minimum purchase of $55 million of our
services by WorldCom each year. WorldCom also agreed to vote in favor of the
merger with Bracknell when it is proposed to our shareholders. Further, WorldCom
converted $37,000,000 of our indebtedness to WorldCom for advances under the
Master Services Agreement into our Series D Preferred Stock. The Series D
Preferred Stock is convertible into our common stock at a price of $10.01 per
share. For a description of the terms of our Series D Preferred Stock see the
discussion under the heading "Description of Securities -- Preferred Stock --
Series D Convertible Preferred Stock." Further, WorldCom agreed to extend the
term of our $4.5 million note payable to WorldCom to a seven-year, 8% interest
rate note. As extended, this note will mature on July 12, 2007.

SHAREHOLDERS' MEETING. We are submitting a number of proposals related to the
securities covered by this prospectus for approval at an annual meeting of our
shareholders currently scheduled to be held in late September or early October
of this year. In addition to other matters to be considered at this annual
meeting, we are submitting the following proposals to our shareholders:

         -        to approve grants of stock options to officers and directors
                  outside of our 1995 Stock Option Plan;

         -        to approve issuing up to 2,600,000 shares of our common stock
                  to WorldCom if it exercises options and stock appreciation
                  rights obtained from us when we acquired the network,
                  construction and transportation systems business from
                  WorldCom;

         -        to approve issuing shares of our common stock in connection
                  with conversion, redemption and exercise of securities issued
                  to finance our acquisition of the network construction and
                  transportation business from WorldCom;

         -        to approve issuing shares of our common stock to holders of
                  our Series C Preferred Stock and warrants upon conversion or
                  exercise of those securities; and

         -        to approve issuing shares of our common stock in connection
                  with a litigation settlement with Sirit Technologies, Inc.

These proposals are being submitted for approval because they include actions
for which shareholder approval is required under rules applicable to companies
listed on the Nasdaq National Market System, such as us. Under Nasdaq rules,
certain transactions require us to obtain the approval of holders of a majority
of our shares casting votes if we plan to issue new shares of common stock that
represent 20% or more of the shares of common stock that are outstanding at the
time we agree to issue the common stock. The Nasdaq rules apply to the following
stock issuances relevant to the proposals being submitted to our shareholders:

         -        common stock to be issued to acquire another company;

         -        common stock to be issued at a price below the greater of book
                  value or market value of the common stock immediately prior to
                  the issuance; and

         -        common stock to be issued to officers and directors under an
                  arrangement that does not include other employees, even if
                  less than 20% of the outstanding common stock.

For purposes of disclosure in this prospectus, we have assumed that the
shareholders will approve each of the proposals described above. For a
discussion of risks related to the shareholders failure to approve such
proposals, see the discussion under the heading "Risk Factors." We also intend
to submit a proposal at our annual meeting to approve a change in our name to
"The Adesta Group, Inc." We will not reflect this proposed change in this
prospectus unless and until our name is actually changed.



                                       3
<PAGE>   9


THE SIRIT SETTLEMENT. In May 1998, Sirit Technologies, Inc. filed a lawsuit
against us and Thomas M. Davidson, a former member of our Board of Directors.
Sirit sued for tortious interference, fraudulent inducement, negligent
misrepresentation and breach of contract in connection with our acquisition of
the network construction and transportation systems business of WorldCom. In May
2000, the jury awarded Sirit compensatory damages against us in the amount of
$1.2 million and punitive damages in the amount of $30.0 million. Additionally,
the Court assessed punitive damages against Mr. Davidson.

In July 2000, we and Sirit, among others, entered into a settlement agreement
which resulted in the court's entry of a consent judgment vacating the $31.2
million judgment. As part of the Sirit settlement, we agreed to issue Sirit and
its affiliates, subject to using our best efforts to obtain shareholder approval
at our annual shareholder meeting, the following securities:

         -        4,074,597 shares of our common stock, and

         -        an additional 936,914 shares of common stock at such time as
                  holders of the Series C Convertible Preferred Stock have
                  converted their shares of Series C Convertible Preferred Stock
                  into common stock. This amount assumes that the Series C
                  Convertible Preferred Stock has a $15.0 million face value and
                  is converted at a conversion price of $4.00 per share.

The resale by Sirit of the common stock issued or issuable to it is covered by
this prospectus.

GOING CONCERN

We incurred losses applicable to common stock of $57.5 million during the six
months ended April 30, 2000, and losses applicable to common stock of $36.8
million during the fiscal year ended October 31, 1999. These net losses, our
default under our Secured Credit Facility and our contractual obligations are
placing a significant strain on our financial resources that raise substantial
doubt about our ability to continue as a going concern. See "Risk Factors,"
"Management's Discussion and Analysis" and the consolidated financial statements
and footnotes included in this prospectus.

Our ability to continue as a going concern is dependent upon our ability to:

         -        generate sufficient cash flow to meet our obligations on a
                  timely basis;

         -        obtain additional financing when we need it; and

         -        achieve and maintain profitability.

We have strategically realigned portions of our business, converted
some of our debt to common stock and discontinued unprofitable cash-intensive
operations to correct our financial difficulties. We also are reallocating
resources to meet contractual commitments and seeking other sources of capital,
whether with existing lenders or investors or new strategic investors. However,
we cannot assure you that the realignment or reallocation of resources will
be successful or that we will be able to secure additional capital on acceptable
terms or at all.



                                       4
<PAGE>   10

                   SUMMARY CONSOLIDATED FINANCIAL INFORMATION
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

We have provided you with a summary of our historical financial statements. The
following information should be read in conjunction with the sections "Selected
Consolidated Financial Data" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations." Our results of operations
reflect the operating results of MFSNT and other acquired businesses only from
the respective dates of acquisition. Accordingly, our results are not
necessarily comparable on a period-to-period basis. See the Consolidated
Financial Statements for the Company, and the related notes to those statements,
which are included in this prospectus. The consolidated financial data for the
six months ended April 30, 1999 and 2000 include, in the opinion of management,
all adjustments (consisting only of normal recurring adjustments) necessary to
present fairly the consolidated financial position and results of the Company
for such period. Due to seasonality and other market factors, the consolidated
historical results for the six months ended April 30, 2000 are not necessarily
indicative of results for a full year.



<TABLE>
<CAPTION>
                                                                 Year Ended October 31,           Six Months Ended April 30,
                                                          ------------------------------------    --------------------------
                                                            1997         1998          1999          1999            2000
                                                          --------    ----------    ----------    ----------      ----------
<S>                                                       <C>         <C>           <C>           <C>             <C>
INCOME STATEMENT DATA:
   Total Revenue ......................................   $ 86,334    $  217,481    $  418,565    $  216,809      $  238,741
   Total Costs and Expenses ...........................     81,493       206,072       420,449       217,145         282,409
   Income (loss) from operations ......................      4,841        11,409        (1,884)         (336)        (43,668)
   Total other expenses ...............................       (964)       (4,872)      (12,678)       (3,346)        (12,071)
   Net income (loss) ..................................      2,857         2,514       (18,060)       (6,913)        (55,789)
   Income (loss) applicable to common stock ...........      1,331        (5,840)      (36,758)      (19,804)        (57,455)
   Income (loss) applicable to common stock per share:
   Basic ..............................................   $   0.16    $    (0.59)   $    (3.12)    $   (1.69)     $    (4.01)
   Diluted ............................................       0.16         (0.59)        (3.12)        (1.69)          (4.01)

BALANCE SHEET DATA (AT END OF PERIOD):
      Cash and cash equivalents .......................   $  6,230    $   13,544    $   16,568     $  30,502      $   11,441
      Total assets ....................................     50,346       290,760       262,033       272,868         303,851
      Total debt ......................................     17,294        76,123        66,372        66,467          41,775
      Total preferred stock ...........................      6,713        11,325        16,322         2,385          13,665
      Total shareholders' equity (deficit).............     15,247        40,217           431        27,287         (21,166)
</TABLE>

                                       5
<PAGE>   11


                                  RISK FACTORS

INVESTING IN OUR COMMON STOCK IS RISKY. YOU SHOULD BE ABLE TO BEAR A COMPLETE
LOSS OF YOUR INVESTMENT. YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS AND
OTHER INFORMATION IN THIS PROSPECTUS BEFORE DECIDING TO INVEST IN SHARES OF
COMMON STOCK. YOU SHOULD ALSO BE AWARE THAT THIS SECTION CONTAINS
"FORWARD-LOOKING STATEMENTS." YOU SHOULD READ THESE STATEMENTS TOGETHER WITH THE
DISCUSSION OF THE RISKS AND UNCERTAINTIES REGARDING THESE STATEMENTS CONTAINED
UNDER THE HEADING "FORWARD-LOOKING STATEMENTS" IN THIS PROSPECTUS.

OUR DEFAULT UNDER OUR SECURED CREDIT FACILITY COULD TRIGGER ACCELERATION OF THE
DEBT AND DEFAULTS UNDER OTHER LOANS, AND WE MAY NOT HAVE THE FINANCIAL RESOURCES
TO PAY OFF THOSE LOANS IF THEY ARE ACCELERATED.

We are in default of covenants under the Secured Credit Facility, even though we
are able to make scheduled payments of principal and interest when due.
Therefore, under the Secured Credit Facility, the lenders are entitled to
declare all principal and interest that we owe them to be immediately due and
payable, an aggregate of $36.6 million as of April 30, 2000. Additionally, these
lenders could exercise their right to take control of all our tangible property,
including the stock of the subsidiaries that we pledged as collateral.

This default under the Secured Credit Facility could trigger default provisions
in our other loans, which would also make all principal and interest under those
loans immediately due and payable. If this happens or if the lenders under our
Secured Credit Facility elect to use their remedies, we may not have sufficient
funds to pay off all our defaulted loans. If these lenders take control of our
tangible assets, we would lose several of our operational subsidiaries.

WE WILL NEED ADDITIONAL CAPITAL IN THE FUTURE TO CONTINUE AS A GOING CONCERN AND
ADDITIONAL FUNDS MAY NOT BE AVAILABLE.

We currently anticipate that our available cash resources will be sufficient to
meet our expected working capital and capital expenditure requirements for less
than six months. Because we are in default under the Secured Credit Facility,
those lenders have refused to extend any additional credit to us. While we may
be able to reduce our expenditures under existing contracts, a reduction could
give rise to an obligation for us to pay liquidated damages.

We may not be able to obtain additional financing on terms favorable to us, if
at all. If adequate funds are not available, we may not be able to continue as
a going concern.

WE HAVE A SIGNIFICANT AMOUNT OF OUTSTANDING DEBT WHICH RESTRICTS OUR USE OF CASH
RESOURCES FOR OPERATIONS AND SUBJECTS US TO RISKS OF DEFAULT.

We have incurred a high level of debt. At April 30, 2000, we had approximately
$42 million of total debt outstanding. Payments of principal and interest on
borrowings may leave us with insufficient cash resources for our operations.
Further, a high debt level creates an increased risk that we may default on our
obligations. We are in default under our Secured Credit Facility, as discussed
above. As a result, the lenders who lent us funds under that facility could take
the property securing their loans and could immediately require us to pay our
obligations in full.

Our ability to repay our debt depends upon a number of factors, many of which
are beyond our control. These factors include, among other things:

         -        Changes in interest rates

         -        The state of the economy

         -        Our financial condition

         -        The amount of competition that we face

         -        Changes in the law

         -        Changes in the communications industry, generally

         -        Changes in our customer base

         -        Timing of our customers' payment for existing work orders and
                  projects

         -        Seasonal factors that may hinder our ability to work on
                  projects, including weather conditions

WE HAVE CONTRACTUAL OBLIGATIONS THAT WILL PLACE A SIGNIFICANT STRAIN ON OUR CASH
RESOURCES IF WE CANNOT MEET THOSE OBLIGATIONS, AND OUR ABILITY TO MEET THOSE
OBLIGATIONS IS IN SOME CASES OUT OF OUR CONTROL.



                                       6

<PAGE>   12


According to the terms of the documents relating to the Series C Preferred Stock
if:

         -this registration statement which includes the shares of common stock
         underlying the Series C securities is not declared effective on or
         before November 30, 2000,

         -we are delisted under certain circumstances from any securities
         exchange, or

         -any representation or warranty by us to the holders is not true and
         correct,

then the holders of the outstanding shares of Series C Preferred Stock, in whole
or part, have the option to require us to redeem their securities at a premium
price equalling at least $18.0 million. Further, Sirit has the right to seek
payment in cash of the $20.0 million judgment against us if this registration
statement is not declared effective on or before November 30, 2000. Although we
intend to use our commercially reasonable best efforts to comply with the
provisions in the documents relating to the Series C Preferred Stock and the
terms of the Sirit settlement, there can be no assurance that we will be able to
do so, in part, because certain of such matters are dependent upon the efforts
or approval of others (such as the SEC with respect to the timely effectiveness
of this registration statement). In addition, there can be no assurance that we
will not experience adverse operating results or other factors which could
materially increase our cash requirements or adversely affect our liquidity
position.

WE ARE CURRENTLY NOT IN COMPLIANCE WITH THE CONTINUED LISTING CRITERIA OF THE
NASDAQ NATIONAL MARKET. AS A RESULT, OUR COMMON STOCK MAY BE DELISTED FROM THE
NASDAQ NATIONAL MARKET.

We are submitting a number of proposals for shareholder approval at a meeting
currently expected to be held in late September or early October. Several of the
proposals being submitted for approval include actions for which shareholder
approval is required under rules applicable to companies listed on the Nasdaq
National Market System, such as us.

Further, we did not hold an annual shareholders' meeting in 1999. We have
discussed our failure to hold an annual meeting in 1999 with Nasdaq and have
been granted a waiver of this requirement so long as we hold our annual meeting
on or before October 2, 2000. If we fail to hold our annual meeting by October
2, 2000, we will be in violation of this requirement and will be subject to
delisting.

Finally, we are required under the Nasdaq rules to establish and maintain an
audit committee of at least three members, all of whom shall be independent
directors by June 2001. We currently do not have three independent directors and
our audit committee does not consist solely of independent directors. We intend
to nominate for election at our annual shareholders' meeting two directors
meeting the independence requirement. If we are unable to locate a third
independent director or either of the two nominated directors are not elected by
June 2001, we would also be in violation of Nasdaq's requirements and would be
subject to additional delisting risks.

If we do not maintain the criteria required by Nasdaq or if shareholder approval
is not obtained, but we nonetheless issue common stock contrary to the Nasdaq
requirements, our securities could be delisted by Nasdaq. If we are delisted for
any of these reasons, the common stock would likely be traded in the
Over-The-Counter market on the OTC Electronic Bulletin Board. In such an event,
the market price of the common stock may be adversely impacted and a shareholder
may find it difficult to dispose, or obtain accurate quotations as to the market
value, of the common stock.



                                       7

<PAGE>   13


WE GENERATE REVENUE FROM A CONCENTRATED GROUP OF CUSTOMERS, INCLUDING WORLDCOM
AND THE NEW JERSEY CONSORTIUM. IF WE LOSE THESE CUSTOMERS, OUR REVENUE WILL BE
NEGATIVELY AFFECTED.

Our customer base is highly concentrated and our key customers may change from
year to year. We receive, and expect to continue to receive, a substantial
portion of our total revenues and operating income from a concentrated group of
customers, including WorldCom. If we lose WorldCom, the New Jersey Consortium or
any other of our key customers and are unable to replace them, our business,
financial condition and results of operations will be materially affected. As of
April 30, 2000, the WorldCom Master Services Agreement accounted for
approximately 25% of our total revenues and the New Jersey Consortium agreements
accounted for approximately 20% of our total revenues. The termination of these
agreements would materially affect our financial condition and results of
operations.

IF WE FAIL TO MEET PERFORMANCE DEADLINES UNDER OUR SERVICE CONTRACTS, WE COULD
BE SUBJECT TO MONETARY PENALTIES AND TERMINATION OF THE CONTRACTS.

Our contracts contain performance milestones and deadlines for the
completion of phases of a project and the project as a whole. The failure to
meet such milestones or deadlines could result in the imposition of penalty
payments on us and/or termination of the contract, either of which would impair
our financial results.

In particular, we have missed deadlines and failed to meet performance
milestones under our contracts with the New Jersey Consortium, which includes
the New Jersey Turnpike Authority, New Jersey Highway Authority, Port Authority
of New York and New Jersey and the Delaware Department of Transportation. During
fiscal year 1999, we paid approximately $4.5 million in liquidated damages for
failing to perform our obligations and revenue had also been withheld under the
contracts. As of June 1, 2000, we executed an amendment which established new
milestones and deadlines. If we miss those new deadlines and performance
milestones, we will incur penalties of up to $60,000 per day, additional revenue
may be withheld from us and the New Jersey Consortium may terminate the
contracts, any of which will significantly negatively affect our cash position
and financial results generally.

MANY OF OUR CONTRACTS MAY BE CANCELED ON SHORT NOTICE, AND WE MAY NOT BE
SUCCESSFUL IN REPLACING OUR CONTRACTS AS THEY ARE COMPLETED OR EXPIRE.

Under most of our master services agreements, the customer may terminate the
agreement for any reason on 90 to 180 days' written notice. The termination or
renegotiation of any such contracts or our failure to enter into new master
services agreements with our customers could have a material adverse effect on
our business and results of operations. Many of our contracts, including master
contracts, are also opened to bid at the expiration of the contract term, and we
may not be able to renew existing contracts that come up for bid. Our failure to
win a significant number of existing contracts upon re-bid could have a material
adverse effect on our results of operations or financial condition.

IF WE DEFAULT ON OUR NOTE TO WORLDCOM, OUR ABILITY TO GENERATE REVENUE UNDER THE
WORLDCOM MASTER SERVICES AGREEMENT MAY BE NEGATIVELY AFFECTED, WHICH WOULD
SIGNIFICANTLY IMPAIR OUR FINANCIAL RESULTS.

Under the terms of our acquisition agreement with WorldCom, we agreed to execute
the WorldCom Note for $30.0 million in favor of WorldCom. As of April 30, 2000,
$4.5 million was outstanding under the WorldCom Note. The remaining outstanding
principal and interest on the WorldCom Note is due and payable by July 12, 2007.
If we default on our obligation to pay the WorldCom Note, WorldCom will be able
to do any or all of the following:

         -Reduce the minimum yearly and aggregate revenues we would receive
         under the Master Services Agreement;

         -Refuse to make additional advances under the Master Services
         Agreement;

         -Refuse to give us additional work under the Master Services Agreement
         while we are in default; and

         -Require us to pay a 10.5 percent annual default rate of interest while
         we are in default.

Our business and financial condition could be materially affected by any default
under the WorldCom Note.


WE MUST MAINTAIN THE ABILITY TO OBTAIN PERFORMANCE BONDS TO MEET OUR OBLIGATIONS
UNDER SERVICE CONTRACTS.

We must submit performance bonds on substantially all contracts obtained. As a
result of our financial condition, we have had difficulty obtaining sufficient
bonding capacity. If we continue to experience bonding difficulties it will
impact our ability to complete order backlogs and will have a material adverse
effect on our business and financial position.

WE ARE DEFENDANTS IN A LAWSUIT THAT COULD BECOME A CLASS ACTION LAWSUIT. AN
ADVERSE OUTCOME IN THIS LAWSUIT OR OTHER LITIGATION WOULD IMPAIR OUR FINANCIAL
POSITION AND CASH FLOW.

In 1998, Shipping Financial Services Corp. filed a lawsuit against us and some
of our officers. Shipping Financial Services asserted claims under the federal
securities laws that we and the officers named in the lawsuit allegedly caused
us to falsely represent and mislead the public in connection with our
acquisitions of MFSNT, assumption of certain contracts from COMSAT and our
acquisitions of MFSNT, assumption of certain contracts from COMSAT and our
ongoing financial



                                       8

<PAGE>   14


condition as a result of the acquisition, assumption and the related financing
transactions. The plaintiff is seeking certification as a class action on behalf
of itself and all others similarly situated and is seeking unspecified damages
and attorneys fees. We are currently assessing the allegations in the lawsuits
and intend to vigorously defend this matter. An adverse outcome in this lawsuit
or in other shareholder lawsuits would likely have a material adverse effect
upon our consolidated financial position, results of operations and cash flow.

In the past six months, arbitrators have ruled against us in three separate
litigation matters, for approximately $8.7 million. While we intend to appeal
these arbitration awards, if we lose the appeal, payment of these awards would
significantly negatively impact our cash position and our financial position.

We are subject to other lawsuits and claims for various amounts which arise out
of the normal course of our business. We intend to vigorously defend these
matters. We do not believe that any of these other lawsuits and claims will have
a material adverse effect on our financial position.

OUR CUSTOMERS' FUTURE REQUIREMENTS MAY BE LESS THAN OUR BACKLOG ESTIMATE, WHICH
WOULD REDUCE OUR EXPECTED REVENUE.

Our backlog is comprised of the uncompleted portion of services to be performed
under our agreements with customers and the estimated value of future services
we expect to provide those customers. Our master service agreements allow the
customers to cancel orders at any time. Accordingly, our backlog estimate does
not necessarily indicate the amount of our future sales. Cancellations of
purchase orders or reductions in purchase orders in progress could negatively
impact our revenues and thus, our financial condition as a whole.

OUR BUSINESS IS LABOR INTENSIVE AND IF WE CANNOT ATTRACT AND RETAIN QUALIFIED
EMPLOYEES, WE MAY NOT BE ABLE TO IMPLEMENT OUR GROWTH STRATEGY.

Our business has high employee turnover in many operations. The low unemployment
rate in the United States could continue to make it difficult to find qualified
personnel in some areas where we operate. Shortages of labor or increased labor
costs could have a material adverse effect on our operations. There can be no
assurance that we will be able to continue to hire and retain a sufficient labor
force of qualified persons.

BECAUSE SOME OF OUR REVENUE IS DERIVED FROM CONTRACTS WITH
GOVERNMENTALLY-CONTROLLED ENTITIES, OUR ABILITY TO GENERATE REVENUE FROM THOSE
CONTRACTS IS DEPENDENT ON THE CUSTOMERS RECEIVING NECESSARY GOVERNMENTAL
FUNDING.

Our customer base for our telecommunications services includes public utilities
and governmental units. Public utilities and governmental units often rely upon
funding from government sources. If our customers do not receive necessary
government funding, they may be unable to pay us for our work or order new work.
If this occurs, these customers may be forced to reduce the amount of our work,
cancel proposed projects, or delay payments under the contracts, which would
lower our revenues and profits.

TO SUCCESSFULLY OPERATE OUR BUSINESS, WE MUST KEEP UP WITH RAPID TECHNOLOGICAL
CHANGES IN THE TELECOMMUNICATIONS INDUSTRY.

The telecommunications industry is subject to rapid changes in technology.
Wireline systems used for the transmission of video, voice and data are subject
to potential displacement by various technologies, including wireless
technologies. Other companies may develop new technologies that allow users to
enhance their telecommunications services without significantly upgrading their
existing networks. These new technologies could reduce the need for wireline
services, undermine our ability to compete in the telecommunications business
and otherwise harm our business, financial condition and results of operations.

OUR BUSINESS IS SUBSTANTIALLY DEPENDENT ON PROPRIETARY TECHNOLOGY. IF WE DO NOT
ADEQUATELY PROTECT THIS TECHNOLOGY, OR IF OUR COMPETITORS DEVELOP SIMILAR
TECHNOLOGY, OUR BUSINESS COULD BE NEGATIVELY AFFECTED.

We do not hold or own any patents for our technology and currently rely on a
combination of contractual rights, exclusive and nonexclusive licenses, trade
secrets and trademarks, to establish and protect our proprietary rights. Despite
these efforts, our proprietary rights protection may not be sufficient to
prevent competitors from developing similar technology.

We currently license hardware and software technology from third parties
pursuant to contractual license arrangements and plan to continue to do so in
the future. We may not be able to retain any or all of our licenses for software
and hardware technology, and our inability to continue to utilize this
technology could have a material adverse effect upon our results of operations
and financial condition.

We attempt to ensure that our trade names, trademarks, technology and processes,
including patents, trade names, trademarks, technology and processes owned by
third parties that have been licensed to us, do not infringe patents and other
proprietary rights; however, third parties may allege that these proprietary
rights infringe upon the proprietary rights they hold. If infringement is
alleged, we may try to obtain a license to use the proprietary right, but we may
be unable to do so on acceptable terms, if at all. We may also try to challenge
the infringement claim in court, but we may ultimately lose the challenge and
could be required to pay the winning party damages, costs, and legal fees.
Intellectual property litigation is often



                                       9


<PAGE>   15


lengthy and, if initiated or prosecuted by or against us, would divert
management's attention and resources from our operations. The legal costs and
other expenses we may incur to challenge an infringement claim, even for claims
that we may ultimately win, could also have a material adverse effect upon our
business, results of operations and financial condition.

THE TELECOMMUNICATIONS INFRASTRUCTURE SERVICE INDUSTRY IS HIGHLY COMPETITIVE AND
POTENTIAL COMPETITORS FACE FEW BARRIERS TO ENTRY. OUR INABILITY TO COMPETE
SUCCESSFULLY COULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.

The telecommunications industry is highly competitive and we compete with other
companies in most of the markets in which we operate. We may also face
competition from existing or prospective customers who employ in-house personnel
to perform some of the same types of services as we provide. There are
relatively few significant barriers to entry into the markets we serve, and as a
result, any organization that has adequate financial resources and access to
technical expertise may compete with us. Also, since a significant portion of
our revenues are derived from master service agreements where price is often an
important factor, we may be outbid by new or existing competitors. Increased
competition in the markets we serve may have a negative effect on our financial
results.

OUR OPERATING RESULTS FLUCTUATE FROM QUARTER TO QUARTER AND OUR REVENUE IS
GENERALLY LOWER IN THE FIRST AND FOURTH QUARTERS OF THE YEAR.

Our quarterly results may not be indicative of longer-term performance. We have
experienced and expect to continue to experience quarterly variations in
revenues and income from operations. These variations result from many factors,
including the following:

         -        The timing and volume of work under new or existing projects;

         -        The budgetary spending patterns of customers;

         -        Timing of services that we perform under master services
                  agreements;

         -        The termination of existing master services agreements;

         -        Costs incurred by us to support growth;

         -        The change in mix of our customers and business;

         -        Fluctuations in insurance expenses due to changes in claims
                  experience and actuarial assumptions;

         -        Changes in construction and design costs;

         -        General economic conditions;

         -        The effect of the change of business between negotiated
                  contracts and bid contracts; and

         -        The timing of additional general and administrative expenses
                  to support the growth of our business.

Revenues and income from operations in our first quarter and, occasionally, the
fourth quarter, have in the past been, and may in the future be, adversely
affected by weather conditions and the year-end budgetary spending patterns of
our customers.

IF WE LOSE MEMBERS OF OUR SENIOR MANAGEMENT TEAM, OUR RESULTS OF OPERATIONS WILL
BE NEGATIVELY AFFECTED.

We depend highly upon the continued services and experience of our senior
management team, and managers of key operating subsidiaries. In the past two
years, we have lost a number of significant members of senior management. We
have replaced those managers with highly qualified senior executives. To be
successful, we must efficiently integrate these new executives. In addition, the
loss of the services of key individuals could have a material adverse effect on
the business, financial condition and results of our operations.

OUR CHARTER DOCUMENTS AND FLORIDA LAW CONTAIN ANTI-TAKEOVER PROVISIONS THAT MAY
MAKE IT MORE DIFFICULT TO EFFECT A CHANGE IN OUR CONTROL AND COULD ADVERSELY
IMPACT THE PRICE OF OUR COMMON STOCK.

Our articles of incorporation and bylaws, and provisions of the Florida Business
Corporation Act, may make it more difficult in some respects to effect a change
in our control and replace incumbent management. These provisions may:

         -have a negative impact on the price of our common stock;



                                       10
<PAGE>   16


         -discourage third party bidders from making a bid for us; or

         -reduce any premiums paid to you for your common stock.

In addition, our board of directors has the authority to fix the rights and
preferences of, and to issue additional shares of, our preferred stock. It also
may take other actions without shareholder consent that may have the effect of
delaying or preventing a change of our control.

FUTURE SALES OF OUR COMMON STOCK BY EXISTING SHAREHOLDERS MAY DEPRESS OUR STOCK
PRICE.

As of August 17, 2000 we had approximately 16,374,504 shares of common stock
issued and outstanding. Assuming that as of August 17, 2000 the Series B
securities, the Series C securities, our Series D Preferred Stock, the Senior
Note Warrants, the WorldCom securities and the Sirit shares were exercised,
converted or issued, we would have had approximately 34,508,854 shares of common
stock issued and outstanding on that date, substantially all of which would be
eligible for sale in the public market, except for the 3,696,303 shares of
common stock issuable upon conversion of the Series D Preferred Stock. Sales of
a substantial number of shares in the public market could cause a reduction in
the market price of our common stock.



                                       11

<PAGE>   17

                                 USE OF PROCEEDS

We are not selling any of the shares offered in this prospectus, and we will not
receive any of the proceeds from the sale of these shares. However, we may
receive proceeds from the exercise of the WorldCom option and the various
warrants described herein, assuming that all exercises occur by the payment of
the exercise price with cash, as follows:

         -        To the extent that WorldCom exercises the WorldCom Option in
                  full by paying the cash exercise price, we will receive gross
                  proceeds in an amount equal to $14,000,000.

         -        To the extent that the Series B warrants are exercised in
                  full, we will receive gross proceeds in an amount equal to
                  $7,020,000.

         -        To the extent that the warrants issued in connection with our
                  Senior Notes are exercised in full, we will receive gross
                  proceeds in an amount equal to $3,378,416.25.

         -        To the extent the Series C warrants are exercised we will
                  receive gross proceeds in an amount equal to $7,400,000.

We will bear all costs and expenses associated with registering the shares. The
gross proceeds that we receive from the exercise of these securities will be
reduced by the amount of related expenses. We anticipate that we will use the
gross proceeds from exercise, if any, for working capital and general corporate
purposes.



                                       12
<PAGE>   18


                                 CAPITALIZATION

The following table sets forth, as of April 30, 2000, the unaudited
capitalization of the Company, on a consolidated basis and as adjusted as
described below. This table should be read in conjunction with the historical
consolidated financial statements of the Company and the related notes thereto
included elsewhere in this prospectus. Dollar amounts are in thousands.

<TABLE>
<CAPTION>
                                                          At April 20, 2000             As Adjusted( )
                                                         -------------------           ----------------
<S>                                                      <C>                           <C>
Advances from WorldCom                                        $ 32,000                   $      --
                                                              ========                   =========
Total debt(1):
Secured Credit Facility                                         35,000                      35,000
WorldCom Note(2)                                                 4,456                       4,456
Revolving lines of credit                                        1,459                       1,459
Other debt(4)                                                      860                         860
                                                              --------                   ---------
Total debt                                                      41,775                      41,775
                                                              ========                   =========
Temporary equity:
Series C Convertible Preferred Stock(5)                         13,665                      13,665
Common securities subject to mandatory redemption:
Common stock                                                     4,911                       4,911
Series B Preferred Stock Exchange Warrants                       1,213                       1,213
Series C Preferred Stock Warrants                                  784                       1,458
                                                              --------                   ---------
                                                                20,573                      21,247
                                                              ========                   =========
Stockholders' deficit:
Common Stock                                                        15                          15
Series D Convertible Preferred Stock(5)                             --                      37,000
Additional paid-in capital                                      69,303                      69,303
Senior Note Warrants                                             1,244                       1,244
Series B Preferred Stock Warrants                                2,735                       2,735
Series C Preferred Stock Warrants                                  313                         313
WorldCom SAR                                                       606                         606
Retained Deficit(6)                                            (99,911)                   (129,813)
                                                              --------                   ---------
Total Shareholders' Deficit                                    (25,695)                    (18,597)
                                                              --------                   ---------
Total Capitalization                                          $ 68,653                   $  44,425
                                                              --------                   ---------
</TABLE>

(1)      For information concerning our indebtedness outstanding at April 30,
         2000, see Note 10 "Debt" of Notes to our Condensed Consolidated
         Financial Statements.

(2)      See Note 10, "Debt" of Notes to our Condensed Consolidated Financial
         Statements for discussion of the WorldCom Note.

(3)      Consists of revolving lines of credit held by two of our subsidiaries.

(4)      Consists primarily of capital leases for construction equipment.

(5)      A total of 1 million shares of preferred stock is authorized, of which
         1,200 shares have been designated Series A Convertible Preferred Stock,
         4,000 shares have been designated Series B Convertible Preferred Stock,
         5,000 shares have been designated Series C Convertible Preferred Stock
         and 1,000 shares have been designated Series D Convertible Preferred
         Stock. At April 30, 2000, all of the Series A Convertible Preferred
         Stock had been converted, all of the Series B Convertible Preferred
         Stock has been repurchased or converted and the Series C Convertible
         Preferred Stock was outstanding. The Series D Convertible Preferred
         Stock was issued to WorldCom subsequent to April 30, 2000 in exchange
         for $32.0 million in advances made to us prior to April 30, 2000 plus
         $5.0 million in advances we received after that date. See Note 10,
         "Debt" and Note 12, "Preferred Stock" of Notes to our Condensed
         Consolidated Financial Statements.

(6)      The pro forma reduction in retained deficit relates to the following
         charges we anticipate during the three months ended July 31, 2000: (a)
         a $25.0 million charge related the SIRIT Settlement; (b) a $4.2 million
         charge related to additional common shares issuable to the Palladin
         group; and (c) a $0.7 million charge related 750,000 additional
         warrants given to the Series C Stock holders. See Note 19, "Pro Forma
         Financial Information," of Notes to our Condensed Consolidated
         Financial Statements.



                                       13
<PAGE>   19


                MARKET PRICE OF COMMON STOCK AND DIVIDEND POLICY

The common stock is traded on the Nasdaq National Market under the trading
symbol "ABTE." The following table provides for each period indicated the high
and low sale prices for the common stock.

<TABLE>
<CAPTION>
                                                               SALE PRICE RANGE
                                                            ---------------------
                                                             High           Low
                                                            -------      --------
          <S>                                               <C>          <C>
          YEAR ENDED OCTOBER 31, 1998

          1ST Quarter                                       $  9.81      $  9.63
          2nd Quarter                                         12.44         7.31
          3rd Quarter                                         20.31         9.38
          4th Quarter                                         10.38         1.75

          YEAR ENDED OCTOBER 31, 1999

          1st Quarter                                         12.38         5.25
          2nd Quarter                                         11.56         5.75
          3rd Quarter                                         12.94         5.81
          4th Quarter                                         10.06         7.50

          YEAR ENDED OCTOBER 31, 2000

          1st Quarter                                         11.87         4.50
          2nd Quarter                                          6.72         1.88
          3rd Quarter                                          3.88         1.13
          4th Quarter (through August 29, 2000)                3.47         2.13
</TABLE>

On August 29, 2000 the last reported sales price of the common stock was
$2.88 and there were approximately 386 record holders of the common stock.

We have never paid any dividends to holders of shares of common stock. The terms
of our Secured Credit Facility, the Series C Preferred Stock and the Series D
Preferred Stock restrict or prohibit our ability to declare or pay dividends on
shares of common stock.

We expect that we will retain our earnings, if any, to finance operations. Thus,
we do not expect to pay dividends to holders of common stock for the foreseeable
future.



                                       14

<PAGE>   20


                      SELECTED CONSOLIDATED FINANCIAL DATA
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

We have provided you with a summary of our historical consolidated financial
statements. The following information should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." Our results of operations reflect the operating results of MFSNT
and other acquired businesses only from the respective dates of acquisition.
Accordingly, our results are not necessarily comparable on a period-to-period
basis. See the consolidated financial statements for the Company, and the
related notes to those statements, which are included in this prospectus. The
financial data for the six months ended April 30, 1999 and 2000 include, in the
opinion of management, all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the consolidated financial position and
results of the Company for such period. Due to seasonality and other market
factors, the consolidated historical results for the six months ended April 30,
2000 are not necessarily indicative of results for a full year.

<TABLE>
<CAPTION>
                                                                                Year Ended October 31,
                                                           --------------------------------------------------------------
                                                             1995         1996        1997        1998         1999
                                                           --------     --------     --------     ---------     ---------
<S>                                                        <C>          <C>          <C>          <C>           <C>
INCOME STATEMENT DATA:
   Revenue:
      Construction and maintenance ......................  $ 35,408     $ 48,906     $ 86,334     $ 217,481     $ 382,844
      Conduit Sale ......................................        --           --           --            --        35,721
                                                           --------     --------     --------     ---------     ---------
   Total Revenue: .......................................    35,408       48,906       86,334       217,481       418,565

   Costs and Expenses:
      Costs of revenues .................................    27,720       40,486       68,164       179,505       330,387
      Costs of Conduit Sale .............................        --           --           --            --        34,673
      General and administrative ........................     5,464        8,404        8,797        18,967        41,041
      Depreciation and amortization .....................     1,914        2,750        4,532         7,600        11,833
      Impairment of long-lived assets ...................        --           --           --            --         2,515
      Charges and transactions/translations losses
      related to Latin American operations ..............        96        3,553           --            --            --
                                                           --------     --------     --------     ---------     ---------

   Total costs and expenses .............................    35,194       55,193       81,493       206,072       420,449
                                                           --------     --------     --------     ---------     ---------

   Income (loss) from operations ........................       214       (6,287)       4,841        11,409        (1,884)
                                                           --------     --------     --------     ---------     ---------

   Other income (expenses):
      Interest expense ..................................    (1,118)      (1,350)      (1,565)       (5,534)       (9,512)
      Change in value of stock appreciation rights ......        --           --           --            --        (1,814)
      Equity in losses of investment in Kanas ...........        --           --           --            --          (591)
      Other .............................................       574          238          601           662          (761)
                                                           --------     --------     --------     ---------     ---------

   Total other expenses..................................      (546)      (1,112)        (964)       (4,872)      (12,678)
                                                           --------     --------     --------     ---------     ---------

   Income (loss) before income taxes, minority
   interest and extraordinary item ......................      (332)      (7,399)       3,877         6,537       (14,562)
   Provision for (benefit from) income taxes ............      (368)        (891)         727         3,405          (138)
                                                           --------     --------     --------     ---------     ---------

   Income (loss) before minority interest and
   extraordinary item ...................................        36       (6,508)       3,150         3,132       (14,424)
   Minority interest ....................................      (317)         598         (293)         (618)         (569)
                                                           --------     --------     --------     ---------     ---------

   Income (loss) before extraordinary item ..............      (281)      (5,910)       2,857         2,514       (14,993)
   Extraordinary loss on early extinguishment of
   debt, net of tax of zero in 1999 .....................        --           --           --            --        (3,067)
                                                           --------     --------     --------     ---------     ---------
   Net income (loss) ....................................      (281)      (5,910)       2,857         2,514       (18,060)
   Beneficial conversion privilege of preferred stock ...        --           --       (1,266)       (8,013)           --
   Repurchase of Series B Preferred Stock ...............        --           --           --            --        (4,496)
   Modification of conversion price of Series B
      Preferred Stock....................................        --           --           --            --        (6,430)
   Modification of exercise price of Series B
   Preferred Stock Warrants .............................        --           --           --            --        (1,894)
   Increase in default redemption value of Series B
   Preferred Stock ......................................        --           --           --            --        (5,878)
   Preferred stock dividends ............................        --           --         (260)         (341)           --
                                                           --------     --------     --------     ---------     ---------
   Income (loss) applicable to common stock .............  $   (281)    $ (5,910)    $  1,331     $  (5,840)    $ (36,758)
                                                           ========     ========     ========     =========     =========

   Income (loss) applicable to common stock per
      share:(1)
   Basic:
      Income (loss) applicable to common stock
      before extraordinary item .........................  ($  0.03)    ($  0.71)    $   0.16     ($   0.59)    ($   2.86)
      Extraordinary loss ................................        --           --           --            --         (0.26)
      Income (loss) applicable to common stock ..........     (0.03)       (0.71)        0.16         (0.59)        (3.12)
   Diluted:
      Income (loss) applicable to common stock
      before extraordinary item .........................     (0.03)       (0.71)        0.16         (0.59)        (2.86)
      Extraordinary loss ................................        --           --           --            --         (0.26)
      Income (loss) applicable to common stock ..........     (0.03)       (0.71)        0.16         (0.59)        (3.12)

BALANCE SHEET DATA (AT END OF PERIOD):
   Cash and cash equivalents ............................  $  2,952     $  3,267     $  6,230     $  13,544     $  16,568
      Total assets ......................................    32,482       38,919       50,346       290,760       262,033
      Total debt ........................................     8,475       14,742       17,294        76,123        66,372
      Total preferred stock .............................        --           --        6,713        11,325        16,322
      Total shareholders' equity ........................    17,467       11,598       15,247        40,217           431
</TABLE>


                                       15

<PAGE>   21


<TABLE>
<CAPTION>
                                                                      Six Months Ended April 30,    Three Months Ended April 30,
                                                                      --------------------------    ----------------------------
                                                                         1999             2000         1999              2000
                                                                      ----------       ---------    ----------        ----------
   <S>                                                                <C>              <C>          <C>               <C>
   Revenue:
      Construction and maintenance ...........................         $ 181,088       $ 238,741    $   88,008        $  131,826
      Conduit Sale ...........................................            35,721              --        35,721                --
                                                                       ---------       ---------    ----------        ----------
   Total Revenue: ............................................           216,809         238,741       123,729           131,826

   Costs and Expenses:
      Construction and Maintenance ...........................           155,656         247,167        77,560           144,641
      Costs of Conduit .......................................            34,673              --        34,673                --
      General and administrative .............................            18,367          29,609         8,681            17,642
      Impairment of intangible assets ........................             2,465              --         2,465                --
      Depreciation and amortization ..........................             5,984           5,633         3,207             2,825
                                                                       ---------       ---------    ----------        ----------
   Total costs and expenses ..................................           217,145         282,409       126,586           165,108
                                                                       ---------       ---------    ----------        ----------
   Loss from operations ......................................              (336)        (43,668)       (2,857)          (33,282)
                                                                       ---------       ---------    ----------        ----------

   Other income (expense):
      Interest expense .......................................            (4,688)         (3,965)       (2,210)           (1,516)
      Equity in losses/impairment of investment in
      Kanas ..................................................                --         (12,184)           --           (11,875)
      Change in value of stock appreciation rights ...........             1,896           3,710         7,230                --
      Other ..................................................              (554)            368          (551)               44
                                                                       ---------       ---------    ----------        ----------
   Total other income (expense) ..............................            (3,346)        (12,071)        4,469           (13,347)
                                                                       ---------       ---------    ----------        ----------

   Loss before income taxes, minority interest
   and extraordinary item ....................................            (3,682)        (55,739)        1,612           (46,629)
   Provision for (benefit from) income taxes .................               (35)             --            15              (296)
                                                                       ---------       ---------    ----------        ----------

   Loss before minority interest and extraordinary item ......            (3,647)        (55,739)        1,597           (46,333)

   Minority interest .........................................               199              50           125               122
                                                                       ---------       ---------    ----------        ----------

   Loss before extraordinary item ............................            (3,846)        (55,789)        1,472           (46,455)
   Extraordinary loss on early extinguishment of debt ........            (3,067)             --        (3,067)               --
                                                                       ---------       ---------    ----------        ----------

   Net loss ..................................................            (6,913)        (55,789)       (1,595)          (46,455)
   Increase in default redemption value of Series B
   Preferred Stock ...........................................                --          (1,404)           --                --
   Redemption of 2,785 shares of Series B Preferred Stock ....            (4,323)             --        (4,323)               --
   Modification of exercise price of Series B
   Preferred Stock Warrants ..................................            (1,894)             --        (1,894)               --
   Modification of conversion price of Series B
   Preferred Stock ...........................................            (6,430)             --        (6,430)               --
   Series C Preferred Stock dividends and accretion ..........                --            (262)           --              (262)
   Series B Preferred Stock dividends ........................              (244)             --           (64)               --
                                                                       ---------       ---------    ----------        ----------
   Loss applicable to common stock ...........................         $ (19,804)      $ (57,455)   $  (14,306)       $  (46,717)
                                                                       =========       =========    ==========        ==========

   Loss applicable to common stock per share (1)
   Basic:
      Loss before extraordinary item .........................         $   (1.43)      $   (4.01)   $    (0.96)       $    (2.93)
      Extraordinary loss on the early extinguishment
      of debt ................................................             (0.26)             --         (0.26)               --
      Loss applicable to common stock ........................             (1.69)          (4.01)        (1.22)            (2.93)
   Diluted:
      Loss before extraordinary item .........................             (1.43)          (4.01)        (0.96)            (2.93)
      Extraordinary loss on the early extinguishment
      of debt ................................................             (0.26)             --         (0.26)               --
      Loss applicable to common stock ........................             (1.69)          (4.01)        (1.22)            (2.93)

BALANCE SHEET DATA (AT END OF PERIOD):
      Cash and cash equivalents ..............................            30,502          11,441        30,502            11,441
      Total assets ...........................................           272,868         303,851       272,868           303,851
      Total debt .............................................            66,467          41,775        66,467            41,775
      Total preferred stock ..................................             2,385          13,665         2,385            13,665
      Total shareholders' equity (deficit) ...................            27,287         (21,166)       27,287           (21,166)
</TABLE>

(1)      Per share data has been restated, where applicable, in accordance with
         Statement of Financial Accounting Standards No. 128, "Earnings Per
         Share," which became effective for the Company during the fiscal year
         ended October 31, 1998.



                                       16

<PAGE>   22


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

Except for historical information contained herein, the matters discussed below
contain forward looking statements that involve risk and uncertainties,
including but not limited to economic, governmental and technological factors
affecting the Company's operations, markets and profitability.

OVERVIEW
The Company's unaudited operating results reflect the unaudited operating
results of Southern Aluminum & Steel Corporation ("SASCO") and Specialty
Electronic Systems, Inc. ("SES") only from the date of acquisition that was
November 1, 1999. Combined selected financial information of SASCO and SES
during the three and six months ended April 30, 2000 were as follows:

<TABLE>
<CAPTION>
                                                       For the Months Ended April 30, 2000
                                                       -----------------------------------
                                                         Three                      Six
                                                       ---------                 ---------
<S>                                                    <C>                       <C>
Revenues                                               $   6,273                 $  11,020
Costs of revenues                                          4,854                     9,500
General and administrative expenses                          514                     1,032
Depreciation and amortization                                 28                        59
Other expense                                                 39                        82
                                                       ---------                 ---------
Net income                                             $     838                 $     347
                                                       ---------                 ---------
</TABLE>

See Note 6, "Assumption of COMSAT Contracts," to the accompanying condensed
consolidated financial statements for a discussion and summary of contracts
assumed from the Texas Department of Transportation during the fiscal year ended
October 31, 1998. All of the COMSAT Contracts were substantially complete as of
October 31, 1999. The revenues, cost of revenues and gross margins were
non-recurring and are not generally indicative of returns we expect to achieve
on future contracts.

<TABLE>
<CAPTION>
                                          For the Three Months     For the Six Months      For the Fiscal Years
                                             Ended April 30,        Ended April 30,          Ended October 31,
                                          --------------------    -------------------      ---------------------
                                           2000          1999      2000        1999          1999          1998
                                          ------        ------    ------      -------      -------       -------
<S>                                       <C>           <C>       <C>         <C>          <C>           <C>
Billings on the COMSAT contracts(1)       $   --        $3,251    $   --      $ 5,556      $ 7,952       $11,327
Deferred revenue recognized                   --         1,032        --        2,531        3,935         8,481
                                          ------        ------    ------      -------      -------       -------
                                              --         4,283        --        8,087       11,887        19,808
Direct contract costs                         --         2,048        --        5,115        8,675        10,672
                                          ------        ------    ------      -------      -------       -------
Gross margin from COMSAT contracts        $   --        $2,235    $   --      $ 2,972      $ 3,212       $ 9,136
                                          ------        ------    ------      -------      -------       -------
</TABLE>

The following table sets forth selected elements of our condensed consolidated
statements of operations as a percentage of our revenues:

<TABLE>
<CAPTION>
                                       For the Three Months     For the Six Months      For the Fiscal Years Ended
                                          Ended April 30,        Ended April 30,               October 31,
                                      ---------------------   --------------------   -----------------------------
                                         2000        1999        2000       1999       1999       1998       1997
                                      ---------   ---------   ---------   --------   -------   --------    -------
<S>                                   <C>         <C>         <C>         <C>        <C>       <C>         <C>
Revenues:
     Construction and maintenance         100.0%       71.1%      100.0%      83.5%     91.5%     100.0%     100.0%
     Conduit sales                           --        28.9          --       16.5       8.5         --         --
                                      ---------   ---------   ---------   --------   -------   --------    -------
                                          100.0       100.0       100.0      100.0     100.0      100.0      100.0

Costs and expenses:
     Construction and maintenance         109.7        62.7       103.5       71.8      78.9       82.5       79.0
     Costs of conduit                        --        28.0          --       16.0       8.3         --         --
     General and administrative
          expense                          13.4         7.0        12.4        8.5       9.8        8.7       10.2
     Impairment of intangible assets         --         2.0          --        1.1       0.6         --         --
     Depreciation and amortization          2.1         2.6         2.4        2.8       2.8        3.5        5.2
                                      ---------   ---------   ---------   --------   -------   --------    -------
Income (loss) from operations             (25.2)       (2.3)      (18.3)      (0.2)     (0.4)       5.3        5.6
Other expenses, net                       (10.0)        1.0        (5.1)      (3.0)     (3.9)      (4.1)      (2.3)
                                      ---------   ---------   ---------   --------   -------   --------    -------
Net income (loss)                         (35.2)       (1.3)      (23.4)      (3.2)     (4.3)       1.2        3.3
Income (loss) applicable to common
     stock                                (35.4)      (11.6)      (24.1)      (9.1)     (8.8)      (2.7)       1.5
                                      ---------   ---------   ---------   --------   -------   --------    -------
</TABLE>



                                       17

<PAGE>   23


RESULTS OF OPERATIONS

THREE AND SIX MONTHS ENDED APRIL 30, 2000 COMPARED WITH THE THREE AND SIX MONTHS
ENDED APRIL 30, 1999

The following discussion and analysis relates to our financial condition and
results of operations for the three and six months ended April 30, 2000 and
1999. This information should be read in conjunction with our condensed
consolidated financial statements appearing elsewhere in this prospectus.

REVENUES. Construction and maintenance revenues were $131.8 million for the
three months ended April 30, 2000, compared to $88.0 million for the same three
month period of fiscal 1999 an increase of $43.8 million or 49.8 percent.
Construction and maintenance revenues were $238.7 million for the six months
ended April 30, 2000, compared to $181.1 million for the same six month period
of fiscal 1999 an increase of $57.6 million or 31.8 percent. Substantially all
of the increase is due to increased revenues from the WorldCom Master Services
Agreement and the New Jersey Consortium Contracts.

Our estimated backlog at May 30, 2000, was as follows (in thousands):

<TABLE>
<CAPTION>
                                                   Operations and
                                    Construction     Maintenance
Organizational Group                  Contracts       Contracts      Total
                                    ------------   --------------   --------
<S>                                 <C>            <C>              <C>
Network Services                      $376,000        $111,000      $487,000
Transportation Services                110,000         110,000       220,000
Construction                           138,000          29,000       167,000
                                      --------        --------      --------
                                      $624,000        $250,000      $874,000
                                      --------        --------      --------
</TABLE>


We expect to complete approximately 40% of the total backlog within the next
twelve months. Due to the nature of our contractual commitments, in many
instances our customers do not commit to the volume of services to be purchased
under a contract but, rather, commit us to perform these services if requested
by the customer and commit to obtain these services from us if they are not
performed internally. Many of the contracts are multi-year agreements, ranging
from less than one year to 20 years. We include the full amount of services
projected to be performed over the lives of the contract in backlog due to our
historical relationships with our customers and our experience in procurements
of this nature. Contract backlog of $500 million is under performance bonds and
we may be subject to liquidated damages for failure to perform in a timely
manner. Our backlog may fluctuate and does not necessarily indicate the amount
of future sales. A substantial amount of the order backlog can be canceled at
any time without penalty, except, in some cases, we can recover actual committed
costs and profit on work performed up to the date of cancellation. Cancellations
of pending purchase orders or termination or reductions of purchase orders in
progress from our customers could have a material adverse effect on our
business, operating results and financial condition. In addition, there can be
no assurance as to customers' requirements during a particular period or that
such estimates at any point in time are accurate.

As a result of our consolidated financial condition, there can be no assurances
that we can obtain the bonding necessary to bid on and accept new projects.

Conduit Sales - Sales of conduit during the three months ended April 30, 1999,
related to sales of capacity in the NYSTA Network and generated revenues, costs
of conduit and margins of $35.7 million, $34.7 million and $1.0 million,
respectively. There were no comparable sales during the six months ended April
30, 2000. However, during that period we expended $39.8 million for "networks
under construction" that we expect to sell or lease in future periods. Refer to
Note 7, "Networks Under Construction," to the accompanying condensed
consolidated financial statements for a further discussion of these projects.

COSTS OF REVENUES. Construction and maintenance costs were $144.6 million for
the three months ended April 30, 2000, compared to $77.6 million for the same
three month period of fiscal 1999, an increase of $67.0 million or 86.5 percent.
Construction and maintenance costs were $247.2 million for the six months ended
April 30, 2000, compared to $155.7 million for the same three month period of
fiscal 1999, an increase of $91.5 million or 58.8 percent.

Our construction and maintenance margins were (9.7) percent and (3.5) percent
for the three and six months ended April 30, 2000, respectively, compared to
11.9 percent and 14.0 percent during the comparable periods of fiscal 1999. As
discussed and summarized in Note 16, "Segment Information" to the accompanying
condensed consolidated financial statements, the negative construction and
maintenance margins during fiscal 2000 and the substantial reduction in such
margins from fiscal 1999 related primarily to current and future losses recorded
on the New Jersey Consortium Contracts.



                                       18

<PAGE>   24


The following is a summary of the reserves for losses on uncompleted contracts
(amounts in thousands):

<TABLE>
<CAPTION>
                                     Network Services Group     Transportation Services Group              Total
                                    -----------------------     -----------------------------     -----------------------
                                      2000           1999           2000           1999             2000           1999
                                    --------       --------       --------       --------         --------       --------
<S>                                 <C>            <C>            <C>            <C>              <C>            <C>

Balance, beginning of fiscal
year                                $  5,703       $  8,029       $  2,917       $ 17,361         $  8,620       $ 25,390
Additions(1)                             141             --         4,744             --             4,885             --
Amount utilized                         (393)        (1,231)        (961)        (6,068)            (1,354)        (7,299)
                                    --------       --------       --------       --------         --------       --------
Balance, January 31                    5,451          6,798         6,700         11,293            12,151         18,091
Additions(1)                             627             --        18,885          1,858            19,512          1,858
Amount utilized                          (53)        (1,250)       (1,005)        (1,044)           (1,058)        (2,294)
                                    --------       --------       --------       --------         --------       --------
Balance, April 30                   $  6,025       $  5,548       $ 24,580       $ 12,107         $ 30,605       $ 17,655
                                    --------       --------       --------       --------         --------       --------
</TABLE>

(1)      Additions during the three and six months ended April 30, 2000, related
         primarily to the New Jersey Consortium Contracts. Additions and amounts
         utilized exclude previously unprojected losses incurred during each
         period (refer to Note 16, "Segment Information").

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses were
$17.6 million for the three months ended April 30, 2000, compared to $8.7
million for the same three month period of fiscal 1999, an increase of $8.9
million or 102.3 percent. General and administrative expenses were $29.6 million
for the six months ended April 30, 2000, compared to $18.4 million for the same
six month period of fiscal 1999, an increase of $11.2 million or 60.9 percent.
The increase in general and administrative expense during the three and six
months ended April 30, 2000, compared to the same period of fiscal 1999 related
primarily to increased professional fees associated with the SIRIT litigation
(refer to Note 11, "Contingencies," to the accompanying condensed consolidated
financial statements), increased financial advisory fees (refer to Note 14,
"Financial Advisory Services," to the accompanying condensed consolidated
financial statements) and higher overall executive compensation.

OTHER EXPENSE, NET. Other income (expense), consisted of the following (dollars
in thousands):

<TABLE>
<CAPTION>
                                                                         For the Three Months Ended April 30,
                                                              -----------------------------------------------------------
                                                                 2000             1999           $Change          %Change
                                                              ---------        ---------        --------          -------

<S>                                                           <C>              <C>              <C>               <C>
Interest expense                                              $ (1,516)        $ (2,210)        $    694             31.4%
Change in value of stock appreciation rights                        --            7,230            7,230            100.0
Equity in losses/impairment of investment in Kanas             (11,875)              --          (11,875)              --
Benefit from (provision for) income taxes                          296              (15)             311          2,073.3
Minority interest                                                 (122)            (125)              (3)            (2.4)
Extraordinary loss on the early extinguishment of debt              --           (3,067)          (3,067)          (100.0)
Other, net                                                          44             (551)             595            108.0

<CAPTION>
                                                                          For the Six Months Ended April 30,
                                                              -----------------------------------------------------------
                                                                 2000             1999           $Change          %Change
                                                              ---------        ---------        --------          -------

<S>                                                           <C>              <C>              <C>               <C>
Interest expense                                              $ (3,965)        $ (4,688)        $    723             15.4%
Change in value of stock appreciation rights                     3,710            1,896            1,814             95.7
Equity in losses/impairment of investment in Kanas             (12,184)              --          (12,184)              --
Benefit from (provision for) income taxes                           --               35              (35)          (100.0)
Minority interest                                                  (50)            (199)             149             74.9
Extraordinary loss on the early extinguishment of debt              --           (3,067)           3,067            100.0
Other, net                                                         368             (554)             922            166.4
</TABLE>

Interest Expense - The decrease in interest expense during fiscal 2000 compared
to fiscal 1999 is primarily attributable to the lower outstanding balance due
WorldCom resulting from the WorldCom Debt to Equity Conversion. During the three
months ended April 30, 2000, we had $35.0 million outstanding under our Secured
Credit Facility, $4.5 million outstanding under the WorldCom Note with an
interest rate of 11.5 percent per annum and $19.2 million outstanding under
property taxes payable that is net of imputed interest at 15 percent per annum.

The $32.0 million outstanding under the WorldCom Advance is non-interest
bearing.

Stock Appreciation Rights - The change in the value of the stock appreciation
rights is a non-cash item related to the value of amounts potentially owed to
WorldCom under the existing WorldCom stock appreciation rights (WorldCom SARs).
Management expects the conversion of WorldCom SARs into options for our common
stock at our next shareholders' meeting and will not result



                                       19

<PAGE>   25


in a cash charge to the Company. The value of the WorldCom SARs will be
increased or decreased based on the intrinsic value of the WorldCom SARs
utilizing the price of our common stock at each reporting date until the
WorldCom SARs are converted to options or exercised by WorldCom.

Equity in Losses/Impairment of Investment in Kanas - As reflected in Note 8,
"Investment in Kanas (Held for Sale)," in the accompanying condensed
consolidated financial statements, we wrote off our investment in Kanas during
the three months ended April 30, 2000.

Extraordinary Loss on the Early Extinguishment of Debt - During the three months
ended April 30, 1999, we purchased all of our outstanding Senior Subordinated
Notes with an outstanding principal balance of $10.0 million resulting in an
extraordinary loss from the early extinguishment of debt of $3.1 million. The
Senior Subordinated Notes were purchased with proceeds from the WorldCom
Advance.

LOSS APPLICABLE TO COMMON STOCK. Loss applicable to common stock was $46.7
million for the three months ended April 30, 2000, compared to $14.3 million for
the same three month period of fiscal 1999, an increase of $32.4 million or
226.6 percent. During the three months ended April 30, 2000, we recorded
approximately $0.3 million of dividends and accretion related to the Series C
Preferred Stock.

Loss applicable to common stock was $57.5 million for the six months ended April
30, 2000, compared to $19.8 million for the same six month period of fiscal
1999, an increase of $37.7 million or 190.1 percent. During the six months ended
April 30, 2000, we recorded approximately $1.4 million related to the increase
in default redemption value of the Series B Preferred Stock and approximately
$0.3 million of dividends and accretion related to the Series C Preferred Stock.

Loss applicable to common stock for the six months ended April 30, 1999, was
adversely affected by charges of $12.6 million related to the February 1999
partial redemption and modification of the Series B Preferred Stock and related
warrants.

FISCAL YEAR ENDED OCTOBER 31, 1999 COMPARED WITH FISCAL YEAR ENDED OCTOBER 31,
1998.

REVENUES. For the fiscal year ended October 31, 1999, revenues totaled $418.6
million compared to $217.5 million during the fiscal year ended October 31,
1998, an increase of $201.1 million or 92.0 percent. This increase in revenues
is due primarily to growth in our operations through the acquisition of MFSNT on
July 2, 1998. Revenues generated by MFSNT for the fiscal year ended October 31,
1999, totaled approximately $264.0 million and included sales of conduit
capacity of approximately $35.7 million.

COST OF REVENUES. For the fiscal year ended October 31, 1999 cost of revenues
totaled $365.1 million compared to $179.5 million during the fiscal year October
31, 1998, an increase of $185.6 million or 103.0 percent. This increase in cost
of revenues is due primarily to growth in our operations through the acquisition
of MFSNT on July 2, 1998. Cost of revenues incurred by MFSNT for the fiscal year
ended October 31, 1999, totaled approximately $233.5 million and included cost
associated with sales of conduit capacity of approximately $34.7 million.

Our construction and maintenance margins (Revenues less Cost of Revenues) were
$53.5 million or 12.8 percent for the fiscal year ended October 31, 1999,
compared to $38.0 million or 17.5 percent for the fiscal year ended October 31,
1998. The dollar increase in construction and maintenance margins is due
primarily to the acquisition of MFSNT on July 2, 1998. Construction and
maintenance margins generated by MFSNT for the fiscal year ended October 31,
1999, totaled approximately $31.6 million and included margins from sales of
conduit capacity of $1.0 million. The decrease in construction and maintenance
margins on a percentage basis from fiscal year 1999 to fiscal year 1998 was due
primarily to increased emphasis on cost plus contracts (predominately with
WorldCom) and negative margins generated by former subsidiaries Dial and AIS
(which were closed in fiscal year 1999).

As of July 2, 1998, we estimated the need for reserves for contract losses with
respect to MFSNT contracts of $40.5 million. These reserves relate to specific
MFSNT jobs identified as Loss Jobs. Revenues and costs recognized in our
consolidated statement of operations related to these identified Loss Jobs
subsequent to the acquisition date have resulted in no net margin as all losses
were recorded against the reserve balance. We utilized the reserves for losses
on uncompleted contracts only on those jobs identified as Loss Jobs at the date
of acquisition. The following is a summary of the reserves for losses on
uncompleted contracts (amounts in thousands):



                                       20

<PAGE>   26


<TABLE>
<CAPTION>
                                    Network        Transportation
                                   Services           Services             Total
                                  --------        --------------        --------

<S>                               <C>             <C>                   <C>
Balance, July 2, 1998(1)             16,266             24,234             40,500
Amount utilized                      (8,237)            (6,873)           (15,110)
                                   --------           --------           --------
Balance, October 31, 1998             8,029             17,361             25,390
Valuation adjustments(2)              2,463             (3,082)              (619)
Amount utilized                      (4,789)           (11,362)           (16,151)
                                   --------           --------           --------
Balance, October 31, 1999          $  5,703           $  2,917           $  8,620
                                   --------           --------           --------
</TABLE>

(1)      The valuation adjustments made during the fiscal year ended October 31,
         1999, were the result of final projected cost estimates on previously
         identified Loss Jobs unavailable at the date of acquisition.

GENERAL AND ADMINISTRATIVE EXPENSES. For the fiscal year ended October 31, 1999
general and administrative expenses were $41.0 million compared to $19.0 million
during the fiscal year ended October 31, 1998, an increase of $22.0 million or
116.0 percent. This increase in general and administrative expenses is due
primarily to growth in our operations through the acquisition of MFSNT on July
2, 1998. General and administrative expenses incurred by MFSNT for the fiscal
year ended October 31, 1999, totaled approximately $14.8 million. The remaining
increase was due to i) significant professional fees associated with pending
litigation and reviews by the Securities and Exchange Commission; ii) increases
in our management structure necessary to support our increased revenue in
accordance with our strategic objective; and iii) costs associated with ongoing
efforts to recapitalize the Company.

DEPRECIATION AND AMORTIZATION. For the fiscal year period ended October 31,
1999, depreciation and amortization expense totaled $11.8 million compared to
$7.6 million during the fiscal year ended October 31, 1998, an increase of $4.2
million or 55.0 percent. As a percentage of revenues, depreciation and
amortization decreased from 3.5 percent during fiscal year 1998 to 2.8 percent
during fiscal year 1999 due to an increase in revenues which did not require the
same percentage increase in capital assets to support our operations.

IMPAIRMENT OF LONG-LIVED ASSETS. During the fiscal year ended October 31, 1999,
we closed Dial and AIS that resulted in impairment of Dial goodwill of $1.3
million. We also wrote-off $1.2 million of equipment.

INCOME (LOSS) FROM OPERATIONS. For the fiscal year ended October 31, 1999, loss
from operations was $1.9 million compared to income from operations of $ 11.4
million for the fiscal year ended October 31, 1998, a decrease of $13.3 million
or 117.0 percent. This decrease, as discussed above, was due primarily to lower
construction and maintenance margins and increased general and administrative
expenses.

OTHER EXPENSE, NET. For the fiscal year ended October 31, 1999, other expense
totaled $16.2 million compared to $8.9 million during the fiscal year ended
October 31, 1998, an increase of $7.3 million or 82.0 percent. Other expense
includes the following for the fiscal years ended October 31 (amounts in
thousands):

<TABLE>
<CAPTION>
                                                                1999             1998           $Change        %Change
                                                              --------         --------         --------       -------

<S>                                                           <C>              <C>              <C>                <C>
Interest expense                                              $  9,512         $  5,534         $  3,978           72%
Extraordinary loss                                               3,067               --            3,067           --
Change in value of stock appreciation rights                     1,814               --            1,814           --
Provision for (benefit from) income taxes                         (138)           3,405           (3,543)        (104)%
Other                                                            1,921              (44)           1,965         4,466%
</TABLE>

Interest Expense - The increase of $4.0 million in interest expense is due
primarily to the $30.0 million, 11.5 percent debt associated with the
acquisition of MFSNT on July 2, 1998 and accreted interest at 15 percent on
property taxes payable assumed in the acquisition of MFSNT.

Extraordinary Loss - During the fiscal year ended October 31, 1999, we purchased
all of our Senior Subordinated Notes with an outstanding principal balance of
$10.0 million resulting in an extraordinary loss from the early extinguishment
of debt of $3.1 million. The Senior Subordinated Notes were purchased by the
Company with proceeds from the non-interest bearing WorldCom Advance.

Change in Value of Stock Appreciation Rights - The change in the value of stock
appreciation rights is a non-cash charge associated with changes in the
intrinsic value of the WorldCom SAR. We anticipate shareholder approval for the
conversion of the WorldCom SAR into options for common stock at our next
shareholders' meeting. If shareholder approval is received, the SARs will not
result in cash payments by the Company. Pending approval, the WorldCom SAR
liability will be increased or decreased based upon the difference in the market
price of the common stock and the strike price of the SARs.



                                       21

<PAGE>   27


Provision for (Benefit from) Income Taxes - For the fiscal year ended October
31, 1999, the benefit from income taxes was $0.1 million compared to a provision
for income taxes of $3.4 million during the fiscal year ended October 31, 1998,
a decrease of $3.5 million or 103.0 percent which corresponds to decreases in
our income before taxes.

NET INCOME (LOSS). For the fiscal year ended October 31, 1999, net loss was
$18.1 million compared to net income of $2.5 million for the fiscal year ended
October 31, 1998 a decrease of $20.6 million. Net loss applicable to common
stock was $36.8 million after $18.7 million in charges related to the Series B
Preferred Stock and Warrants (see Note 14 of Notes to Consolidated Financial
Statements).

FISCAL YEAR ENDED OCTOBER 31, 1998 COMPARED WITH FISCAL YEAR ENDED OCTOBER 31,
1997.

RESULTS OF OPERATIONS. The following discussion and analysis relates to the
financial condition and results of operations of the Company for the fiscal
years ended October 31, 1998 and 1997. This information should be read in
conjunction with our condensed consolidated financial statements appearing
elsewhere in this document.

REVENUES. For the fiscal year ended October 31, 1998 revenues increased $131.2
million, from $86.3 million through October 31, 1997 to $217.5 million, for the
fiscal year ended October 31, 1998. This increase in revenues is due primarily
to growth in our operations through the acquisition of MFSNT in the third
quarter and the acquisition of Patton and the COMSAT Contracts in the second
quarter of fiscal 1998, as well as increased demands for services in the traffic
management and telecommunications industry. For the fiscal year ended October
31, 1998, revenues increased approximately $87.0 million, $17.6 million and
$17.4 million related to the acquisition of MFSNT, Patton, and the COMSAT
Contracts, respectively.

COST OF REVENUES. For the fiscal year ended October 31, 1998 and 1997, cost of
revenues as a percentage of revenues increased from 78.9 percent to 82.5
percent. The increase was due to increased costs related to the Network Services
Group resulting from tighter margins and competition in the telecommunications
industry, as well as inclement weather which restricted some work during the
winter months and extended completion dates into later periods, offset by
decreased costs as a result of COMSAT Contracts included in the Transportation
Services Group's operations.

GENERAL AND ADMINISTRATIVE EXPENSES. For the fiscal year ended October 31, 1998
general and administrative expenses were $19.0 million, an increase of $8.2
million over the same period in the prior year. This increase was due to the
overall increase in the management structure at the corporate level, as well as
the division offices, necessary to support our increased revenue in accordance
with our strategic objective of growth through acquisitions, and an increase in
costs resulting from the acquisition of MFSNT. For the fiscal year ended October
31, 1998, general and administrative expenses relating to the operations of
MFSNT were approximately $5.1 million.

DEPRECIATION AND AMORTIZATION. For the fiscal year period ended October 31,
1998, depreciation and amortization expense as a percentage of revenue decreased
from 5.3 percent to 3.5 percent as compared to the same period in 1997. This
decrease as a percentage of revenue is due to the significant increase in
revenues which did not require the same percentage increase in capital assets to
support our operations.

INCOME FROM OPERATIONS. For the fiscal year ended October 31, 1998, income from
operations was $11.4 million compared to $4.8 million for the same period in the
prior year, primarily as a result of our strategy of growth through
acquisitions.

OTHER EXPENSE, NET. Other expense, net, increased by $3.9 million to $4.9
million for the fiscal year ended October 31, 1998 as compared to $1.0 million
for the comparable period in 1997. This increase is due primarily to increased
interest costs related to the acquisition of MFSNT. Other expense, net, was also
impacted by non-cash charges associated with stock options granted below market
prices, and amortization of loan costs associated with the Secured Credit
Facility.

Income taxes increased from $0.7 million in fiscal 1997 to $3.4 million in
fiscal 1998. This increase is due to increased income from operations, state
taxes in the State of Georgia, and the write-off of foreign tax credits.

NET INCOME. For the fiscal year ended October 31, 1998, net income was $2.5
million compared to net income of $2.9 million for the comparable period in 1997
for the reasons described above. For the year ended October 31, 1998, the loss
applicable to common stock of $(5.8) million, or $(0.59) per share, is a result
of an $8.0 million charge associated with the beneficial conversion privileges
on the Series B Preferred Stock, other non-recurring adjustments associated with
our obtaining financing for a portion of the purchase price of MFSNT and
preferred stock dividends. For the year ended October 31, 1997, income
applicable to common stock was $1.3 million, or $0.16 per share.




                                       22

<PAGE>   28


QUARTERLY RESULTS OF OPERATIONS

The following table sets forth a summary of our unaudited quarterly operating
results for each of the ten quarters in the period ended April 30, 2000. This
information has been derived from unaudited interim consolidated financial
statements that, in the opinion of management, have been prepared on a basis
consistent with the consolidated financial statements contained elsewhere in
this prospectus and include all adjustments, consisting of only normal recurring
adjustments, necessary for a fair statement of such information when read in
conjunction with our consolidated financial statements and notes thereto. The
operating results for any quarter are not necessarily indicative of results for
any future period.

<TABLE>
<CAPTION>
                                                                                 Quarter Ended
                                                     ---------------------------------------------------------------------------
                                                     January 31,  April 30,    July 31,    October 31,    January 31,  April 30,
                                                       1998         1998         1998         1998           1999        1999
                                                     -----------  ---------    --------    -----------    -----------  ---------
<S>                                                  <C>          <C>          <C>         <C>            <C>          <C>
Statement of Operations Data:
Revenue............................................. $22,268      $34,552      $58,305       $102,356      $93,080     $123,729
Income (Loss) from operations.......................  (1,164)       2,180        4,319          6,074        2,521       (2,857)
Income (Loss) before extraordinary item.............    (927)         867          790          1,784       (5,318)       1,472
Net income (loss)...................................    (927)         867          790          1,784       (5,318)      (1,595)
Income (Loss) applicable to common stock............  (1,081)         838       (7,186)         1,589       (5,498)     (14,306)
Income (Loss) applicable to common stock per share:
Basic:
Income (Loss) before extraordinary item.............   (0.12)        0.09        (0.72)          0.16        (0.47)       (0.96)
Extraordinary loss on early extinguishment of debt..      --           --           --             --           --        (0.26)
Income (Loss) applicable to common stock............   (0.12)        0.09        (0.72)          0.16        (0.47)       (1.22)
Diluted:
Income (Loss) before extraordinary item.............   (0.12)        0.09        (0.72)          0.16        (0.47)       (0.96)
Extraordinary loss on early extinguishment of debt..      --           --           --             --           --        (0.26)
Income (Loss) applicable to common stock............   (0.12)        0.09        (0.72)          0.16        (0.47)       (1.22)




<CAPTION>
                                                                           Quarter Ended
                                                          -------------------------------------------------
                                                          July 31,    October 31,    January 31,  April 30,
                                                            1999         1999           2000        2000
                                                          --------    -----------    -----------  ---------
<S>                                                       <C>         <C>            <C>          <C>
Statement of Operations Data:
Revenue.............................................      $102,781     $98,975        $106,915    $131,826
Income (Loss) from operations.......................         1,455      (3,003)        (10,386)    (33,282)
Income (Loss) before extraordinary item.............        (5,485)     (5,662)         (9,334)    (46,555)
Net income (loss)...................................        (5,485)     (5,662)         (9,334)    (46,555)
Income (Loss) applicable to common stock............       (10,265)     (6,689)        (10,738)    (46,717)
Income (Loss) applicable to common stock per share:
Basic:
Income (Loss) before extraordinary item.............         (0.87)      (0.56)          (0.84)      (2.93)
Extraordinary loss on early extinguishment of debt..            --          --              --          --
Income (Loss) applicable to common stock............         (0.87)      (0.56)          (0.84)      (2.93)
Diluted:
Income (Loss) before extraordinary item.............         (0.87)      (0.56)          (0.84)      (2.93)
Extraordinary loss on early extinguishment of debt..            --          --              --          --
Income (Loss) applicable to common stock............         (0.87)      (0.56)          (0.84)      (2.93)
</TABLE>


LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents were $11.4 million at April 30, 2000 compared to $16.6
million at October 31, 1999. The decrease in cash and cash equivalents of $5.1
million during the six months ended April 30, 2000 resulted from cash from
financing activities




                                       23
<PAGE>   29


of $3.8 million, offset by cash used in operating and investing activities of
$3.6 million and $5.3 million, respectively.

CASH FROM OPERATING ACTIVITIES

Cash used in operating activities during the six months ended April 30, 2000 of
$3.6 million consisted of the following:

<TABLE>
<S>                                                                                                                <C>
  Net loss                                                                                                         $(55,789)
Adjustments to reconcile net loss to net cash used in operating activities, net of effects of acquisitions:
         Depreciation and amortization                                                                                5,632
         Equity in loss/impairment of Kanas                                                                          12,159
         Change in value of stock appreciation rights                                                                (3,710)
         Accretion of property tax payable                                                                            1,144
                                                                                                                   --------
                                                                                                                    (40,564)
  Changes in assets and liabilities, net of effects from acquisitions:
         Increase in accounts receivable                                                                            (24,251)
         Decrease in costs and profits in excess of billings on uncompleted contracts                                13,136
         Increase in other current assets                                                                            (2,797)
         Increase in networks under construction                                                                    (38,017)
         Increase in accounts payable and other current liabilities                                                  55,882
         Increase in reserves for losses on uncompleted contracts                                                    21,985
         Increase in long-term deferred revenues                                                                     11,073
         Other, net                                                                                                     (74)
                                                                                                                   --------
  Cash used in operating activities                                                                                $ (3,627)
                                                                                                                   --------
</TABLE>

As discussed in Note 7, "Networks Under Construction," to our accompanying
unaudited condensed consolidated financial statements, the $38.0 million
increase in networks under construction related predominately to the ongoing
construction of the CDOT Network. We expect to incur significant additional
amounts to complete the construction of the CDOT Networks. Our failure to
execute sufficient user agreements for the CDOT Networks could have a material
adverse effect on the carrying value of our investment.

Cash flows from operations during the six months ended April 30, 2000, were
adversely affected by cash payments of $2.4 million related to Loss Jobs that
were charged to reserves for losses on uncompleted contracts. As discussed in
Note 9, "Reserves for Losses on Uncompleted Contracts," to the accompanying
unaudited condensed consolidated financial statements, reserves for losses on
uncompleted contracts at April 30, 2000, totaled $30.6 million, including $24.4
million of additions during the six months ended April 30, 2000, related
primarily to the New Jersey Consortium. Funding of these expected losses will
require cash resources not presently available to us.

CASH FROM INVESTING ACTIVITIES

Cash used in investing activities during the six months ended April 30, 2000, of
$5.3 million is due to net capital expenditures of approximately $5.4 million
required to support increased operations and replacement of existing equipment
offset by cash acquired in the acquisition of SASCO and SES of approximately
$0.1 million.

CASH FROM FINANCING ACTIVITIES

Cash provided by financing activities during the six months ended April 30, 2000
of $3.8 million is due primarily to proceeds from the issuance of the Series C
Preferred Stock and exercise of stock options of $14.4 million and $1.1 million,
respectively, offset by the redemption of the Series B Preferred Stock and
payments of debt of $11.6 million and $0.3 million, respectively.

As discussed in Note 10, "Debt," to the accompanying unaudited condensed
consolidated financial statements, we entered into an agreement with WorldCom
during the six months ended April 30, 2000, whereby WorldCom agreed to convert
approximately $25.5 million of its $30.0 million WorldCom Note into 3,050,000
shares of the Company's Common Stock. The conversion was based on the January 8,
2000 closing price of the Company's Common Stock at $8.375 per share. The
remainder of the original WorldCom Note, approximately $4.4 million, was
converted into an amended and restated 11.5 percent subordinated promissory note
due February 2001. This note has subsequently been converted to an 8 percent,
seven-year note, due July 12, 2007.

FUTURE LIQUIDITY

There can be no assurance that we will not experience adverse operating results
or other factors that could materially increase our cash requirements or
adversely affect our liquidity position.

GOING CONCERN. As described in Note 2, "Going Concern," to the accompanying
condensed consolidated financial statements, there is substantial doubt about
our ability to continue as a going concern. Our continuation as a going concern
is dependent upon our ability to (a) generate sufficient cash flow to meet our
obligations on a timely basis, (b) obtain additional financing as may be
required, and (c) ultimately sustain profitability. Management's plans in regard
to these matters are discussed in Note 2, "Going Concern," to the accompanying
condensed consolidated financial statements.

SIRIT SETTLEMENT. As described in Note 11, "Contingencies," to the accompanying
condensed consolidated financial statements, we have agreed to issue to Sirit up
to 5.0 million common shares, subject to shareholder approval and registration
rights. In the event we fail to deliver Sirit registered common stock by
November 30, 2000, Sirit can instead execute a $20.0 million consent judgement
against us (i.e. demand a cash payment of $20.0 million).

OTHER LITIGATION. As described in Note 11, "Contingencies," to the accompanying
condensed consolidated financial statements, we are the defendant in
various legal matters that individually or in aggregate could have a material
adverse effect on our future liquidity.

CREDIT FACILITY. As described in Note 10, "Debt," to the accompanying condensed
consolidated financial statements, we have borrowed the maximum available under
our existing Credit Facility and are in default of the related covenants. The
Credit Facility lenders have the right to demand payment and we have
insufficient liquidity to pay such amounts, if called. We have not yet been
successful in obtaining alternative financing and may have insufficient
liquidity to fund our continuing operations.

PREFERRED STOCK. As described in Note 12, "Preferred Stock," to the accompanying
condensed consolidated financial statements, we have certain outstanding
securities related to past preferred stock issuances that may require mandatory
cash redemption at premium prices if we fail to meet certain conditions. Those
securities include 801,787 common shares and 266,646 exchange warrants issued in
conjunction with the Series B Stock redemption and 200,000 warrants issued in
conjunction with the Series C Stock offering.

As also described in Note 12, "Preferred Stock," to the accompanying unaudited
condensed consolidated financial statements, we have agreed to issue to certain
of our preferred stockholders 1,057,031 shares of our common stock prior to
December 1, 2000; provided that our shareholders have approved such issuance. In
the event the shareholders have not approved such issuance, these holders may
demand a cash payment of $4.2 million. We expect to reflect a charge to income
applicable to common stock and a current liability for $4.2 million in our
financial statements for the quarter ended July 31, 2000. Upon shareholder
approval, we will issue the shares to satisfy the liability and adjust the
charge to equal the fair value of the shares on the date of approval.

CONTRACTS ACQUIRED FROM MFSNT. We have recorded reserves for losses on certain
contracts assumed in the MFSNT acquisition that are expected to use cash from
operations of approximately $30.6 million over the next two fiscal years.

We also assumed in the MFSNT acquisition certain obligations to perform under
long-term service contracts for the operation and maintenance of fiber networks.
Performance under these agreements, which were predominantly executed by MFSNT
in 1996 and 1997, began during fiscal 1999. We subsequently determined that the
costs to perform under these contracts are expected to be greater than amounts
presently expected to be billable to network users under firm contractual
commitments. We have also subsequently determined that such losses over the
contract terms (up to 20 years) cannot be reasonably estimated due to potential
changes in various assumptions.

In March 2000, our obligations and responsibilities with respect to the Kanas
operations and maintenance agreement were terminated. Increases in management's
estimates of costs to complete the Loss Jobs and to service the maintenance
contracts, without an offsetting increase in revenues, could have a material
adverse effect on our consolidated results of operations, financial condition
and liquidity.

OTHER CONTRACT MATTERS. Some of our construction contracts require payment of
liquidated damages if certain milestones are not achieved on schedule. Lack of
sufficient liquidity to pay vendors and subcontractors for those contracts on a
timely basis could result in delays and significant additional obligations to
the Company that are currently not anticipated or reflected in our consolidated
financial statements.



                                       24
<PAGE>   30

CAUTIONARY STATEMENTS

Certain of the information contained herein may contain "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, as the same may be amended from time to time ("the Act") and in
releases made by the Securities and Exchange Commission ("SEC") from time to
time. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance,
or achievements expressed or implied by such forward-looking statements. The
words "estimate," "believes," "project," "intend," "expect" and similar
expressions when used in connection with the Company, are intended to identify
forward-looking statements. Any such forward-looking statements are based on
various factors and derived utilizing numerous important assumptions and other
important factors that could cause actual results to differ materially from
those on the forward-looking statements. These cautionary statements are being
made pursuant to the Act, with the intention of obtaining benefits of the "Safe
Harbor" provisions of the Act. We caution investors that any forward-looking
statements made by us are not guarantees of future performance and that actual
results may differ materially from those in the forward-looking statements as a
result of various factors, including but not limited to those set forth below.

Important assumptions and other important factors that could cause actual
results to differ materially from those in the forward-looking statements
include, but are not limited to: (i) risks associated with leverage, including
cost increases due to rising interest rates; (ii) risks associated with our
ability to successfully integrate all of our recent acquisitions; (iii) our
ability to make effective acquisitions in the future and to successfully
integrate newly acquired businesses into existing operations and the risks
associated with such newly acquired businesses; (iv) changes in laws and
regulations, including changes in tax rates, accounting standards, environmental
laws, occupational, health and safety laws; (v) access to foreign markets
together with foreign economic conditions, including currency fluctuations;
(vi) the effect of, or changes in, general economic conditions; (vii) weather
conditions that are adverse to our specific businesses, and (viii) the outcome
of litigation, claims and assessments involving us.

Other factors and assumptions not identified above may also be involved in the
derivation of forward- looking statements, and the failure of such other
assumptions to be realized as well as other factors may also cause actual
results to differ materially from those projected.



                                       25

<PAGE>   31


           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk from changes in interest rates on debt
obligations that impact the fair value of these obligations. The Company's
policy is to manage interest rates through a combination of fixed and variable
rate debt. Currently, the Company does not use derivative financial instruments
to manage its interest rate risk. The table below provides information about the
Company's risk exposure associated with changing interest rates (amounts in
thousands):

<TABLE>
<CAPTION>
                                                    Expected Maturity During the Fiscal Year Ended October 31,
                                      ---------------------------------------------------------------------------------------
                                        2000             2001            2002           2003           2004        Thereafter
                                      --------         --------         ------         ------         ------       ----------
<S>                                   <C>              <C>              <C>            <C>            <C>          <C>
Variable rate debt:
   Amount                             $ 35,531               --             --             --             --             --
   Average interest rate                 11.45%              --             --             --             --             --
Fixed rate debt:
   Amount                             $    603         $  4,777         $   75         $   19         $   19         $   19
   Average interest rate                  9.00%           11.10%          9.00%          9.00%          9.00%          9.00%
Total:
   Amount                             $ 36,134         $  4,777         $   75         $   19         $   19         $   19
   Average                               11.06%           11.10%          9.00%          9.00%          9.00%          9.00%
</TABLE>

The above presentation does not reflect the $32.0 million WorldCom Advance
(refer to Note 10, "Debt" to the accompanying condensed consolidated financial
statements) that was converted into Series D stock in August 2000. Additionally,
the above presentation does not reflect the present value of future property
taxes payable (over a period of 20 years). On the April 30, 2000, condensed
consolidated balance sheet, the long-term portion of this liability totaled
$16.6 million and is reflected as "Property Taxes Payable," while the current
portion totaled $2.5 million and is reflected in "Accounts Payable and Accrued
Liabilities."

The fair value of our debt approximates its carrying value.

Although we conduct business in foreign countries, the international operations
were not material to our consolidated financial position, results of operations
or cash flows as of October 31, 1999. Additionally, foreign currency transaction
gains and losses were not material to the Company's results of operations for
the six months ended April 30, 2000 and 1999. Accordingly, we were not subject
to material foreign currency exchange rate risk from the effects that exchange
rate movements of foreign currencies would have on our future costs or on future
cash flows which we would receive from our foreign subsidiaries. To date, we
have not entered into any significant foreign currency forward exchange
contracts or other derivative financial instruments to hedge the effects of
adverse fluctuations in foreign currency exchange rates.



                                       26
<PAGE>   32


                                    BUSINESS

GENERAL OVERVIEW

We develop, build and maintain communications systems for companies and
government authorities. We have five main organizational groups. Each group is
comprised of subsidiaries of the Company with each having local executive
management functioning in a decentralized operating environment. We completed
operational restructuring of our subsidiaries during fiscal 1999. As a result,
we now have fourteen subsidiaries, eleven of which are wholly owned. We own at
least 80% of the remaining three subsidiaries. The table below shows these
subsidiaries in the operating group where the majority of their services are
categorized.

<TABLE>
<S>                       <C>                      <C>                              <C>                    <C>
                                                   AbleTelcom Holding
                                                         Corp.
                                                    Headquartered:
                                                     Atlanta, GA

Network Services          Network Development      Transportation Services          Construction           Communications
      Omaha, NE              ATLANTA, GA               Mt. Laurel, NJ                     Tampa, FL        Development
 FY99 Consolidated        FY99 CONSOLIDATED           FY99 Consolidated               FY99 Consolidated     Ft. Lauderdale, FL
  Revenue: 63%              REVENUE: --%                 Revenue: 9%                    Revenue: 27%       FY99 Consolidated
                                                                                                             Revenue: 1%

Adesta                    Adesta Ventures, Inc.    Adesta                           Georgia Electric         Able Telcom
Communications,Inc.       Ownership: 100%          Transportation,                  Company                International, Inc.
formerly                  Roswell, GA              Inc. formerly                    Ownership: 100%        Ownership: 100%
MFS Network                                        MFS Transportation               Albany, GA             Ft. Lauderdale, FL
Technologies, Inc.                                 Systems, Inc.
Ownership:  100%                                   Ownership: 100%
       Omaha, NE                                      Mt. Laurel, NJ

                                                   TransTech, Inc.                  Patton Management      Able Telcom CA
                                                   formerly                         Corp.                  Ownership: 80%
                                                   MFS TransTech, Inc.              Ownership: 100%             Venezuela
                                                   Ownership: 85%                        Tampa, FL
                                                       Mt. Laurel, NJ

                                                  Southern Aluminum &               Transportation Safety  Able Telcom Do
                                                  Steel Corp.                       Contractors, Inc.      Brasil, LTDA
                                                  Ownership: 100%                   Ownership: 100%        Ownership: 99.9%
                                                      Irondale, AL                        Tampa, FL              Brazil


                                                  SES of Florida, Inc.              Able                   Able Wireless, Inc.
                                                  Ownership: 100%                   Telecommunications     Ownership: 100%
                                                      Chantilly, VA                 & Power, Inc.          Ft. Lauderdale, FL
                                                                                    Ownership: 100%
                                                                                    Leesburg, FL
</TABLE>

The services provided by each operating group are as follows:

<TABLE>
<CAPTION>
         Organization Group                    Service Provided
         ------------------                    ----------------

         <S>                                   <C>
         Network Service.................      Design, development, engineering, installation, construction,
                                               operation and maintenance services for telecommunications
                                               systems.

         Network Development.............      Own, operate and maintain local and regional
                                               telecommunication networks.

         Transportation Services.........      Design, development, integration, installation,
                                               construction, project management, maintenance and
                                               operation of automated toll collection systems.

         Construction....................      Design, development, installation, construction,
                                               maintenance and operation of electronic traffic
                                               management and control systems, and road signage and
                                               telcom infrastructure construction.

         Communications Development......      Design, installation and maintenance services to
                                               foreign telephone companies in South America.
</TABLE>

In conjunction with our reorganization much of our executive management has
changed. We have replaced several executives and Group Presidents and have added
other senior people to our executive staff.



                                       27

<PAGE>   33

As part of our ongoing efforts to strategically align the profitable portions of
our business, the following steps were taken during the fiscal year ended
October 31, 1999 to discontinue the operations of, merge and/or manage
unprofitable subsidiaries:


         -        We assigned control of certain of our previously independent
                  operating subsidiaries (Patton and ATP) to the Construction
                  Group.

         -        We merged several of our previously independent operating
                  subsidiaries into currently profitable Construction Group
                  subsidiaries.

         -        As a result of significant turnover and the deterioration of
                  underlying contracts, we discontinued the operations of our
                  subsidiaries Dial and Able Integrated Systems, which together
                  used cash flow from operations of approximately $7.4 million
                  and $3.8 million during the fiscal years ended October 31,
                  1999 and 1998.

HISTORICAL DEVELOPMENT OF BUSINESS

We were incorporated in 1987 as "Delta Venture Fund, Inc.," a Colorado
corporation. We adopted our current name in 1989 and changed our corporate
domicile to Florida in 1991. We are presenting a proposal to shareholders at our
upcoming annual meeting to change our corporate name to "The Adesta Group, Inc."
Commencing in mid-1992 until mid-1994, 95 percent of our revenues and profits
were derived from telecommunication services provided primarily through two
majority owned subsidiaries located in Caracas, Venezuela. These services were
provided to one customer, CANTV, the Venezuelan national telephone company. To
decrease our exposure to foreign markets, in 1994, we expanded our business
focus by marketing our services in the southeastern United States, with the
acquisition of Florida-based Transportation Safety Contractors, Inc. and its
affiliates (collectively "TSCI"). TSCI installs and maintains traffic control
signage, signalization and lighting systems and performs outside plant
telecommunication services. The majority of TSCI's business is conducted in
Florida and Virginia with these states' respective Departments of Transportation
and various city and county municipalities.

To further expand in the domestic market and to facilitate a continued
acquisition program, we acquired the common stock of H.C. Connell, Inc. in
December 1995. Connell performs primarily outside plant telecommunication and
electric power services for local telephone and utility companies in central
Florida. Connell was renamed Able Telecommunications and Power, Inc. ("ATP") in
January 1999. In October 1996, we acquired the common stock of Georgia Electric
Company ("GEC"), headquartered in Albany, Georgia. GEC operates in eight
southeastern states and specializes in the installation, testing and maintenance
of intelligent highway and communication systems including computerized traffic
management, wireless and fiber optic data networks, weather sensors, voice data
and video systems and computerized manufacturing and control systems. In April
1998, we acquired the common stock of Patton Management Company ("Patton") of
Atlanta, Georgia which provides advanced telecommunication network services to
upgrade existing networks and to provide connectivity to office buildings, local
and wide area networks.

In July 1998, in a transaction that increased our revenues by approximately 300
percent, we acquired the network construction and transportation systems
business of MFS Network Technologies, Inc. from WorldCom, Inc. MFSNT was then
divided into two entities, 1) the network construction business became Adesta
Communications, Inc. and 2) the transportation systems business became Adesta
Transportation Systems, Inc. As part of the MFSNT acquisition, the Company,
WorldCom and MFSNT entered into a Master Services Agreement pursuant to which we
agreed to provide telecommunication infrastructure services to WorldCom on a
cost-plus 12 percent basis for a minimum of $40.0 million per year. For
additional detail about the MFSNT Acquisition, see the discussion under the
heading "Acquisition of Network Construction and Transportation Systems Business
of WorldCom and Issuance of Series B Securities" below.

In November 1999, we acquired the common stock of Southern Aluminum and Steel
Corporation ("SASCO") and Specialty Electronic Systems, Inc., renamed SES of
Florida, Inc. ("SES") which together provide expertise in design, installation
and project implementation of advanced highway communication networks and
Intelligent Transportation Systems.

In January 2000, we established Adesta Ventures, Inc. ("Adesta Ventures") which
will own, operate and maintain local and regional telecommunication networks as
part of our Network Development Group. Adesta Ventures is a development company
that is expected to require significant capital expenditures related to network
construction and which is not expected during fiscal 2000 to generate
significant net income or earnings before interest, depreciation, taxes and
amortization. Our ability to grow Adesta Ventures and to implement its business
plan will be dependent on our ability to fund our capital expenditure


                                       28

<PAGE>   34

needs, either internally or through borrowings and the sale of equity. No
assurance can be given that we will be able to meet Adesta Ventures' funding
needs on a timely basis or at all, on terms acceptable to us, or that Adesta
Ventures will ever be profitable.


                                       29

<PAGE>   35


BRACKNELL MERGER

On August 24, 2000, we announced that we had entered into an agreement to merge
with Bracknell Corporation of Toronto in a stock-for-stock transaction with a
conversation rate of 0.6 shares of Bracknell's common stock for each share of
our common stock. The completion of this merger is conditioned upon a number of
items, including the receipt of regulatory and shareholder approval and the
receipt by Bracknell of appropriate financing. Bracknell is a leading provider
of value-added facilities and structure services to businesses across North
America, servicing customers in the technology, telecommunications, industrial
and commercial sectors.

In connection with our signing the merger agreement with Bracknell, and to
comply with certain terms of our settlement with Sirit which is described below,
we entered into a new Master Services Agreement with WorldCom which extends the
term of that agreement and provides for a minimum purchase of $55.0 million by
WorldCom each year. WorldCom also agreed to vote in favor of the merger with
Bracknell when it is proposed to our shareholders. Further, WorldCom converted
$37,000,000 of our indebtedness to WorldCom for advances under the Master
Services Agreement into our Series D Preferred Stock. The Series D Preferred
Stock is convertible into our common stock at a price of $10.01 per share. For a
description of the terms of our Series D preferred stock see the discussion
under the heading "Description of Securities -- Preferred Stock -- Series D
Convertible Preferred Stock." Further, WorldCom agreed to extend the term of our
$4.5 million note payable to WorldCom to a seven-year, 8% interest rate note. As
extended, this note will expire on July 12, 2007.

ACQUISITION OF NETWORK CONSTRUCTION AND TRANSPORTATION SYSTEMS BUSINESS OF
WORLDCOM AND ISSUANCE OF SERIES B SECURITIES

In a transaction consummated on July 2, 1998, we acquired the network
construction and transportation systems businesses of WorldCom from its indirect
subsidiary MFS Network Technologies, Inc. The business acquired provides design,
development, engineering, installation, construction, operation and maintenance
services for telecommunication systems, as well as design, development,
integration, installation, construction, project management, maintenance and
operation of automated toll collection systems, electronic traffic management
and control systems and computerized manufacturing systems. These businesses are
now operated by our subsidiaries Adesta Communications and Adesta
Transportation.

The acquisition was accounted for using the purchase method of accounting at a
total price of approximately $67.5 million of which $30 million was paid by
issuance of a promissory note to WorldCom. In addition, in connection with the
acquisition, we granted an option to WorldCom to purchase up to 2,000,000 shares
of our common stock, at an exercise price of $7.00 per share and the right to
receive, upon satisfaction of certain conditions, phantom stock awards or stock
appreciation rights, ("SARs") equivalent to up to 600,000 shares of common
stock, payable in cash, stock or a combination of both at our option. For a
discussion of the terms of the WorldCom securities, see the discussion under the
heading "Description of Securities -- The WorldCom Option and the WorldCom
SARs."

In conjunction with the acquisition, we entered into a Master Services Agreement
with WorldCom to provide telecommunications infrastructure services to it, which
was recently amended as stated above to provide for WorldCom to receive services
for a minimum of $55.0 million per year through July 1, 2006. The agreement
further calls for WorldCom to pay an aggregate sum of not less than $390
million, including a fee of 12% of reimbursable costs under the agreement.

A portion of the consideration for the acquisition of the MFS Network
Technologies businesses from WorldCom was cash. To generate a portion of the
cash, we issued 4,000 shares of Series B Convertible Preferred Stock and
warrants to purchase up to an aggregate of 1,000,000 shares of our common stock
at an exercise price of $19.80.

As a result of conversions and redemptions of the Series B Preferred Stock, no
shares remain outstanding. In addition to the warrants initially granted to the
Series B investors, in connection with redemptions of and amendment of the terms
of the Series B securities we granted additional warrants to the Series B
investors. As of August 30, 2000, warrants to purchase an aggregate of 570,000
shares remain outstanding. For a discussion of the Series B warrants, see
"Description of Securities -- Warrants." Shares issuable upon exercise of these
Series B warrants are being offered through this prospectus.

THE SERIES C SECURITIES

In February 2000, we created and sold 5,000 shares of a new series of preferred
stock, the Series C Convertible Preferred Stock, and warrants to purchase
200,000 shares of common stock at $10.75 a share, for aggregate gross proceeds
of $15 million to us. We used a portion of this $15 million to repurchase
certain of our remaining shares of Series B Convertible Preferred Stock and the
rest for general working capital purposes.

In connection with our settlement of the Sirit litigation, we modified the terms
of the Series C Convertible Preferred Stock and agreed to issue to the Series C
Convertible Preferred Stock holders additional warrants to purchase 375,000
shares of common stock at $6.00 per share and to purchase 375,000 shares of
common stock at $8.00 per share.

For a discussion of the Series C Convertible Preferred Stock, see "Description
of Securities -- Preferred Stock -- Series C Convertible Preferred Stock." For a
discussion of the Series C warrants, see "Description of Securities --
Warrants." Shares issuable upon conversion of the Series C Convertible Preferred
Stock and upon exercise of the Series C warrants are being offered through this
prospectus.


                                       30

<PAGE>   36


 ACQUISITION OF SASCO AND SES

On November 5, 1999, we acquired all of the outstanding common stock of Southern
Aluminum & Steel Corporation ("SASCO") along with Specialty Electronic Systems,
Inc. ("SES"). SASCO has operations in Birmingham, Cape Canaveral and Atlanta and
has 40 years experience in surveillance systems, signalization, Intelligent
Transportation Systems ("ITS") and roadway lighting. It provides expertise in
design, installation, and project implementation of advanced highway
communication networks. SES is a systems/integration company in the ITS market,
having designed, fabricated, installed and integrated ITS systems in 11 states
from the East Coast to Ohio and Texas.

Consideration for SASCO and SES was 75,000 shares of common stock with a value
of approximately $0.7 million. In addition to the initial consideration, an
earn-out provision provides that additional consideration can result from
attaining certain performance measurements. The additional consideration can be
earned over a four-year period. We recorded this transaction using the purchase
method of accounting. The pro forma effect on consolidated results of
operations, from the acquisition of SASCO and SES, is not material.

The earn-out consideration for year one (ending October 31, 2000) will be
converted into our common stock by dividing the earn-out consideration by $8.00.
The earn-out consideration for year two through year four will be converted into
our common stock by dividing the earn-out consideration by the 52-week average
of the closing market price of our common stock for each


                                       31

<PAGE>   37


respective year.

The consideration is to be paid in shares of our common stock. If the combined
consideration calculated pursuant to the terms of the two agreements, and which
includes the initial consideration and the earn-out consideration, ever equals
19.9 percent of the total Company common stock issued and outstanding, any and
all consideration in excess of 19.9 percent of issued and outstanding Company
common stock shall be paid in cash or promissory notes, as mutually agreed upon
by the Company and the former shareholders, at the time of payment and shall
include interest calculated on the notes at a market rate.

On a combined basis, SASCO and SES have total assets of less than $2.0 million
and are expected to generate third-party revenues during fiscal year 2000 of
approximately $15.0 million.

SERVICES, MARKETS AND CUSTOMERS

We conduct five distinct types of business activities, four of which are
primarily conducted in the United States and one of which is conducted abroad.
Domestically we provide network services, network development, transportation
services and construction. Abroad, principally in Venezuela, we conduct
communication development activities. Each of these activities is discussed in
more detail below. In most of our business activities we face competitors that
may be larger and may have substantially greater financing, distribution and
marketing resources than us.

NETWORK SERVICES GROUP. The Network Services Group provides telecommunications
network services through two divisions: (i) the Telecommunications Systems
Integration Division provides general contracting services for large-scale
telecommunications projects, and (ii) the Telecommunications Construction
Division specializes in the construction of network projects or project phases.

We provide turnkey telecommunications infrastructure solutions through the
Telecommunications Systems Integration Division. As a telecommunications systems
integrator, we provide "one-stop" capabilities that include project development,
design, engineering, construction management, and ongoing maintenance and
operations services for telecommunications networks. The projects include the
construction of fiber networks that provide advanced digital voice, data and
video communications and wireless infrastructure deployment.

Our Telecommunications Construction Division provides construction and technical
services for building both outside plant and inside plant telecommunications
systems. Outside plant services are large-scale installation and maintenance of
coaxial and fiber optic cable (installed either aerially or underground) and
ancillary equipment for digital voice, data and video transmissions. These
installations are most often undertaken to upgrade or replace existing
communications networks. Inside plant services, also known as premise wiring,
include design, engineering, installation and integration of telecommunications
networks for voice, video and data inside customers' facilities. We provide
outside plant telecommunications services primarily under hourly and per unit
basis contracts to local telephone companies. We also provide these services to
long distance telephone companies, electric utility companies, local
municipalities and cable television multiple system operators.

NETWORK DEVELOPMENT GROUP. Our Network Development Group was established during
fiscal 2000 to design, engineer, construct, operate and maintain
state-of-the-art, "future proof" (designed for low cost upgrades to avoid
obsolescence), fiber optic networks providing virtually unlimited bandwidth, and
a comprehensive suite of cutting edge multimedia telecommunications services for
users in cities with populations between 50,000 and 250,000.

TRANSPORTATION SERVICES GROUP. Our Transportation Services Group provides
"one-stop" electronic toll and traffic management solutions for intelligent
transportation system infrastructure projects, including project development and
management, design, development, integration, installation, engineering,
construction, and systems operation and maintenance. Additionally, we have and
continue to develop proprietary software and applications designed to support
these systems. The electronic toll and traffic management segment of the
intelligent transportation system industry uses technology to automate toll
collection for bridges and highways allowing for "non-stop" toll collection.
Electronic toll and traffic management systems use advanced scanning devices to
identify a vehicle's type, combined with the user's account information, as the
vehicle passes a tolling station and immediately charges the appropriate toll to
the user's account. In addition, significant support systems must be developed
to maintain electronic toll and traffic management accounts, and process
violations. We developed automatic vehicle identification technology jointly
with Texas Instruments and used it in many of its electronic toll and traffic
management projects. The Transportation Services Group markets its services to
state and local government transportation departments. No significant new
projects have been undertaken since 1999.

CONSTRUCTION GROUP. Our Construction Group installs and maintains traffic
control and signalization devices. These services include the design and
installation of signal devices (such as stop lights, crosswalk signals and other
traffic control devices) for rural and urban traffic intersections, drawbridge
and railroad track signals and gate systems, and traffic detection


                                       32

<PAGE>   38


and data gathering devices. We also design, develop, install, maintain and
operate "intelligent highway" communications systems that involve the
interconnection of data and video systems, fog detection devices, remote
signalization or computerized signage. These systems monitor traffic conditions,
communicate such conditions to central traffic control computers, and provide
real-time responses to dynamic changes in traffic patterns and climate
conditions by changing speed limit display devices, lowering traffic control
gates, or changing the text on remote signs and signals. We also install and
maintains computerized manufacturing systems for various industrial businesses.
Many of the functions of the Construction Group, particularly those involved in
intelligent highway systems, complement those of the Network Services Group.

COMMUNICATIONS DEVELOPMENT GROUP. Our Communications Development Group operates
primarily in Venezuela. Their activities consist of management of the joint
venture arrangements, which were formed to provide telecommunication
installation and maintenance services to privatized local phone companies. These
joint ventures are in the form of subsidiaries in which we have an 80% voting
and ownership interest and a 50% share of profits and losses.

INDUSTRY AND GEOGRAPHIC AREA SEGMENT INFORMATION

Sales to unaffiliated customers, income (loss) from operations, and identifiable
assets pertaining to the groups in which we operate are presented below (in
thousands).

<TABLE>
<CAPTION>
                                                For the Three Months        For the Six Months          For the Fiscal Years Ended
                                                  Ended April 30,            Ended April 30,                   October 31,
------------------------------------------------------------------------------------------------------------------------------------
                                                  2000       1999              2000       1999          1999        1998        1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>           <C>             <C>          <C>            <C>        <C>        <C>
Sales to unaffiliated customers:
Network Services                             $ 72,369      $ 86,420        $134,923     $134,942       $260,354   $ 62,243   $    --
Transportation Services                        29,699        29,201          46,129       40,902         39,394     24,455        --
Construction                                   28,221         7,151          55,337       39,009        113,948    125,270    82,171
Communication Development                       1,537           957           2,352        1,956          4,869      5,329     4,163
----------------------------------------------------------------------------- ------------------------------------------------------
                                             $131,826      $123,729        $238,741     $216,809       $418,565   $217,297   $86,334
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations:
Network Services                             $   (551)       $7,601        $  4,499     $ 11,277       $ 14,746   $  6,272        --
Transportation Services                       (32,665)       (5,915)        (45,723)      (4,493)       (10,618)     2,586        --
Construction                                      777        (2,244)           (885)      (2,258)        (5,730)     1,718     4,824
Communication Development                          13            13            (183)        (152)           346        182        17
Unallocated Corporate Overhead                   (856)       (2,312)         (1,376)      (4,710)          (628)       651        --
------------------------------------------------------------------------------------------------------------------------------------
                                             $(33,282)     $ (2,857)       $(43,668)    $   (336)      $ (1,884)  $ 11,409   $ 4,841
------------------------------------------------------------------------------------------------------------------------------------
Identifiable assets:
Network Services                             $185,617      $151,939        $185,617     $151,939       $139,460   $159,660   $    --
Transportation Services                        38,685        47,918          38,685       47,918         50,178     48,830        --
Construction                                   72,314        63,865          72,314       63,865         66,667     71,941    44,751
Communication Development                       3,270         3,468           3,270        3,468          3,813      4,496     2,509
Corporate                                       3,965         5,678           3,965        5,678          1,915      5,833     3,086
------------------------------------------------------------------------------------------------------------------------------------
                                             $303,851      $272,868        $303,851     $272,868       $262,033   $290,760   $50,346
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

DEPENDENCE UPON KEY CUSTOMERS

We derive a significant portion of our revenues from a few large customers.
Those customers are as follows

<TABLE>
<CAPTION>
                                                                   For the Months Ended         Percentage of Total Revenues During
                                                                      April 30, 2000             The Fiscal Years Ended October 31,
Customer                              Operating Group                 Three       Six               1999         1998       1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>                           <C>           <C>                <C>          <C>          <C>
New Jersey Consortium                Transportation and            $25,716       $44,294            18%           7%           --
                                     Network Services
WorldCom                             Network Services               29,506        55,368            15%          14%           --
Williams Communications, Inc.        Network Services                  620         2,435            12%           --           --
Cooper Tire Company                    Construction                  3,727         7,277             3%           6%          15%
Florida Power Corp.                    Construction                  4,589         8,525             3%           2%           9%
State of Illinois (ISTHA)            Network Services                  798         1,385             2%           8%          12%
</TABLE>

We are party to multiple contracts with the New Jersey Consortium ("New Jersey
Consortium Contracts") which includes the New Jersey Turnpike Authority, New
Jersey Highway Authority, Port Authority of New York and New Jersey, South
Jersey Transportation Authority, and the State of Delaware Department of
Transportation/ The New Jersey Consortium Contracts generally provide for us to
(i) construct a fully integrated electronic toll collection ("ETC") system; (ii)
maintain the related Customer Service Center ("CSC") and Violations Processing
Center ("VPC") for periods of up to 10 years; and (iii) construct and maintain a
supporting fiber optic network. The estimated future gross revenues from the New
Jersey Consortium Contracts are projected to be at least $167 million, including
estimated minimum revenues of $51.4 million for VPC operations and $40.0 million
for fiber network operations and maintenance billable over the duration of the
agreements.

As of October 31, 1999, the Company estimated that the electronic toll
collection (ETC) construction segment of the New Jersey Consortium Contracts
would generate total margins of approximately $2.6 million. Based upon an
estimated completion percentage of 30 percent, the Company had recorded job-to-
date margins of $0.8 million through October 31, 1999.

During the three months ended January 31, 2000, the Company determined through
its ongoing analyses of the ETC construction segment of the New Jersey
Consortium Contracts (i.e., excluding the VPC and fiber network construction and
long-term service contracts) that costs to be incurred were expected to exceed
amounts billable by approximately $7.7 million. The change from October 31,
1999, related primarily to changes in estimated costs associated with changing
design specifications and certain near-term milestones. The loss recognized in
the January quarter was approximately $8.2 million, including costs incurred in
the quarter, reversal of previously recognized profit, and a loss reserve
accrual of $4.7 million for the remaining projected loss.

During the three months ended April 30, 2000, we continued negotiation of a
comprehensive amendment that was executed on June 1, 2000. While the scope of
work for the remainder of the project was clarified, we made significant
concessions to arrive at resolution and estimated losses for the construction
portion of the contract were revised to $35.3 million, resulting in a loss for
the quarter of $27.6 million. The remaining loss expected to be incurred in
completing the contract and accrued at April 30, 2000 was $17.1 million.

The loss was partially attributable to vagaries in the original contract
language that made it extremely difficult for us to meet performance criteria
and targeted completion deadlines, resulting in penalties and costs in excess of
original estimates. In addition, we were forced to engage subcontractors on a
time and materials or cost-plus basis and experienced significant overruns in an
attempt to meet our contractual obligations. The June 2000 amendment reduced the
scope of the contract, provided previously undefined benchmarks, provided a
revised and extended schedule for completion of the project and resolved various
claims between the parties. At the same time, we negotiated a revised agreement
with our primary subcontractor, comprising the majority of remaining contract
costs, from time and materials to a fixed price. While these agreements reduced
the uncertainty of some of the remaining costs on the project, they also
eliminated the opportunity to recover certain previously incurred costs.

The revised schedule includes several significant milestone dates. If not met,
the Consortium will have the right to terminate the contracts, including the VPC
and fiber maintenance contracts. If terminated, we would lose the opportunity to
earn potential future profits from these long-term service contracts.

At April 30, 2000, we had billed and unbilled receivables of $26.1 million and
$14.4 million, respectively, related to WorldCom and $15.1 million and $15.8
million, respectively, related to the New Jersey Consortium.

The loss of the New Jersey Consortium, WorldCom or any other major customers
could have a material adverse effect on our business, financial condition and
results of operations.



                                       33

<PAGE>   39


SUPPLIERS AND RAW MATERIALS

We have no material dependence on any one supplier of raw materials.

CONSTRUCTION CONTRACTS. For construction contracts, we obtain fixed price or
cost-plus contracts for projects, either as a prime contractor or as a
subcontractor, on a competitive bid basis. Typically, for prime contracts, a
state department of transportation ("DOT") or other governmental body provides a
set of specifications for the project. We then estimate the total project cost
based on input from engineering, production and materials procurement personnel
and submit a bid along with a bid bond. For most government-funded projects, the
scope of work extends across many industry segments. In those cases, we
subcontract our expertise to a prime contractor. We must submit performance
bonds on substantially all contracts obtained. Our financial viability is
dependent on maintaining adequate bonding capacity and any loss of such could
have a material adverse effect on us.

Government business is, in general, subject to special risks, such as delays in
funding, termination of contracts or subcontracts for the convenience of the
government or default by a contractor, reduction or modification of contracts or
subcontracts, changes in governmental policies, and the imposition of budgetary
constraints. Our contracts with governmental agencies provide specifically that
such contracts are cancelable for the convenience of the government.

Contract duration is dependent on the size and scope of a project but typically
is from six months to three years. Contracts generally set forth date-specific
milestones and provide for liquidated damages for failure to meet the
milestones. During fiscal 1999, we were subject to liquidated damages relating
to the "Violations Processing Center" portion of the New Jersey Consortium
Contract amounting to approximately $4.9 million.

In most cases, we supply the materials required for a particular project,
including materials and component parts required for the production of highway
signage and guardrails and the assembly of various electrical and computerized
systems. Aluminum sheeting, steel poles, concrete, reflective adhesive, wood
products, cabling and electrical components are the principal materials
purchased domestically for the production of highway signage and guard railing.
Conduit and fiber optic cable are the major materials purchased for network
development. Generally, the supply and costs of most materials has been and is
expected to continue to be stable, and we are not dependent upon any one
supplier for these materials. We also purchase various components for the
assembly of various electrical, lighting and computerized traffic control
systems. Many of these materials must be certified as meeting specifications
established by the customer. The unavailability of those components could have
an adverse impact on meeting deadlines for the completion of projects which may
subject us to liquidated damages; however, the availability of these materials,
generally, has been adequate.

NETWORK DEVELOPMENT CONTRACTS. For development and construction of
telecommunication networks we contract with customers to develop and construct
conduit and/or fiber-optic cable for specific routes, normally on a negotiated
price basis. In those instances that we are responsible for obtaining
right-of-way usage, we contract with owners of rights of way. The development
and project management is done by our employees; construction is normally
sub-contracted, and we normally provide the material used.

Certain projects are "co-development" projects, whereby we undertake building
out routes which include fiber-optic capacity for several customers. When such
projects are on right of way such as interstate highways, we enter into
contracts with right-of-way owners, generally providing compensation to such
holders in the form of network systems or revenue sharing.

Projects to develop or expand local fiber-optic networks are done either on
fixed-price or cost-plus basis. Generally, we manage such projects and
sub-contract the construction activity.

Many network development contracts are several years in duration.

SERVICE CONTRACTS. We generally provide telecommunication, cable television,
electric utility and manufacturing system services (i.e., non-governmental
business) under comprehensive operation and maintenance and master service
contracts that either give us the right to perform certain services at
negotiated prices in a specified geographic area during the contract period or
pre-qualify us to bid on projects being offered by a customer. Contracts for
projects are awarded based on a number of factors such as price competitiveness,
quality of work, on-time completion and the ability to mobilize equipment and
personnel efficiently. We are typically compensated on an hourly or per unit
basis or, less frequently, at a fixed price for services performed. Contract
duration is either for a specified term, usually one to three years, or is
dependent on the size and scope of the project. In most cases, our customers
supply most of the materials required, generally consisting of cable, equipment
and hardware, and we supply the expertise, personnel, tools and equipment
necessary to perform its services.

SALES AND MARKETING

We market our systems integration services through a dedicated sales group. Our
salespeople market directly to existing and potential customers, including
municipalities and other government authorities and telecommunications
companies. Our salespeople work with those responsible for project development
and funding to facilitate network design and funding procurement.

Typically, the contracting process for systems integration projects entails the
development of a list of qualified bidders and the establishment of a bid
schedule, the distribution of, and response to, a request for proposal ("RFP"),
and the awarding of the contract to an approved service provider. Important
elements in determining the qualifications of a bidder are its reputation, its
previous projects and its ability to secure bonding for the project. The selling
cycle, which may be as much as 24 months in


                                       34

<PAGE>   40


duration, is protracted due to the scope and complexity of the services
provided.

We market our telecommunications services to local and long distance telephone
companies, utility companies, local municipalities and certain corporations with
particular communications needs. In addition, we market our construction
services to certain systems integrators. A dedicated sales force, as well as
members of each subsidiaries' senior management, actively market our services.
Additionally, we market our transportation construction services to state and
local departments of transportation, public/private toll authorities and certain
international authorities.

Major development projects in which we retain an ownership interest after
completion, such as our current Colorado Department of Transportation ("CDOT")
projects, are marketed in differing ways. We contract for access to the right of
way and, simultaneously, contact various carriers whom we believe, based upon
our industry awareness, may have an interest in obtaining fiber capacity for a
particular route. As development and construction get underway we continue to
contact potential users of the capacity being built so that, by the time a
particular segment is completed, all capacity not being retained is sold.
Contracts with the customers normally provide for mobilization payments and
progress payments.

COMPETITION

NETWORK SERVICES GROUP. The Telecommunications Systems Integration Division of
the Network Services Group competes for business in two segments: the
traditional request for proposal ("RFP")/bid based segment for the installation
and integration of infrastructure projects and a less traditional "project
development" segment. Our largest competitors in the traditional RFP/bid based
segment are telecommunications service providers. The Telecommunications Systems
Integration Division has identified and pursued the "project development"
segment as a "niche" market for its services, providing network alternatives to
large public agencies, utilities and telecommunications service providers
through the use of public-private partnerships and other financing models unique
to the industry. These customers often must choose between building their own
networks and using an existing telecommunication service provider's network.
Once a customer has decided to build its own network, we assist the customer in
preparing a viable and customized project business plan that addresses the
customer's specific telecommunications needs, including budgetary and other
concerns. We also have focused on "project development" opportunities presenting
ownership or participation opportunities that can generate recurring revenues.
We believe that no other company provides this kind of complete, turnkey project
development service for these customers.

The Telecommunications Construction Division competes for business with several
large competitors. In addition, the Telecommunications Construction Division
also competes in a market characterized by a large number of smaller size
private companies that compete for business generally in a limited geographic
area or with few principal customers. The Telecommunications Construction
Division's largest competitors are MasTec, Inc. and Dycom Industries, Inc.

NETWORK DEVELOPMENT GROUP. The large metropolitan areas such as New York, Los
Angeles, Chicago and Atlanta, already have an Incumbent Local Exchange Carrier
("ILEC") and multiple Competitive Local Exchange Carriers ("CLECs") competing
for their large, high volume, business base. In addition, due to the high
density of apartment complexes, many have more than one cable company.

In contrast, the cities of 50,000 to 250,000 people that the Network Development
Group is targeting typically have an ILEC, one cable company and in some cases,
facilities-based CLECs each targeting a limited area of business. In most cases
both the cable company and the ILEC have legacy infrastructures with very
limited capability to provide modern services.

TRANSPORTATION SERVICES GROUP. The Transportation Services Group believes its
major competitor in the North American market is Transcore. Chase Manhattan and
Lockheed Martin are also competitors in this area.

CONSTRUCTION GROUP. The market in which the Construction Group competes is
characterized by large competitors who meet the experience, bonding and
licensure requirements for larger projects and by small private companies
competing for projects of $3 million or less in limited geographic areas. The
Construction Group's largest competitors include Dycom Industries, Inc. and
MasTec, Inc. The Construction Group has several smaller competitors some of
which may be larger, may have substantially greater financial, distribution and
marketing resources, and may have more established reputations than ours.

COMMUNICATION DEVELOPMENT GROUP. The Communications Development Group competes
for business in the international market, primarily in Latin America. The
operations of the Communications Development Group are in Venezuela and Brazil.
In Venezuela, the market is characterized by a single customer, CANTV, the
telephone company of Venezuela, and a large number of smaller private companies
that compete for business generally in a limited geographic area. In Brazil, the
market consists of myriad smaller companies competing for a growing but limited
market, which forces margins down.


                                       35

<PAGE>   41

BACKLOG


Our estimated backlog at May 30, 2000, was as follows (in thousands):

                                                    Operations and

                                    Construction     Maintenance

 Organizational Group                Contracts        Contracts         Total

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

Network Services                      $376,000         $111,000        $487,000

Transportation Services                110,000          110,000         220,000

Construction                           138,000           29,000         167,000

--------------------------------------------------------------------------------
                                      $624,000         $250,000        $874,000
--------------------------------------------------------------------------------

We expect to complete approximately 40% of the total backlog within the next
fiscal year. In many instances our customers do not commit to the volume of
services to be purchased under a contract but commit to obtain these services
from us if they are not performed internally. Our contracts commit us to perform
these services if requested by the customer. Many of the contracts are
multi-year agreements, ranging up to 20 years. We include the full amount of
services projected to be performed over the life of the contract in backlog due
to our historical relationships with our customers and experience in
procurements of this nature. Contract backlog of $500 million is under
performance bonds and we may be subject to liquidated damages for failure to
perform in a timely manner. Our backlog may fluctuate and does not necessarily
indicate the amount of future sales. A substantial amount of our order backlog
can be canceled at any time without penalty except, in some cases, we can
recover actual committed costs and profit on work performed up to the date of
cancellation. Cancellations of pending purchase orders or termination or
reductions of purchase orders in progress by our customers could have a material
adverse effect on our business, operating results and financial condition. In
addition, there can be no assurance as to customers' requirements during a
particular period or that such estimates at any point in time are accurate.

RESEARCH AND DEVELOPMENT: PROPRIETARY TECHNOLOGY AND RIGHTS

We acquired proprietary software in the MFSNT acquisition including applications
at the lane, plaza, host, and customer service center levels within a
sophisticated electronic toll collection system architecture. Prior to the MFSNT
acquisition, MFSNT had also developed a proprietary video and data multiplexing
system used for surveillance, monitoring, and system audit purposes. The
benefits of this proprietary software include reduced operating costs, non-stop
tolling, reduced traffic congestion, efficient traffic management, and increased
revenue accountability. However, we can make no assurances that products will
not be developed in the future that will produce the same or a better result or
be produced in a more economical manner. In connection with completion of
electronic toll collection projects, we have continued to refine the software.



                                       36

<PAGE>   42


We rely on a combination of contractual rights, patents, trade secrets,
know-how, trademarks, non-disclosure agreements, licenses and other technical
measures to establish and protect our proprietary rights and to protect our
proprietary applications and technologies. To the extent necessary, we intend to
vigorously defend any and all rights we have, now or in the future, in our
proprietary applications and technologies. However, we can make no assurances
that we will be successful in pursuing any of our rights or, if successful, that
it will be timely.

EMPLOYEES

At August 30, 2000, the Company and its subsidiaries had approximately 2,000
employees. The number of employees considered as laborers can vary significantly
according to contracts in progress. Such employees are generally available to
the Company through an extensive network of contacts within the communications
industry.

PROPERTIES

Our corporate offices are in Roswell, Georgia, where we occupy 6,600 square feet
under a lease that expires July 31, 2004. We also lease 5,110 square feet of
office space under a lease that expires January 31, 2004 in West Palm Beach,
Florida, which we are currently negotiating to sublet. We lease 35,815 square
feet of office space in Omaha, Nebraska, under a lease that expires September
30, 2004 and which houses Adesta Communications, and 40,111 square feet in Mt.
Laurel, New Jersey, under a lease that expires February 28, 2003 and which
houses Adesta Transportation. We lease 6,800 square feet of space in Fort
Lauderdale, Florida, under a lease, which expires September 30, 2003, which
facility is presently available for sublet. We lease several field offices and
numerous smaller offices. We also lease on a short-term or cancelable basis
temporary equipment yards or storage locations in various areas as necessary to
enable it to efficiently perform its service contracts.

We own (subject to a mortgage) and operate a 10,000 square foot facility for
operations based in Chesapeake, Virginia. Our Venezuelan subsidiaries own and
operate from a 33,000 square foot floor of an office building located in
Caracas, Venezuela, and lease an additional 50,000 square feet of covered
parking and shop facilities. We own a 15,000 square foot facility located on
approximately three acres of land for operations in Tampa, Florida. We also own
a small facility in Birmingham, Alabama.

We believe that our properties are in good condition and adequate for current
operations and, if additional capacity becomes necessary due to growth, other
suitable locations are available in all areas where we currently do business.
See "Commitments and Contingencies" in the Notes to the Consolidated Financial
Statements for additional information relating to leased facilities which
includes mortgage/lease obligations. Certain of our properties are subject to
federal, state and local provisions involving the protection of the environment.
Compliance with these provisions has not had and is not expected to have a
material effect upon our financial position.

LEGAL PROCEEDINGS

On or about September 10, 1998, Shipping Financial Services Corp. ("SFSC") filed
a lawsuit in the United States District Court for the Southern District of
Florida against the Company, its then Chairman of the Board Gideon Taylor, then
Chief Executive Officer Frazier L. Gaines, the Company's then Chief Accounting
Officer, Jesus Dominguez, and then Chief Financial Officer Mark A. Shain
(collectively the "Defendants"). At or near that time, six additional plaintiffs
filed substantially similar lawsuits. By order dated December 30, 1998, all of
these cases have been consolidated with the SFCS case. The plaintiffs assert
claims



                                       37

<PAGE>   43


under the federal securities laws against us and four of our officers
that the defendants allegedly caused us to falsely represent and mislead the
public with respect to:

         -        two acquisitions: the MFSNT Acquisition and the acquisition of
                  the COMSAT Contracts, and

         -        our ongoing financial condition as a result of the
                  acquisitions and the related financing of those acquisitions.

The plaintiffs seek an unspecified amount of damages and attorneys' fees.
Additionally, plaintiffs are expected to seek certification as a class action on
behalf of themselves and all others similarly situated persons. We have moved to
dismiss the action and discovery is stayed during the pendancy of this motion.
We intend to vigorously defend this matter. An adverse outcome in this lawsuit
or in other shareholder lawsuits would likely have a material adverse effect
upon Able's consolidated financial position, results of operations and cash
flow.

In May 1998, SIRIT Technologies, Inc. filed a lawsuit against us and Thomas M.
Davidson, a former member of our Board of Directors. Sirit sued for tortious
interference, fraudulent inducement, negligent misrepresentation and breach of
contract in connection with our acquisition of Adesta Communications and Adesta
Transportation from WorldCom. In May 2000, the jury awarded Sirit compensatory
damages against us in the amount of $1.2 million and punitive damages in the
amount of $30.0 million. Additionally, the Court assessed punitive damages
against Mr. Davidson.

In July 2000, we and Sirit, among others, entered into a settlement agreement
which resulted in the court's entry of a consent judgment vacating the $31.2
million judgment. As part of the Sirit settlement, we agreed to issue Sirit and
its affiliates, subject to using our best efforts to obtain shareholder
approval,

         -        4,074,597 shares of our common stock, and

         -        an additional 936,914 shares of common stock at such time as
holders of the Series C Convertible Preferred Stock have converted their shares
of Series C Convertible Preferred Stock into common stock. This amount assumes
that the Series C Convertible Preferred Stock has a $15.0 million face value and
is converted at a conversion price of $4.00 per share, which numbers were
accurate as of July 17, 2000.

         We also made a cash payment to Sirit of $5,000,000. If we do not secure
shareholder approval to issue the above described shares or fail to have the
registration statement of which this prospectus is a part declared effective by
November 30, 2000, we will be obligated under the settlement agreement to pay
Sirit $20,000,000 instead of issuing the shares. Sirit also has the right to buy
additional shares from us, if we sell additional shares within the next two
years, on the same terms as the shares are sold to third parties in an amount
sufficient to maintain its pro rata ownership of common stock. However, this
right will not apply if we sell shares at a price of at least $10.00 per share.

Holders of the Series B Convertible Preferred Stock and warrants and holders of
the Series C Convertible Preferred Stock and warrants modified their own rights
to help convince Sirit to enter into the settlement agreement.

In addition to the shares that Sirit may receive when the Series C Convertible
Preferred Stock is converted, if the holders of our Series B warrants or our
Series C Preferred Stock are entitled to additional shares of our common stock
or derivative securities, we must issue a pro rata portion to Sirit so that
Sirit maintains the same percentage ownership interest it had immediately prior
to the issuance. Sirit may acquire those shares for the same consideration as is
paid by the holders of the other securities.

If we are required to make any cash payments to the holders of our Series B
warrants or Series C Preferred Stock or warrants, including cash penalties and
redemption payments, Sirit will become entitled to additional shares of common
stock for no additional consideration. The number of shares to which they would
become entitled would be the amount of funds paid to the holders in excess of
$15,000,000, divided by $4.00. If any shares to which Sirit is entitled would
increase its percentage ownership above 19.99 percent, Sirit has the right to
those shares, but they will not be issued to Sirit without Sirit's consent.



                                       38

<PAGE>   44


In 1997, Bayport Pipeline, Inc. ("Bayport") filed a lawsuit against MFSNT
seeking a declaratory judgment concerning the rights and obligations of Bayport
and MFSNT under a Subcontract Agreement that was entered into on May 1, 1997
related to the NYSTA contract. The matter was referred to arbitration in January
1999. The total amount sought was not less than $5.5 million and subsequent to
October 31, 1999, was increased to $19 million.

On February 24, 2000, the independent arbitrator ruled that we owed Bayport $4.1
million. The Company has appealed the award in Federal District Court (Northern
District of Texas) and is subject to statutory interest from the date of the
award in the event the award is not overturned.

In 1997, U.S. Public Technologies, Inc. ("USPT") filed a lawsuit in the United
States District Court for the Southern District of California, (San Diego),
against MFSNT for breach of contract, breach of an alleged implied covenant of
good faith and fair dealing, tortuous interference, violation of the California
Unfair Competition Act, promissory estoppel and unjust enrichment in connection
with a Teaming Agreement between MFSNT and USPT concerning the Consortium
Regional Electronic Toll Collection Implementation Program in the state of New
Jersey. In this lawsuit, USPT seeks actual damages in excess of $8.5 million and
unspecified exemplary damages. On April 4, 2000, the magistrate judge extended
the discovery deadline until May 31, 2000, set July 14, 2000, as the deadline
for MFSNT to file its expert report, and set the pretrial for October 2, 2000.

In 1999, Newbery Alaska, Inc. ("Newbery") filed a demand for arbitration
seeking approximately $3.8 million. This dispute arises out of Newbery's
subcontract with MFSNT related to the fiber optic network constructed by MFSNT
for Kanas. Newbery's claims are for the balance of the subcontract, including
retainage and disputed claims for extras based on alleged deficiencies in the
plans and specifications and various other alleged constructive change orders.
In June 2000, the arbitrator awarded Newbery $2.7 million plus fees of
approximately $0.3 million and interest on the award of 8 percent until payment
to Newbery is made. Interest on the award through August 31, 2000, totals
approximately $55,000. We are challenging the arbitrators award in Federal
District Court (Alaska) and intend to appeal the ruling, if necessary.

In 1998, Alphatech, Inc. ("Alphatech") filed a lawsuit in the U.S. District
Court in Massachusetts against MFSNT. This suit alleges ten counts, including
breach of Teaming Agreements on the E-470 project and the New Jersey Regional
Consortium project, breach of implied duty of good faith and fair dealing on
both projects, misappropriation of trade secrets, deceit, violation of
Massachusetts General Laws Chapter 93A, promissory estoppel, quantum meruit, and
unjust enrichment. Alphatech's claim is for $15 million. The court has denied
our motion for summary judgment on breach of contract claims and granted our
motion for summary judgment on the Chapter 93A claim. The lawsuit has not yet
been set for trial.

The Company is subject to other lawsuits and claims for various amounts which
arise out of the normal course of its business. The Company intends to
vigorously defend itself in these matters. The Company does not believe that any
of these suits will have a material adverse effect on the Company's financial
position.



                                       39

<PAGE>   45


                                   MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information, as of August ___, 2000 about
each person who is currently a Company director or executive officer.

<TABLE>
<CAPTION>
    Name                                   Age               Position
    ----                                   ---               --------
    <S>                                    <C>               <C>
    Billy V. Ray, Jr.                      42                Chief Executive Officer and Chairman of the
                                                             Board of Directors


    Edwin D. Johnson                       43                President, Chief Financial Officer, Director


    Frazier L. Gaines                      60                Former Chief Executive Officer, now President
                                                             - Able Telcom International


    Charles C. Maynard                     56                Chief Operating Officer


    James E. Brands                        63                Senior Executive Vice President


    Michael Brenner                        52                General Counsel and Executive Vice President


    Edward Z. Pollock                      61                Associate General Counsel


    Robert Sommerfeld                      50                President - Adesta Communications


    Philip A. Kernan, Jr.                  49                President - Adesta Transportation


    J. Barry Hall                          50                President - Transportation Safety
                                                             Contractors, Inc.


    Richard A. Boyle                       46                President - Patton Management Corp.
</TABLE>

All directors are elected annually at our Annual Meeting of Shareholders and
hold office following election or until their successors are elected and
qualified. Once elected, the newly elected Directors will determine who will
serve as members of our Audit Committee, Compensation Committee and Nominating
Committee. The chief executive officer is elected by and serves at the
discretion of our Board of Directors. All other executive officers are appointed
by the Chief Executive Officer.

BILLY V. RAY, JR. has served as our Chief Executive Officer since December 1,
1998. From December 1, 1998 to May 2000, Mr. Ray also served as our President.
Mr. Ray has served as a director since March 5, 1999 and was elected as Chairman
of the Board of Directors on May 12, 2000. Mr. Ray also served as our acting
Chief Financial Officer from November 30, 1998 to February 2000. From October 1,
1998 to November 30, 1998, Mr. Ray was our Executive Vice President of Mergers
and Acquisitions and Treasurer. From May 1998 to October 1998 and from January
1997 to June 1997, Mr. Ray served as a consultant to us. Mr. Ray served as our
Chief Financial Officer from June 1997 to April 1998. From December 1995 to
January 1997 and from April 1997 to July 1997, Mr. Ray was the President of
Ten-Ray Utility Construction, Inc., a utility construction company. During a
part of that period, he also served as a consultant to Alcatel, a maker of
intelligent highway systems.

EDWIN D. JOHNSON joined the Company in May 2000 and serves as President, Chief
Financial Officer and a director. From November 1998 to April 2000, Mr. Johnson
served as Executive Vice President and Chief Financial Officer of Mortgage.com,
an on-line banking and lending company. From March 1996 to June 1998, Mr.
Johnson served as Chief Financial Officer of



                                       40

<PAGE>   46


MasTec, Inc., a telecommunications infrastructure company. From January 1995 to
March 1996, Mr. Johnson was a private real estate consultant.

FRAZIER L. GAINES was one of our Directors from August 1992 through March 19,
1999 and has served as President of Able Telcom International, Inc., one of our
wholly owned subsidiaries, since June 1994. Mr. Gaines served as our Interim
President and Chief Executive Officer from March 1998 to November 1998. From
1992 to 1994, Mr. Gaines was our Chief Operating Officer.

CHARLES C. MAYNARD was named Chief Operating Officer of the Company in February
2000. From July 1999 to January 2000, Mr. Maynard was an independent
communications consultant primarily for Able. From July 1997 to June 1999, Mr.
Maynard served as the Chief Executive Officer of International Satellite Group
(INSAT), a satellite telephone sales and rental company. From October 1996 to
June 1997, Mr. Maynard was an independent communications consultant to
Cybernetic Services, Inc. From October 1992 to September 1996, Mr. Maynard
served as the Managing Director, U.S. Business Development, of TeleDiffusion de
France (TDF), a division of French Telecom, which was established to develop an
international messaging network for the worldwide logistic industry.

JAMES E. BRANDS has served as our Senior Executive Vice President since March
1999. From November 1997 to March 1999, Mr. Brands was the CFO of Wilson Pest
Control, Inc., a pest control services company. From July 1997 to November 1997.
Mr. Brands served as the Executive Vice President and a Director of KBAS, Inc.,
an employee leasing company and from February 1997 to July 1997, he was the CFO
of Arrow Exterminators, which provides pest control services. From January 1993
to March 1995, Mr. Brands served as Chairman, CEO and a Director of Marquest
Medical Products, Inc. (NASDAQ: MMPI), which manufactures disposable products
for respiratory, pulmonary and related medical segments and also served as Vice
Chairman, CFO and a director of Scherer Healthcare, Inc. (Nasdaq:SCHR), which
was involved in disposable medical products, pharmaceutical development and
medical waste management.

MICHAEL BRENNER joined the Company in May 2000 and serves as General Counsel and
Executive Vice President. From November 1998 to April 2000, Mr. Brenner served
as General Counsel to Mortgage.com, an on-line mortgage and lending company.
From July 1995 to November 1998, Mr. Brenner served as deputy city attorney for
West Palm Beach, Florida.

EDWARD Z. POLLOCK became our General Counsel in November 1998; he became
Associate General Counsel in May 2000. From 1963 to 1998, Mr. Pollock was a sole
practitioner at the law firm of Edward Z. Pollock.

ROBERT SOMMERFELD was named President of Adesta Communications, Inc. in April
2000. From August 1998 to April 2000, Mr. Sommerfeld served as Vice President of
Business Development for Adesta Communications, Inc., formerly MFS Network
Technologies, Inc. ("MFSNT"). Prior to our purchase, Mr. Sommerfeld served MFSNT
as project manager since its inception in 1988, which was formed as a subsidiary
of Peter Kiewit Sons', Inc.

PHILIP A. KERNAN, JR. joined the company in February 2000 as President of Adesta
Transportation, Inc. From July 1997 to June 1999, Mr. Kernan served as President
and Chief Financial Officer of Skysite Communications, Inc, a satellite
communications company. From January 1994 to June 1997, Mr. Kernan served as
Vice President of David Werner International, an executive placement firm.

J. BARRY HALL serves as President of Transportation Safety Contractors, Inc.
("TSCI"). From October 1996 to October 1999, Mr. Hall served both as President
of TSCI and Georgia Electric Company. From 1990 to October 1996, Mr. Hall was
Vice President of Georgia Electric Company.

RICHARD A. BOYLE has been the President of Patton Management Corp., one of our
subsidiaries since March 1996. From May 1991 to March 1996, Mr. Boyle was Vice
President and General Manager of Wright & Lopez, Inc., a telecommunications
contractor.

RESIGNATIONS OF DIRECTORS DURING FISCAL YEARS 1998 AND 1999

During the fiscal year ended October 31, 1998, three of our directors, Robert C.
Nelles, John D. Foster and Richard J. Sandulli resigned to pursue other business
interests.

During the fiscal year ended October 31 1999, five of our directors resigned for
unrelated reasons. Gideon D. Taylor resigned in March 1999 to pursue other
business interests. Frazier L. Gaines resigned in March 1999 to devote time to
his duties as president of our wholly-owned subsidiary, Able Telcom
International. Robert Young resigned in May 1999 to devote more time to his
consulting business. Thomas Davidson resigned in January 2000 to devote more
time to his personal business. Jonathan Bratt resigned in February 2000 because
he found it difficult to attend board meetings from his residence in



                                       41
<PAGE>   47


Venezuela.

EXECUTIVE COMPENSATION

The following table contains summary information for the years indicated of
compensation to (i) those persons serving as our Chief Executive Officer during
the 1999 fiscal year, (ii) the other four of our most highly compensated
executive officers who were serving as such at October 31, 1999, and (iii) up to
two additional individuals who had served as one of our executive officers
during the 1999 fiscal year but who were not executive officers at October 31,
1999. The persons referred to in clauses (ii) and (iii) above generally are not
included in the table if they received total annual salary and bonus of $100,000
or less for the 1999 fiscal year end. The persons named in this table are
collectively referred to as the "Named Executive Officers".

                           Summary Compensation Table
                               Annual Compensation

<TABLE>
<CAPTION>
                                                                                               Long Term
                                                                                             Compensation
                                                                                             ------------

                                                                                  Other        Securities
                                                                                  Annual       Underlying
                                                                                  Compen-      Options      All other
                                                                                  sation          (6)/      Compensation
    Name and Principal Position           Year       Salary($)      Bonus($)        ($)         SARs(#)          ($)
<S>                                       <C>        <C>            <C>           <C>          <C>          <C>
Billy V. Ray, Jr. (1)                        1999       203,792       200,000       24,000        160,000           --
Chief Executive Officer and                  1998        48,462             0           --         35,000      110,818
Chairman of the Board of Directors           1997        34,615        40,000           --             --       56,961

Frazier L. Gaines (2)                        1999       201,138            --        2,500             --           --
Former Chief Executive Officer, and          1998       153,986            --           --        290,000        4,609
President - Able Telcom                      1997       110,000            --           --             --    1,024,375
International

Stacy Jenkins (4)                            1999       207,304        55,000        4,000        125,000           --
Former President of Adesta
Communications

Michael Arp (3)                              1999       149,565        30,000       24,000         65,000           --
Former Acting President - GEC and
      TSCI

J. Barry Hall (5)                            1999       240,000       150,000           --             --           --
President - Transportation Safety            1998       209,173             0           --             --       33,906

Richard Boyle (7)                            1999       159,000        70,000       19,200         65,000           --
President - Patton Management Corp.
</TABLE>

         (1)      Mr. Ray has served as our Chief Executive Officer since
                  December 1, 1998. From December 1, 1998 to May 2000, Mr. Ray
                  also served as President. He served as acting Chief Financial
                  Officer from November 3, 1998 to February 2000. From October
                  1, 1998 to November 30, 1998, Mr. Ray served as Executive Vice
                  President of Mergers and Acquisition and Treasurer. From May
                  1998 to October 1998 and from January 1997 to June 1997, he
                  served as a consultant to us. From June 1997 to April 1998 he
                  served as our Chief Financial Officer. For 1999, other
                  compensation includes auto allowance of $6,000 and housing
                  allowance of $18,000. In 1998, other compensation included
                  consulting fees in the amount of $92,099, an automobile
                  allowance of $5,400, a housing allowance of $12,600 and health
                  insurance premiums paid on Mr. Ray's behalf of $719. In 1998,
                  25,000 options expired during the time Mr. Ray served as our
                  consultant. In 1997, other annual compensation includes
                  compensation for consulting services rendered prior to Mr.
                  Ray's appointment in June 1997, as our Chief Financial
                  Officer, and a travel and housing allowance.
         (2)      Mr. Gaines served as our President and Chief Executive Officer
                  from March 1998 through November 30, 1998. Prior thereto, Mr.
                  Gaines was President of Able Telcom International, Inc. (a
                  position which he continues to hold). For 1999, other
                  compensation includes an auto allowance of $2,500. For 1998,
                  other compensation includes an automobile allowance of $4,500
                  and health insurance premiums paid by us on Mr. Gaines behalf
                  in the amount of $109. For 1997, other compensation consists
                  of an automobile allowance, a housing allowance and an amount
                  of $991,375, which represents the difference between the price
                  paid by Mr. Gaines upon the exercise of certain stock options
                  and the fair market value of the underlying common stock on
                  the date of exercise.
         (3)      Mr. Arp is no longer employed by us but will receive severance
                   pay in the amount of $15,000 monthly through December 2000.
                   Mr. Arp joined us in January 1999. In 1999, Mr. Arp's other
                   compensation included a $1,500 monthly housing allowance and
                   a $5,000 auto allowance.



                                       42
<PAGE>   48


                  Mr. Arp served as Acting President of Georgia Electric Company
                  and Transportation Safety Contractors, Inc. from November 1999
                  to March 2000.
         (4)      Mr. Jenkins' other compensation includes $4,000 for automobile
                  allowance. Mr. Jenkins resigned from the Company in March
                  2000.
         (5)      In 1998, other compensation includes a housing allowance of
                  $24,000, an automobile allowance of $7,800 and contributions
                  to our 401K plan of $2,106.
         (6)      Includes options that have not yet been approved by
                  shareholders.
         (7)      Mr. Boyle's other compensation includes a housing allowance of
                  $14,400 plus an automobile allowance of $4,800.

         OPTION/SAR GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
                                                                                            Potential Realizable
                                                                                              Value at Assumed
                                                                                              Annual Rates of
                                                                                                Stock Price
                                                                                              Appreciation for
                              Individual Grants                                                 Option Term
  ------------------------------------------------------------------------------------    -------------------------
                         Number of       % of Total
                         Securities     Options/SARs
                         Underlying      Granted to          Exercise or
                        Options/SARs      Employees in        Base Price        Expiration
  Name                 Granted (#)(1)    Fiscal Year (2)        ($/Sh)              Date          5% ($)      10% ($)
  ----                 --------------    ---------------        ------              ----          ------      -------
  <S>                   <C>              <C>                 <C>                <C>              <C>         <C>
  Billy V. Ray               10,000            0.4%              $5.75           12/31/00          5,894       12,075
                            100,000            3.7                5.75           12/31/00         90,634      190,325
                             50,000            1.8               6.375           05/07/03         61,958      147,931
  Frazier L. Gaines         260,000            9.5                5.75           12/31/00        153,237      313,950
                             30,000            1.1                5.75           07/03/04         42,352       92,384
  Stacy Jenkins             100,000            3.6                5.75           04/12/02         99,790      211,024
                             25,000            0.9               6.375           04/12/02         24,481       51,318
  Michael Arp                40,000            1.5                5.75           12/31/00         49,566      106,743
                             25,000            0.9               6.375           05/07/03         34,346       73,965
  J. Barry Hall                  --             --                  --                 --             --           --
  Richard Boyle              65,000            2.4               6.375           05/07/01         42,473       87,018
</TABLE>

------------------
(1) Each option has anti-dilution provisions for stock splits, stock dividends
    and similar events.
(2) Based on 2,734,000 options granted to employees during fiscal year 1999.

          OPTION EXERCISES AND PERIOD END VALUES

          No options were exercised during the last fiscal year by the Named
          Executive Officers. As of August 17, 2000, there were 150,000 options
          that were "in-the-money." Options are "in-the-money" if the exercise
          price is less than or equal to the market price of our common stock.
          These options are exercisable at $2.44 per share and the closing price
          for our common stock on August 17, 2000 was $2.50 per share.

          The following table sets forth information regarding exercisable and
          unexercisable stock options held as of October 31, 1999 by the named
          executive officers.

                    AGGREGATE FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>

                             Number of Securities                Value of Unexercised
                           Underlying Unexercised              In-the-Money Options at
                         Options at Fiscal Year-end                Fiscal Year End
                         ---------------------------         ---------------------------
Name                     Exercisable   Unexercisable         Exercisable   Unexercisable
----                     -----------   -------------         -----------   -------------
<S>                      <C>           <C>                   <C>           <C>
Bill V. Ray                127,000         33,000              $377,995       $80,355
Frazier L. Gaines          290,000             --               887,400            --
Stacy Jenkins               83,500         16,500               250,198        40,178
Michael Arp                 36,750         28,250               101,986        81,288
J. Barry Hall                   --             --                    --            --
Richard Boyle               43,500         21,500               105,923        52,353
</TABLE>


          DIRECTOR COMPENSATION

          Our directors who are not our employees and who do not own more than
          5% of any class of our outstanding capital stock ("Non-Affiliate
          Directors") are currently paid $12,000 annually plus $750 for each
          committee meeting attended and are reimbursed for expenses associated
          with Board responsibilities. In addition, pursuant to Able's 1995
          Stock Option Plan, as amended, Non-Affiliate Directors currently
          receive one-time automatic grants of options to purchase 5,000 shares
          of common stock as of the date the Non-Affiliate Director is initially
          elected or appointed, at an exercise price equal to the fair market
          value at the date of grant.

          In April 1998, we granted options to purchase 10,000 shares of common
          stock to all directors, which grants were outside the Plan. These
          options are subject to shareholder approval. Employee directors
          receive no



                                       43

<PAGE>   49

         additional fees or remuneration for acting in their capacity as one of
         our directors.

         On May 7, 1999 and as ratified on May 12, 2000, our Board of Directors
         voted to increase the annual fees paid and to make additional annual
         grants of options under the 1995 Stock Option Plan to Non-Affiliate
         Directors as described in the table below. The options grants are
         subject to shareholder approval at our annual meeting.

<TABLE>
<CAPTION>
                                                                                                NUMBER OF
                                                                                                 OPTIONS
                               POSITION                                    FEES                 (ANNUALLY)
                               --------                                    ----                 ----------

          <S>                                                         <C>                        <C>
          Chairman of the Board                                       $2,500 per month           15,000
          Board Member (other than Chairman of the Board)             $1,750 per month           10,000
          Audit Committee Chairman                                    $1,000 per meeting          2,000
          Audit Committee Member                                      $  750 per meeting          1,000
          Compensation Committee Chairman                             $1,000 per meeting          2,000
          Compensation Committee Member                               $  750 per meeting          1,000
          Nominating Committee Chairman                               $1,000 per meeting          2,000
          Nominating Committee Member                                 $  750 per meeting          1,000
</TABLE>

          The fees described above will be paid on a monthly basis so long as
          the Non-Affiliate Director attends at least 65% of properly noticed
          meetings. Any adjustments to fee payments will be done on a quarterly
          basis.

          During fiscal 1998 and fiscal 1999, the following options were granted
          to our directors as additional compensation for service as directors,
          some of whom no longer serve in that capacity and will not stand for
          reelection. The terms of these option grants are summarized below.
          Those of our directors who also serve or have served as our employees
          have received option grants in their capacity as employees as is
          discussed elsewhere in this proxy statement.

<TABLE>
<CAPTION>
                                               NUMBER                                  DATE OF           EXPIRATION
           DIRECTOR                          OF SHARES           GRANT PRICE       INITIAL GRANT(1)         DATE
           --------                          ---------           -----------       ----------------      ----------
<S>                                         <C>                  <C>               <C>                   <C>
Thomas M. Davidson (2)                      20,000                  $5.75             12/31/98             12/31/04
                                            10,000                  $6.25               5/7/99               5/8/01

John D. Foster (3)                          10,000(4)               $6.20              4/24/98               7/3/04
                                            20,000(4)              $11.93              4/24/98               7/3/04

Robert C. Nelles (5)                        10,000(4)               $6.20              4/24/98               7/3/04
                                            20,000(4)            $11.9375              4/24/98               7/3/04
                                            15,000(4)               $5.34              2/19/98              9/19/05

Richard J. Sandulli (6)                     10,000(4)               $6.20              4/24/98               7/3/04
                                            20,000(4)            $11.9375              4/24/98               7/3/04

C. Frank Swartz (7)                         20,000                  $5.75             12/31/98             12/31/04
                                            10,000                  $6.75               6/9/99               5/9/02

Robert H. Young (8)                         10,000                  $6.25               5/7/99               5/8/01

Alec McLarty (9)                            10,000                  $8.75              7/29/99              7/29/02
</TABLE>

(1)      On December 31, 1998, in an effort to correct a number of ambiguities
         in the minutes of the Board of Directors' meetings, and in order to
         comply with the incentive stock option terms of our 1995 Stock Option
         Plan, our Board of Directors rescinded all of the then issued option
         grants prior to December 31, 1998, with the exception of the grants to
         Mr. Nelles, Mr. Foster and Mr. Sandulli which met the requirements of
         the Plan. The Board then reissued new options outside of the Plan as
         reflected in the table in the amounts set forth above at the calculated
         fair market value per share on December 31, 1998, which was $5.75.
         However, because these new options were granted outside the Plan, the
         Company was required to make the grants subject to shareholder approval
         to comply with the Nasdaq rules.

(2)      Mr. Davidson resigned from our Board of Directors in January 2000.



                                       44

<PAGE>   50


(3)      Mr. Foster resigned from our Board of Directors on June 5, 1998.
(4)      Non-qualified stock options granted pursuant to our 1995 Stock Option
         Plan.
(5)      Mr. Nelles resigned from our Board of Directors on May 5, 1998
(6)      Mr. Sandulli resigned from our Board of Directors on August 25, 1998.
(7)      Mr. Swartz and Mr. McLarty are standing for reelection for our Board of
         Directors.
(8)      Mr. Young resigned from our Board of Directors in May 1999.

The options granted outside the Stock Option Plan, including those in the chart
granted to Messrs. Bratt, Davidson and Swartz, are subject to shareholder
approval.

THE ABLE TELCOM HOLDING CORP. 1995 STOCK OPTION PLAN, AS AMENDED

We adopted the 1995 Stock Option Plan (the "Plan") pursuant to which 550,000
shares of common stock were originally authorized for issuance. In April 1998,
our shareholders approved amendments to the Plan to increase the number of
shares outstanding under the Plan to 1,300,000. We intend to amend our
registration statement on Form S-8 to register an additional 750,000 shares of
common stock currently reserved for issuance under the Plan. Assuming we obtain
shareholder approval to increase the number of shares reserved under the Plan to
5 million shares, we will amend our registration statement on Form S-8
to register an additional 5 million shares.

We may grant Nonqualified Stock Options and Incentive Stock Options, and
restricted stock under the Plan to Non-Affiliate Directors, key employees,
advisors and consultants. With respect to the grant of awards under the Plan to
persons other than Non-Affiliate Directors, the Board of Directors, or a
committee appointed by the Board of Directors will determine persons to be
granted stock options and restricted stock, the amount of stock to be optioned
or granted to each such person, and the terms and conditions of any stock
options and restricted stock. Our Plan defines a "Non-Affiliate Director" as a
person who is not our employee and who does not own more than 5 percent of our
outstanding capital stock.

An Incentive Stock Option is intended to qualify as an incentive stock option
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended. Any Incentive Stock Option granted under the Plan will have an exercise
price of not less than 100% of the fair market value of the shares on the date
on which such option is granted. With respect to an Incentive Stock Option
granted to a Participant who owns more than 10% of the total combined voting
stock of the Company or any parent or subsidiary of the Company, the exercise
price for such option must be at least 110% of the fair market value of the
shares subject to the option on the date the option is granted. An option to
purchase common stock that does not meet the Code's requirements for Incentive
Stock Options is a Nonqualified Stock Option. Generally, a restricted stock
award will not require the payment of any option price by the Participant but
will call for the transfer of shares to the Participant subject to forfeiture,
without payment of any consideration by the Company, if the Participant's
employment terminates during a "restricted" period (which must be at least six
months) specified in the award of the restricted stock.

Amendments to the Plan are being submitted for shareholder approval at our next
annual meeting of shareholders currently planned for late September or early
October. These amendments include:

- increasing the number of shares of Common Stock which may be issued pursuant
  to awards granted from 1,300,000 to 5,500,000,

- increasing the number of options granted to Non-Affiliate Directors from a
  one-time grant of 5,000 options to an annual grant of 10,000 options,

- granting additional options, on an annual basis, to Non-Affiliate Directors
  who serve as Chairman of the Board of the Company, or as Chairman or as a
  member of a Board committee, and

- extending the exercise period of the date of grants to Non-Affiliate Directors
  to the earlier of (A) September 19, 2005, or (B) the date which is two years
  after the date that such Non-Affiliate Director is no longer serving as a
  director.

EMPLOYMENT AGREEMENTS

BILLY V. RAY, JR., Chief Executive Officer and Chairman of the Board of
Directors, is party to an employment agreement, dated June 15, 2000 with us (the
"Ray Employment Agreement"). The Ray Employment Agreement terminates on May 1,
2003, and provides that Mr. Ray is to be paid a salary of $350,000 per year,
plus a housing allowance of $1,800 per month and an automobile allowance of $500
per month, as well as health and life insurance benefits for the term of the
agreement. The Ray Employment Agreement also provides for a minimum bonus of
$150,000 annually, and stock options for 150,000 shares which were fully vested
upon grant and are exercisable at $2.84 per share, fair market value at the date
of grant. These options expire on July 15, 2010 and are subject to shareholder
approval. This grant was in addition to a grant dated February 21, 2000 to
purchase 100,000 shares of common stock at an exercise price equal to the fair
market value of the common stock on the date our shareholders approve this
additional grant and which will vest immediately on the date approval is
received from the shareholders and a grant dated December 31, 1998 to purchase
100,000 shares of common stock at an exercise price of $5.75 per share. The
February 21, 2000 options vest immediately on the date approval is received from
the shareholders and the



                                       45
<PAGE>   51


December 31, 1998 options vested immediately upon grant. These options were
issued to Mr. Ray under previous employment agreements all of which were
otherwise superceded by the Ray Employment Agreement. The Ray Employment
Agreement also contains a covenant by Mr. Ray not to compete with us for a
period of three years following termination of his employment. Should Mr. Ray's
employment be terminated without cause, or should Mr. Ray elect to terminate his
employment following a change of control, Mr. Ray will be entitled to a lump sum
payment equal to three times his current base salary and bonus, and to the
continuation of certain fringe benefits for three years after the date of
termination. To the extent he incurs any federal excise taxes on the severance
benefits, he is entitled to be reimbursed by us for those tax consequences. On
May 7, 1999, Mr. Ray was granted options to purchase 50,000 shares of common
stock at $6.37 per share, one third of which vested May 7, 1999, one third of
which vested May 31, 2000 and one third of which will vest on May 31, 2001.

EDWIN D. JOHNSON, President and Chief Financial Officer is a party to an
employment agreement, dated May 8, 2000 with us (the "Johnson Employment
Agreement"). The Johnson Employment Agreement terminates on May 7, 2003 and
provides that Mr. Johnson is to be paid a salary of $300,000 per year, plus an
automobile allowance of $1,500 per month, as well as health and life insurance
benefits for the term of the agreement. The Johnson Employment Agreement also
provides for a minimum bonus of $150,000 annually and stock options for 150,000
shares, which were fully vested upon grant and are exercisable at $2.44 per
share, fair market value at date of grant. These options expire on May 7, 2010
and are subject to shareholder approval. The Johnson Employment Agreement also
contains a covenant by Mr. Johnson not to compete with us for a period of three
years following termination of his employment. Should Mr. Johnson's employment
be terminated without cause, or should Mr. Johnson elect to terminate his
employment following a change of control, Mr. Johnson will be entitled to a lump
sum payment equal to three times his current base salary and bonus, and to the
continuation of certain fringe benefits for three years after the date of
termination. To the extent he incurs any federal excise taxes on the severance
benefits, he is entitled to be reimbursed by us for those tax consequences.

FRAZIER L. GAINES, President of Able Telcom International, Inc., is party to an
employment agreement, dated November 12, 1998 with us (the "Gaines Employment
Agreement"). The Gaines Employment Agreement terminates on November 11, 2001,
may be extended for one additional year by mutual agreement, allows for a
consulting agreement to be signed at the end of the initial three year term, and
provides that Mr. Gaines is to be paid a salary of $200,000 per year, plus
health and life insurance and a monthly automobile allowance of $500. The Gaines
Employment Agreement also provides that we will pay all health and life
insurance benefits plus $60,000 per year for the number of years equal to Mr.
Gaines' years of service currently 11 years and payable beginning at Mr. Gaines'
termination date. The Gaines Employment Agreement also contains a covenant by
Mr. Gaines not to compete with us for a period of three years following
termination of his employment. The Gaines Employment Agreement also provides
that if Mr. Gaines' employment is terminated with cause Mr. Gaines will be
entitled to 30 days prior notice. However, should Mr. Gaines' employment be
terminated without cause, Mr. Gaines will be paid one-year's severance plus
regular health and insurance benefits. $100,000 of this amount would be payable
immediately upon termination with the remainder of the $100,000 payable within
45 days from termination. In addition, the Gaines Employment Agreement provides
for the grant of options to purchase 100,000 shares of common stock, subject to
approval by our Board of Directors, which vest over a three year period, or
immediately upon either a change in control or ownership of us. To date, these
options have not been approved by our Board of Directors and thus have not yet
been granted.

CHARLES C. MAYNARD, Chief Operating Officer, is a party to an employment
agreement dated February 21, 2000 with us (the "Maynard Employment Agreement").
The Maynard Employment Agreement terminates on February 20, 2003 and provides
that Mr. Maynard is to be paid a salary of $240,000 per year, plus insurance and
other benefits. The Maynard Employment Agreement also provides that if Mr.
Maynard's employment is terminated with cause, that Mr. Maynard will be entitled
to 90 days prior notice. However, if Mr. Maynard's employment is terminated
without cause, Mr. Maynard will be paid out the remainder of his contract plus
fringe benefits without any rights of mitigation. In addition, the Maynard
Employment Agreement provides for the grant of options to purchase 200,000
shares of common stock, subject to approval of our shareholders, which will vest
over a two-year period at prices ranging from $6.00 to $9.50 per share.

JAMES E. BRANDS, Senior Executive Vice President, is party to a consulting and
employment agreement, dated March 15, 1999 with us (the "Brands Employment
Agreement"). The Brands Employment Agreement terminates on April 5, 2001, and
may be extended by mutual agreement for an additional one-year period. The
Brands Employment Agreement provides that Mr. Brands was paid (i) a consulting
fee of $20,000 for the period commencing March 15, 1999 and ending May 15, 1999,
and (ii) a salary of (A) $5,750 for the period between April 2, 1999 to April
30, 1999, and (B) $2,500 for the period between May 1, 1999 to May 31, 1999 and
that will be paid at least $12,500 per month from June 1, 1999 through April 5,
2001; provided that if another executive or management employee other than a CEO
is hired during the initial term of the Brands Employment Agreement at a rate of
more than $12,500 per month, Mr. Brands' monthly rate shall immediately become
the same as such employee. Mr. Brands is also entitled to an automobile
allowance of $500 per month or at our option, we may provide Mr. Brands with a
late model Lincoln Town Car and reimbursement of its operating costs, a housing
allowance of $1,500 per month effective August 1, 1999 (during the period April
2, 1999 to July 31, 1999, Mr. Brands was reimbursed for actual expenses
incurred), plus health and life insurance benefits. However, no housing
allowance has been paid to Mr. Brands. In addition, the Brands Employment
Agreement provides for the grant of options to purchase 100,000 shares of common
stock at $6.375 per share, of which 75,000 vested as of April 5, 1999 and 25,000
vested June 21, 2000. Shareholder approval is required for these options. The
exercise period terminates two years from each vesting date. Mr. Brands was
granted a salary increase to $175,000 per year as of January 1, 2000 and to
$240,000 per year as of February 21, 2000.



                                       46
<PAGE>   52


MICHAEL BRENNER, General Counsel and Executive Vice President, is party to an
employment agreement, dated May 3, 2000 with us (the "Brenner Employment
Agreement"). The Brenner Employment Agreement terminates on May 2, 2003 and
provides that Mr. Brenner is to be paid a salary of $200,000 per year, plus an
automobile allowance of $1,000 per month, as well as health and life insurance
benefits. The Brenner Employment Agreement also calls for a minimum bonus of
$50,000 annually, and stock options for 100,000 shares, which vest immediately
and are exercisable at $2.69 per share, fair market value at date of grant.
These options expire on May 2, 2010 and are subject to shareholder approval. The
Brenner Employment agreement also contains a covenant by Mr. Brenner not to
compete with us for a period of three years following termination of his
employment. Should Mr. Brenner's employment be terminated without cause, or
should Mr. Brenner elect to terminate his employment following a change of
control, he will be entitled to a lump sum payment equal to three times his
current base salary and bonus, and to the continuation of certain fringe
benefits for three years after the date of termination. To the extent he incurs
any federal excise taxes on the severance benefits, he is entitled to be
reimbursed by us for those tax consequences.

EDWARD POLLOCK, Associate General Counsel, is party to an employment agreement,
dated January 1, 1999 with us (the "Pollock Employment Agreement"). The Pollock
Employment Agreement terminates on December 31, 2000 and provides for Mr.
Pollock to be paid an initial salary of $10,000 per month for the period from
January 1, 1999 to June 30, 1999, increased to $11,000 per month for the period
from July 1, 1999 to December 31, 1999, increased to $12,000 monthly for the
period from January 1, 2000 to June 30, 2000, and increased to $12,500 monthly
for the period from July 1, 2000 to December 31, 2000. In addition, the Pollock
Employment Agreement provides an automobile allowance of $300 per month, plus
health insurance and other benefits. The Pollock Employment Agreement may be
extended for an additional two-year period by mutual agreement. The Pollock
Employment Agreement also contains a covenant by Mr. Pollock not to compete with
us for a period of three years following termination of his employment. The
Pollock Employment Agreement also provides that if Mr. Pollock's employment is
terminated with cause, Mr. Pollock will be entitled to 90 days prior notice.
However, should Mr. Pollock's employment be terminated without cause, Mr.
Pollock will be paid out the remainder of his contract. In addition, the Pollock
Employment Agreement provides for the grant of options to purchase 40,000 shares
of common stock, as approved by our Board of Directors, which vest over a three
year period (20,000 options vested on January 1, 1999, 10,000 options vested on
January 1, 2000 and 10,000 options will vest on January 2, 2001), unless there
is a change in control or ownership of us, in which case, the options vest.
Effective May 7, 1999, Mr. Pollock's salary increased to $150,000 per year and
he was granted options to purchase 25,000 shares at $6.375 per share, one-third
of which vested as of May 7, 1999, one-third vested on May 7, 2000 and one-third
will vest on May 7, 2001. All of these options are subject to shareholder
approval. The exercise period for the options granted on May 7, 1999 to Mr.
Pollock commences as of the date of vesting and continues through the earlier of
(i) September 19, 2005 or (ii) two years from the date he is no longer employed
by us.

PHILIP A. KERNAN, Jr., President of Adesta Transportation, is a party to an
employment agreement dated February 21, 2000 with us (the "Kernan Employment
Agreement"). The Kernan Employment Agreement terminates on February 20, 2003 and
provides that Mr. Kernan is to be paid a salary of $182,000 per year, plus
insurance and other benefits. The Kernan Employment Agreement also provides that
if Mr. Kernan's employment is terminated with cause, that Mr. Kernan will be
entitled to 90 days' prior notice. However, if Mr. Kernan's employment is
terminated without cause, Mr. Kernan will be paid out the remainder of his
contract plus fringe benefits without any rights of mitigation. In addition, the
Kernan Employment Agreement provides for the grant of options to purchase
125,000 shares of common stock, subject to approval of our shareholders, which
will vest over a two-year period at prices ranging from $6.00 to $9.50 per
share.

J. BARRY HALL, President of Transportation Safety Contractors, Inc. ("TSCI"), is
party to an employment agreement dated October 12, 1996 with TSCI (the "Hall
Employment Agreement"). The Hall Employment Agreement terminates on October 11,
2001, and provides that Mr. Hall is to be paid a salary of $150,000 per year,
plus insurance and other benefits. The Hall Employment Agreement also contains a
covenant by Mr. Hall not to compete with us for a period of two years following
termination of his employment, unless we terminate the Hall Employment Agreement
for cause or if Mr. Hall terminates the agreement with good reason, in which
case the non-competition period will terminate after six (6) months (which
period may be extended by us up to one year in exchange for additional
compensation). Effective May 7, 1999, Mr. Hall received a cash bonus of
$100,000, based upon compensation that has been assigned to Mr. Hall from Gerry
Hall, a former Chief Executive Officer of ours.

RICHARD A. BOYLE, President of the Patton Management Group, is party to an
employment agreement, dated April 1, 1998 with us (the "Boyle Employment
Agreement"). The Boyle Employment Agreement terminates on March 31, 2000, and
provides that Mr. Boyle is to be paid a salary of $159,000 per year, plus
insurance and other benefits. The Boyle Employment Agreement also contains a
covenant by Mr. Boyle not to compete with us for a period of two years following
termination of his employment. Also, pursuant to the terms of the Patton
Management Corporation acquisition documents, Mr. Boyle's non-competition
agreement has been extended for one additional year by mutual agreement. The
Boyle Employment Agreement also provides that if Mr. Boyle is terminated with
cause, Mr. Boyle will not be entitled to any notice. Effective May 7, 1999, Mr.
Boyle was granted options to purchase 65,000 shares of common stock at $6.375
per share, one-third of which vested as of May 7, 1999, one-third vested on May
7, 2000 and one-third vest on May 7, 2001. The exercise period for the options
granted on May 7, 1999 to Mr. Boyle commences as of the date of vesting and
continues through the earlier of (i) September 19, 2005 or (ii) two years from
the date Mr. Boyle is no longer employed by us.



                                       47

<PAGE>   53

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During the fiscal year ended October 31, 1999, compensation for our executive
officers was determined by our Compensation Committee, consisting of Messrs. C.
Frank Swartz, H. Alec McLarty and Billy V. Ray, Jr. Mr. Swartz is Chairman of
the Committee and he and Mr. McLarty are the two non-employee members of the
Compensation Committee. In addition to being a director of Able, Mr. Ray is our
Chief Executive Officer. Mr. Ray excused himself from all discussions and
abstained from voting on any issues relating to the compensation and bonuses to
be paid to Mr. Ray as Chief Executive Officer.

In April 1998, we engaged Washington Equity Partners ("WEP") as an advisor in
connection with the MFSNT acquisition. At the time of the engagement, Mr. Thomas
A. Davidson, a member of our Board of Directors and a former member of the
Compensation Committee, who resigned as a director in January 2000, was Managing
Director of WEP. In connection with the engagement, we agreed to pay WEP a fee
if we consummated the financing of the MFSNT acquisition through an investor
contacted by WEP. We also committed to reimburse WEP for its reasonable travel
and out-of-pocket expenses (up to a maximum of $20,000 without prior approval)
incurred in connection with its engagement. Mr. Davidson subsequently left his
position as Managing Director of WEP in April 1998 and WEP assigned its rights
in the agreement to Mr. Davidson. Mr. Davidson became one of our directors in
June 1998. On October 21, 1998, we agreed with Mr. Davidson to pay him
$1,332,000 in satisfaction of amounts owing under our agreement with WEP. During
the 1999 fiscal year, Mr. Davidson was paid $350,000 of this amount and on April
30, 1999, Mr. Davidson converted the remaining $828,002 due, into 118,286 shares
of common stock at the then market price of $7.00 per share.

Mr. Davidson was a codefendant with us in the Sirit lawsuit described elsewhere
in this prospectus. Under our indemnification obligations to Mr. Davidson as a
director and now a former director, we have paid attorneys fees and costs for
the defense of this lawsuit. One counsel has represented us and Mr. Davidson so
it is not possible to segregate amounts paid on his behalf from the amounts paid
on our behalf. However, Mr. Davidson has benefited materially from these
payments. Mr. Davidson paid the settlement amount related to claims against him
without our assistance.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

On October 12, 1996, we acquired all of the issued and outstanding capital stock
of Georgia Electric Company ("GEC"), which prior to the acquisition was owned
equally by Gerry W. and J. Barry Hall (collectively, the "Halls"). Following the
acquisition, Gerry Hall was elected to our board of directors, and on June 12,
1997, was elected our President and Chief Executive Officer. Gerry Hall resigned
as our President, Chief Executive Officer and a director on March 2, 1998. Barry
Hall is president of our subsidiary Transportation Safety Contractors Inc. The
purchase price for the GEC acquisition was $3 million in cash, plus the issuance
at the end of each of the next five fiscal years of a number of shares of common
stock to be determined pursuant to a formula contained in the acquisition
agreement. The formula involves dividing a dollar figure derived from GEC's
actual pre-tax profits and operating margins compared with target profits and
margins for each fiscal year by a discounted per share price. The GEC
acquisition agreement was amended in February 1998 to increase the percentage
discount applicable to the price of the common stock for purposes of this
formula, thus increasing the potential earn-out consideration to the Halls. At
the same time the amendment limited the total market value of the shares of
common stock which could be issued under the agreement. In the event that GEC is
sold by us prior to the end of fiscal year 2001, we are obligated to issue to
Gerry Hall and Barry Hall a number of shares of common stock having a market
value (as determined in accordance with the contract) of $1 million for each
year that earn-out consideration remains payable. Gerry Hall's resignation as
our President, CEO and director had no relationship to the amendment to the
GEC acquisition Agreement. The shares issued to the Halls for fiscal year 1998
totaled 508,398 and for fiscal year 1999 totaled 204,944.

We have various agreements, and have entered into various transactions, with
WorldCom which beneficially owns 29.7% of our outstanding stock as of August 17,
2000. Among these agreements and transactions are the Master Services Agreement
and debt obligations and the conversion of debt into Series D Preferred Stock,
described elsewhere in the prospectus. We believe the terms of these agreements
are no less favorable to us than would have been obtained in arm's-length
transactions.

During fiscal 2000, we have loaned $300,000 to Edwin D. Johnson, our President,
$300,000 to Billy V. Ray, our Chief Executive Officer and Chairman and $200,000
to Michael Brenner, our General Counsel and Executive Vice President. Each of
these loans was made pursuant to requirements of the employment agreements
between us and these individuals. Interest accrues on these loans at the prime
rate and is payable annually. All outstanding principal and accrued interest is
due on the third anniversary of the loans to Messrs Johnson and Brenner and the
sixth anniversary of the loan to Mr. Ray.

In August 2000, we made a $2,000,000 loan to Billy V. Ray, Jr., our Chief
Executive Officer and Chairman. The purpose of this loan was to provide funds
for Mr. Ray to purchase a Certificate of Deposit which was then pledged on our
behalf to secure a performance bond required in connection with our performance
under a newly awarded contract. The bonding agency required that a third-party
provide collateral for such bond and, in light of our need to provide such
collateral quickly, Mr. Ray agreed to post a Certificate of Deposit if we would
loan the funds to him to purchase such Certificate of Deposit. The loan is
payable on or before June 30, 2001 and bears interest at a rate of 9.5 percent
per annum. The loan has been secured by a second priority pledge of the
Certificate of Deposit, but this security interest has not yet been perfected.

See also "Compensation Committee Interlocks and Insider Participation" regarding
certain related party transactions between members of our Compensation Committee
and with Mr. Thomas Davidson, one of our former directors.


                                       48

<PAGE>   54


                             PRINCIPAL SHAREHOLDERS

The following table shows, as of August 17, 2000 the common stock owned
beneficially by (i) each of our executive officers, (ii) each of our current
directors, (iii) all directors and executive officers as a group, and (iv) each
person known by us to be the "beneficial owner" of more than five percent of our
common stock. "Beneficial ownership" is a technical term broadly defined by the
Securities and Exchange Commission to mean more than ownership in the usual
sense. For example, you "beneficially" own common stock not only if you hold it
directly, but also if you indirectly (through a relationship, a position as a
director or trustee, or a contract or understanding), have or share the power to
vote the stock, or sell the stock, or you have the right to acquire it within 60
days. Except as disclosed in the footnotes below, each of the directors and
executive officers listed have sole voting and investment power over his shares.
As of August 17, 2000 there were 16,374,504 shares of common stock issued and
outstanding and approximately 386 holders of record.

<TABLE>
<CAPTION>

                                                                               SHARES BENEFICIALLY OWNED (2)
                                                                           ------------------------------------
              NAME OF BENEFICIAL OWNER(1)                                   NUMBER                   PERCENTAGE
                                                                           ---------                 ----------
              EXECUTIVE OFFICERS AND DIRECTORS:
              <S>                                                          <C>                       <C>
              Billy V. Ray, Jr(3)                                            410,000                     2.4%
              Edwin D. Johnson(4)                                            157,000                       *
              Frazier L. Gaines(5)                                           217,000                     1.3%
              Charles A. Maynard                                             200,000                     1.2%
              James E. Brands                                                100,000                       *
              Michael Brenner                                                100,000                       *
              Philip A. Kernan, Jr                                           125,000                       *
              Edward Z. Pollock(6)                                            66,000                       *
              Robert Sommerfeld                                              100,000                       *
              J. Barry Hall(7)                                               102,472                       *
              Richard A. Boyle                                                65,000                       *
              C. Franklin Swartz                                              30,000                       *
              H. Alec McLarty(8)                                              11,610                       *
              Gerald Pye                                                          --                       *

              All Executive Officers and Directors                         1,684,082                     9.9%
              as a Group (15 Persons)

              BENEFICIAL OWNER OF 5% OR MORE OF VOTING
              SECURITIES
              Gideon D. Taylor(9)                                            946,638                     5.8%
              Worldcom(10)                                                 5,650,000                    29.7%
</TABLE>

              *Less than 1%.

(1)      Unless otherwise indicated, the address of each Executive Officer,
         Director and beneficial owner of more than 5% of the Company's voting
         securities is 1000 Holcomb Woods Parkway, Suite 440, Roswell, Georgia
         30076.

(2)      Beneficial ownership is determined in accordance with the rules of the
         SEC that deem shares to be beneficially owned by any person who has or
         shares voting or investment power with respect to such shares. Unless
         otherwise indicated below, the persons and entities named in the table
         have sole voting and sole investment power with respect to all shares
         beneficially owned. Shares of common stock subject to options that are
         currently exercisable or exercisable within 60 days of August 17, 2000
         are deemed to be outstanding and to be beneficially owned by the person
         holding such options for the purpose of computing the percentage
         ownership of such person but are not treated as outstanding for the
         purpose of computing the percentage ownership of any other person.

(3)      Mr. Ray owns 410,000 options subject to shareholders approval.

(4)      Mr. Johnson owns 7,000 shares and options to purchase 150,000 shares
         subject to shareholder approval.

(5)      Includes 80,000 shares underlying stock options, which are immediately
         exercisable subject to shareholder approval, 128,000 shares held in a
         trust controlled by Mr. Gaines and an aggregate of 9,000 shares held by
         Mr. Gaines as trustee to four minor children.

(6)      Includes 65,000 shares underlying options which are immediately
         exercisable subject to shareholder approval and 1,000 shares owned by
         Mr. Pollock.



                                       49
<PAGE>   55


(7)      Mr. Hall received these shares in payment of the October 31, 1999
         portion of an earn-out owed from our acquisition of the Georgia
         Electric Company.

(8)      Includes 1,610 shares owned by Mr. McLarty's wife and 10,000 shares
         underlying options, which are immediately exercisable subject to
         shareholder approval.

(9)      Includes 21,619 shares owned by Mr. Taylor's wife and 220 shares
         underlying stock options which are immediately exercisable subject to
         shareholder approval. Mr. Taylor's address is 265 Harper Road, Dry
         Fork, VA 24549.

(10)     Includes 3,050,000 shares issued to WorldCom by converting debt into
         shares at $8.375 per share on January 13, 2000 and 2,600,000 shares are
         issuable to WorldCom upon its exercise of the option and SAR granted to
         WorldCom in 1998. Does not include 3,696,303 shares issuable upon
         conversion of Series D Preferred Stock issued to WorldCom on August
         24, 2000. WorldCom's address is 515 East Amite Street, Jackson,
         Mississippi 39201. After considering the August 2000 issuance of the
         Series D stock to WorldCom in exchange for amounts due under the
         WorldCom Advance, WorldCom would have voting interests of 33.6 percent.



                                       50

<PAGE>   56

                           DESCRIPTION OF INDEBTEDNESS

The following discussion of certain of the provisions of our indebtedness are
not intended to be complete or exhaustive and are qualified in its entirety by
references to the provisions of the documents and agreements with respect to
such indebtedness. These documents and agreements have been filed as exhibits to
the Registration Statement of which this prospectus forms a part.

SECURED CREDIT FACILITY. Pursuant to a Secured Credit Facility, a syndicate of
lenders lent us $35.0 million in the form of senior secured revolving credit
facilities. The Secured Credit Facility has a letter of credit sublimit of $5.0
million. The Secured Credit Facility matures on November 1, 2000.

The interest rate under the Secured Credit Facility is, at our option, based
upon either (i) a Eurodollar rate or (ii) a base rate, for any day, the greater
of the prime rate announced from time to time by the Administrative Agent as its
U.S. dollar prime commercial lending rate (which rate may or may not be the
lowest rate of interest charged by the Administrative Agent) and the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System in effect on such day, plus 1 percent. Currently, we are
paying a default interest rate of an additional 2 percent.

The Secured Credit Facility is guaranteed by all of our existing and future
subsidiaries other than our international subsidiaries. The Secured Credit
Facility is secured by a pledge of all of the capital securities of those
subsidiaries, including all existing intercompany notes issued to any subsidiary
by any of its subsidiaries and all shares of capital securities set forth in the
Pledge Agreement.

The Secured Credit Facility contains covenants restricting our ability and our
Restricted Subsidiaries ability to, among others, (i) incur additional debt,
(ii) declare dividends or redeem or repurchase capital stock, (iii) prepay,
redeem or purchase debt, (iv) incur liens, (v) make loans and investments, (vi)
make capital expenditures, (vii) engage in mergers, acquisitions and asset
sales, and (viii) engage in transactions with affiliates. We are required to
comply with financial covenants with respect to certain minimum ratios,
including debt coverage, interest, fixed charges and quick ratio. We currently
are in default under several of these covenants.

WORLDCOM NOTE. In order to finance the MFSNT Acquisition, we issued the WorldCom
Note to WorldCom, which has a current principal balance of $4.5 million as a
result of the conversion of $25 million of principal debt under this note into
common stock. We must repay the WorldCom Note in full on July 12, 2007. The
WorldCom Note bears interest at 8.0 percent per year. Our obligations under the
WorldCom Note are junior and fully subordinated to those under the Secured
Credit Facility. No amounts may be paid on the WorldCom Note so long as any debt
is outstanding under the Secured Credit Facility.

If we do not repay the WorldCom Note in full by July 12, 2007, WorldCom will be
able to:

         - Require us to pay a 13.5 percent annual default rate of interest
         while we are in default

         - Reduce the minimum yearly and aggregate revenues we would receive
         under the WorldCom Master Services Agreement

         - Refuse to give us additional work under the WorldCom Master Services
         Agreement while we are in default


                                       51
<PAGE>   57


DESCRIPTION OF PERFORMANCE BONDS. There are numerous risks inherent in providing
services in the telecommunications industry, which may result in a contractor or
subcontractor being unable to complete the contracted work. As a contractor, we
are required to supply the project owners with a performance and payment bond
and a certificate of insurance to protect the owners from liability. Internally,
we make use of builders' risk insurance to protect our own interests. If we
decide to subcontract a portion of the work, we also require our subcontractors
to provide performance and payment bonds and certificates of insurance to
protect us from liability. Depending upon the contract and/or the state and
local laws, we may also need to make use of other types of insurance or bonds.
As of April 30, 2000, we have contract backlog of approximately $444,000 under
performance bonds.

                            DESCRIPTION OF SECURITIES

We are currently authorized to issue 25,000,000 shares of common stock, par
value $.001 per share, and 1,000,000 shares of preferred stock, par value $.10
per share. We intend to ask our shareholders to approve an increase in our
authorized capital stock to 100,000,000 shares of common stock and 5,000,000
shares of common stock at our next annual meeting of shareholders, currently
planned for late September or October.

The following summary description of our common stock and preferred stock is not
intended to be complete or exhaustive and is qualified in its entirety by
reference to our Amended and Restated Articles of Incorporation (the "Articles")
and Bylaws, copies of which are included as exhibits to the Registration
Statement of which this prospectus forms a part.

COMMON STOCK. As of August 17, 2000, we had 16,374,504 shares of common stock
outstanding. Holders of common stock are entitled to one vote for each share
held on all matters submitted to a vote of shareholders and do not have
cumulative voting rights. Accordingly, holders of a majority of the shares of
common stock entitled to vote in any election of directors may elect all of the
directors standing for election. Holders of common stock are entitled to receive
ratably such dividends, if any, as may be declared by the Board of Directors out
of funds legally available therefor, subject to any preferential dividend rights
of any outstanding preferred stock. Upon the liquidation, dissolution or winding
up of the Company, the holders of common stock are entitled to receive ratably
the net assets of the Company available after the payment of all debts and other
liabilities and subject to the prior rights of any outstanding preferred stock.
Holders of common stock have no preemptive, subscription, redemption or
conversion rights. The outstanding shares of common stock are, and the shares
offered by Selling Shareholders will be, when issued and paid for, fully paid
and non-assessable. The rights, preferences and privileges of holders of common
stock are subject to, and may be adversely affected by, the rights of the
holders of shares of any series of preferred stock which the Company may
designate and issue in the future.

PREFERRED STOCK. The Board of Directors has the authority, without further
action of our shareholders, to issue up to an



                                       52

<PAGE>   58


aggregate of 1,000,000 shares of preferred stock in one or more series and to
fix or alter the designations, preferences, rights and any qualifications,
limitations or restrictions of the shares of each such series thereof, including
the dividend rights, dividend rates, conversion rights, voting rights, terms of
redemption (including sinking fund provisions), redemption price or prices,
liquidation preferences and the number of shares constituting any series or the
designation of such series.

The Board of Directors, without shareholder approval, can issue preferred stock
with voting and conversion rights that could adversely affect the voting power
of holders of common stock. Issuing preferred stock may have the effect of
delaying, deferring or preventing a change in control of the Company.

As of August 30, 2000, we have designated 1,200 shares of Series A Convertible
Preferred Stock, 4,000 shares of Series B Convertible Preferred Stock, 5,000
shares of Series C Convertible Preferred Stock and 1,000 shares of Series D
Preferred Stock. No shares of Series A or Series B preferred stock are
outstanding. The following table shows the number of shares of Series C and
Series D preferred stock outstanding on August 30, 2000, the number of shares of
common stock unto which they are convertible and the percentage of our
outstanding shares of common stock they would represent if converted on August
17, 2000:

<TABLE>
<CAPTION>
                              Number
                                of       Shares of Common Stock
Series of Preferred Stock     Shares     Issuable Upon Conversion     Percentage
-------------------------     ------     ------------------------     ----------
<S>                           <C>        <C>                          <C>
Series C                      5,000          3,750,000                 18.6% (1)
Series D                      1,000          3,696,304                 18.4  (1)
                              -----          ---------                 ----
   Total                      6,000          7,446,304                 31.3% (2)
</TABLE>

----------

(1) Assumes conversion of only the Series C or Series D, as the case may be.
(2) Assumes conversion of both the Series C and Series D.

SERIES C CONVERTIBLE PREFERRED STOCK. We have designated and issued 5,000 shares
of preferred stock Series C Convertible Preferred Stock. The Series C Preferred
Stock is non-voting, pays dividends at a rate of 5.9% of the stated $3,000 value
of each share and is convertible at the option of the holder into common stock
at a conversion price of $4.00 per share. The conversion rights may be exercised
on the earlier of the date that we receive shareholder approval of this
conversion or December 1, 2000. We must pay dividends accrued through November
30, 2000 by December 31, 2000, in cash, or the accrued dividends will be added
to the $3,000 stated value of each share.

Conversion Rights. If holders of Series C Convertible Preferred Stock could
convert to common stock as of August 30, 2000, they would be entitled to
3,750,000 shares of common stock ($3,000 (stated value) divided by $4.00
(conversion price) multiplied by 5,000 (number of Series C shares outstanding)),
or 18.6% of our outstanding shares immediately following the conversion. The
$4.00 conversion price is subject to adjustment for stock splits, stock
dividends, mergers or similar transactions, and reorganizations or
reclassifications of our common stock or if we issue common stock or convertible
securities at a price less than the conversion price or at a variable price. The
conversion price is also subject to adjustment if certain events, like the
registration of the underlying common stock by November 30, 2000, do not occur.
Because of these potential adjustments, these securities may become convertible
at a price that is not now readily determinable. Because the conversion price
may be reduced, resulting in our issuing more shares of common stock than
originally contemplated, our then-existing holders of the common stock will face
additional dilution.

Holder Redemption Rights. In addition to our redemption obligations if we do not
timely register the common stock as described below, we may be required to
redeem the Series C Convertible Preferred Stock at the holders' option. We would
have five business days to make the redemption payments. Furthermore, if we
enter into a major transaction such as a merger, sale of all or substantially
all of our assets or a purchase, tender or exchange offer accepted by holders of
more than 30% of our outstanding shares of common stock, the holders can require
us to redeem the Series C Convertible Preferred Stock for 120% of the
liquidation value. For reference purposes, the aggregate liquidation value of
the Series C Convertible Preferred Stock on August 17, 2000 was $15 million.
This redemption payment would be required to be made before consummation of the
major transaction. The holders have agreed not to exercise their redemption
rights for the Bracknell merger.

Registration Rights. Holders of the Series C Convertible Preferred Stock have
the right to have the common stock issued upon conversion of the Series C
Convertible Preferred Stock and upon exercise of their warrants registered under
the Securities Act of 1933 on Form S-1. Our registration obligations cover all
of the common stock issuable upon conversion of the Series C Convertible
Preferred Stock, plus 997,500 shares issuable pursuant to exercise of the
warrants, plus any shares issued as anti-dilution adjustments. We have until
November 30, 2000 to register these securities.

If we fail to timely register the shares, the holders will have the right after
December 1, 2000 to require us to redeem for cash all of the Series C
Convertible Preferred Stock, for the greater of 120% of the liquidation value or
a price based on a formula incorporating the trading price of our common stock.
As measured on August 17, 2000, the trading price of our common



                                       53
<PAGE>   59

stock would have to be greater than $4.80 per share for the formula to produce a
redemption price greater than 120% of the liquidation value measured as of
August 17, 2000.

For 90 days after the registration statement is effective, neither we nor any of
our subsidiaries may issue any equity securities or instruments or rights
convertible into or exchangeable or exercisable for any equity securities
except:

         - issuances pursuant to currently outstanding convertible securities;

         - shares issued pursuant to our Stock Option Plan; or

         - options otherwise issued to our employees.

Delinquent Payments. If we fail to timely pay any redemption price or any other
penalty that we are obligated to pay to holders of the Series C Convertible
Preferred Stock, the holders can require us to redeem all of the Series C
Convertible Preferred Stock, all of the Series C warrants held by them, and any
shares of common stock issued upon conversion or exercise of those securities.
The redemption price would be the greater of

         - 1.20 multiplied by the conversion price on the date of redemption
         multiplied by the total number of shares of common stock being redeemed
         plus common stock issuable upon conversion or upon exercise; or

         - a price based on a formula incorporating the trading price of our
         common stock. Based on the conversion value of the Series C Convertible
         Preferred Stock on July 17, 2000, the trading price of our common stock
         would have to be greater than $6.01 per share for the formula to
         produce a redemption price greater than the formula based on the
         conversion price measured as of July 17, 2000.

We also would be required to pay default interest at 2% per month for any
delinquent amounts.

SERIES D CONVERTIBLE PREFERRED STOCK. We have designated and issued 1,000 shares
of preferred stock as Series D Convertible Preferred Stock. The Series D
Preferred Stock pays dividends at a rate of 6 percent of the stated value of
$37,000 for each share and is convertible at the option of the holder into
common stock at a conversion price of $10.01 per share. The conversion rights
may be exercised at any time after the date of issuance of the shares, but in no
event prior to the effective time of the proposed merger with Bracknell or the
termination of that proposed merger. Dividends on the Series D Preferred Stock
are not cumulative but must be paid if we are liquidated or dissolved, there is
an acquisition of us by another entity that results in a transfer of 50 percent
or more of our outstanding voting power or there is a sale of all or
substantially all of our assets.

Voting Rights. Holders of Series D Preferred Stock are entitled to one vote for
each share of common stock into which the Series D Preferred Stock may be
converted on all matters on which holders of common stock are entitled to vote,
voting as a class with the common stock.

Conversion Rights. If holders of Series D Preferred Stock could convert to
common stock as of August 30, 2000, they would be entitled to 3,696,303 shares
of common stock ($37,000 (stated value) divided by $10.01 (conversion price)
multiplied by 1,000 (number of Series D shares outstanding)) or 18.4% percent of
outstanding shares immediately following the conversion. The $10.01 conversion
price is subject to adjustment for stock splits, stock dividends, mergers or
similar transactions, and reorganizations or reclassifications of our common
stock or if we issue common stock or convertible securities at a price less than
the conversion price.

In addition, if there is a liquidation event, including the Bracknell merger,
the conversion price will be reduced to the price per share paid to holders of
common stock in the liquidation event. For example, if a liquidation event
occurred on August 29, 2000, the Series D Preferred Stock would convert to
12,869,565 shares of common stock ($37,000 (stated value) divided by $2.875
(adjusted conversion price based on the August 29, 2000 closing price)
multiplied by 1,000 (number of Series D shares outstanding)) or 44.0% of
outstanding shares immediately following the conversion. Because of these
potential adjustments, these securities may become convertible at a price that
is not now readily determinable. Because the conversion price may be reduced,
resulting in our issuing more shares of Common Stock than originally
contemplating, our then-existing holders of the Common Stock will face
additional dilution.

Liquidation Preference. Upon the occurrence of any of the events described above
which gives the holders the right to receive dividends, the holders of Series D
Preferred Stock will be entitled to receive in preference to any distribution of
assets to holders of common stock, but after satisfaction of the liquidation
preference of our Series C Preferred Stock, an amount equal to $37,000 per
share.

Company Redemption. We may at our option at any time after August 23, 2004
redeem all of the outstanding Series D Preferred Stock for a price equal to the
amount payable upon a liquidation together with an accrued dividend at the rate
stated above, whether or not actually declared.

SERIES B SECURITIES. In 1998, we issued 5,000 shares of Series B Preferred Stock
and related warrants to purchase our common stock. All of the Series B Preferred
Stock has been converted or redeemed. The following table summarizes current
holdings of common stock and warrants by the former holders of our Series B
Preferred Stock.


                                       54
<PAGE>   60


<TABLE>
<S>                                                                                               <C>                <C>
Shares of Series B Convertible Preferred Stock outstanding                                                                   0

Shares of Common Stock issued upon conversion of Series B Convertible
Preferred Stock(1)                                                                                1,007,927

Shares of Common Stock issued in redemption of Series B Convertible
Preferred Stock(1)                                                                                  801,787

Shares of Common Stock issued upon exercise of Warrants to purchase
Common Stock at $.01 per share(1)                                                                    66,246

TOTAL SHARES ISSUED TO SERIES B CONVERTIBLE PREFERRED STOCK HOLDERS                                                  1,875,960

Shares of Common Stock to be issued in redemption of Series B Convertible
Preferred Stock upon shareholder approval(1)(5)                                                   1,057,031

Shares of Common Stock issuable upon exercise of Warrants to purchase
Common Stock at $13.50 per share and upon shareholder approval(1)(2)(3)(4)                          370,000

Shares of Common Stock issuable upon exercise of Warrants to purchase Common
Stock at $10.125 per share and upon shareholder approval(1)(2)(4)                                   200,000

TOTAL SHARES SUBJECT TO SHAREHOLDER APPROVAL
                                                                                                                     1,627,031

Total shares of Common Stock issued and issuable to Series B Convertible
Preferred Stock holders after receipt of shareholder approval                                                        3,502,991
</TABLE>

(1)      Subject to registration rights.

(2)      Each of these warrants has a "cashless exercise" feature. A "cashless
         exercise" means that a person exercising their warrants does not pay
         cash, but elects to receive a lesser number of shares by using the
         value of the shares issuable under the warrants to satisfy the exercise
         price. In a "cashless exercise," the holder will receive shares of
         common stock with a total market value equal to the per share excess of
         the market value of the common stock over the exercise price multiplied
         by the number of shares being exercised.

(3)      We have the right to redeem these warrants for $35.00 per share unless
         we are in default under the warrants. Because we have not yet
         registered the underlying common stock, we currently do not have the
         right to redeem these warrants.

(4)      No holder may exercise warrants that would cause it to own more than
         4.99% of the outstanding shares of our common stock on the date of
         exercise.

(5)      If we do not obtain shareholder approval to issue these shares before
         November 30, 2000, we must pay former holders of the Series B Preferred
         $4,228,124 instead of issuing the shares.

Registration Rights. Generally, the holders of the securities listed above have
a right to cash payments and other consideration if we do not timely register
the shares or maintain our listing on Nasdaq or another approved market.
Specifically, if we do not timely register the holders' shares, the exercise
price of the various warrants is reduced by 1% if our registration is late by 1
to 30 days, and 1.5% for each 30-day period thereafter. If during the
registration period our common stock is delisted, we owe cash penalty payments
of 3% of the value of the common stock owned or issuable to the holder for each
30 day period the common stock is not listed. If we fail to make any of these
payments, the warrant exercise price is reduced by 30% and the holder can
require us to redeem the common stock at 130% of their value, plus the
delinquent amounts.

The Warrants. Holders of the Series C Convertible Preferred Stock hold the
following warrants to purchase common stock:

         - 200,000 at $10.75 per share, expiring February 4, 2005;

         - 375,000 at $6.00 per share, expiring July 6, 2002; and

         - 375,000 at $8.00 per share, expiring July 6, 2002.

The exercise prices of these warrants are subject to adjustment for stock
splits, stock dividends, mergers or similar transactions, and reorganizations or
reclassifications of our common stock, or if we issue common stock or
convertible securities at a price less than the exercise price or the fair
market value of our common stock.

THE WORLDCOM OPTION AND THE WORLDCOM SARs

Generally

As part of the MFSNT Acquisition, we granted an option (the WorldCom Option) to
WorldCom to purchase up to 2,000,000 shares of the common stock at an exercise
price of $7.00 per share. We also granted WorldCom an equity award in the form
of stock appreciation rights ("SARs") equivalent to 600,000 shares of common
stock, payable in cash, stock, or a combination of both at our option. The
WorldCom SARs are exercisable, in whole or in part, on the following days: July
2, 2001, or July 2, 2002.



                                       55

<PAGE>   61


The following chart summarizes the terms of the securities held by WorldCom.

<TABLE>
<CAPTION>

                                                    WORLDCOM OPTION                               WORLDCOM SARS(1)

  <S>                                        <C>                                          <C>
  Type of Security                           Stock options                                Stock appreciation right awards

  Type of Property Issuable                  2,000,000 shares of Common Stock             Cash, Common Stock, or any
  Pursuant to Exercise of Security                                                        combination, at our discretion

  Aggregate Base Common Stock                N/A                                          600,000 shares

  Exercise Price(2)                          $7.00 per share                              $5.0938 per share(3)

  Ceiling Collar Price, if any(2)            None                                         $32.0938 per share(3)

  Determination of Amount of                 Number of shares exercised by                Difference between the exercise price
  Property Issuable                          WorldCom                                     and the fair market value of our
                                                                                          Common Stock on the date of exercise
                                                                                          of the SAR, subject to the Ceiling
                                                                                          Collar Price

  Exercise Period/Dates                      January 1, 2000 through January 2, 2002      July 2, 2001 or July 2, 2002

  Other Material Terms                       Any stock issued pursuant to the SARs        Any stock issued pursuant to the SARs
                                             must be registered with the SEC              must be registered with the SEC

  Maximum Consideration Payable              $14 million                                  $0
  to Us

  Maximum Consideration Payable              2,000,000 shares of Common Stock             $15 million in cash, stock or a
  to WorldCom                                                                             combination
</TABLE>

(1)      The value of an SAR is determined by subtracting the exercise price
         from the fair market value of Common Stock on the exercise date. For
         example, if WorldCom exercised 1,000 SARs when the fair market value of
         our Common Stock was $10.0938 per share, then the value of the SARs
         exercised would be equal to $5,000 ($10.0938 (fair market value) less
         $5.0938 (exercise price) x 1,000 shares (SARs exercised)).

(2)      May be adjusted in the event of any capital restructuring such as stock
         splits, recapitalization or reclassification of our Common Stock.

(3)      If the fair market value of our Common Stock as of the date immediately
         preceding our issuing the WorldCom SAR is greater than the exercise
         price of $5.0938, then we will adjust the exercise price to then fair
         market value, and the ceiling collar price shall be adjusted to a
         dollar amount equal to the then fair market value plus $25.00.
         Additionally, the Aggregate Base Common Stock will be adjusted by

                  - multiplying 600,000 by a fraction,

                  - the numerator of which shall be the adjusted exercise price,
                  and

                  - the denominator of which shall be $5.0938;

         up to a maximum of 700,000 shares of Common Stock.

A general description of the common stock, underlying the WorldCom Option and
the WorldCom SARs is provided above. Other than as described above, WorldCom is
not entitled to any pre-emptive rights under the terms of either the WorldCom
Option or the WorldCom SARs. The rights granted to WorldCom under the WorldCom
Option and the WorldCom SARs are not limited or qualified by any rights of any
other class of securities.

LIMITED LIABILITY AND INDEMNIFICATION

Under the Florida Business Corporation Act (the "FBCA"), a director is not
personally liable for monetary damages to the corporation or any other person
for any statement, vote, decision, or failure to act unless (i) the director
breached or failed to perform his duties as a director and (ii) the director's
breach of, or failure to perform, those duties constitutes: (1) a violation of
the criminal law, unless the director had reasonable cause to believe his
conduct was lawful or had no reasonable cause to believe his conduct was
unlawful, (2) a transaction from which the director derived an improper personal
benefit, either directly or indirectly, (3) a circumstance under which an
unlawful distribution is made, (4) in a proceeding by or in the right of the
corporation to procure a judgment in its favor or by or in the right of a
shareholder, conscious disregard for the best interest of the corporation or
willful misconduct, or (5) in a proceeding by or in the right of someone other
than the corporation or shareholder, recklessness or an act or omission which
was committed in bad faith or with malicious purpose or in a manner exhibiting
wanton and willful disregard of human rights, safety, or property. A corporation
may purchase and maintain insurance on behalf of any director or officer against
any liability asserted against him or her and incurred by him or her in his or
her capacity or arising out of his or her status as such,



                                       56
<PAGE>   62


whether or not the corporation would have the power to indemnify him or her
against such liability under the FBCA. Our Bylaws provide that we shall
indemnify our officers and directors against liability resulting from their
service as an officer or director of the Company and the Company has executed
indemnification agreements so providing.

Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.

CERTAIN PROVISIONS OF THE FBCA AND THE ARTICLES

We are subject to (i) Section 607.0901 of the FBCA, which generally requires
super-majority approval by disinterested directors or shareholders of certain
specified transactions between a corporation and holders of more than 10 percent
of the outstanding shares of the corporation (or their affiliates), and (ii)
Section 607.0902 of the FBCA, which generally provides that shares acquired in
excess of certain specified thresholds will not possess any voting rights unless
such voting rights are approved by a majority vote of the corporation's
disinterested shareholders.

The authorized but unissued shares of common stock and Preferred Stock are
available for future issuance without shareholder approval. These additional
shares may be utilized for a variety of corporate purposes, including future
public offerings to raise additional capital, corporate acquisitions and
employee benefit plans. The existence of authorized but unissued and unreserved
common stock and Preferred Stock may enable the Board of Directors to issue
shares to persons friendly to current management which could render more
difficult or discourage an attempt to obtain control of the Company by means of
a proxy contest, tender, offer, merger or otherwise, and thereby protect the
continuity of the Company's management.

                         SHARES ELIGIBLE FOR FUTURE SALE

As of August 17, 2000, we had 16,374,504 shares of common stock issued and
outstanding. Assuming that as of August 30, 2000 all the Selling Shareholders
had converted or exercised the securities included in this prospectus into or
for common stock and the Series D Preferred Stock had been converted, the
Company would have had 34,508,854 shares of common stock issued and outstanding
on that date, substantially all of which would have been freely tradeable,
except for the 3,696,303 shares issuable upon conversion of the Series D
Preferred Stock, which will constitute restricted securities when issued.

On May 22, 1996, we filed a registration statement on Form S-8 with the SEC to
register 550,000 shares of common stock issuable under the Plan and 510,000
shares of common stock issuable under other agreements entered into with certain
of our current and former directors, officers and employees. On June 18, 1997,
we filed a post-effective amendment to this Form S-8 with the SEC to register
the resale of 459,800 of such shares by affiliates. On April 24, 1998, the
Company's shareholders amended the Plan to increase the aggregate number of
shares of common stock issuable under the Plan from 550,000 to 1,300,000 (an
increase in 750,000 shares). We intend to file a registration statement under
the Securities Act to register the additional 750,000 additional shares of
common stock reserved for issuance under the Plan and, to the extent that the
shareholders approve an additional increase of 4,200,000 shares (for a total of
5,500,000 shares), the Company will file a registration statement of Form S-8 to
register these additional shares. As of August 30, 2000, options to purchase
734,000 shares of common stock were outstanding under the Plan and options to
purchase 2,189,897 shares of common stock were outstanding outside the Plan.

Sales of substantial amounts of our securities in the public market could have a
significant adverse effect on prevailing market prices and could impair our
future ability to raise capital through the sale of our equity securities.

                              SELLING SHAREHOLDERS

The following table shows for all Selling Shareholders the number of shares of
common stock currently owned or which are currently issuable to them upon the
conversion or exercise of outstanding securities or under our contractual
obligations prior to the offering and the number of shares they will own
assuming the maximum shares registered hereunder are sold.



                                       57
<PAGE>   63


<TABLE>
<CAPTION>

                                                         SHARES BENEFICIALLY OWNED       NUMBER         SHARES BENEFICIALLY OWNED
                                                           PRIOR TO OFFERING(1)         OF SHARES           AFTER OFFERING(2)
                                                         -------------------------       OFFERED        -------------------------
     NAME OF SELLING SHAREHOLDER                          NUMBER        PERCENTAGE       HEREBY          NUMBER        PERCENTAGE
     ------------------------------                      ---------      ----------      ---------       ---------      ----------
     <S>                                                 <C>            <C>             <C>             <C>            <C>
     John Hancock Mutual Life Insurance Company            409,505             2.4       409,505               --              --
     DeAm Convertible Arbitrage Fund Limited               310,555             1.9       310,555               --              --
     Halifax Fund, L.P.                                  2,911,654            15.0     2,911,654               --              --
     Lancer Securities (Cayman) Limited                    263,083             1.6       263,083               --              --
     Palladin Partners I., L.P.                            244,972             1.5       244,972               --              --
     Palladin Overseas Fund Limited                        310,555             1.9       310,555               --              --
     Palladin Securities, L.L.C.                            47,472             *          47,472               --              --
     PGEP III, LLC                                         197,500             1.2       197,500               --              --
     Quattro Fund Limited                                  150,250             *         150,250               --              --
     RGC International Investors, LDC                      479,092             2.8       479,092               --              --
     Sirit Technologies, Inc.                            5,011,511            23.4      5,011,511              --              --
     WorldCom, Inc./MFS Communications Company,
     Inc.(3)                                             5,650,000            29.7      2,600,000       3,050,000             9.9%
</TABLE>



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

     *Less than 1%.

(1)      In addition to shares currently owned by each Selling Shareholder, the
         number of shares set forth in the table represents an estimate of the
         number of shares of common stock that will be offered by each Selling
         Shareholder. The actual number of shares of common stock offered hereby
         and included in the Registration Statement of which this prospectus
         forms a part, includes such additional number of shares of common stock
         as may be issued or issuable by reason of any stock split, stock
         dividend or similar transaction involving the common stock, in order to
         prevent dilution, in accordance with Rule 416 under the Securities Act.
         We have agreed to register 105 percent of the actual number of shares
         of common stock issuable pursuant to an assumed exercise of the Series
         C warrants, as determined by us.

(2)      Based on shares outstanding on August 17, 2000, assuming the sale of
         all shares offered in this prospectus.

(3)      Includes 2,000,000 shares of common stock exercisable pursuant to an
         option granted by us in connection with the MFSNT acquisition and
         600,000 shares of common stock that may be issued upon the exercise of
         the SARs. Does not include 3,696,303 issuable upon conversion of Series
         D Preferred Stock issued to WorldCom on August 24, 2000.

                              PLAN OF DISTRIBUTION

The Selling Shareholders may, from time to time, sell all or a portion of the
shares on Nasdaq (or such other exchange on which the common stock may from time
to time be trading), in privately negotiated transactions or otherwise, at fixed
prices that may be changed, at market prices prevailing at the time of sale, at
prices related to such market prices or at negotiated prices. The shares may be
sold by the Selling Shareholders by one or more of the following methods,
without limitation: (i) block trades in which the broker or dealer so engaged
will attempt to sell the Shares as agent but may position and resell a portion
of the block as principal to facilitate the transaction, (ii) purchases by a
broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this prospectus, (iii) an exchange distribution in
accordance with the rules of such exchange, (iv) ordinary brokerage transactions
and transactions in which the broker solicits purchasers, (v) privately
negotiated transactions, (vi) short sales and (vii) a combination of any such
methods of sale. In effecting sales, brokers and dealers engaged by the Selling
Shareholders may arrange for other brokers or dealers to participate. Brokers or
dealers may receive discounts from the Selling Shareholders (or, if any such
broker-dealer acts as agent for the purchaser of such Shares, from such
purchaser) in amounts to be negotiated which are not expected to exceed those
customary in the types of transactions involved. Broker-dealers may agree with
the Selling Shareholders to sell a specified number of such shares at a
stipulated price per share and, to the extent such broker-dealer is unable to do
so acting as agent for a Selling Shareholder, to purchase as principal any
unsold shares at the price required to fulfill the broker-dealer commitment to
the Selling Shareholders. Broker-dealers who acquire shares as principal may
thereafter resell such shares from time to time in transactions (which may
involve block transactions of the nature described above) in the
over-the-counter market or otherwise at prices and on terms then prevailing at
the time of sale, at prices then related to the then-current market price or in
negotiated transactions and, in connection with such resales, may pay to or
receive from the purchasers of such shares discounts as described above. The
Selling Shareholders may also sell the shares in accordance with Rule 144 under
the Securities Act, rather than pursuant to this prospectus.

The Selling Shareholders and any broker-dealers or agents that participate with
the Selling Shareholders in sales of the shares may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with such
sales. In such event, any discounts received by such broker-dealers or agents
and any profit on the resale of the Shares purchased by them may be deemed to be
underwriting or discounts under the Securities Act.



                                       58
<PAGE>   64


From time to time, the Selling Shareholders may engage in short sales, short
sales against the box, puts and calls and other transactions in securities of
the Company or derivatives thereof, and may sell and deliver the shares in
connection therewith or in settlement of securities loans. From time to time,
the Selling Shareholders may pledge their shares pursuant to the margin
provisions of its customer agreements with its brokers. Upon a default by the
Selling Shareholders, the broker may offer and sell the pledged shares from time
to time.

The Selling Shareholders and any other persons participating in the sale or
distribution of the shares will be subject to applicable provisions of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder, which provisions may limit the timing of purchases and sales of any
of the shares by the Selling Shareholders or any other such person. The
foregoing may affect the marketability of the shares.

The Company has agreed to indemnify in certain circumstances the Selling
Shareholders against certain liabilities, including liabilities under the
Securities Act. The Selling Shareholders have agreed to indemnify in certain
circumstances the Company against certain liabilities, including liabilities
under the Securities Act.

To the extent required, this prospectus will be updated to reflect any change in
the Selling Shareholders for whose account shares are to be offered, the number
of shares so offered for such Selling Shareholder's account and, if such
offering is to be made by or through underwriters or dealers, the names of such
underwriters or dealers and the principal terms of the arrangements between the
underwriters or dealers and the Selling Shareholders for whose account such
offering is made.

The Company has agreed to use its best efforts to keep the Registration
Statement, of which this prospectus constitutes a part, effective until the
shares of common stock underlying such stock and warrants may be or have been
sold pursuant to Rule 144(k) of the Securities Act. The Company has agreed with
WorldCom to file and maintain an effective registration statement with respect
to the shares of common stock underlying the WorldCom Option until such time, if
any, as the holder of the WorldCom Option would be able to sell the shares on an
unrestricted basis without being required to comply with the volume limitations
contained in Rule 144(e) promulgated under the Securities Act. The Company has
agreed with the holders of the John Hancock Warrants to file and maintain an
effective Registration Statement until the earlier of (i) January 1, 2000, or
(ii) such time as all of the shares of common stock underlying the John Hancock
Warrants have been sold.

The Company will not receive any proceeds from the sale of the shares by any
Selling Shareholder pursuant to this prospectus. There can be no assurance that
any Selling Shareholder will sell any of the shares offered pursuant to this
prospectus. We have agreed to pay all expenses of registration of the shares,
which expenses are expected to be approximately $1.2 million.

                                  LEGAL MATTERS

The validity of the shares of common stock being offered hereby will be passed
upon for the Company by Michael Brenner, General Counsel to the Company.

                                     EXPERTS

The consolidated financial statements of Able Telcom Holding Corp. and its
subsidiaries at October 31, 1999 and 1998 and for the years then ended included
in this prospectus and Registration Statement have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report with
respect thereto, and is included herein in reliance upon the authority of said
firm as experts in accounting and auditing in giving said report.

The consolidated statements of operations, shareholders' equity and cash flows
of Able Telcom Holding Corp. and its subsidiaries for the year ended October 31,
1997, appearing in this prospectus and Registration Statement have been audited
by Ernst & Young LLP, independent certified public accountants, as set forth in
their report thereon appearing elsewhere herein, and are included in reliance
upon such report given on the authority of Ernst & Young LLP as experts in
accounting and auditing.

During the year ended October 31, 1997 and during the subsequent interim period
prior to engaging Arthur Andersen LLP, neither the Company nor anyone on our
behalf consulted with Arthur Andersen LLP regarding either the application of
accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that might be rendered on our financial statements.
Previously, however, Arthur Andersen LLP was the independent auditors for MFS
Network Technologies, Inc. and Patton Management Corporation, both of which were
acquired by us during fiscal year 1998.



                                       59

<PAGE>   65


On September 7, 1998, Ernst & Young LLP, our former accountants, resigned and,
on October 12, 1998, Arthur Andersen LLP was appointed our accountants. On
September 2, 1998, prior to the resignation by Ernst & Young LLP, we sent out a
request for proposals for the audit of our consolidated financial statements for
the fiscal year ending October 31, 1998 to several national accounting firms,
including Ernst & Young LLP. The reports of Ernst & Young LLP on Able's
financial statements for the two fiscal years ended October 31, 1997 and 1996
did not contain an adverse opinion or disclaimer of opinion and were not
qualified or modified as to uncertainty, audit scope or accounting principles.
In connection with the audits of our financial statements for each of the two
fiscal years ended October 31, 1997 and 1996, there were no disagreements with
Ernst & Young LLP on any matters of accounting principles or practices,
financial statement disclosure, or auditing scope and procedures which, if not
resolved to the satisfaction of Ernst & Young LLP, would have caused Ernst &
Young LLP to make reference to the matter in their reports.

Ernst & Young LLP informed us of the following "reportable events" (as defined
in Item 304(a)(i)(v) of Regulation S-K promulgated under the Securities Act of
1933, as amended):

         - In their report to the Audit Committee for the year ended October 31,
         1997, Ernst & Young LLP advised Able as to the existence of reportable
         conditions in Able's system of internal controls. These reportable
         conditions related to (i) the lack of segregation of duties over the
         cash disbursements function, (ii) the failure to provide adequate
         documentation to support the business purpose of certain significant
         transactions with related parties, and (iii) the lack of monitoring
         controls over operations of its foreign subsidiaries.



                                       60
<PAGE>   66
                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                                                              PAGE
                                                                                                                             NUMBER
                                                                                                                             ------
<S>                                                                                                                          <C>
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets as of April 30, 2000 (Unaudited) and October 31, 1999 ................................. F-2

Condensed Consolidated Statements of Operations (Unaudited) for the three and six months ended April 30, 2000 and 1999 ...... F-3

Condensed Consolidated Statements of Cash Flows (Unaudited) for six months ended April 30, 2000 and 1999 .................... F-4

Notes to Condensed Consolidated Financial Statements (Unaudited) ............................................................ F-5

CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Public Accountants .................................................................................... F-29

Report of Independent Certified Public Accountants .......................................................................... F-30

Consolidated Balance Sheets - October 31, 1999 and 1998 ..................................................................... F-31

Consolidated Statements of Operations - Years Ended October 31, 1999, 1998 and 1997 ......................................... F-32

Consolidated Statements of Shareholders' Equity - Years Ended October 31, 1999, 1998 and 1997 ............................... F-33

Consolidated Statements of Cash Flows -Years Ended October 31, 1999, 1998 and 1997 .......................................... F-34

Notes to Consolidated Financial Statements - October 31, 1999 ............................................................... F-35

FINANCIAL STATEMENT SCHEDULE

II. Valuation and Qualifying Accounts - Years Ended October 31, 1999, 1998 and 1997 ......................................... F-61



</TABLE>


<PAGE>   67

                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)


<TABLE>
<CAPTION>
ASSETS                                                                                       April 30, 2000  October 31, 1999(1)
                                                                                             --------------  -------------------
Currents Assets:                                                                              (UNAUDITED)
<S>                                                                                             <C>               <C>
         Cash and cash equivalents .......................................................      $  11,441         $  16,568
         Accounts receivable, including retainage of $18,809 and $16,158 and net of
              allowances for bad debts of $3,323 and $3,514 at April 30, 2000 and
              October 31, 1999, respectively .............................................        104,326            73,645
         Costs and profits in excess of billings on uncompleted contracts ................         56,841            69,977
         Prepaid expenses and other current assets .......................................          9,332             5,853
                                                                                                ---------         ---------
                 Total current assets ....................................................        181,940           166,043
Property and equipment:
         Land and buildings ..............................................................          3,801             3,801
         Equipment, furniture and fixtures ...............................................         47,642            43,989
                                                                                                ---------         ---------
                                                                                                   51,443            47,790
         Less - Accumulated depreciation .................................................        (22,854)          (19,987)
                                                                                                ---------         ---------
         Property and equipment, net .....................................................         28,589            27,803
Other assets:
         Goodwill, net of accumulated amortization of $5,208 and $4,078 at April 30,
              2000 and October 31, 1999, respectively ....................................         40,485            41,222
         Networks under construction .....................................................         39,848             1,831
         Investment in Kanas .............................................................             --            12,159
         Other non-current assets ........................................................         12,989            12,975
                                                                                                ---------         ---------
                  Total other assets .....................................................         93,322            68,187
                                                                                                ---------         ---------
         Total assets ....................................................................      $ 303,851         $ 262,033
                                                                                                =========         =========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
         Current portion of long-term debt ...............................................      $  41,043         $  35,754
         Accounts payable and accrued liabilities including retainage of $18,737
              and $11,618 at April  30, 2000 and October 31, 1999, respectively ..........        117,120            66,617
         Accruals for incurred job costs .................................................         49,444            45,593
         Advance from WorldCom ...........................................................         32,000                --
         Reserves for losses on uncompleted contracts ....................................         30,605             8,620
         Billings in excess of costs and profits on uncompleted contracts ................          9,387             6,478
         Notes payable to shareholders and employees .....................................            607                --
         Stock appreciation rights payable ...............................................             --             3,710
                                                                                                ---------         ---------
                 Total current liabilities ...............................................        280,206           166,772
         Long-term debt, non-current portion .............................................            732            30,618
         Advance from WorldCom ...........................................................             --            32,000
         Property tax payable, non-current portion .......................................         16,661            15,468
         Long-term deferred revenues .....................................................         11,073                --
         Other non-current liabilities and minority interest .............................            301               422
                                                                                                ---------         ---------
                  Total liabilities ......................................................        308,973           245,280

Commitments and contingencies

Series B Preferred Stock, $.10 par value; stated at aggregate accumulated
         redemption value at October 31, 1999; 779 shares issued and outstanding at
         October 31, 1999 ................................................................             --            16,322
Series C Preferred Stock, $.10 par value; aggregate liquidation value of $15,000
         plus accumulated dividends of $208; 5,000 shares issued and outstanding at
         April 30, 2000 ..................................................................         13,665                --
Common securities subject to mandatory redemption:
        Common stock (801,787 shares at April 30, 2000) ..................................          4.911                --
        Series B Preferred Stock Exchange Warrants .......................................          1,213                --
        Series C Preferred Stock Warrants ................................................            784                --
                                                                                                ---------         ---------
                  Total temporary equity .................................................         20,573            16,322
                                                                                                ---------         ---------
Shareholders' Equity (Deficit):
         Common stock, $.001 par value, authorized 25,000,000 shares; 15,206,428 and
           11,891,338 shares issued and outstanding, respectively ........................             15                12
         Additional paid-in capital ......................................................         69,303            38,290
         Senior Note Warrants ............................................................          1,244             1,244
         Series B Preferred Stock Warrants ...............................................          2,735             2,735
         Warrants issued to financial advisor ............................................            313                --
         WorldCom Phantom Stock ..........................................................            606               606
         Retained deficit ................................................................        (99,911)          (42,456)
                                                                                                ---------         ---------
                  Total shareholders' equity (deficit) ...................................        (25,695)              431
                                                                                                =========         =========
         Total liabilities and shareholders' equity (deficit) ............................      $ 303,851         $ 262,033
                                                                                                =========         =========
</TABLE>

(1)      The balance sheet at October 31, 1999 has been derived from the audited
         financial statements at that date, but does not include all of the
         information and footnotes required by generally accepted accounting
         principles for complete financial statements.

            See notes to condensed consolidated financial statements.


                                      F-2
<PAGE>   68

                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


<TABLE>
<CAPTION>
                                                                           For the Three Months             For the Six Months
                                                                              Ended April 30                  Ended April 30
                                                                       ----------------------------    ----------------------------
                                                                           2000            1999            2000            1999
                                                                       ------------    ------------    ------------    ------------
                                                                                      (Restated)(1)                   (Restated)(1)
<S>                                                                    <C>             <C>             <C>             <C>
Revenue:
            Construction and maintenance ...........................   $    131,826    $     88,008    $    238,741    $    181,088
            Conduit sale ...........................................             --          35,721              --          35,721
                                                                       ------------    ------------    ------------    ------------
            Total revenue ..........................................        131,826         123,729         238,741         216,809

Costs and expenses:
            Construction and maintenance ...........................        144,641          77,560         247,167         155,656
            Costs of conduit sale ..................................             --          34,673              --          34,673
            General and administrative expense .....................         17,642           8,681          29,609          18,367
            Impairment of intangible assets ........................             --           2,465              --           2,465
            Depreciation and amortization expense ..................          2,825           3,207           5,633           5,984
                                                                       ------------    ------------    ------------    ------------

            Total costs and expenses ...............................        165,108         126,586         282,409         217,145
                                                                       ------------    ------------    ------------    ------------

Loss from operations ...............................................        (33,282)         (2,857)        (43,668)           (336)

Other income (expense):
            Interest expense .......................................         (1,516)         (2,210)         (3,965)         (4,688)
            Change in value of stock appreciation rights ...........             --           7,230           3,710           1,896
            Equity in losses/impairment of investment in Kanas .....        (11,875)             --         (12,184)             --
            Other ..................................................             44            (551)            368            (554)
                                                                       ------------    ------------    ------------    ------------

            Total other income (expense) ...........................        (13,347)          4,469         (12,071)         (3,346)
                                                                       ------------    ------------    ------------    ------------

Income (loss) before income taxes, minority interest
  and extraordinary item ...........................................        (46,629)          1,612         (55,739)         (3,682)
Provision for (benefit from) income taxes ..........................           (296)             15              --             (35)
                                                                       ------------    ------------    ------------    ------------

Income (loss) before minority interest and
  extraordinary item ...............................................        (46,333)          1,597         (55,739)         (3,647)
Minority interest ..................................................            122             125              50             199
                                                                       ------------    ------------    ------------    ------------
Income (loss) before extraordinary item ............................        (46,455)          1,472         (55,789)         (3,846)
Extraordinary loss on early extinguishment of debt .................             --          (3,067)             --          (3,067)
                                                                       ------------    ------------    ------------    ------------

Net loss ...........................................................        (46,455)         (1,595)        (55,789)         (6,913)
Increase in default redemption value of Series B Preferred Stock ...             --              --          (1,404)             --
Redemption of 2,785 shares of Series B Preferred Stock .............             --          (4,323)             --          (4,323)
Modification of exercise price of Series B Preferred
  Stock Warrants ...................................................             --          (1,894)             --          (1,894)
Modification of conversion price of Series B Preferred Stock .......             --          (6,430)             --          (6,430)
Series C Preferred Stock dividends and accretion ...................           (262)             --            (262)             --
Series B Preferred Stock dividends .................................             --             (64)             --            (244)
                                                                       ------------    ------------    ------------    ------------
Loss applicable to common stock ....................................   $    (46,717)   $    (14,306)   $    (57,455)   $    (19,804)
                                                                       ============    ============    ============    ============

Weighted average shares outstanding:
Basic ..............................................................     15,966,215      11,717,244      14,339,220      11,709,839
Diluted ............................................................     15,966,215      11,717,244      14,339,220      11,709,839
Loss applicable to common stock per share:
Basic:
Loss before minority interest and extraordinary item ...............          (2.93)          (0.96)          (4.01)          (1.43)
Extraordinary loss on early extinguishment of debt .................             --           (0.26)             --           (0.26)
Loss applicable to common stock ....................................          (2.93)          (1.22)          (4.01)          (1.69)
Diluted:
Loss before minority interest and extraordinary item ...............          (2.93)          (0.96)          (4.01)          (1.43)
Extraordinary loss on early extinguishment of debt .................             --           (0.26)             --           (0.26)
Loss applicable to common stock ....................................          (2.93)          (1.22)          (4.01)          (1.69)
</TABLE>


(1)      The fiscal 1999 unaudited amounts have been adjusted from amounts
         previously reported by the Company in quarterly filings with the
         Securities and Exchange Commission. Refer to Note 4, "Quarterly
         Financial Data."


            See notes to condensed consolidated financial statements.


                                      F-3
<PAGE>   69

                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                                              For the Six Months
                                                                                               Ended April 30,
                                                                                           -----------------------
                                                                                             2000           1999
                                                                                           --------       --------
                                                                                                        Restated (1)
<S>                                                                                        <C>            <C>
Cash provided by (used in) operating activities .....................................      $ (3,627)      $ 17,645

Cash flows from Investing Activities:
     Capital expenditures, net ......................................................        (5,396)        (1,646)
     Cash acquired from acquisition of businesses ...................................           122             --
                                                                                           --------       --------
         Net cash used in investing activities ......................................        (5,274)        (1,646)

Cash flows from Financing Activities:
     Repayments of long-term debt and other borrowings ..............................          (291)       (31,232)
     Proceeds from the issuance of long-term debt and other borrowings ..............            --         32,163
     Redemption of Series B Preferred Stock .........................................       (11,601)            --
     Proceeds from the issuance of preferred stock and warrants, net ................        14,400            (92)
     Proceeds from the exercise of stock options ....................................         1,102            330
     Dividends paid on preferred stock ..............................................            --           (244)
     Other ..........................................................................           164             34
                                                                                           --------       --------

     Net cash provided by financing activities ......................................         3,774            959
                                                                                           --------       --------

Change in cash and cash equivalents .................................................        (5,127)        16,958
Cash and cash equivalents, beginning of period ......................................        16,568         13,544
                                                                                           --------       --------

Cash and cash equivalents, end of period ............................................      $ 11,441       $ 30,502
                                                                                           ========       ========

Supplemental disclosures:
     Increases in goodwill resulting from acquisition of SASCO/SES ..................           392             --
     Common stock issued in conjunction with the acquisition of SASCO/SES ...........           739             --
     Conversion of WorldCom debt to common stock ....................................        25,544             --
     Contribution of interest payable to WorldCom ...................................         3,483             --
     Increase in default redemption value of Series B Preferred Stock ...............         1,404             --
     Warrants issued to financial advisor for Series C Preferred Stock offering .....           313             --
     Common stock issued to redeem Series B Preferred Stock .........................         4,911             --
     Warrants issued to redeem Series B Preferred Stock .............................         1,213             --
     Valuation of stock appreciation rights .........................................         3,710          1,896
     Common stock issued or accrued in conjunction with GEC earnout provisions ......           205          4,595
     Common stock issued in exchange for note payable to director ...................            --            828
     Modification of conversion price of Series B Preferred Stock ...................            --          6,430
     Modification of exercise price of Series B Preferred Stock Warrants ............            --          1,894
     Compensation recognized on deferred compensation plans .........................            --            710
</TABLE>


(1)      The fiscal 1999 unaudited amounts have been adjusted from amounts
         previously reported by the Company in quarterly filings with the
         Securities and Exchange Commission. Refer to Note 4, "Quarterly
         Financial Data."


            See notes to condensed consolidated financial statements.


                                      F-4
<PAGE>   70

                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


1.       BASIS OF PRESENTATION

In the opinion of management of Able Telcom Holding Corp. ("Able" or the
"Company"), the unaudited condensed consolidated financial statements furnished
herein include all adjustments (consisting of normal recurring adjustments)
necessary for a fair presentation of the results of operations for the interim
periods presented. These interim results of operations are not necessarily
indicative of results for the entire year. The condensed consolidated financial
statements contained herein should be read in conjunction with the consolidated
financial statements and related notes contained in the Company's 1999 Annual
Report on Form 10-K.

The accompanying unaudited condensed consolidated financial statements are
prepared on an accrual basis and include the accounts of the Company and all its
subsidiaries. A substantial portion of consolidated total assets, liabilities
and revenues are generated by one subsidiary of the Company, Adesta
Communications, Inc. ("Adesta"), formerly MFS Network Technologies, Inc.

All material intercompany accounts and transactions have been eliminated.
Certain items in the condensed consolidated financial statements for the three
and six months ended April 30, 1999, and as of October 31, 1999, have been
reclassified to conform with the current presentation.

2.       GOING CONCERN

The accompanying condensed consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. The following
conditions raise substantial doubt about the Company's ability to continue as a
going concern.

(1)      The Company has negative working capital of $98.3 million and a
         shareholders' deficit of $21.2 million as of April 30, 2000.

(2)      The Company incurred losses from operations of $43.7 million, net
         losses of $55.8 million, and losses applicable to common stock of $57.5
         million during the six months ended April 30, 2000. The Company also
         incurred losses from operations of $1.9 million, net losses of $18.1
         million, and losses applicable to common stock of $36.8 million during
         the fiscal year ended October 31, 1999.

(3)      The Company has borrowed the maximum available under its existing
         Credit Facility and is in default of the related covenants. The Credit
         Facility lenders have the right to demand payment and the Company has
         insufficient liquidity to pay such amounts, if called. The Company has
         not yet been successful in obtaining alternative financing and may have
         insufficient liquidity to fund its continuing operations.

(4)      As discussed in Note 9, "Reserves for Losses on Uncompleted Contracts"
         and Note 16, "Segment Information", reserves for losses on uncompleted
         contracts at April 30, 2000, totaled $30.6 million, including a $24.4
         million increase during the six months ended April 30, 2000 related
         primarily to the New Jersey Consortium contract. Funding of these
         expected losses will have a material adverse effect on the Company's
         future liquidity.

(5)      Some of the Company's construction contracts require payment of
         liquidated damages if certain milestones are not achieved on schedule.
         Lack of sufficient liquidity to pay vendors and subcontractors for
         those contracts on a timely basis could result in delays and
         significant additional obligations to the Company that are currently
         not anticipated or reflected in the Company's consolidated financial
         statements.

(6)      As discussed in Note 11, "Contingencies," the Company is the defendant
         in various legal matters that individually or in aggregate could have a
         material adverse effect on the Company's financial position.


                                      F-5
<PAGE>   71

         Subsequent to April 30, 2000, a significant judgement was awarded by a
         jury against the Company in favor of SIRIT Technologies, Inc.
         ("SIRIT"). Thereafter, the Company executed a settlement agreement with
         SIRIT which is described in Note 11. Because the settlement was made
         after the preparation and release of the April 30, 2000 financial
         statements, the accompanying unaudited condensed consolidated financial
         statements do not reflect any liability resulting from the SIRIT
         litigation. Refer to Note 19, "Pro Forma Financial Information" for the
         pro forma effects of the SIRIT settlement agreement.

(7)      The Company has been involved in discussions with NASDAQ regarding the
         Company's ability to meet certain minimum listing requirements,
         including minimum net equity. Failure of the Company to meet such
         requirements or present a plan approved by NASDAQ to meet such
         requirements could result in delisting of the Company's common stock by
         NASDAQ. As discussed in Note 12, "Preferred Stock," delisting by NASDAQ
         is an event of default under certain of the Company's non-registered
         securities that may require the Company to pay punitive interest and/or
         redeem such securities at punitive liquidation values. The Company has
         insufficient liquidity to redeem such securities if required to do so.

The accompanying condensed consolidated financial statements do not include any
adjustments relating to the recoverability and classification of asset carrying
amounts, including goodwill, or the amount and classification of liabilities
that might be necessary should the Company be unable to continue as a going
concern. The Company's continuation as a going concern is dependent upon its
ability to (a) generate sufficient cash flow to meet its obligations on a timely
basis, (b) obtain additional financing as may be required, and (c) ultimately
sustain profitability.

In response to these conditions, Management has consummated the following over
the past 12 months:

(1)      As part of the Company's ongoing efforts to align strategically the
         profitable portions of its business and as a result of significant
         turnover and the deterioration of underlying contracts, the Company
         closed Dial Communications, Inc. ("Dial") and Able Integrated Systems,
         Inc. ("AIS") during the fiscal year ended October 31, 1999, which
         together used cash flows from operations of approximately $7.4 million
         and $3.8 million during the fiscal years ended October 31, 1999 and
         1998.

(2)      As discussed in Note 10, "Debt," approximately $25.5 million of the
         Company's indebtedness to WorldCom was converted to common stock of the
         Company during January 2000. In addition, as also described in Notes
         10, 18 and 19, in connection with the SIRIT settlement, WorldCom has
         subsequently advanced an additional $5 million to the Company and
         agreed to convert aggregate advances of $37.0 million to Series D
         Preferred Stock.

(3)      As discussed in Note 12, "Preferred Stock," approximately $6.1 million
         of the accrued redemption value of the Company's Series B Preferred
         Stock was paid by issuing common stock and warrants of the Company
         during the quarter ended April 30, 2000. Concurrently, the remaining
         Series B Preferred Stock redemption obligation of approximately $10.9
         million was paid with cash funded through the issuance of $15.0 million
         of Series C Preferred Stock.

(4)      As discussed in Note 16, "Segment Information," the Company executed a
         comprehensive amendment to the New Jersey Consortium Contracts in June
         2000.

(5)      As discussed in Note 11, "Contingencies," the Company has executed a
         settlement agreement with SIRIT.

In addition to meeting the terms of the SIRIT settlement agreement, Management's
ongoing plans to deal with these conditions are as follows:


(1)      As described in Note 18, "Subsequent Event," the Company has agreed to
         merge with Bracknell Corporation. This transaction is scheduled to
         close in December 2000 or early in calendar 2001.

(2)      The Company is allocating its resources to meet its current contractual
         commitments, particularly those commitments that could result in
         contractual default and liquidated damages.


                                      F-6
<PAGE>   72
(3)      With regard to certain jobs, the Company continues to negotiate
         significant change orders for out-of-scope and other work that the
         Company has previously completed. Such change orders are not reflected
         in the condensed consolidated financial statements.

(4)      The Company continues with its efforts to raise replacement or
         additional financing which include ongoing discussions with current
         investors and the Credit Facility lenders.

3.       REVIEW BY THE SECURITIES AND EXCHANGE COMMISSION

The Company has worked, over approximately the past year, with the staff of the
Securities and Exchange Commission ("SEC") to resolve certain issues relating to
accounting and other disclosures made by the Company in connection with the
acquisition of Adesta from WorldCom effective July 2, 1998. As a result of the
SEC's review, the following events have taken place:

(1)      The Company has restated the preacquisition financial statements of
         Adesta (formerly known as MFS Network Technologies, Inc. or MFSNT). The
         restatement included the financial statements of MFSNT as of and for
         the year ended December 31, 1997 and as of and for the period ended
         July 2, 1998. See the Company's Form 8-K/A-4 that has been filed with
         the SEC.

(2)      The Company's 1998 Form 10-K/A-2 has been filed with the SEC to include
         certain additional disclosures and to include changes required to the
         "Pro Forma Financial Information" relating to the acquisition of MFSNT.

(3)      The Company has also filed Forms 10-Q/A for the quarters ended January
         31, 1999, April 30, 1999 and July 31, 1999. The financial statements
         for the quarters were restated as disclosed in the Company's 1999 Form
         10-K and certain additional disclosures in the notes to the financial
         statements were added. The Company's 1999 Form 10-K/A has also been
         filed to incorporate additional disclosures requested by the SEC staff.

The Company has received verbal acceptance from the SEC regarding resolution of
the accounting and disclosure issues related to the acquisition of Adesta.
However, the SEC has reserved the right to review the Company's Form 10-K/A for
1999 and the Form 10-Q for the quarter ended January 31, 2000.

The Company has also resubmitted its Notice of Annual Meeting, Proxy Statement
and Proxy (collectively the "Proxy") for the years ended October 31, 1999 and
1998 and responded to comments of the SEC Staff. As of August 31, 2000, the SEC
had not completed its review of the Proxy. As a result of the ongoing review by
the SEC, Able has not been able to hold a shareholders' meeting since April 1998
and shareholder approval of certain proposals included in the Proxy is necessary
to avoid punitive provisions relating to the Company's preferred stock as
described in Note 12, "Preferred Stock." Able expects to schedule and hold a
shareholders' meeting as soon as practicable after receiving clearance of its
Proxy from the SEC.

4.       QUARTERLY FINANCIAL DATA

The quarterly unaudited amounts for the three and six months ended April 30,
1999, have been adjusted from amounts originally reported by the Company in its
quarterly filings with the Securities and Exchange Commission. The adjustments
relate to accounting errors discovered subsequent to October 31, 1999. Their
nature and effects on the results of operations for the three and six months
ended April 30, 1999, are summarized below (in thousands, except per share
data):


                                      F-7
<PAGE>   73

<TABLE>
<CAPTION>
                                                                          As Reported    Adjustments      Adjusted
                                                                          -----------    -----------     ---------
<S>                                                                       <C>            <C>             <C>
For the Three Months Ended April 30, 1999:
     Revenues                                                              $ 124,481       $  (752)      $ 123,729
     Operating income (loss)                                                     536        (3,393)         (2,857)
     Net income (loss)                                                            41        (1,636)         (1,595)
     Loss applicable to common stock                                         (15,151)          845         (14,306)
     Loss applicable to common stock per share                                 (1.29)         0.07           (1.22)

For the Six Months Ended April 30, 1999:
     Revenues                                                              $ 216,258       $   551       $ 216,809
     Operating income (loss)                                                   5,899        (6,235)           (336)
     Net loss                                                                   (540)       (6,373)         (6,913)
     Loss applicable to common stock                                         (15,912)       (3,892)        (19,804)
     Loss applicable to common stock per share                                 (1.35)        (0.34)          (1.69)
                                                                          ----------       -------       ---------
</TABLE>

<TABLE>
<CAPTION>
                                                                                         Net income (loss)
                                                         Net Income (loss) for         Applicable to Common
                                                            the Months Ended           Stock for the Months
                                                             April 30, 1999            Ended April 30, 1999
                                                        -----------------------       -----------------------
                                                         Three           Six           Three           Six
                                                        --------       --------       --------       --------
<S>                                                     <C>            <C>            <C>            <C>
Amounts previously reported                             $     41       $   (540)      $(15,151)      $(15,912)
Adjustments:
     WorldCom SAR obligation (1)                             821         (1,085)           821         (1,085)
     Improperly deferred costs (2)                        (2,382)        (3,145)        (2,382)        (3,145)
     Costs improperly charged against reserves (3)           623            491            623            491
     Prior year accrual adjustment (4)                        --           (957)            --           (957)
     Equipment impairment loss (5)                        (1,146)        (1,146)        (1,146)        (1,146)
     Tax effects of all adjustments                          807            689            807            689
     Series B redemption and modification (6)                 --             --          2,481          2,481
     Other adjustments (7)                                   (18)          (643)           (18)          (643)
     Long-term service contracts adjustments (8)            (341)          (577)          (341)          (577)
                                                        --------       --------       --------       --------
  Total adjustments                                       (1,636)        (6,373)           845         (3,892)
                                                        --------       --------       --------       --------

Restated amounts                                        $ (1,595)      $ (6,913)      $(14,306)      $(19,804)
                                                        --------       --------       --------       --------
</TABLE>

(1)      The obligation under the WorldCom SARs was calculated using a
         Black-Scholes option-pricing model. The obligation should have been
         accounted for at "intrinsic value" determined as the difference between
         the closing price of the Company's common stock on the balance sheet
         date and the strike price of $7.00.

(2)      The Company deferred certain costs relating to its operation of the
         Violation Processing Center for the New Jersey Consortium that should
         have been expensed as incurred.

(3)      Indirect costs were not consistently allocated to Transportation
         Services Group jobs. In addition, certain other costs were
         inappropriately charged against the reserves for losses on uncompleted
         contracts.

(4)      A prior year consolidating adjustment to reduce accrued expenses was
         inappropriately not reversed in the preparation of the 1999
         consolidations.

(5)      An impairment loss for certain equipment for one of the Company's
         subsidiaries should have been recognized in the second quarter of
         fiscal 1999.

(6)      The February 1999 redemption of Series B Preferred Stock and the
         modification of the terms of the then remaining Series B shares was not
         correctly determined.

(7)      Other adjustments made as a result of the year-end audit affected the
         previously reported quarterly amounts as shown.

(8)      These adjustments recognize losses on long-term service contracts as
         incurred as discussed more fully in the following paragraph.


                                      F-8
<PAGE>   74

LONG-TERM SERVICE CONTRACTS

During the three months ended July 31, 1999, an accrual of $8.4 million was made
with an offsetting increase to goodwill for projected losses on long-term
service contracts assumed as part of the acquisition of Adesta for operation and
maintenance of fiber networks. The contracts extend for fifteen to twenty years.
Performance under these agreements, which were predominately executed in 1996
and 1997, began during fiscal 1999. The Company subsequently determined that the
costs to perform under these contracts are expected to be greater than amounts
presently expected to be billable to network users under firm contractual
commitments. The appropriate accounting treatment for long-term service
contracts of this nature is not clearly defined, particularly when the contracts
have been assumed as part of a purchase business combination. The Company
subsequently determined that such losses cannot be reasonably estimated due to
potential changes in various assumptions. Consequently, the Company has
determined the appropriate accounting for these obligations is to record any
such losses in the periods in which the losses are incurred. In March 2000, the
SEC informed the Company that it would not object to the conclusion that such
revised accounting is appropriate under generally accepted accounting
principles. The Company has restated its quarterly results for the first, second
and third quarters of 1999 to reflect these losses as incurred and to reverse
the additional $8.4 million accrued for these obligations.

5.       ACQUISITIONS

SASCO/SES

On November 5, 1999, the Company acquired all of the outstanding common stock of
Southern Aluminum & Steel Corporation ("SASCO") along with Specialty Electronic
Systems, Inc. ("SES"). SASCO has operations in Birmingham, Cape Canaveral and
Atlanta and has 40 years' experience in surveillance systems, signalization,
Intelligent Transportation Systems ("ITS") and roadway lighting. It provides
expertise in design, installation, and project implementation of advanced
highway communication networks. SES is a systems/integration company in the ITS
market, having designed, fabricated, installed and integrated ITS systems in 11
states from the East Coast to Ohio and Texas.

Consideration for SASCO and SES was 75,000 shares of common stock with a value
of approximately $0.7 million. In addition to the initial consideration, the
Company has provided an earn-out provision to the prior shareholders whereby
additional consideration will be given based on certain performance
measurements. The additional consideration can be earned over a four-year
period. The Company has recorded this transaction using the purchase method of
accounting. The pro forma effect on consolidated results of operations, from the
acquisition of SASCO and SES, is not material.

The earn-out consideration for year one (ending October 31, 2000) shall be
converted into the Company's common stock by dividing the earn-out consideration
by $8. The earn-out consideration for year two through year four shall be
converted into the Company's common stock by dividing the earn-out consideration
by the 52-week average of the closing market price of the Company's common stock
for each respective year.

The consideration shall be paid in shares of the Company's common stock.
However, the cumulative shares issued (initial and earn-out) may never exceed
19.9 percent of the total Company common stock issued and outstanding. Should
the 19.9 percent threshold be reached, any additional consideration earned will
be paid in cash or promissory notes with interest calculated at a market rate,
as mutually agreed upon by the Company and the former shareholders, at the time
of payment.

As of April 30, 2000, the Company has outstanding approximately $0.6 million of
debt to former shareholders of SASCO and SES. Such amounts are reflected in the
accompanying condensed consolidated balance sheet as "Notes Payable to
Shareholders and Employees" and bear interest at 10 percent per annum.


                                      F-9
<PAGE>   75
6.       ASSUMPTION OF COMSAT CONTRACTS

On February 25, 1998, Georgia Electric Company ("GEC") assumed obligations to
complete 12 contracts (the `COMSAT Contracts') with the Texas Department of
Transportation from CRSI Acquisition, Inc., a subsidiary of COMSAT Corporation
("COMSAT"). The COMSAT Contracts were for the installation of intelligent
traffic management systems and the design and construction of wireless
communication networks. In exchange for assuming the obligations to perform
under the COMSAT Contracts, GEC received consideration from COMSAT of
approximately $15.0 million and assumed existing payables of approximately $2.6
million.

On February 25, 1998, the date when GEC assumed the COMSAT contracts, the
remaining amounts billable to the customers for these contracts totaled $17.0
million. The estimated costs to complete these contracts for COMSAT was from
$17.0 million to $27.3 million. GEC made the following entry to reflect the
assumption of the COMSAT contracts (amounts in thousands):


<TABLE>
<S>                                                                               <C>
Consideration received:
     Cash                                                                         $  4,663
     Accounts receivable                                                             3,754
     Equipment and other assets                                                      6,548
                                                                                  --------
Subtotal                                                                            14,965
Accounts payable assumed                                                            (2,549)
                                                                                  --------
Deferred revenue (net amount received from COMSAT to complete the contracts)      $(12,416)
                                                                                  --------
</TABLE>

The following is a summary of revenues and costs associated with the COMSAT
contracts for the periods ended April 30, 1999 (amounts in thousands):

<TABLE>
<CAPTION>
                                          Three        Six
                                          Months      Months
                                          ------      ------
<S>                                       <C>         <C>
Billings on the COMSAT contracts (1)      $3,251      $5,556
Deferred revenue recognized                1,032       2,531
                                          ------      ------
                                           4,283       8,087
Direct contract costs                      2,048       5,115
                                          ------      ------
Gross margin from COMSAT contracts        $2,235      $2,972
                                          ------      ------
</TABLE>

(1)      Billings on the COMSAT contracts include approved change order revenues
         associated with these contracts but not anticipated when GEC assumed
         such contracts.

All of the COMSAT Contracts were substantially complete as of October 31, 1999.
The revenues, cost of revenues and gross margins are non-recurring and are not
generally indicative of returns the Company expects to achieve on future
contracts.

7.       NETWORKS UNDER CONSTRUCTION

Networks under construction at April 30, 2000, and October 31, 1999, consisted
primarily of telecommunication infrastructure projects (the "CDOT Network") on
rights-of-way leased for 20 years, with renewal rights, from the Colorado
Department of Transportation ("CDOT"). The duct capacity varies along the CDOT
Network and is being constructed, marketed and sold or leased by Adesta under
long-term user (irrevocable rights of use) agreements. In addition to long-term
user agreements, the Company may execute fiber installation and long-term
maintenance contracts with the CDOT Network users.

As of April 30, 2000, there are three primary segments of the CDOT Network: (i)
the I-70 corridor from Denver, Colorado to Salt Lake City, Utah ("I-70 West");
(ii) I-70 corridor from Denver, Colorado to the Kansas border ("I-70 East"); and
(iii) the Denver, Colorado metro loop ("Denver Metro Loop"). The status of these
CDOT Network segments at April 30, 2000, was as follows:


                                      F-10
<PAGE>   76

<TABLE>
<CAPTION>
                                   Long-Term
                     Construction   Deferred       Percent   Percent of Total
                        Costs       Revenues       Complete  Capacity Leased
                     ------------  ---------       --------  ----------------
<S>                    <C>          <C>               <C>           <C>
I-70 West              $17,448      $    --           18            --
I-70 East                4,643        3,335           99            18
Denver Metro Loop       15,037        5,901           28            50
Other                    2,720        1,837           45            45
                       -------      -------           --            --
                       $39,848      $11,073
                       -------      -------
</TABLE>

Adesta and an independent telecommunications company ("the Co-owner") will
jointly own the I-70 West network. Future plans include extension of the network
to Salt Lake City, Utah. Adesta and the Co-owner will separately own one conduit
each. The other six conduits will be jointly owned by the parties. Initially,
one of the jointly-owned conduits will include fiber optic cable. Adesta and the
Co-owner will separately own 36 fibers each, 72 fibers will be jointly-owned,
and all rights to 24 fibers ("the CDOT fiber") will be transferred to CDOT as
consideration for the right-of-way along I-70. The right-of-way is for an
initial term of 20 years, with a 20-year renewal option.

Generally, Adesta and the Co-owner will share the costs of the network equally.
Adesta is accounting for this project as a "cost-sharing" agreement and the
Co-owner's share of network costs is not being recognized as revenues by Adesta.
The Co-owner has agreed to pay Adesta a percentage of the costs for constructing
the network which Adesta is recognizing as fee revenue as the construction takes
place. Fees earned of $1.8 million and $1.8 million were recognized for the
three and six months ended April 30, 2000, respectively.

Adesta and the Co-owner will jointly market the capacity of the network. Adesta
plans to enter into fiber installation agreements with users that contract for
use of the network. No installation agreements have been signed for this network
as of April 30, 2000. The accounting policies for revenues and costs applicable
to installation agreements will be based on the terms of the individual
agreements. FASB Interpretation No. 43, "Real Estate Sales" ("FIN 43"), issued
in June 1999, broadens the definition of real estate to include some or all
elements of fiber optic networks. Among other requirements, FIN 43 effectively
requires title to transfer to the user for up-front revenue recognition to be
appropriate.

Adesta and the Co-owner will jointly share the costs of maintaining the CDOT
fibers. Sharing of revenues and costs of maintenance for other users is to be
negotiated. Adesta plans to account for its share of the maintenance revenues
and costs as the revenues are earned and as the costs are incurred.

User fees received by Adesta through April 30, 2000, have been deferred.
Generally, the Company expects to recognize revenue from the user agreements
ratably over the lives of the agreements, while the cost of the CDOT network,
including the cost assigned to the capacity provided to CDOT as consideration
for the use of the rights-of-way, will be depreciated over the expected useful
life of the network. As of April 30, 2000, no revenues, except for the fees of
$1.8 million discussed above, or direct costs of construction associated with
the CDOT Network have been recognized in determining the results of operations.

The Company is not in the telephone service or data distribution business, so no
part of the networks have been viewed as the construction of productive assets
for its own use. Rather, the future sale/lease to third-party users of
telecommunication infrastructures represents a significant component of the
Company's operating plan, and the Company believes it should be reported as
such.

The Company expects to incur significant additional amounts to complete the
construction of the CDOT Networks. Failure of the Company to execute sufficient
user agreements for the CDOT Networks could have a material adverse effect on
the carrying value of the Company's investment.

8.       INVESTMENT IN KANAS (HELD FOR SALE)

An equity interest in Kanas was acquired in the Adesta Acquisition, and has been
held for sale since that time. The original carrying value of the Company's
interest in Kanas, which was assigned in purchase accounting, represents the net
proceeds originally expected to be received from the sale of Kanas stock and was
based, in part, on active negotiations with potential buyers.


                                      F-11
<PAGE>   77

Until March 2000, the Company was a 25% owner of Kanas, with the remaining 75
percent owned by native corporations of Alaska. Kanas was established by its
shareholders with a $100,000 total equity contribution ($25,000 per shareholder)
to construct a telecommunications network along the Alaskan Pipeline system
between Prudhoe Bay, Alaska, and Valdez, Alaska (the "Alyeska Network"). Adesta
had been contracted by Kanas to build the fiber optic network which cost in
excess of $83.0 million and was funded by Kanas through a credit agreement that
is guaranteed by WorldCom.

While Kanas provided Adesta with notice of substantial completion in December
1998, the owner of the Alyeska Network has yet to give Kanas final acceptance of
the system and significant outstanding claims exist among the parties. Reserves
were provided in purchase accounting for estimated amounts payable by the
Company to complete the project and to settle outstanding claims against Adesta.
While Adesta had outstanding claims of at least $15.8 million against Alyeska
for work it believed was outside the scope of the contract, no accounting
recognition was given to these claims because of the uncertainty of resolution
favorable to the Company.

Kanas owns and is responsible for maintaining the Alyeska Network. Kanas
contracted with Adesta to operate and maintain the Alyeska Network for 15 years,
beginning in December 1998. Through April 30, 2000, service contract revenues
were insufficient to cover related costs. In March 2000, the service contract
was terminated and the Company was released from further responsibilities and
obligations related to that arrangement.

At the date of the acquisition of Adesta, the Company anticipated a near-term
sale of its interest in Kanas. Accordingly, the estimated amount expected to be
realized on sale was allocated to this investment in purchase accounting and, in
accordance with the guidance of EITF Issue 87-11, "Allocation of Purchase Price
to Assets to be Sold," the equity method of accounting was not employed.
However, the timing of any sale of this interest by the Company became
uncertain. Consequently, effective one year from the date of acquisition, the
Company began to apply equity method accounting to this investment based on the
guidance of EITF Issue 90-06, "Accounting for Certain Events Not Addressed in
EITF 87-11 Relating to an Acquired Operating Unit to be Sold."

Through January 31, 2000, the Company recorded equity in losses of Kanas and
amortized the difference between the carrying value of the Kanas investment and
its equity in the net assets of Kanas over 19 years which was the remaining
goodwill life related to the acquisition of Adesta. The amount of loss the
Company recorded during the six months ended April 30, 2000, against the
carrying value of the asset was approximately $0.2 million, while the associated
amortization of the difference in carrying value was approximately $0.2 million.

WorldCom was and continues to be the guarantor of the payment obligations of
Kanas under its credit agreement. In conjunction with the acquisition of Adesta,
the Company agreed to indemnify WorldCom under its guarantee. The debt under the
Kanas credit agreement at October 31, 1999 was approximately $87.5 million which
was payable in full on September 15, 2000.

The Company learned on February 25, 2000 that, on February 24, 2000, Alyeska
declared Kanas to be in default under the terms of their contract. Alyeska
asserted that Kanas did not have the right to cure the default and notified
Kanas that the contract was terminated. Adesta did not receive any notice of
default from Kanas nor did it receive any request regarding the indemnification
agreement with WorldCom.

During March 2000, Kanas sold newly-issued shares to WorldCom that reduced the
25% equity interest of Adesta and each of the three other original shareholders
of Kanas to 5%. The equity infusion resulted in an implied value of the
Company's residual 5% interest in Kanas of less than $100,000.

During May 2000, Kanas and Adesta executed an agreement that provides the
following:

(1)      Adesta remains liable for any and all claims that Kanas or third
         parties (including, without limitation, Alyeska and subcontractors) may
         have against Adesta arising out of the services performed by Adesta for
         Kanas.

(2)      As consideration for Adesta's transfer of assets provided in item (3)
         below, Adesta has no payment obligation in respect of damages, loss,
         liability or expense, exclusive of the fees and expenses of Adesta's
         own attorneys and


                                      F-12
<PAGE>   78

         other professional fees (collectively the "Losses") arising from
         alleged defects in the Alyeska Network, unless and until the aggregate
         amount of such Losses incurred by Kanas exceeds $18.0 million.

(3)      As consideration for Kanas' release of Adesta in accordance with item
         (2) above, Adesta (i) transferred to Kanas its rights to $15.8 million
         of claims against Aleyska; and (ii) transferred inventory and equipment
         with a book value of approximately $0.3 million to Kanas.

(4)      As additional consideration, the Company was released from its
         indemnification related to WorldCom's guarantee of the Kanas credit
         facility and WorldCom forgave $3.5 million of accrued interest due on
         the WorldCom Note (see Note 10, "Debt"). Because of WorldCom's
         ownership interest in the Company, the forgiveness of interest was
         credited to equity as a contribution to capital.

As a result of the events described above, during the three months ended April
30, 2000, the Company (i) recognized an impairment of its interest in Kanas of
approximately $11.9 million, equal to its carrying amount; (ii) recorded a loss
of $0.3 million related to the transfer of inventory and equipment and (iii)
wrote-off approximately $0.4 million of receivables from Kanas that will not be
collected.

9.       RESERVES FOR LOSSES ON UNCOMPLETED CONTRACTS

The following is a summary of the reserves for losses on uncompleted contracts
(amounts in thousands):

<TABLE>
<CAPTION>
                                  Network Services Group     Transportation Services Group             Total
                                  -----------------------    -----------------------------    -----------------------
                                    2000           1999           2000           1999           2000           1999
                                  --------       --------       --------       --------       --------       --------
<S>                               <C>            <C>            <C>            <C>            <C>            <C>
Balance, beginning of fiscal
year                              $  5,703       $  8,029       $  2,917       $ 17,361       $  8,620       $ 25,390
Additions (1)                          141             --          4,744             --          4,885             --
Amount utilized                       (393)        (1,231)          (961)        (6,068)        (1,354)        (7,299)
                                  --------       --------       --------       --------       --------       --------
Balance, January 31                  5,451          6,798          6,700         11,293         12,151         18,091
Additions (1)                          627             --         18,885          1,858         19,512          1,858
Amount utilized                        (53)        (1,250)        (1,005)        (1,044)        (1,058)        (2,294)
                                  --------       --------       --------       --------       --------       --------
Balance, April 30                 $  6,025       $  5,548       $ 24,580       $ 12,107       $ 30,605       $ 17,655
                                  --------       --------       --------       --------       --------       --------
</TABLE>

(1)      Additions during the three and six months ended April 30, 2000, related
         primarily to the New Jersey Consortium Contracts. Additions and amounts
         utilized exclude previously unprojected losses incurred during each
         period (refer to Note 16, "Segment Information").

10.      DEBT

CREDIT FACILITY

On June 11, 1998, the Company obtained a $35.0 million three-year senior secured
revolving credit facility ("Credit Facility") with a $5.0 million sub-limit for
the issuance of standby letter(s) of credit. The Credit Facility allows the
Company to select an interest rate based upon the prime rate or on a short-term
LIBOR, in each case plus an applicable margin, with respect to each draw the
Company makes thereunder. Interest is payable monthly in arrears on base rate
advances and at the expiration of each interest period for LIBOR advances. The
Credit Facility contains certain financial covenants that require, among other
conditions, that the Company maintain certain minimum ratios, minimum fixed
charge coverage, and interest coverage, as well as limitations on total debt and
dividends to shareholders. The Credit Facility is secured by a perfected first
priority security interest on all tangible assets of the Company and a pledge of
the shares of stock of each of the Company's subsidiaries operating in the
United States. On June 30, 1998, the Credit Facility was amended to include (i)
the Company's acquisition of Adesta and the related financing of such
transaction, (ii) changes in financial covenants related thereto, and (iii)
other amendments relating to investments, pledging and intercompany matters.


                                      F-13
<PAGE>   79

At April 30, 2000 and October 31, 1999, the Company is in default of certain
provisions of the Credit Facility. As such, the Credit Facility is immediately
callable by the holder and is therefore classified as a current liability in the
accompanying consolidated balance sheets. During the default period, the Company
is required to pay a default penalty of two percent per annum over the contract
rate on all outstanding balances and is required to make interest payments
monthly.

WORLDCOM NOTE

On January 11, 2000, the Company entered into an agreement with WorldCom whereby
WorldCom converted approximately $25.5 million of its $30.0 million WorldCom
Note into 3,050,000 shares of the Company's Common Stock. The conversion was
based on the January 8, 2000 closing price of the Company's Common Stock at
$8.375 per share. The remainder of the original WorldCom Note, approximately
$4.5 million, was converted into an amended and restated 11.5 percent
subordinated promissory note due February 2001. As described in Note 8,
"Investment in Kanas (Held for Sale),' and Note 10, "Debt," WorldCom agreed in
May 2000 to forgive approximately $3.5 million of accrued interest on the
WorldCom Note, which was recorded by the Company as a credit to paid in capital.

Subsequent to April 30, 2000, WorldCom has agreed to extend the terms of the
$4.5 million promissory note to a seven-year, 8 percent note. As amended, this
note is subordinate to the Credit Facility, will expire in 2007 and is not
prepayable.

WORLDCOM ADVANCE

In February 1999, WorldCom advanced the Company $32 million ("WorldCom Advance")
as an advance against amounts otherwise payable by WorldCom under the WorldCom
Master Services Agreement. The WorldCom Advance is subordinate to the Credit
Facility, bears no interest, and includes a stated repayment date of November
30, 2000. However, payments under the WorldCom Advance were further subordinated
to liabilities associated with certain construction projects that are now
expected to be completed in March 2001. Consequently, the implied maturity date
is currently March 2001 and the WorldCom Advance is presented in the
accompanying balance sheet as of April 30, 2000 as a current liability.

Subsequent to April 30, 2000, WorldCom advanced the Company an additional $5.0
million to pay the cash portion of the SIRIT Settlement (refer to
Note 11, "Contingencies").

Effective August 23, 2000, in exchange for the $37.0 million in advances,
WorldCom was issued 1,000 shares of $.10 par value Series D Convertible
Preferred Stock ("Series D Stock"). The Series D Stock is entitled to dividends
at 6% per annum based on the Liquidation Price of $37,000 per share. Dividends
are to be payable only if and when declared by the Board of Directors and are
not cumulative. However, dividends will nevertheless be deemed declared and
payable upon the occurrence of a Liquidation Event. A Liquidation Event is
defined as an acquisition of the Company that transfers 50% or more of the
Company's voting power, or the sale of substantially all of the Company's
assets. The Series D Stock is convertible to common stock at an initial
conversion price of $10.01 per share. However, the conversion price is subject
to adjustment if new securities (i.e., other than those outstanding at August
23, 2000, and employee options) are issued at an effective price less than the
conversion price. In particular, in the event of a Liquidation Event (such as
the proposed sale to Bracknell described in Note 18), the conversion price will
automatically be reset to the price per share received in such transaction by
holders of the Company's common stock.

The pro forma effects of this subsequent event are presented in Note 19, "Pro
Forma Financial Information."

OTHER DEBT

The following is a summary of other debt as of April 30, 2000 (in thousands):

<TABLE>
<S>                                                                                                    <C>
Revolving line of credit;  aggregate commitment amount of $1.3 million; priced at 1 percent above
     the bank's floating prime rate;  secured by the assets of SASCO and guaranteed by the former
     shareholders of SASCO                                                                             $ 1,000
Revolving line of credit; aggregate commitment amount of $0.5 million; priced at
     1 percent above the bank's floating prime rate; secured by the assets of
     SES and guaranteed by SASCO
                                                                                                           459
Other term debt                                                                                            256
                                                                                                       -------
     Total SASCO and SES debt                                                                            1,715
Credit Facility                                                                                         35,000
Remaining balance of WorldCom Note                                                                       4,456
Capital lease obligations                                                                                  604
                                                                                                       -------
                                                                                                        41,775
Less current portion                                                                                    41,043
                                                                                                       -------
Long-term debt                                                                                         $   732
                                                                                                       -------
</TABLE>


                                      F-14
<PAGE>   80

11.      CONTINGENCIES

LITIGATION

SIRIT TECHNOLOGIES, INC. VERSUS ABLE TELCOM HOLDING CORP. AND THOMAS M. DAVIDSON
- In 1998, SIRIT filed a lawsuit in the United States District Court for the
Southern District of Florida, against the Company and Thomas M. Davidson (a
former director of the Company). SIRIT asserted claims against the Company for
tortuous interference, fraudulent inducement, negligent misrepresentation and
breach of contract in connection with the Company's agreement to purchase the
shares of Adesta and seeks injunctive relief and compensatory damages in excess
of $100.0 million. The Company agreed to indemnify Thomas M. Davidson related to
any loss suffered by him in this matter.

On May 16, 2000, a jury awarded SIRIT the amount of $1.2 million in compensatory
damages. In addition, punitive damages were assessed against Able in the amount
of $30.0 million and $1.3 million against Thomas M. Davidson. The Company
submitted a "motion for remittitur and judgement as a matter of law" to the
court and planned to appeal the judgement, if not altered or amended by the
court as requested in the remittitur. Among other things, the motion asserted
that Sirit failed to prove essential elements of its claims and further, that
Florida law limits punitive damages to three times compensatory damages. On the
same date, Sirit moved for a new trial on the issue of compensatory damages. The
court scheduled June 19, 2000, for hearing the post-trial motions and stayed
execution of the judgement through June 20, 2000.

The accompanying unaudited condensed consolidated financial statements as of
April 30, 2000 do not reflect any liability from this litigation. In spite of
the SIRIT jury verdict, the Company believed there were significant
uncertainties and insufficient information regarding the ultimate outcome of the
SIRIT litigation, and therefore, the SIRIT liability, if any, was not reasonably
estimable prior to the filing date (June 19, 2000) of the Company's Form 10-Q
for the quarterly period ended April 30, 2000.

SIRIT SETTLEMENT - It was subsequently concluded that settlement of the SIRIT
litigation was necessary in order for the Company to move forward with financing
alternatives under consideration. As a result, on July 7, 2000, the Company
executed a settlement with SIRIT (the "SIRIT Settlement"). The terms of the
SIRIT Settlement generally provide for the following:

1.       Cash Settlement - Able paid SIRIT $5.0 million cash as consideration
         for entering into the Settlement. Mr. Davidson also paid SIRIT $650,000
         cash and he will not be reimbursed by the Company.

2.       Equity Settlement - Able also agreed to issue to SIRIT common shares
         equal to 19.99 percent of the outstanding shares of Able. The number of
         shares to be issued totals approximately 4,074,597 (subject to certain
         anti-dilution provisions), subject to shareholder approval and
         registration rights. The value of 4,074,597 common shares of the
         Company, based upon the closing market price on July 7, 2000, was $12.2
         million.

         In addition, SIRIT is entitled to receive, for no additional
         consideration, 936,914 additional common shares upon conversion of the
         outstanding Series C Preferred Stock to common. The Series C has a face
         value of $15 million and, as adjusted by the Settlement Agreement, is
         convertible to common at $4.00 per share. Upon conversion of the Series
         C Stock to 3,750,000 shares of common stock, SIRIT would receive the
         additional shares to maintain its 19.99% interest, subject to the
         impact (if any) of the shares issued pursuant to the following
         paragraph.

         SIRIT was also granted anti-dilution rights for a two-year period
         commencing when the initial 19.99 percent of outstanding shares have
         been issued, which issuance cannot occur unless and until shareholder
         approval is obtained. Upon any issuance of common shares at a price
         less than $10.00 per share during the two-year period, SIRIT would have
         the right to buy additional shares of the Company's common stock. The
         number of shares SIRIT could buy would be sufficient to maintain its
         percentage interest immediately before each such issuance and at the
         same price per share received by the Company upon such issuance. SIRIT
         would have 30 days from each such issuance to exercise this right.

3.       Cash in Lieu of Equity. In the event Able fails to deliver SIRIT
         registered common stock by November 30,


                                      F-15
<PAGE>   81

         2000 in accordance with paragraph 2, SIRIT can execute a $20.0 million
         consent judgement against Able (i.e. demand a cash payment of $20.0
         million). The consent judgement was also executed on July 7, 2000.

The Company expects to record, during the quarterly period ended July 31, 2000,
a charge of $25.0 million related to the SIRIT Settlement. This will consist of
the $5 million of cash paid and a liability for $20.0 million equal to the
consent judgment. If and when the conditions for issuance of equity securities
to SIRIT is satisfied, the Company will record those securities in equity at
their then fair value. Any difference between the aggregate fair value of the
shares issued and the $20 million liability will be recognized as an adjustment
to the original charge for the litigation settlement. The anti-dilution rights
may result in further contingent charges to earnings to the extent of any
intrinsic value to SIRIT, if and when such rights occur and are exercised by
SIRIT.

The pro forma effects of this subsequent event are presented in Note 19, "Pro
Forma Financial Information."

SHIPPING FINANCIAL SERVICES CORP. VERSUS ABLE TELCOM HOLDING CORP. AND CERTAIN
COMPANY OFFICERS - In 1998, Shipping Financial Services Corp. ("SFSC") filed a
lawsuit in the United States District Court for the Southern District of Florida
against the Company, and certain of its officers. SFSC asserts claims under the
federal securities laws against the Company and four of its officers that the
defendants allegedly caused the Company to falsely represent and mislead the
public with respect to two acquisitions, COMSAT and Adesta, and the ongoing
financial condition of the Company as a result of the acquisitions and the
related financing of those acquisitions. SFSC seeks certification as a class
action on behalf of itself and all others similarly situated and seeks
unspecified damages and attorneys' fees. The class period for the SFSC lawsuit
is all persons who purchased the Company's common stock between December 4, 1997
and December 1, 1999.

BAYPORT PIPELINE, INC. VERSUS ADESTA COMMUNICATIONS, INC. - In 1997, Bayport
Pipeline, Inc. ("Bayport") filed a lawsuit against Adesta seeking a declaratory
judgment concerning the rights and obligations of Bayport and Adesta under a
Subcontract Agreement that was entered into on May 1, 1997 related to the NYSTA
contract. The matter was referred to arbitration in January 1999. The total
amount sought was not less than $5.5 million and subsequent to October 31, 1999,
was increased to $19 million.

On February 24, 2000, the independent arbitrator ruled that Adesta owed Bayport
$4.1 million, which is consistent with amounts previously accrued by the
Company. The Company has appealed the award in Federal District Court (Northern
District of Texas) and is subject to statutory interest from the date of the
award in the event the award is not overturned.

U.S. PUBLIC TECHNOLOGIES, INC. VERSUS ADESTA COMMUNICATIONS, INC. - In 1997,
U.S. Public Technologies, Inc. ("USPT") filed a lawsuit in the United States
District Court for the Southern District of California, (San Diego), against
Adesta for breach of contract, breach of an alleged implied covenant of good
faith and fair dealing, tortuous interference, violation of the California
Unfair Competition Act, promissory estoppel and unjust enrichment in connection
with a Teaming Agreement between Adesta and USPT concerning the Consortium
Regional Electronic Toll Collection Implementation Program in the state of New
Jersey. In this lawsuit, USPT seeks actual damages in excess of $8.5 million and
unspecified exemplary damages. On April 4, 2000, the magistrate judge extended
the discovery deadline until May 31, 2000, set July 14, 2000, as the deadline
for Adesta to file its expert report, and set the pretrial for October 2, 2000.

NEWBERRY ALASKA, INC. VERSUS ADESTA COMMUNICATIONS, INC. - In 1999, Newberry
Alaska, Inc. ("Newberry") filed a demand for arbitration seeking approximately
$3.8 million. This dispute arises out of Newberry's subcontract with Adesta
related to the fiber optic network constructed by Adesta for Kanas. Newberry's
claims are for the balance of the subcontract, including retainage and disputed
claims for extras based on alleged deficiencies in the plans and specifications
and various other alleged constructive change orders. In June 2000, the
arbitrator awarded Newberry $2.7 million plus fees of approximately $0.3 million
and interest on the award of 8 percent until payment to Newberry is made.
Interest on the award through June 2000, totals approximately $0.3 million. The
Company is challenging the arbitrators award in Federal District Court (Alaska)
and intends to appeal the ruling, if necessary. The amount of the award, fees
and interest is not materially different than amounts previously accrued by the
Company.


                                      F-16
<PAGE>   82

ALPHATECH, INC. VERSUS ADESTA COMMUNICATIONS, INC. AND ADESTA TRANSPORTATION,
INC. - In 1998, Alphatech, Inc. ("Alphatech") filed a lawsuit in the U.S.
District Court in Massachusetts. This suit alleges ten counts, including breach
of Teaming Agreements on the E-470 project and the New Jersey Regional
Consortium project, breach of implied duty of good faith and fair dealing on
both projects, misappropriation of trade secrets, deceit, violation of
Massachusetts General Laws Chapter 93A, promissory estoppel, quantum meruit, and
unjust enrichment. Alphatech's claim is for $15 million. A hearing for a summary
judgment is scheduled in the summer of 2000.

T.A.M.E. CONSTRUCTION, INC. VERSUS GEORGIA ELECTRIC COMPANY - In 1998, T.A.M.E.
Construction, Inc. ("TAME") sued for breach of contract, promissory estoppel,
discrimination and defamation related to certain contracts performed by GEC.
TAME alleges that it was wrongfully terminated as a subcontractor. TAME claims
contract damages in the amount of $250,000, punitive damages for discrimination
of $1,000,000 and defamation damages of an additional $1,000,000. GEC has moved
for summary judgment. This matter is not set for trial.

AMERICAN TRAFFIC SYSTEMS, INC. VERSUS ADESTA COMMUNICATIONS, INC. - Subsequent
to April 30, 2000 (on July 10, 2000), an independent arbitrator awarded against
Adesta in the amount of $1.5 million related to a dispute between Adesta and
American Traffic Systems, Inc. ("ATS"). The dispute arose out of a subcontract
agreement between Adesta and ATS for development of the violations processing
software for the New Jersey Consortium Contracts (refer to Note 16, "Segment
Information"). Because of what it considered to be ATS' ongoing failures to
deliver software within contractual guidelines, Adesta terminated the
subcontract in February 1999. Arbitration between the parties thereafter ensued
resulting in the aforementioned award. The accompanying unaudited condensed
consolidated financial statements do not reflect any liability that may result
from such award. The Company is currently evaluating its remedies with regard to
this award.

OTHER LITIGATION AND CLAIMS - The Company is subject to a number of shareholder
and other lawsuits and claims for various amounts that arise out of the normal
course of its business. The Company intends to vigorously defend itself in these
matters. The disposition of all pending lawsuits and claims is not determinable
and may have a material adverse effect on the Company's financial position.

CONTRACTS - The Company has and will continue to execute various construction
and other contracts which may require the Company to, among other items,
maintain specific financial parameters, meet specific milestones and post
adequate collateral generally in the form of performance bonds. Failure by the
Company to meet its obligations under these contracts may result in the loss of
the contracts and subject the Company to litigation and various claims,
including liquidated damages. WorldCom continues to provide performance bonds on
certain contracts acquired in the acquisition of Adesta.

12.      PREFERRED STOCK

REDEMPTION OF SERIES B CONVERTIBLE PREFERRED STOCK - On February 4, 2000, the
Company reacquired and retired the remaining Series B Stock outstanding. The
Series B Stock was originally issued to and held by two groups of accredited
investors, the RoseGlen group and the Palladin group. The exchange/redemption
transaction is summarized as follows:

<TABLE>
<CAPTION>
                                              RoseGlen Group                    Palladin Group                         Total
----------------------------------------------------------------------------------------------------------------------------

<S>                                          <C>                               <C>                           <C>
Number of Series B Shares retired                        375                               404                           779
Cash paid by Company (in thousands)          $         5,032                   $         5,819               $        10,851
Common shares issued                                 500,000                     (a)   301,787                       801,787
Exchange Warrants issued                      100,000 shares                    100,000 shares                200,000 shares
     Exercise price per share (b)            $        10.127                   $        10.127               $        10.127
Special Exchange Warrants issued                        None                     66,246 shares                 66,246 shares
     Exercise price per share (c)                        n/a                   $           .01               $           .01
</TABLE>

The exchange agreements with RoseGlen and Palladin were amended on July 7, 2000,
as indicated below, in connection with the SIRIT Settlement.

(a)      The Original agreements provided that additional shares may be issuable
         to the Palladin group if the average price of the Company's common
         stock for the 100 trading days after February 4, 2000 (June 27, 2000)
         is less than $7.79 per share. The average price was to be calculated
         using the 50 low trading prices for each pair of two consecutive
         trading days and was approximately $3.54. However, the average price so
         calculated for this purpose may not be less than $4.00. Assuming the
         $4.00 minimum price applied, the maximum additional shares issuable
         would be determined as follows (total value in thousands):

<TABLE>
<CAPTION>

                                                                        Shares        Share Price          Total Value
         -------------------------------------------------------------------------------------------------------------
         <S>                                                           <C>            <C>                  <C>
         Common shares issued                                          301,787
         Shares underlying Special Exchange Warrants                    66,246
         -------------------------------------------------------------------------------------------------------------
         Total shares                                                  368,033              $7.79               $2,867
         -------------------------------------------------------------------------------------------------------------
         Lowest average price (same total value)                       716,744              $4.00               $2,867
         -------------------------------------------------------------------------------------------------------------
         Incremental shares issuable to Palladin group                 348,711
         -------------------------------------------------------------------------------------------------------------
</TABLE>


                                      F-17
<PAGE>   83

         If the incremental shares cannot be issued because of failure to obtain
         shareholder approval, the holders may require the Company to pay them
         cash equal to the number of incremental shares so calculated times
         $12.125 (i.e., 348,711 shares times $12.125, or $4.2 million).

         In conjunction with the SIRIT Settlement (Refer to Note 11,
         "Contingencies"), this provision was modified such that the Company has
         agreed to issue to the Palladin group 1,057,031 incremental shares of
         the Company's common stock prior to December 1, 2000; provided that the
         Company's shareholders have approved such issuance. In the event the
         shareholders have not approved such issuance, the Palladin group may
         demand a cash payment of $4.2 million.

         In conjunction with this modification, the Company expects to record a
         charge to income applicable to common stock of $4.2 million during the
         three months ended July 31, 2000. If and when shareholder approval is
         obtained for issuance of the incremental shares, the charge will be
         adjusted to the fair market value of those shares at the date of
         approval. The pro forma effects of this subsequent event are presented
         in Note 19, "Pro Forma Financial Information."

(b)      May be exercised on a "cashless" basis. Exercisable through February 3,
         2005, as extended by 1.5 days for every day between November 30, 2000
         (as amended) and February 3, 2005 that a registration statement
         covering the underlying shares is not effective.

(c)      May be exercised on a "cashless" basis. Exercise period is for 30 days
         beginning with the date the average price discussed in (a) above is
         determined.

The RoseGlen group also continues to hold Initial Warrants for the purchase of
370,000 shares of common stock that were issued as part of the Series B offering
in June 1998. The exercise price of the Initial Warrants is $13.25 per share
(refer to Note 14, "Preferred Stock," to the Consolidated Financial Statements
included in the Company's Form 10-K for the year ended October 31, 1999), but
they may be exercised on a "cashless" basis. The Initial Warrants are
exercisable through June 30, 2003, as extended by 1.5 days for every day between
December 27, 1998 and June 30, 2003 that a registration statement covering the
underlying shares is not effective.

A charge to loss applicable to common stock was made for the quarter ended
January 31, 2000, determined as follows (amounts in thousands):

<TABLE>
<S>                                                                                                         <C>
Cost to redeem the Series B Stock -
            Cash paid to Series B Shareholders                                                              $  10,851
            Value of 801,787 shares of common stock issued                                                      4,912
            Black Scholes value of warrants to purchase 266,246 common shares                                   1,213
            Fees paid to financial advisors                                                                       750
---------------------------------------------------------------------------------------------------------------------
                  Total cost of redemption                                                                     17,726
            Accumulated default redemption value recorded through October 31, 1999                            (16,322)
---------------------------------------------------------------------------------------------------------------------
            Increase in default redemption value recognized during the six months ended April 30, 2000      $   1,404
---------------------------------------------------------------------------------------------------------------------
</TABLE>

If the 500,000 common shares issued to the RoseGlen group and the 100,000 shares
issuable under their Exchange Warrants are not registered and listed with Nasdaq
by May 4, 2000, then the Company must pay the holders 3% of the aggregate market
value of those shares for each 30-day period thereafter until the shares are
listed. In conjunction with the SIRIT Settlement (refer to Note 11,
"Contingencies"), the registration date has been amended to November 30, 2000.

If the Company fails to pay any default payments when due, the holders may
require the Company to purchase their common stock and warrant shares on demand
at a price equal to 130% of the fair market value of such shares or if the
Warrants have not been exercised, reduce the then exercise price by 30%.
Further, if the registration statement is not effective by November 30, 2000 (as
amended), the exercise price of the Exchange Warrants will be reduced by 1% for
the first 30-day period after November 30, 2000, and an additional 1.5% for each
additional 30-day period thereafter until it is effective.


                                      F-18
<PAGE>   84

THE SERIES C OFFERING - On February 4, 2000, the Company issued 5,000 shares of
Series C Convertible Preferred Stock ("Series C Stock") and warrants exercisable
for 200,000 shares of common stock ("Series C Warrants") for aggregate
consideration of $15.0 million. Approximately $10.9 million of the proceeds was
used to redeem the Series B Stock, approximately $1.0 million was used to pay
transaction costs, and the remainder was used for working capital. The net
consideration was allocated to the Series C Stock and the Series C Warrants as
follows (in thousands)

<TABLE>
<CAPTION>

                                                Series C Stock      Series C Warrants           Total
-----------------------------------------------------------------------------------------------------
<S>                                             <C>                 <C>                       <C>
Gross proceeds                                         $14,165                   $835         $15,000
Cash paid to financial advisor                            (567)                   (33)           (600)
Warrants issued to financial advisor                      (296)                   (17)           (313)
-----------------------------------------------------------------------------------------------------
Net consideration                                      $13,302                   $785         $14,087
-----------------------------------------------------------------------------------------------------
</TABLE>

As described below, the Series C investors were issued additional Series C
Warrants for the purchase of 750,000 shares of common stock in connection with
the July 7, 2000 amendment.

The Series C Warrants and the financial advisor warrants were valued using a
Black Scholes model. The Series C Stock net valuation of $13.3 million will be
accreted to the initial Liquidation Value of $15 million over five years until
maturity as a charge against income available to common shareholders.

Transaction costs included $1.7 million of fees to financial advisors. These
fees consisted of $0.8 million in cash related to redemption of the Series B
Stock, $0.6 million in cash related to the Series C offering, and the fair value
of warrants for the purchase of 75,000 shares of common stock, with terms the
same or similar to the terms of the Series C Exchange Warrants, issued to the
financial advisors.

The individual holders may convert the Series C Stock to common stock at any
time. However, generally, a holder and its affiliates may own not more than
4.99% of all outstanding common shares. That limitation may be increased to
9.99% under certain circumstances. If any Series C Stock remains outstanding and
not converted to common stock by February 4, 2005, subject to extensions of 1.5
days for each day after November 30, 2000 (as amended) the registration
statement described below is not effective, then all such Series C Stock will
automatically convert to common shares at the conversion price then in effect.

Through September 30, 2000, the Series C investors had the right to purchase
additional Series C Stock for an aggregate of $15.0 million, at $3,000 per
share, having the rights, designations and preferences then in effect for the
Series C Stock. The September 30 date could have been extended if the
registration statement was not effective when required. Pursuant to the July 7,
2000 amendment, the Series C investors waived this right to purchase additional
Series C shares.

REGISTRATION RIGHTS - The Series C holders and the former Series B holders have
registration rights with respect to the following Registerable Securities:

-        the shares of common stock underlying the Series C Stock and the Series
         C Warrants, and

-        1,858,818 common shares and Exchange Warrants for the purchase of
         266,246 common shares issued to the Series B holders for cancellation
         of the remaining Series B Stock.

If a registration statement for the Registerable Securities is not effective by
November 30, 2000 the exercise period for the Series C Warrants will be extended
by 1.5 times the number of days after November 30, 2000 (as amended) that the
registration statement is not effective.


                                      F-19
<PAGE>   85

LIQUIDATION VALUE AND CONVERSION PRICE - The Series C Shares have a preference
in liquidation equal to the Liquidation Value. The Liquidation Value is equal to
the stated value of $3,000 per share plus unpaid default interest through the
date of determination, plus any accrued dividends. Dividends are cumulative and
accrue daily at 5.9% per annum on the stated value of $3,000 per share. The
Series C shares may be converted to common stock at any time based on the
Liquidation Value divided by the conversion price then in effect. The initial
conversion price is $9.35. However, starting on August 4, 2000, and then on the
fourth day of the month at the end of each following six month period (Reset
Dates) the conversion price may be reduced to equal:

-        the average closing bid price of the common stock for the ten
         consecutive trading days preceding the applicable Reset Date; however,
         the conversion price will never be increased from the conversion price
         then in effect, and

-        if any recalculation results in a conversion price of less than $4.00,
         generally, the conversion price will thereafter be $4.00; the
         conversion price would have been reset to the $4.00 floor on August 4,
         2000; however, the July 7, 2000 amendment reduced the conversion price
         to $4.00 as of that date and provided for no further reductions,
         regardless of when the registration statement may be declared effective
         or whether the Company may subsequently issue securities at less than
         $4.00 per equivalent common share.


MANDATORY REDEMPTION - The holders of the Registerable Securities may require
the Company to redeem their shares in the event of a Triggering Event or a Major
Transaction. A Triggering Event will have occurred upon any of the following:

-        if the registration statement is not declared effective on or prior to
         November 30, 2000 (as amended);

-        after declared effective, if the effectiveness of the registration
         statement lapses for any reason or is unavailable for more than five
         consecutive days or ten days in any calendar year; and

-        delisting or suspension from listing of the Company's common stock from
         Nasdaq for a period of five consecutive days or for an aggregate of at
         least ten days in any 365-day period.

A Major Transaction would include:

-        a merger or business combination in which the voting power of the
         Company's shareholders in the surviving entity or entities is
         insufficient to elect a majority of the Board of Directors;

-        the sale or transfer of all or substantially all of the Company's
         assets; or

-        a purchase, tender or exchange offer made to and accepted by the
         holders of more than 30% of the Company's outstanding shares of common
         stock.

The redemption price for the Series C Stock and other Registerable Securities
would be as follows:


                                      F-20
<PAGE>   86

<TABLE>
<CAPTION>
                                            Series C Stock                                 Other Registerable Securities
-----------------------------------------------------------------------------------------------------------------------------

<S>                          <C>                                                     <C>
Triggering event             Greater of 120% of Liquidation Value or the             Premium Redemption Price (defined below)
                             Conversion Benefit

Major transaction            120% of Liquidation Value                               No specific provisions exist
</TABLE>

The Conversion Benefit is equal to the product of:

-        the number of shares of common stock issuable on conversion, and

-        the greater of the closing bid price on the trading day immediately
         preceding the Triggering Event, or the closing bid price on the date
         the holder requests redemption.

In addition to the right of redemption, simultaneous with or after a Triggering
Event occurs, the Company may be required to pay in cash to each holder default
interest equal to 3% of the Liquidation Value of the Series C Stock for each
subsequent 30-day period until redeemed. Such interest not paid timely will
increase the Liquidation Value of the Series C Stock.

PREMIUM REDEMPTION PRICE - If the Company fails to pay any default payment or
honor any penalty or similar amounts when due, the holders may require the
Company to purchase, within five days of demand, all or a portion of the Series
C Stock or other registerable securities they hold at the Premium Redemption
Price. That price is to be the greater of (i) 1.2 times the product of the
number of equivalent common shares to be redeemed and the conversion price, or
(ii) the Conversion Benefit.

Mandatory redemption at 120% of Liquidation Value is also provided if conversion
by a holder of any Series C Stock for common shares could result in the Company
being delisted from the Nasdaq National Market for issuing in excess of 20% of
the Company's outstanding common stock without shareholder approval. The
Company's proxy statement will include a proposal to obtain such shareholder
approval.

RESTRICTIONS IMPOSED BY THE SERIES C STOCK -- Holders of Series C Stock have no
voting rights, except as required by law. However, the Series C holders may
impose significant restrictions on certain activities of the Company.

So long as at least 20% of the Series C Stock or Warrants remain outstanding,
the Company can not declare or pay any dividends or make any distributions to
holders of common stock, or purchase or acquire for value, directly or
indirectly, any of the Company's equity securities.

Until 90 days after the registration statement has been declared effective,
neither the Company, nor any of its subsidiaries, may issue any equity
securities, except for currently outstanding convertible securities, shares
issued under the stock option plan, and other options to employees.

Further, unless agreed to by the Series C holders, prior to February 4, 2001, or
such additional time if the registration statement is not effective by November
30, 2000 (as amended), the Company may not issue or grant any convertible
securities for which the rate of conversion is not fixed, or any option, warrant
or other right to purchase Company securities for which exercise is contingent
upon, or whose price is determined with respect to, the market price of the
common stock.

SERIES C INVESTORS' RIGHT OF FIRST REFUSAL-- The Company agreed not to sell or
issue any securities, other than in connection with an employee stock purchase
or similar plan or an acquisition of another company, unless first offered to
the Series C investors. This right does not apply to (i) transactions between
the Company and WorldCom, and certain pre-existing investment discussions, (ii)
strategic investments in the Company or in any of its subsidiaries by an
industry joint venture partner, industry supplier, or one or more of their
customers, or (iii) a public or private secondary offering for net proceeds of
at least $20.0 million.


                                      F-21
<PAGE>   87
THE SERIES C WARRANTS -- The Series C Warrants are exercisable through February
3, 2005, subject to extension of 1.5 days for every day after November 30, 2000
(as amended) the registration statement is not effective. However,
exercisability is limited if any holder and its affiliates would own more than
4.99% of the outstanding shares of Common Stock. However, that restriction may
be waived by the holder up to 9.99%.

The exercise price is initially $10.75 per share. The exercise price and number
of common shares issuable upon exercise of the Series C Warrants are subject to
proportional adjustments in the event of stock splits, stock dividends, and
similar transactions that would effect the holders' proportionate interest in
the Company. In addition, except for previously existing securities, if at any
time prior to February 4, 2001, the Company issues common stock or convertible
securities at a purchase or conversion price per share less than the greater of
(i) the exercise price or, (ii) the fair market value of the common stock at the
time, then the exercise price will be reduced concurrently by applying a
prescribed formula intended to compensate the holders for the dilution resulting
from such issuance.

WARRANTS ISSUED IN CONJUNCTION WITH SIRIT SETTLEMENT - In conjunction with the
SIRIT Settlement (refer to Note 11, "Contingencies"), the Company agreed,
subject to shareholder approval, to issue the holders of the Series C Stock
additional warrants to purchase 375,000 shares of the Company's common stock at
$6.00 per share and to purchase 375,000 shares of common stock at $8.00 per
share, exercisable through July 7, 2002. During the quarter ended July 31, 2000,
the Company expects to record a charge to income applicable to common stock of
approximately $0.7 million, representing the Black Scholes value of these
warrants as of July 7, 2000. The pro forma effects of this subsequent event are
presented in Note 19, "Pro Forma Financial Information."

FUTURE PRICED SECURITIES -- The Series C Stock and the Series C Warrants are
"future-priced securities" in that the total number of common shares actually
issuable cannot be presently determined because the conversion rate and the
exercise price are subject to change, depending on whether certain future events
do or do not occur. It is possible that the Series C securities could result in
issuance of more than 20% of the outstanding common shares to the Series C
investors, at less than market value, which would require shareholder approval
in accordance with Rule 4460(i)(1)(C) of the NASD. Consequently, the Company
will submit a proposal to its shareholders to request such approval.

If Shareholder approval is not obtained, the Company believes that the holders
of the Series C securities may be entitled to require the Company to redeem all
of the shares of the Series C Stock for an aggregate redemption price of at
least $18.3 million as of April 30, 2000. Such amount will increase at the rate
of 120 percent of dividends and default interest, if any, that accumulate with
respect to the Series C Stock. The Company may also be required to redeem
approximately 1,859,000 common shares or more, and warrants for the purchase of
approximately 466,000 shares, that may be held by the RoseGlenn and Palladin
groups for amounts not presently determinable. Payment of any redemption amounts
would materially and adversely affect the Company's liquidity because of the
short time frame to pay for such redemption (five business days upon a
Triggering Event).

In addition, depending on the number of shares of Series C Stock to be redeemed,
such redemption could severely diminish the Company's existing cash, working
capital and availability under a credit facility. Payment upon demand for
redemption would also result in default of one or more of the Company's other
obligations, including its obligations to senior lenders under the Credit
Facility. Such defaults would have a material adverse impact on the Company's
business, financial condition, results of operations and cash flow.

Shareholder approval, however, would not negate other Triggering Events,
including the obligation to have the registration statement declared effective
by November 30, 2000 (as amended). Even if shareholder approval is obtained, the
Company could still be in default of other obligations described above,
resulting in additional monetary penalties as well as redemption of the
Registerable Securities at the Premium Redemption Price.

CLASSIFICATION OF COMMON SECURITIES WITH MANDATORY REDEMPTION PROVISIONS - As
discussed above, certain common securities issued in conjunction with the
February 4, 2000, Series B Stock redemption and Series C Stock issuance are
subject to mandatory redemption provisions if certain future contingent events
occur. Those securities include the 801,787 common shares and the 266,646
Palladin exchange warrants issued in conjunction with the Series B Stock
redemption and the 200,000 warrants issued in conjunction with the Series C
Stock offering.

13.      SHAREHOLDERS' EQUITY

The following is a summary of the activity in shareholders' equity (deficit)
during the six months ended April 30, 2000 (in thousands):


                                      F-22
<PAGE>   88

<TABLE>
<CAPTION>

                                                                          Series B      Warrants
                                                   Additional    Senior   Preferred    Issued to   WorldCom
                                          Common     Paid-in      Note      Stock      Financial    Phantom   Retained
                                          Stock      Capital    Warrants   Warrants     Advisor      Stock     Deficit      Total
------------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>      <C>          <C>       <C>          <C>         <C>        <C>          <C>
Balance, November 1, 1999                  $ 12       $38,290     $1,244     $2,735      $   --      $ 606     $(42,456)   $    431

Issuance of common stock for
   acquisition of SASCO                      --           739         --         --          --         --           --         739
Conversion of WorldCom Debt                   3        25,541         --         --          --         --           --      25,544
Increase in default redemption value of
   Series B Preferred Stock                  --            --         --         --          --         --       (1,404)     (1,404)
Redemption of Series B Preferred Stock       --         2,532         --         --          --         --           --       4,911
Issuance of Series B Preferred Warrants      --            --         --         --          --         --           --          --
Issuance of Series C Preferred Warrants      --            --         --         --         313         --           --         313
Contribution of interest payable from
   WorldCom                                  --         3,483         --         --          --         --           --       3,483
Exercise of stock options and other          --         1,250         --         --          --         --           --       1,250
Accretion and dividends on Series C
   Preferred Stock                           --            --         --         --          --         --         (262)       (262)
Net loss                                     --            --         --         --          --         --      (55,789)    (55,789)
------------------------------------------------------------------------------------------------------------------------------------
Balance, April 30, 2000                    $ 15       $71,835     $1,244     $2,735      $  313      $ 606     $(99,911)   $(23,163)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The difference between the Company's weighted basic average shares outstanding
and diluted shares outstanding is due to the dilutive effect of stock options
and convertible securities. There are no significant differences in the
numerators for the Company's computations of basic and diluted earnings per
share for any period presented. The effect of securities that could dilute basic
earnings per share would be antidilutive for all periods presented. The Company
has potentially dilutive securities that could have a dilutive effect in the
future. Those securities and their potentially dilutive effects are as follows
(dilutive shares in thousands):

<TABLE>
<CAPTION>

                                                                                                    Potentially
                                                                                                      Dilutive        Average
                                                                                                       Shares       Strike Price
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                 <C>             <C>
Potentially dilutive securities outstanding at April 30, 2000:
    Series C Preferred Stock (1)                                                                        3,750             $ 4.00
    WorldCom Options (subject to shareholder approval)                                                  2,000               7.00
    Employee stock options (subject to shareholder approval) (2)                                        2,146               6.07
    Employee stock options (621,000 vested)                                                               841               6.56
    Senior Subordinated Note Warrants                                                                     410               8.25
    Series B Preferred Stock Warrants                                                                     370              13.25
    Additional shares that may be issuable to the Palladin group (refer to Note 12,
         "Preferred Stock")                                                                               348                 --
    GEC Earnout (shares issued May 4, 2000)                                                               205                 --
    Exchange Warrants issued to redeem Series B Preferred Stock (refer to Note 12,
         "Preferred Stock")                                                                               200              10.13
    Series C Preferred Stock Warrants (refer to Note 12, "Preferred Stock")                               200              10.75
    Warrants issued to financial advisors related to the Series C Preferred Stock
         (refer to Note 12, "Preferred Stock")                                                             75              10.75
    Special Exchange Warrants issued to redeem Series B Preferred Stock Warrants                           66               0.01
    Series A Preferred Stock Warrants                                                                      62               9.82
    Employee stock grants (subject to shareholder approval)                                                50                 --
--------------------------------------------------------------------------------------------------------------------------------
Subtotal outstanding at April 30, 2000                                                                 10,723               5.73
--------------------------------------------------------------------------------------------------------------------------------
Potentially dilutive securities issued subsequent to April 30, 2000:
    SIRIT Settlement (subject to shareholder approval) (refer to Note 11,
         "Contingencies")(3)                                                                            5,012                 --
    Series D Preferred Stock(4)                                                                         3,696              10.01
    Increase in additional shares issuable to the Palladin group (subject to shareholder
         approval) (refer to Note 12, "Preferred Stock")                                                  709                 --
    Additional Series C Warrants (subject to shareholder approval)                                        750               7.00
    Employee stock options (subject to shareholder approval)(5)                                           250               2.54
    Stock offered to settle litigation                                                                     25                 --
--------------------------------------------------------------------------------------------------------------------------------
Subtotal granted subsequent to April 30, 2000                                                          10,442               4.11
--------------------------------------------------------------------------------------------------------------------------------
Total                                                                                                  21,165             $ 4.93
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                      F-23
<PAGE>   89

(1)      Based on a conversion price of $4.00 (as amended).

(2)      In February 2000 the Company granted options to purchase a total of
         525,000 to three new employees of the Company. The options, if approved
         by shareholders, will vest as follows: 125,000 as of February 1, 2000;
         200,000 on February 1, 2001; and 200,000 on February 1, 2002 with the
         exercise prices being $6.00, $8.50 and $9.00 respectively. These
         options will expire on February 1, 2004.

(3)      SIRIT is to receive 19.99% of common shares outstanding as of the date
         shareholder approval is obtained, and has general anti-dilution rights
         to maintain that percentage interest for a period of two years.
         Consequently, the number of shares issuable to SIRIT may exceed the
         number of shares shown in the table.

(4)      The Series D Stock issued to WorldCom effective August 23, 2000, has a
         stated conversion price of $10.01 per share. However, in the event of a
         Liquidation Event (such as the proposed sale to Bracknell described in
         Note 18), the conversion price will automatically be reset to the price
         per share received in such transaction by holders of the Company's
         common stock. For example, the closing price of the Company's common
         stock on August 30, 2000, was $3.00. If common shareholders received
         that amount per share in a sale transaction, the Series D Stock would
         automatically convert to approximately 12.3 million shares, plus
         dividends would be payable to the Series D holders at 6% per annum from
         the date of issue.

(5)      In May 2000, options were granted to two new employees of the Company.
         The options, if approved by shareholders, will vest immediately with
         exercise prices ranging from $2.44 to $2.69. These options will expire
         in May 2010.

In connection with the acquisition of Adesta, the Company granted to WorldCom
rights to receive upon satisfaction of certain conditions, including shareholder
approval, phantom stock awards for up to 700,000 shares of common stock, payable
in cash, stock, or a combination of both at the Company's option.

The Company is committed to issue shares of common stock as contingent
consideration earned by the sellers of Georgia Electric Company through 2001.
Common stock issued to date as contingent consideration earned for the years
ended October 31, 1998 and 1997 was 628,398 shares and 204,448 shares,
respectively. Contingent consideration earned for the year ended October 31,
1999, amounted to $1.8 million and was accrued at October 31, 1999, in accounts
payable and accrued liabilities. Approximately 205,000 shares were issued in May
2000. The Company has made a similar commitment related to the acquisition of
SASCO and SES (refer to Note 5, "Acquisitions"). The number of shares that may
be issued as earn-out consideration under these commitments in the future is not
presently determinable.

The Company has executed an equity swap agreement with 186K.NET. Either the
Company or 186K.NET can exercise the swap at any time from July 2000 to July
2003. Upon exercise, the Company has committed to issue shares of its common
stock to 186K.NET in exchange for common shares of 186K.NET of equivalent value
at the date of exercise. The value of the shares to be issued and received is to
be determined by the lower of 10% of the increase in the fair market value of
the Company or of 186K.NET from July 1999 to the date of exercise. 186K.NET is a
privately-owned start-up company that provides data and communications
facilities consulting services.

14.         FINANCIAL ADVISORY SERVICES

The Company incurred approximately $1.5 million in financial advisory fees to
two related firms, L. Dolcenea, Inc. and Platinum Advisory Services, Inc. during
the six months ended April 30, 2000. Those fees were for the following services
(in thousands):


                                      F-24
<PAGE>   90

<TABLE>
<CAPTION>

                                                                          Paid Prior to         Accrued at
                                                                         April 30, 2000     April 30, 2000      Total Incurred
------------------------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>                <C>                 <C>
Series B Conversion (refer to Note 12, "Preferred Stock")                        $  750               $ --              $  750
Series C Issuance (refer to Note 12, "Preferred Stock")                             600                 --                 600
Fair value of warrants issued related to Series C offering                          313                 --                 313
Compensation for settlement of past common stock warrant disputes
                                                                                    300                 50                 350
------------------------------------------------------------------------------------------------------------------------------
                                                                                 $1,963               $ 50              $2,013
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Certain of these fees were paid during the fiscal year ended October 31, 1999.
The Company may be committed to pay these advisors additional amounts related to
future transactions for which the advisors may claim compensation.

15.      COMPENSATION ARRANGEMENTS

On March 31, 2000, the Board of Directors approved supplemental compensation
arrangements for six members of management in addition to the compensation
provided for in their employment agreements. Upon a change of control or the
termination of each individual's employment without cause, the aggregate minimum
amount payable to these individuals would be $4,750,000. The payments would be
based on units equivalent to shares of Company common stock. A total of 475,000
units were granted. The minimum payment is based on $10.00 per unit, but if
greater, would be based on the per share value of a change in control
transaction or the prior day closing price of the Company's common stock in the
event of termination without cause. The plan also includes 175,000 units
reserved for future executives of the Company but not yet granted. In
Conjunction with the SIRIT Settlement (Refer to Note 11, "Contingencies"), these
supplemental compensation arrangements were terminated.


EMPLOYMENT CONTRACTS -- The employment contracts of two new executives hired in
May 2000 provide for full payment of the three-year compensation without
mitigation. Salaries of these individuals were set at an aggregate amount of
$550,000 per year.

In June 2000, a new three-year employment agreement was executed with the
Company's Chief Executive Officer. The new contract provides for annual cash
compensation of $500,000, allowances of approximately $40,000 per year, and the
grant of stock options as disclosed in the Company's Proxy Statement. In the
event the CEO is terminated without cause, he will be paid out the full
remainder of his contract without any duty to mitigate.

The above contracts also authorized loans made by the Company to these three
executives in the aggregate amount of $800,000.


16.      SEGMENT INFORMATION

The Company manages and analyzes the operations of the Company in four separate
groups, Network Services Group, Transportation Services Group, Construction
Group and Communications Development Group. The Company has established the
Networks Development Group, which had no significant income or expenses during
the three and six months ended April 30, 2000.

<TABLE>
<CAPTION>

                                                               For the Three Months              For the Six Months Ended
                                                                 Ended April 30,                         April 30,
----------------------------------------------------------------------------------------------------------------------------
                                                            2000                1999                2000                1999
----------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>                 <C>                 <C>                 <C>
Sales to unaffiliated customers:
      Network Services                                 $  72,369           $  86,420           $ 134,923           $ 134,942
      Transportation Services                             29,699              29,201              46,129              40,902
      Construction                                        28,221               7,151              55,337              39,009
      Communication Development (International)            1,537                 957               2,352               1,956
----------------------------------------------------------------------------------------------------------------------------
                                                       $ 131,826           $ 123,729           $ 238,741           $ 216,809
----------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations:
      Network Services                                 $    (551)          $   7,601           $   4,499           $  11,277
      Transportation Services                            (32,665)             (5,915)            (45,723)             (4,493)
      Construction                                           777              (2,244)               (885)             (2,258)
      Communication Development (International)               13                  13                (183)               (152)
      Unallocated Corporate Overhead                        (856)             (2,312)             (1,376)             (4,710)
----------------------------------------------------------------------------------------------------------------------------
                                                       $ (33,282)          $  (2,857)          $ (43,668)          $    (336)
----------------------------------------------------------------------------------------------------------------------------
Identifiable assets:
      Network Services                                 $ 185,617           $ 151,939           $ 185,617           $ 151,939
      Transportation Services                             38,685              47,918              38,685              47,918
      Construction                                        72,314              63,865              72,314              63,865
      Communication Development (International)            3,270               3,468               3,270               3,468
      Corporate                                            3,965               5,678               3,965               5,678
----------------------------------------------------------------------------------------------------------------------------
                                                       $ 303,851           $ 272,868           $ 303,851           $ 272,868
----------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                      F-25
<PAGE>   91

The Company derives a significant portion of its revenues from a few large
customers. Those customers and their revenues for the three and six months ended
April 30, 2000, are as follows:

<TABLE>
<CAPTION>

                                                                                      For the Months Ended April 30, 2000
-------------------------------------------------------------------------------------------------------------------------
      Customer                                   Operating Group                           Three                   Six
-------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>                                                <C>                    <C>
WorldCom                                         Network Services                         $29,506                $55,368
New Jersey Consortium                  Transportation and Network Services                 25,716                 44,294
Florida Power Corp.                                Construction                             4,589                  8,525
Cooper Tire Company                                Construction                             3,727                  7,277
</TABLE>

In conjunction with the acquisition of Adesta, the Company entered into a
five-year agreement with WorldCom to provide telecommunications infrastructure
services to WorldCom (the "WorldCom Master Services Agreement") for a minimum of
$40.0 million per year ("Annual Minimum"), provided that the aggregate sum
payable to Adesta shall be not less than $325.0 million ("Aggregate Minimum"),
including a fee of 12 percent of reimbursable costs under the agreement. On
August 24, 2000, the terms of the WorldCom Master Services Agreement was
extended through August 24, 2006. Under the modified WorldCom Master Service
Agreement, WorldCom has agreed to award Adesta a minimum volume of 75 percent of
all outside plant work related to WorldCom's local network projects but in no
event will the Annual Minimum be less than $55.0 million and the Aggregate
Minimum less than $390.0 million.

Adesta is party to multiple contracts with the New Jersey Consortium ("New
Jersey Consortium Contracts") which includes the New Jersey Turnpike Authority,
New Jersey Highway Authority, Port Authority of New York and New Jersey, South
Jersey Transportation Authority, and the State of Delaware Department of
Transportation. The New Jersey Consortium Contracts generally provide for Adesta
to (i) construct a fully integrated electronic toll collection ("ETC") system;
(ii) maintain the related Customer Service Center ("CSC") and Violations
Processing Center ("VPC") for periods of up to 10 years; and (iii) construct and
maintain a supporting fiber optic network. The estimated future gross revenues
from the New Jersey Consortium Contracts are projected to be at least $167
million, including estimated minimum revenues of $51.4 million for VPC
operations and $40.0 million for fiber network operations and maintenance
billable over the duration of the agreements.

As of October 31, 1999, the Company estimated that the electronic toll
collection (ETC) construction segment of the New Jersey Consortium Contracts
would generate total margins of approximately $2.6 million. Based upon an
estimated completion percentage of 30 percent, the Company had recorded
job-to-date margins of $0.8 million through October 31, 1999.

During the three months ended January 31, 2000, the Company determined through
its ongoing analyses of the ETC construction segment of the New Jersey
Consortium Contracts (i.e., excluding the VPC and fiber network construction and
long-term service contracts) that costs to be incurred were expected to exceed
amounts billable by approximately $7.7 million. The change from October 31,
1999, related primarily to changes in estimated costs associated with changing
design specifications and certain near-term milestones. The loss recognized in
the January quarter was approximately $8.2 million, including costs incurred in
the quarter, reversal of previously recognized profit, and a loss reserve
accrual of $4.7 million for the remaining projected loss.

During the three months ended April 30, 2000, the Company continued negotiation
of a comprehensive amendment that was executed on June 1, 2000. While the scope
of work for the remainder of the project was clarified, significant concessions
were made by the Company to arrive at resolution and estimated losses for the
construction portion of the contract were revised to $35.3 million, resulting in
a loss for the quarter of $27.6 million. The remaining loss expected to be
incurred in completing the contract and accrued at April 30, 2000 was $17.1
million.

The loss was partially attributable to vagaries in the original contract
language that made it extremely difficult for the Company to meet performance
criteria and targeted completion deadlines, resulting in penalties and costs in
excess of original estimates. In addition, the Company was forced to engage
subcontractors on a time and materials or cost-plus basis and experienced
significant overruns in an attempt to meet its contractual obligations. The June
2000 amendment reduced the scope of the contract, provided previously undefined
benchmarks, provided a revised and extended schedule for completion of the
project and resolved various claims between the parties. At the same time, the
Company negotiated a revised agreement with its primary subcontractor,
comprising the majority of remaining contract costs, from time and materials to
a fixed price. While these agreements reduced the uncertainty


                                      F-26
<PAGE>   92

of some of the remaining costs on the project, they also eliminated the
opportunity to recover certain previously incurred costs.

The revised schedule includes several significant milestone dates. If not met,
the Consortium will have the right to terminate the contracts, including the VPC
and fiber maintenance contracts. If terminated, the Company would lose the
opportunity to earn potential future profits from these long-term service
contracts.

At April 30, 2000, the Company had billed and unbilled receivables of $26.1
million and $14.4 million, respectively, related to WorldCom and $15.1 million
and $15.8 million, respectively, related to the New Jersey Consortium.

The loss of the New Jersey Consortium, WorldCom or any other major customers
could have a material adverse effect on the Company's business, financial
condition and results of operations.

17.      FINANCING COMMITMENT

The Company previously reported in its Form 10-Q for the quarterly period ended
January 31, 2000, that on March 15, 2000, it had received financing commitments
from investors which would have allowed the Company to repay its existing Credit
Facility of $35 million through new financing of approximately $56 million. The
transaction would have provided for funding of an initial $35 million for
certain current and future Network and Right-of Way development projects.

The Company was subsequently notified that, as a result of certain unrelated
activities and the uncertainties created by the SIRIT verdict, one of the major
investors did not expect to proceed with the proposed financing.

18.      SUBSEQUENT EVENT

On August 24, 2000, the Company executed an agreement to merge with Bracknell
Corporation ("Bracknell") of Toronto in a stock-for-stock transaction with a
conversion rate of .6 shares of Bracknell for each share of Able stock (the
"Bracknell Merger"). The Bracknell Merger is subject to certain conditions,
including shareholder approval and is expected to close in December 2000 or
early in calendar 2001.

19.      PRO FORMA FINANCIAL INFORMATION

The pro forma effects of the SIRIT Settlement (refer to Note 11, "Contingencies"
and Note 12, "Preferred Stock") and the conversion of the WorldCom Advance to
Series D Preferred Stock on the April 30, 2000 consolidated balance sheet is
presented below:

<TABLE>
<CAPTION>

                                                                               Series B&C
                                                                              Modifications
                                                                                Resulting
                                                                                from the
                                        As                  SIRIT                SIRIT               WorldCom             Pro Forma
                                     Reported            Settlement            Settlement           Conversion
------------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>                 <C>                   <C>                  <C>                   <C>
Cash                                 $  11,441           $     --              $    --              $     --              $  11,441
Current Assets                         181,940                 --                   --                    --                181,940
Total Assets                           303,851                 --                   --                    --                303,851
Current liabilities                    280,206             25,000(a)             4,228(b)            (41,456)(c)            267,978
Long-term debt                             732                 --                   --                 4,456 (c)              5,188
Total liabilities                      308,973             25,000(a )            4,228(b)            (37,000)(c)            301,201
Preferred stock                         13,665                 --                   --                37,000                 50,665
Temporary equity                        20,573                 --                  674                    --                 21,247
Total shareholders' deficit            (25,695)           (25,000)(a)           (4,902)(b)            37,000 (c)            (18,597)
</TABLE>


                                      F-27
<PAGE>   93

(a)      Refer to Note 11, "Contingencies." Current liabilities are increased
         by $5.0 million advanced to the Company by WorldCom and paid to SIRIT.
         An additional current liability of $20.0 million is reflected for the
         remainder of the "Consent Judgment" due SIRIT. If shareholder approval
         is obtained and shares issuable to SIRIT are registered prior to
         November 30, 2000, the $20.0 million liability will be satisfied by
         issuing common stock to SIRIT.

(b)      Refer to Note 12, "Preferred Stock." The $4.2 million represents the
         maximum cash payment the Company may be required to make to the
         Palladin Group if the issuance of 1,057,031 shares to them is not
         approved by the shareholders and the shares are not registered by
         November 30, 2000. If the required approval and registration is
         achieved, the liability will be satisfied by issuing the common shares.
         These pro forma disclosures do not include the effect of the additional
         warrants given to the Series C Preferred Stock holders, because they
         have no net effect on "Total Shareholders' Deficit." The warrants' fair
         value of $674,000 will be recorded as an increase to temporary equity
         (Additional Series C Warrants) and $674,000 will be an increase to
         retained deficit for the charge to "Loss Applicable to Common Stock."

(c)      Refer to Note 10, "Debt." In August 2000, WorldCom agreed to convert
         $4.5 million of short-term notes payable to long-term debt and $37.0
         million of advances to Series D Stock.


                                      F-28
<PAGE>   94

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders and Board of Directors of
Able Telcom Holding Corp.:

We have audited the accompanying consolidated balance sheets of Able Telcom
Holding Corp. (a Florida Corporation) and subsidiaries as of October 31, 1999
and 1998 and the related consolidated statements of operations, shareholders'
equity and cash flows for the years then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Able Telcom Holding Corp. and
subsidiaries as of October 31, 1999 and 1998, and the results of their
operations and their cash flows for the years then ended in conformity with
generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. The Company incurred
significant operating losses during the fiscal year ended October 31, 1999.
Significant payments were also made, both during and subsequent to October 31,
1999, to redeem the Series B Preferred Stock and to reduce obligations for loss
contracts assumed in 1998 in the acquisition of MFS Network Technologies, Inc.
The Company has borrowed the maximum available under its existing Credit
Facility and is in default of the related covenants. The lender has the right to
demand payment and the Company has insufficient liquidity to pay such amounts,
if called. The Company has not yet been successful in obtaining alternative
financing and may have insufficient liquidity to fund its continuing operations.
Consequently, there is substantial doubt about the Company's ability to continue
as a going concern. Management's plans in regard to these matters are described
in Note 3. The consolidated financial statements do not include any adjustments
relating to the recoverability and classification of asset carrying amounts or
the amount and classification of liabilities that might result should the
Company be unable to continue as a going concern.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The financial statement schedule listed
in the index to the consolidated financial statements is presented for purposes
of complying with the Securities and Exchange Commission's rules and is not part
of the basic financial statements. The schedule has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.

                                          ARTHUR ANDERSEN LLP

Omaha, Nebraska
February 11, 2000

                                      F-29
<PAGE>   95

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Shareholders and Board of Directors of
Able Telcom Holding Corp.:

         We have audited the accompanying consolidated statements of operations,
shareholders' equity and cash flows of Able Telcom Holding Corp. and
subsidiaries for the year ended October 31, 1997. Our audit also included the
financial statement schedule listed in the Index at Item 14(a). These financial
statements and schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audit.

         We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated results of operations and
cash flows of Able Telcom Holding Corp. and subsidiaries for the year ended
October 31, 1997, in conformity with accounting principles generally accepted in
the United States. Also, in our opinion, the related financial statement
schedule, when considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.

                                              ERNST & YOUNG LLP

West Palm Beach, Florida
January 19, 1998

                                      F-30
<PAGE>   96

                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                                                OCTOBER 31,      OCTOBER 31,
                                                                                                   1999             1998
                                                                                                -----------      -----------
<S>                                                                                             <C>              <C>
ASSETS
Currents Assets:
         Cash and cash equivalents............................................................   $ 16,568         $ 13,544
         Accounts receivable, including retainage of $16,158 and $10,182 and net of allowances
                 for bad debts of $3,514 and $866 at October 31, 1999 and 1998, respectively..     73,645           64,159
         Costs and profits in excess of billings on uncompleted contracts.....................     71,808          105,478
         Prepaid expenses and other current assets............................................      5,853            2,641
                                                                                                 --------         --------
                 Total current assets.........................................................    167,874          185,822

Property and equipment:
         Land and buildings...................................................................      3,801            4,473
         Equipment, furnitures and fixtures...................................................     43,989           42,522
                                                                                                 --------         --------
                                                                                                   47,790           46,995
         Less - Accumulated depreciation......................................................    (19,987)         (14,921)
                                                                                                 --------         --------
         Property and equipment, net..........................................................     27,803           32,074

Other assets:
         Goodwill, net of accumulated amortization of $4,078 and $2,162 at
                 October 31, 1999 and 1998, respectively......................................     41,222           31,374
         Assets held for sale.................................................................         --           38,750
         Investment in Kanas..................................................................     12,159               --
         Other non-current assets.............................................................     12,975            2,740
                                                                                                 --------         --------
                 Total other assets...........................................................     66,356           72,864
                                                                                                 --------         --------
                 Total assets.................................................................   $262,033         $290,760
                                                                                                 ========         ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
         Current portion of long-term-debt....................................................   $ 35,754         $ 14,438
         Accounts payable and accrued liabilities including retainage of $11,618 and $10,374
                 at October 31, 1999 and 1998, respectively...................................     66,617           61,229
         Accruals for incurred job costs......................................................     45,593           51,111
         Billings in excess of costs and profits on uncompleted contracts.....................      6,478            6,328
         Reserves for losses on uncompleted contracts.........................................      8,620           25,390
         Notes payable shareholders/directors.................................................         --            1,182
         Stock appreciation rights payable....................................................      3,710               --
                                                                                                 --------         --------
                 Total current liabilities....................................................    166,772          159,678

         Long-term debt, non-current portion..................................................     30,618           61,685
         Advance from WorldCom................................................................     32,000               --
         Property tax payable, non-current portion............................................     15,468           15,118
         Other non-current liabilities and minority interest..................................        422            2,737
                                                                                                 --------         --------
         Total liabilities....................................................................    245,280          239,218
Commitments and contingencies.................................................................
Series B Preferred Stock, $.10 par value; stated at aggregate accumulated redemption value at
         October 31, 1999; 4,000 shares authorized;
         779 and 3,564 shares issued and outstanding..........................................     16,322           11,325
                                                                                                 --------         --------
Shareholders' Equity:
         Common stock, $.001 par value, authorized 25,000,000 shares;  11,891,338 and
           11,065,670 shares issued and outstanding, respectively.............................         12               11
         Additional paid-in capital...........................................................     38,290           35,164
         Senior Note Warrants.................................................................      1,244            1,244
         Series B Preferred Stock Warrants....................................................      2,735            5,400
         WorldCom Stock Options...............................................................         --            3,490
         WorldCom Phantom Stock...............................................................        606              606
         Retained deficit.....................................................................    (42,456)          (5,698)
                                                                                                 --------         --------
         Total shareholders' equity...........................................................        431           40,217
                                                                                                 --------         --------
         Total liabilities and shareholders' equity...........................................   $262,033         $290,760
                                                                                                 ========         ========
</TABLE>

See notes to consolidated financial statements.

                                      F-31
<PAGE>   97

                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                                        FOR THE YEARS
                                                                                       ENDED OCTOBER 31,

                                                                             1999             1998               1997
                                                                         ----------        ---------         ---------
<S>                                                                        <C>              <C>                <C>
Revenue:
           Construction and maintenance.................................   $382,844         $217,481           $86,334
           Conduit sale.................................................     35,721               --                --
                                                                         ----------        ---------         ---------
           Total revenue................................................    418,565          217,481            86,334
Costs and expenses:
           Construction and maintenance.................................    330,387          179,505            68,164
           Costs of conduit sale........................................     34,673               --                --
           General and administrative expense...........................     41,041           18,967             8,797
           Depreciation.................................................      9,644            6,638             4,124
           Amortization.................................................      2,189              962               408
           Impairment of long-lived assets..............................      2,515               --                --
                                                                         ----------        ---------         ---------
           Total costs and expenses.....................................    420,449          206,072            81,493
                                                                         ----------        ---------         ---------
Income (loss) from operations...........................................     (1,884)          11,409             4,841

Other income (expense):
           Interest expense.............................................     (9,512)          (5,534)           (1,565)
           Change in value of stock appreciation rights ................     (1,814)              --                --
           Equity in losses of investment in Kanas......................       (591)              --                --
           Other........................................................       (761)             662               601
                                                                         ----------        ---------         ---------
           Total other income (expense).................................    (12,678)          (4,872)             (964)
                                                                         ----------        ---------         ---------
Income (loss)  before income taxes, minority interest
           and extraordinary item.......................................    (14,562)           6,537             3,877
Provision for (benefit from) income taxes...............................       (138)           3,405               727
                                                                         ----------        ---------         ---------
Income before minority interest and extraordinary item..................    (14,424)           3,132             3,150
Minority interest.......................................................       (569)            (618)             (293)
                                                                         ----------        ---------         ---------
Income (loss) before extraordinary item.................................    (14,993)           2,514             2,857
Extraordinary loss on the early extinguishment
           of debt, net of tax of zero in 1999..........................     (3,067)              --                --
                                                                         ----------        ---------         ---------
Net income (loss).......................................................    (18,060)           2,514             2,857

Beneficial conversion privilege of preferred stock......................         --           (8,013)           (1,266)
Repurchase of Series B Preferred Stock..................................     (4,496)              --                --
Modification of conversion price of Series B Preferred Stock............     (6,430)              --                --
Modification of exercise price of Series B Preferred Stock Warrants.....     (1,894)              --                --
Increase in default redemption value of Series B Preferred Stock........     (5,878)              --                --
Preferred stock dividends...............................................         --             (341)             (260)
                                                                         ----------        ---------         ---------
Income (loss) applicable to common stock................................   ($36,758)         ($5,840)           $1,331
                                                                         ==========        =========         =========

Weighted average shares outstanding:
           Basic........................................................ 11,776,072        9,907,060         8,504,972
           Diluted...................................................... 11,776,072        9,907,060         8,504,972
Income (loss) per share (see Note 2):
           Basic:
               Income (loss) applicable to common stock before
                   extraordinary item...................................     ($2.86)          ($0.59)            $0.16
               Extraordinary loss.......................................      (0.26)              --                --
               Income (loss) applicable to common stock.................      (3.12)           (0.59)             0.16
           Diluted:
               Income (loss) applicable to common stock before
                   extraordinary item...................................     ($2.86)          ($0.59)            $0.16
               Extraordinary loss.......................................      (0.26)              --                --
               Income (loss) applicable to common stock.................      (3.12)           (0.59)             0.16
</TABLE>

See notes to consolidated financial statements.

                                      F-32
<PAGE>   98

                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
              FOR THE YEARS ENDED OCTOBER 31, 1999, 1998, AND 1997
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                             Common            Additional                    Series B
                                                        ------------------      Paid-in        Senior        Preferred     WorldCom
                                                        Shares   $.001 Par      Capital     Note Warrants    Warrants       Options
                                                        ---------------------------------------------------------------------------
<S>                                                     <C>      <C>           <C>          <C>              <C>           <C>
Balance, October 31, 1996                                8,203      $ 9          $12,833      $   --         $   --       $    --

Issuance of common stock in
     connection with acquisition                           109       --              620          --             --            --
Issuance of common stock for services                        2       --               12          --             --            --
Issuance of common stock for exercise of
     options                                               262       --              732          --             --            --
Compensation recognized on stock options                    --       --              338          --             --            --
Issuance of common stock for conversion of
     convertible preferred stock                             5       --               34          --             --            --
Changes in unrealized loss on investments                   --       --               --          --             --            --
Convertible preferred dividends paid                        --       --               --          --             --            --
Embedded dividend recognized on convertible
     preferred shares                                       --       --               --          --             --            --
Tax benefit from exercise of options                        --       --              527          --             --            --
Net income                                                  --       --               --          --             --            --
-----------------------------------------------------------------------------------------------------------------------------------
Balance, October 31, 1997                                8,581        9           15,096          --             --            --

Issuance of common stock for GEC earnout                   204       --            1,278          --             --            --
Compensation expense for below
     market options                                         --       --               93          --             --            --
Issuance of common stock for
     exercise of options                                   352       --            2,071          --             --            --
Tax benefit from exercise of options                        --       --              516          --             --            --
Dividends on Series A preferred stock                       --       --               --          --             --             -
Embedded dividend recognized on Series
     A Preferred Stock                                      --       --               --          --             --            --
Issuance of common stock for conversion
     of Series A Preferred Stock                           921        1            6,817          --             --            --
Valuation of subordinated note warrants                     --       --               --       1,244             --            --
Valuation of Series B Preferred Stock Warrants              --       --               --          --          5,400            --
Embedded dividend recognized on Series
     B Preferred Stock                                      --       --            7,909          --             --            --
Valuation of WorldCom options                               --       --               --          --             --         3,490
Valuation of WorldCom phantom stock awards                  --       --               --          --             --            --
Issuance of common stock for conversion
     of Series B Preferred Stock                         1,008        1            1,384          --             --            --
Dividends on Series B Preferred Stock                       --       --               --          --             --            --
Net income                                                  --       --               --          --             --            --
-----------------------------------------------------------------------------------------------------------------------------------
Balance, October 31, 1998                               11,066       11           35,164       1,244          5,400         3,490

Conversion of the WorldCom Option to SARs                   --       --            1,594          --             --        (3,490)
Issuance of common stock for GEC earnout                   628        1            4,595          --             --            --
Series B Preferred Stock Transactions:
     Repurchase of Series B Preferred Stock                 --       --           (5,506)         --             --            --
     Modification of conversion price of Series B
          Preferred Stock                                   --       --            6,430          --             --            --
     Modification of conversion price of Series B
          Preferred Stock Warrants                          --       --               --          --          1,894            --
     Repurchase of Series B Preferred Stock Warrants        --       --            2,669          --         (4,559)           --
     Increases to Series B default redemption value         --       --           (7,970)         --             --            --
Issuance of common stock in settlement of
     notes payable to directors                            118       --              828          --             --            --
Issuance of common stock for
     exercise of options                                    79       --              355          --             --            --
Value of options granted to non--employees                  --       --              131          --             --            --
Net loss                                                    --       --               --          --             --            --
-----------------------------------------------------------------------------------------------------------------------------------
Balance, October 31, 1999                               11,891       12           38,290       1,244          2,735            --
-----------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
                                                                        Unrealized Loss    Retained
                                                          WorldCom       on Investments    Earnings
                                                        Phantom Stock     Net of Taxes     (Deficit)    TOTAL
                                                        -------------------------------------------------------
<S>                                                     <C>             <C>                <C>          <C>
Balance, October 31, 1996                                   $--             $ (54)         $ (1,189)     11,599

Issuance of common stock to directors in
     connection with acquisition                             --                --                --         620
Issuance of common stock for services                        --                --                --          12
Issuance of common stock for exercise of
     options                                                 --                --                --         732
Compensation recognized on stock options                     --                --                --         338
Issuance of common stock for conversion of
     convertible preferred stock                             --                --                --          34
Changes in unrealized loss on investments                    --                54                --          54
Convertible preferred dividends paid                         --                --              (260)       (260)
Embedded dividend recognized on convertible
     preferred shares                                        --                --            (1,266)     (1,266)
Tax benefit from exercise of options                         --                --                --         527
Net income                                                   --                --             2,857       2,857
---------------------------------------------------------------------------------------------------------------
Balance, October 31, 1997                                    --                --               142      15,247

Issuance of common stock for GEC earnout                     --                --                --       1,278
Compensation expense for below
     market options                                          --                --                --          93
Issuane of common stock for
     exercise of options                                     --                --                --       2,071
Tax benefit associated with stock options                    --                --                --         516
Dividends on Series A preferred stock                        --                --               (79)        (79)
Embedded dividend recognized on Series
     A Preferred Stock                                       --                --              (104)       (104)
Issuance of common stock for conversion
     of Series A Preferred Stock                             --                --                --       6,818
Valuation of subordinated note warrants                      --                --                --       1,244
Valuation of Series B Preferred Stock Warrants               --                --                --       5,400
Embedded dividend recognized on Series
     B Preferred Stock                                       --                --            (7,909)         --
Valuation of WorldCom options                                --                --                --       3,490
Valuation of WorldCom phantom stock awards                  606                --                --         606
Issuance of common stock for conversion
     of of Series B Preferred Stock                          --                --                --       1,385
Dividends on Series B Preferred Stock                        --                --              (262)       (262)
Net income                                                   --                --             2,514       2,514
---------------------------------------------------------------------------------------------------------------
Balance, October 31, 1998                                   606                --            (5,698)     40,217

Conversion of the WorldCom Option to SARs                    --                --                --      (1,896)
Issuance of common stock for GEC earnout                     --                --                --       4,596
Series B Preferred Stock Transactions:
     Repurchase of Series B Preferred Stock                  --                --            (4,496)    (10,002)
     Modification of conversion price of Series B
          Preferred Stock                                    --                --            (6,430)         --
     Modification of conversion price of Series B
          Preferred Stock Warrants                           --                --            (1,894)         --
     Repurchase of Series B Preferred Stock Warrants         --                --                --      (1,890)
     Increases to Series B default redemption value          --                --            (5,878)    (13,848)
Issuance of common stock in settlement of
     notes payable to directors                              --                --                --         828
Issuance of common stock for                                                   --
     exercise of options                                     --                --                --         355
Value of options granted to non-employees                    --                --                --         131
Net loss                                                     --                --           (18,060)    (18,060)
---------------------------------------------------------------------------------------------------------------
Balance, October 31, 1999                                   606                --           (42,456)        431
---------------------------------------------------------------------------------------------------------------
</TABLE>

See notes to consolidated financial statements

                                      F-33
<PAGE>   99

                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                                          FOR THE YEARS
                                                                                        ENDED OCTOBER 31,

                                                                     1999                      1998                     1997
                                                                   --------                   ------                   ------
<S>                                                                <C>                        <C>                      <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                                  $(18,060)                  $2,514                   $2,857
Adjustment to reconcile net income (loss) to net cash
   provided by (used in) operating activities, net of
   effects of acquisitions:
Extraordinary loss on early extinguishment of debt                    3,067                       --                       --
Depreciation                                                          9,644                    6,638                    4,532
Amortization                                                          2,189                      962                       --
Deferred income taxes                                                  (265)                     717                      727
Minority interest                                                       569                      618                      293
Impairment of long-lived assets                                       2,515                       --                       --
Equity in losses of investment in Kanas                                 591                       --                       --
Change in value of stock appreciation rights                          1,814                       --                       --
Gain on sale of assets held for sale                                 (1,048)                      --                       --
Accretion of property tax payable                                     2,284                       --                       --
Compensation recognized for conversion of stock options                  --                       93                      338
Reduction in revenue for litigation                                      --                       --                     (433)
Gain on disposal of property and equipment                             (234)                      --                       --
Issuance of options to non-employees                                    131                       --                       --
Other - net                                                               4                      156                       10
                                                                   --------                   ------                   ------
                                                                      3,201                   11,698                    8,324
Changes in assets and liabilities, net of effects from
   acquisitions:
Change in accounts receivable                                       (10,886)                   2,694                    1,002
Change in costs and profits in excess of
   billings on uncompleted contracts                                 25,000                  (16,987)                  (4,661)
Change in other current assets                                       (2,947)                   2,334                      431
Change in other assets                                                  327                    1,247                     (280)
Change in accounts payable and accrued liabilities                    4,750                   17,383                     (199)
Change in accruals for incurred job costs                            (9,318)                      --                       --
Change in billings in excess of costs and
   profits on uncompleted contracts                                     150                      569                     (927)
Change in reserves for losses on uncompleted contracts              (16,170)                 (15,110)                      --
Change in other non-current liabilities                              (2,658)                   2,789                      230
                                                                   --------                   ------                   ------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                  (8,551)                   6,617                    3,920
                                                                   --------                   ------                   ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures, net                                            (8,438)                  (9,966)                  (4,487)
Net proceeds from sale of property and equipment                      2,103                       90                       96
Proceeds from sale of assets held for sale                           27,048                       --                       --
Sales of investments                                                     --                       --                      567
Cash acquired in acquisitions                                            --                    4,661                      404
Cash paid for acquisitions                                               --                   (8,681)                  (3,000)
Cash invested in escrow account                                      (7,182)                      --                       --
                                                                   --------                   ------                   ------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                  13,531                  (13,896)                  (6,420)
                                                                   --------                   ------                   ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under lines of credit                                         --                   50,518                   (4,626)
Payment of shareholder / director loans                                (354)                  (2,925)                    (250)
Borrowings from shareholder / director                                   --                    2,050                       --
Proceeds from long-term debt                                            667                   10,000                   11,014
Proceeds from debt to finance acquisition                                --                   10,000                    3,000
Advances from WorldCom                                               32,000                       --                       --
Repayments on long-term debt                                        (13,485)                 (74,388)                  (9,272)
Distributions to minority interests                                    (226)                    (502)                    (293)
Repurchase of Series B Preferred Stock Warrants                      (1,890)                      --                       --
Redemption of Series B Preferred Stock                              (18,857)                      --                       --
Proceeds from the issuance of Preferred Stock, net                       --                   18,110                    5,418
Proceeds from the exercise of stock options                              --                    2,071                      732
Proceeds from issuance of common stock for options                      355                       --                       --
Dividends paid                                                         (166)                    (341)                    (260)
                                                                   --------                   ------                   ------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                  (1,956)                  14,593                    5,463
                                                                   --------                   ------                   ------
Increase in cash and cash equivalents                                 3,024                    7,314                    2,963
Cash and cash equivalents at beginning of year                       13,544                    6,230                    3,267
                                                                   --------                   ------                   ------
Cash and cash equivalents at end of year                           $ 16,568                  $13,544                  $ 6,230
                                                                   ========                  =======                  =======
Supplemental disclosures of cash flow information:
Valuation of detachable warrants                                         --                  $ 6,644                  $    --
Discount on preferred stock                                              --                    7,909                       --
Conversion of Series B Preferred Stock                                   --                    1,385                       --
Conversion of Series A Preferred Stock                                   --                    6,818                       --
Valuation of below market options on acquisition                         --                    4,096                       --
Issuance of common stock for services                                    --                       --                       11
Compensation recognized on below market options                          --                       93                      338
Common stock issued in accordance with GEC earnout provisions         4,596                    1,278                      621
Common stock issued in exchange for note payable to director            828                       --                       --
Valuation of modification of conversion price of
  Series B Preferred Stock Warrants                                   1,894                       --                       --
Conversion of WorldCom Options to SARs                                1,896                       --                       --
Valuation of modification of
  conversion of Series B Preferred Stock                              6,430                       --                       --
Increases to Series B Preferred Stock default redemption value       13,848                       --                       --
Increases to goodwill for:
              Accrued GEC earnout payments                            1,806                   (4,596)                  (1,278)
              Recognition of deferred taxes for Patton
                acquisition                                           1,460                       --                       --
              Reallocation of MFSNT purchase price                    9,773                       --                       --
Cash paid for:
              Interest                                                3,689                    4,226                    1,684
              Income taxes                                            4,643                       29                       --
</TABLE>

                 See notes to consolidated financial statements

                                      F-34
<PAGE>   100

                            ABLE TELCOM HOLDING CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                OCTOBER 31, 1999

1. THE COMPANY:

Able Telcom Holding Corp. ("Able" or the "Company") develops, builds and
maintains communications systems for companies and governmental authorities. The
Company is headquartered in Atlanta, Georgia, and operates its subsidiaries
throughout the United States. The Company also has limited activities in South
America. The Company has five main organizational groups:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
ORGANIZATIONAL GROUP                SERVICE PROVIDED
--------------------------------------------------------------------------------
<S>                                 <C>
Network Services .................  Design, development, engineering,
                                    installation, construction, operation and
                                    maintenance services for telecommunications
                                    systems.
--------------------------------------------------------------------------------
Network Development...............  Established subsequent to October 31, 1999,
                                    to own, operate and maintain local and
                                    regional telecommunication networks.
--------------------------------------------------------------------------------
Transportation Services...........  Design, development, integration,
                                    installation, construction, project
                                    management, maintenance and operation of
                                    automated toll collection systems.
--------------------------------------------------------------------------------
Construction......................  Design, development, installation,
                                    construction, maintenance and operation of
                                    electronic traffic management and control
                                    systems, and road signage.
--------------------------------------------------------------------------------
Communications Development........  Design, installation and maintenance
                                    services to foreign telephone companies in
                                    South America.
--------------------------------------------------------------------------------
</TABLE>

Each group is comprised of subsidiaries of the Company with each having local
executive management functioning under a decentralized operating environment.

The Company's customers primarily include local and long distance telephone
companies, utilities and local, state and federal governments.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements are prepared on an accrual
basis and include the accounts of the Company and its subsidiaries, including
MFS Network Technologies, Inc., Georgia Electric Company, Patton Management
Corporation, Transportation Safety Contractors, Inc., Able Telecommunications &
Power, Inc. and Able Telcom International, Inc., Able Telcom CA and Able Telcom
Do Brasil, LTDA.

Minority shareholders of Able Telcom CA are entitled to share in 50 percent of
the earnings and losses of Able Telcom CA. The Company's share of ownership and
voting control is 80 percent. During the fiscal years ended October 31, 1999,
1998 and 1997, minority interests of $0.6 million, $0.6 million and $0.3
million, respectively, are reflected in the accompanying consolidated statements
of operations.

A substantial portion of consolidated total assets, liabilities and revenues are
generated by one subsidiary of the Company, MFS Network Technologies, Inc.
("MFSNT"), which was acquired effective July 2, 1998. Revenues and expenses of
businesses acquired in purchase transactions are included in the consolidated
results of operations since the date of acquisition. All material intercompany
accounts and transactions have been eliminated.

USE OF ESTIMATES AND SIGNIFICANT RISKS

The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.

The Company's construction and service activities are highly technical and its
contracts are complex. Some contracts have or will require several years to
complete. Work awarded to the Company is often the result of competitive bidding
and many of the Company's significant contracts are based on a fixed price
rather than cost-

                                      F-35
<PAGE>   101

plus or time and materials. Initial cost estimates supporting the Company's bids
are necessarily based on facts and circumstances known at the time the estimates
are made. Estimates of projected contract costs must be continuously updated
over the period of contract performance. Contracts with governmental agencies
may include onerous requirements that adversely affect the cost and efficiency
of the Company's performance. High-profile public works can present difficulties
in obtaining final acceptance of completed work because of local political
considerations. Disputes regarding the scope of the work are not uncommon and
change order requests often require protracted negotiations and concessions on
the part of the Company. Unsatisfactory performance of subcontractors or failure
of installed equipment to function in accordance with contract specifications
may also adversely affect the Company's ultimate profitability. Most contracts
pose risks for both the quality and timeliness of performance. Many contracts
include liquidating or liquidated damage clauses to penalize the Company for
failure to meet contractual deadlines.

Considerable judgment must be applied to reasonably evaluate the potential
outcomes of issues that arise during the contract performance period and the
effect their resolution will have on the ultimate margins or losses that may be
realized by the Company. Consequently, the estimates that support the Company's
revenue recognition and cost accrual decisions have a very significant impact on
the results of operations reported by the Company.

CASH AND CASH EQUIVALENTS

The Company considers all unrestricted highly liquid investments with original
maturities of three months or less to be cash equivalents.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost. Depreciation is provided for using
the straight-line and accelerated methods over the estimated useful lives of the
assets that generally range from three to ten years.

GOODWILL

Goodwill represents the amount by which the purchase price of businesses
acquired exceeds the fair value of the net assets acquired under the purchase
method of accounting. Goodwill is being amortized on a straight-line basis over
20 years. A rollforward of goodwill from November 1, 1998 is as follows (amounts
in thousands):

<TABLE>
<S>                                                                    <C>
Net goodwill, at November 1, 1998                                      $31,374
Patton Management Corporation ("Patton") (1)                             1,460
Dial Communications, Inc. ("Dial") (2)                                  (1,319)
Georgia Electric Company ("GEC") (3)                                     1,806
MFSNT (4)                                                                9,773
Amortization                                                            (1,872)
-------------------------------------------------------------------------------
Net goodwill, at October 31, 1999                                      $41,222
-------------------------------------------------------------------------------
</TABLE>

As discussed in Note 5 "Acquisitions," adjustments made to goodwill during the
fiscal year ended October 31, 1999, related to:

(1)      Goodwill was increased to recognize deferred tax and other liabilities
         of approximately $1.1 million and $0.4 million, respectively, assumed
         in the 1998 acquisition of Patton.
(2)      The Company terminated the operation of Dial and wrote-off the related
         goodwill.
(3)      The increase is for contingent earn-out consideration associated with
         the 1996 acquisition of GEC.
(4)      Goodwill was increased by approximately $9.8 million for adjustments to
         the MFSNT purchase price allocation.

Amortization expense was $1.9 million, $1.0 million, and $0.4 million for the
fiscal years ended October 31, 1999, 1998 and 1997, respectively.

                                      F-36
<PAGE>   102

IMPAIRMENT OF LONG-LIVED ASSETS

The Company, at each balance sheet date, evaluates whether events or changes in
circumstances have occurred that indicate the carrying value of its long-lived
assets and identifiable intangibles may not be recoverable. If such events or
changes in circumstances are deemed to have occurred, the Company estimates the
future cash flows related to the assets and compares the sum of the expected
future cash flows (undiscounted and without interest charges) to the carrying
amount of the assets to determine if there has been an impairment. If an
impairment has occurred, the Company will write the assets down to their
estimated fair value. The estimated fair value of the assets is typically
calculated using the present value of estimated expected future cash flows using
a discount rate commensurate with the risks involved. As described in Note 5,
"Acquisitions", the Company wrote-off $1.3 million of Dial goodwill during the
year ended October 31, 1999. In addition, the Company also wrote-off $1.2
million of equipment during the year ended October 31, 1999.

SELF-INSURED CLAIMS LIABILITY

The Company retains the risk, up to certain limits, for automobile, workers'
compensation, and employee group health claims. As of July 1, 1999, the Company
switched its self-insured automobile and workers' compensation policies to a
premium based, fully-insured policy, but continues to self-insure the employee
group health claims. A liability for unpaid claims and the associated claim
expenses, including incurred but not reported claims, is determined and
reflected in the consolidated financial statements as an accrued liability. The
self-insured claims liability includes estimates of incurred but not reported
claims of $1.6 million and $1.1 million at October 31, 1999 and 1998,
respectively. The determination of such claims and expenses and the
appropriateness of the related liability is continually reviewed and updated.

STOCK BASED COMPENSATION

The Company accounts for stock based compensation under Accounting Principles
Board Opinion No. 25, ("APB No. 25") "Accounting for Stock Issued to Employees,"
and related interpretations, and follows the disclosure provisions of Statement
of Financial Accounting Standards ("SFAS") No. 123. "Accounting for Stock-Based
Compensation." Refer to Note 15, "Stock Options and Other Stock Awarded to
Employees."

REVENUE RECOGNITION

Construction and Installation Contracts. Revenues recognized equal contract
costs incurred plus a percentage of the projected margin that will be earned on
each contract over the entire contract term. Measurements of cumulative progress
to completion approximate the cost-to-cost method. Contract costs include all
direct material and labor costs, as well as those indirect costs relating to the
contract such as indirect labor, supplies and equipment costs. Subcontractor
work completed and other costs not yet invoiced to the Company or processed for
payment are accrued at each balance sheet date as "Accruals For Incurred Job
Costs." Claims from sub-contractors are individually evaluated based upon the
merit of the claim, and if necessary, accruals for such claims are established.
Generally, the customer makes the determination of substantial contract
completion.

Changes in job performance, conditions and estimated costs result in changes in
the estimates for project profits unless change orders can be negotiated and
accepted by the customer. The cumulative effect of revised estimates are
recognized in the period in which the changes are determined. When the current
estimates of total contract revenue and contract costs indicate a loss ("Loss
Jobs"), a provision for the entire estimated loss on the contract is made.

Service Contracts. Service contracts consist primarily of recurring contracts
with telecommunication companies to maintain networks and grids; municipalities
to maintain electronic traffic management and control systems; and utility
companies to maintain utility facilities. Revenues from these contracts are
recognized at the time the services are rendered and accepted by the customer in
accordance with the provisions of the related contracts. Costs associated with
these contracts are incurred and recognized as the services are performed.
Losses on service contracts are recognized as incurred.

Change Orders. The Company begins to recognize revenues associated with change
orders once they have been approved by the customer.

                                      F-37
<PAGE>   103

Segmentation. Each of the Company's contracts are evaluated to determine the
appropriate level of segmentation, if any, for revenue recognition purposes.
Contracts that include construction and installation elements and a long-term
service commitment are appropriately segmented and the long-term service
contract is separately accounted for as described above.

INCOME TAXES

The Company accounts for income taxes using an asset and liability approach that
requires the recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been recognized in the Company's
consolidated financial statements or tax returns. In estimating future tax
consequences, the Company considers all expected future events other than
enactment of or changes in the tax law or rates. The Company files consolidated
federal income tax returns.

INCOME (LOSS) PER COMMON SHARE

Basic earnings (loss) per share is determined by dividing net income (loss) from
continuing operations available to common shareholders by the weighted average
number of common shares outstanding during each period. Diluted earnings per
share includes the effects of potentially issuable Common Stock, but only if
dilutive. The treasury stock method, using the average price of the Company's
Common Stock for the period, is applied to determine dilution from options and
warrants. The if-converted method is used for convertible securities. Because of
reported losses, there are no differences between basic and diluted per share
amounts for the Company for 1999 or 1998.

The Company has potentially dilutive securities that could have a dilutive
effect in the future. Those securities and their potentially dilutive effects
are as follows (dilutive shares in thousands):

<TABLE>
<CAPTION>
                                                                                              Potentially
                                                                                               Dilutive       Average
                                                                                                Shares      Strike Price
------------------------------------------------------------------------------------------------------------------------
<S>                                                                                           <C>           <C>
Potentially dilutive securities outstanding at October 31, 1999:
   WorldCom Options (subject to shareholder approval) (Refer to Note 5)                          2,000        $ 7.00
   Employee stock options (subject to shareholder approval) (Refer to Note 15)                   1,604          6.14
   Employee stock options (572,000 vested) (Refer to Note 15)                                      992          6.59
   Shares issued to redeem Series B Convertible Preferred Stock in February
       2000 (Refer to Note 23)                                                                     802          6.13
   Senior Subordinated Note Warrants (Refer to Note 11)                                            410          8.25
   Series B Preferred Stock Warrants (Refer to Note 14)                                            370         13.25
   GEC Earnout (Refer to Note 5)                                                                   205            --
   Series A Preferred Stock Warrants (Refer to Note 14)                                             62          9.82
   Employee stock grants (subject to shareholder approval) (Refer to Note 15)                       50            --
------------------------------------------------------------------------------------------------------------------------
Subtotal outstanding at October 31, 1999                                                         6,495          6.80
------------------------------------------------------------------------------------------------------------------------
Potentially dilutive securities issued subsequent to October 31, 1999:
   Conversion of WorldCom debt to equity (Refer to Note 23)                                      3,050          8.38
   Warrants issued to redeem Series B Preferred Stock (Refer to Note 23)                           200         10.13
   Series C Convertible Preferred Stock (Refer to Note 23)                                       1,604          9.35
   Series C Preferred Stock Warrants (Refer to Note 23)                                            200         10.75
   Warrants issued to redeem Series B Preferred Stock (Refer to Note 23)                            66         10.13
   Shares issued for the acquisition of SASCO/SES (Refer to Note 23)                                75            --
   Warrants issued to financial advisors related to the Series C Convertible
       Preferred Stock (Refer to Note 17)                                                           75         10.72
   Stock issued to settle litigation                                                                25            --
------------------------------------------------------------------------------------------------------------------------
         Subtotal issued subsequent to October 31, 1999                                          5,295         $8.73
------------------------------------------------------------------------------------------------------------------------
         Total                                                                                  11,790         $7.67
------------------------------------------------------------------------------------------------------------------------
</TABLE>

The conversion price of the Series C Preferred Stock may be reset to a floor of
$4.00 per share. If reset to the floor, conversion would result in the issuance
of 3.75 million common shares.

The Company has also granted to WorldCom rights to receive upon satisfaction of
certain conditions, including shareholder approval, phantom stock awards for up
to 700,000 shares of common stock, payable in cash, stock, or a combination of
both at the Company's option. Refer to Note 5, "Acquisitions."

                                      F-38
<PAGE>   104

As described in Note 5, "Acquisitions", the Company is committed to issue shares
of common stock as contingent consideration earned by the sellers of Georgia
Electric Company through 2001. Common stock issued to date as contingent
consideration earned for the years ended October 31, 1998 and 1997 was 628,398
shares and 204,448 shares, respectively. Contingent consideration earned for the
year ended October 31, 1999, amounted to $1.8 million and is accrued at that
date in accounts payable and accrued liabilities. Approximately 205,000 shares
will be issued in fiscal 2000. The Company has made a similar commitment
subsequent to October 31, 1999, related to the acquisition of SASCO and SES
(refer to Note 23). The number of shares that may be issued as earn-out
consideration under these commitments in the future is not presently
determinable.

The Company has also executed a deferred value added equity swap agreement with
186K.NET. Either the Company or 186K.NET can exercise the swap at any time from
July 2000 to July 2003. Upon exercise, the Company has committed to issue shares
of its common stock to 186K.NET in exchange for common shares of 186K.NET of
equivalent value at the date of exercise. The value of the shares to be issued
and received is to be determined by the lower of 10% of the increase in the fair
market value of the Company or of 186K.NET from July 1999 to the date of
exercise. 186K.NET is a privately-owned start-up company that provides data and
communications facilities consulting services.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of cash and cash equivalents, accounts receivable
(generally unsecured), accounts payable and notes payable approximate fair value
due to the short maturity of the instruments and the provision for what
management believes to be adequate reserves for potential losses. The fair
values of lines-of-credit and long-term debt approximate their carrying amount
since the currently effective rates reflect market rates for debt of similar
credit quality.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

SFAS NO. 133. In June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and for Hedging Activities," (amended by SFAS No. 137,
"Accounting for Derivative Instrument and Hedging Activities - Deferral of the
Effective Date of FASB Statement No. 133"). This statement revises the
accounting for the recognition and measurement of derivatives and hedging
transactions and is effective for fiscal years beginning after June 15, 2000.
The Company does not anticipate the early adoption of this statement and has not
determined the impact it will have on the consolidated financial statements.

FIN 43. In June 1999, the FASB issued Interpretation No. 43, "Real Estate
Sales." The prospective effects of FIN 43 are addressed in Note 8, "Network
Assets Held For Sale."

RECLASSIFICATIONS

Certain items in the 1998 and 1997 consolidated financial statements have been
reclassified to conform to the 1999 presentation.

3.       GOING CONCERN:

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. The Company incurred losses
from operations of $1.9 million, net losses of $18.1 million, and losses
applicable to common stock of $36.8 million during the fiscal year ended October
31, 1999. Significant payments were also made, both during and subsequent to
October 31, 1999, to redeem the Series B Preferred Stock and to reduce
obligations for loss contracts assumed in 1998 in the acquisition of MFSNT. The
Company has borrowed the maximum available under its existing Credit Facility
(refer to Note 11, "Debt") and is in default of the related covenants. While the
Company is current with respect to amounts due under the Credit Facility, the
lender has the right to demand payment and the Company has insufficient
liquidity to pay such amounts, if called. The Company has not

                                      F-39
<PAGE>   105

yet been successful in obtaining alternative financing and may have insufficient
liquidity to fund its continuing operations. Consequently, there is substantial
doubt about the Company's ability to continue as a going concern.

The accompanying consolidated financial statements do not include any
adjustments relating to the recoverability and classification of asset carrying
amounts or the amount and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern. The Company's
continuation as a going concern is dependent upon its ability to (a) generate
sufficient cash flow to meet its obligations on a timely basis, (b) obtain
additional financing as may be required, and (c) ultimately sustain
profitability.

Management's plans in regard to these matters are as follows:

(1)  As part of the Company's ongoing efforts to strategically align the
     profitable portions of its business and as a result of significant turnover
     and the deterioration of underlying contracts, the Company closed Dial
     Communications, Inc. ("Dial") and Able Integrated Systems, Inc. ("AIS")
     during the fiscal year ended October 31, 1999, which together used cash
     flows from operations of approximately $7.4 million and $3.8 million during
     the fiscal years ended October 31, 1999 and 1998.

(2)  As discussed in Note 11, "Debt," and Note 23, "Subsequent Events,"
     approximately $25.5 million of the Company's indebtedness to WorldCom was
     converted to common stock of the Company subsequent to October 31, 1999.

(3)  As discussed in Note 14, "Preferred Stock," and Note 23, "Subsequent
     Events," approximately $6.3 million of the accrued redemption value of the
     Company's Series B Preferred Stock was paid by issuing common stock and
     warrants of the Company subsequent to October 31, 1999. Concurrently, the
     remaining Series B Preferred Stock redemption obligation of approximately
     $10.0 million was paid with cash funded through the issuance of $15.0
     million of Series C Preferred Stock.

(4)  The Company is attempting to obtain a new credit facility with another
     financial institution and is pursuing additional financing through
     discussions with independent investors.

4.       REVIEW BY THE SECURITIES AND EXCHANGE COMMISSION:

The Company is working to resolve questions by the staff of the Securities and
Exchange Commission ("SEC") regarding certain accounting and other disclosures
made by the Company in connection with the acquisition of MFSNT (the "MFSNT
Acquisition") from WorldCom effective July 2, 1998. As a result of the ongoing
review by the SEC, the Company's Annual Report on Form 10-K for the year ended
October 31, 1998, filed February 24, 1999, as amended March 1, 1999 (as amended,
the "1998 10-K") may be further amended by the Company following completion of
the SEC's review. Additionally, because the Company's Notice of Annual Meeting,
Proxy Statement and Proxy (collectively the "1998 Proxy") for the year ended
October 31, 1998 incorporates the 1998 10-K, the SEC has also not completed its
review of the 1998 Proxy and Able has not been able to hold a shareholder
meeting since April 1998. Once the SEC's reviews have been completed, Able
expects to hold an Annual Meeting.

While the MFSNT Acquisition closed on July 2, 1998, subsequent negotiations with
WorldCom resulted in a $41.9 million reduction in purchase price. The reduction
related primarily to projected losses on contracts assumed by Able from MFSNT.
The allocation of the purchase price, as reported in the Company's 1998 10-K,
established additional reserves for losses on assumed contracts that exceeded
reserves reflected in the unaudited balance sheet of MFSNT ($11.7 million) as of
July 2, 1998, by $28.8 million. The net assets reported by MFSNT at July 2, 1998
exceeded the adjusted purchase price by approximately the same amount.

The SEC's principal questions have centered on the following:

(1)  The allocation of the $28.8 million in additional loss accruals to the
     proper preacquisition period in the financial statements of MFSNT.

                                      F-40
<PAGE>   106

     Resolution of these issues may result in the restatement of MFSNT's
     preacquisition financial statements and related pro forma disclosures
     included in Able's prior SEC filings.

(2)  The appropriate accounting for obligations to perform under long-term
     network operation and maintenance agreements acquired as part of the MFSNT
     Acquisition. Refer to Note 22, "Unaudited Quarterly Financial Data", for an
     explanation of the Company's accounting for long-term operation and
     maintenance contracts.

(3)  The Company's accounting for its investment in Kanas. Refer to Note 9,
     "Investment in Kanas (Held For Sale)," for an explanation of the Company's
     accounting for Kanas.

(4)  The Company's accounting for the sale during the current year of the NYSTA
     conduit. Refer to Note 8, "Network Assets Held For Sale," for an
     explanation of the Company's accounting for the NYSTA conduit sale.

     The SEC has not yet agreed with the Company that such accounting for the
     above issues is appropriate and may require the Company to further change
     its accounting for these matters.

5.       ACQUISITIONS:

On July 2, 1998, the Company acquired the network construction and
transportation systems business of MFSNT from WorldCom, Inc. ("WorldCom")
pursuant to a merger agreement dated April 26, 1998 ("Plan of Merger"). On
September 9, 1998, the Company and WorldCom finalized the terms of the Plan of
Merger through the execution of an amended agreement. The acquisition of MFSNT
was accounted for using the purchase method of accounting at a total price of
approximately $67.5 million. In addition, the MFSNT acquisition agreements, as
amended, provide that on November 30, 2000, the Company shall pay to WorldCom
certain amounts, if positive: (i) the difference between $12.0 million related
to losses on MFSNT projects in existence on March 31, 1998 and recorded by MFSNT
as of June 30, 1998, and the amount actually lost on such contracts through
November 30, 2000, and (ii) the difference between $5.0 million and the
aggregate costs incurred by Able for defense of litigation, and payments made in
settlement or in payment of judgments with respect to preacquisition litigation.
The range of this contingent consideration potentially payable to WorldCom is
from $0 to $17.0 million. Presently, Company management expects to pay no
additional consideration to WorldCom for these matters. The purchase price
for MFSNT included the following consideration (in millions):

<TABLE>
<S>                                                      <C>
Contract price                                           $58.8
Transaction related costs                                  4.6
WorldCom Option                                            3.5
WorldCom Phantom Stock Awards                              0.6
--------------------------------------------------------------
Total purchase price                                     $67.5
--------------------------------------------------------------
</TABLE>

The consolidated balance sheet as of October 31, 1998, reflects the Company's
preliminary allocation of the purchase price to the assets acquired and the
liabilities assumed based on initial estimates of their fair values. During the
fiscal year ended October 31, 1999, the Company

                                      F-41
<PAGE>   107

obtained the information needed to complete its valuations and finalized the
allocation as set forth below: (in millions)

<TABLE>
<CAPTION>
                                                                            As Previously                       Final
                                                                               Reported     Adjustments      Allocation
-----------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>             <C>              <C>
Accounts receivable (1)                                                        $  47.0        $ (1.4)        $  45.6
Costs and profits in excess of billings on uncompleted contracts (2)              93.7          (5.0)           88.7
Assets held for sale                                                              38.8          --              38.8
Prepaid expenses                                                                   1.0          --               1.0
Property                                                                           5.7          --               5.7
Goodwill                                                                          16.5           9.8            26.3
Accounts payable (3)                                                             (13.7)         (0.5)          (14.2)
Billings in excess of costs and profits on uncompleted contracts                 (56.6)         --             (56.6)
Reserves for losses on uncompleted contracts (4)                                 (40.5)          0.6           (39.9)
Accrued restructuring costs (5)                                                   (2.0)          0.3            (1.7)
Property taxes payable                                                           (15.0)         --             (15.0)
Other accrued liabilities (6)                                                     (7.4)         (3.8)          (11.2)
-----------------------------------------------------------------------------------------------------------------------
         Total allocated purchase price                                        $  67.5        $ --           $  67.5
-----------------------------------------------------------------------------------------------------------------------

<FN>
(1)  It was determined that a receivable from WorldCom of $1.4 million should
     not have been recorded as part of the purchase price allocation. Therefore,
     the Company has adjusted accounts receivable and goodwill.
(2)  It was determined that certain long-term receivables were recorded at their
     gross values versus their present values. These receivables are to be paid
     to MFSNT over 20 years. Therefore, an adjustment of approximately $5.0
     million to cost and profits in excess of billings (i.e. unbilled
     receivables) and goodwill was necessary to properly reflect the present
     value of these receivables. Refer to Note 8, "Network Assets Held For
     Sale."
(3)  It was determined that $0.5 million of accounts payable assumed had not
     been included in the original purchase price allocation. The Company
     adjusted accounts payable and goodwill to reflect these accounts payable.
(4)  The Company reviewed its estimates of losses on loss contracts and recorded
     adjustments to such reserves. The adjustments decreased the reserves and
     goodwill by $0.6 million.
(5)  Accrued restructuring costs related primarily to severance and benefit
     costs associated with the involuntary termination of employees pursuant to
     an approved restructuring plan. During the fiscal year ended October 31,
     1998, approximately $1.7 million was incurred and charged against this
     reserve. The excess reserve of $0.3 million was reversed and goodwill was
     reduced.
(6)  Subsequent to the acquisition of MFSNT, the Company recorded an additional
     accrued liability of $3.8 million relating to a claim not previously
     recognized by MFSNT.
</FN>
</TABLE>

In conjunction with the acquisition of MFSNT, the Company granted an option to
WorldCom (the "WorldCom Option") to purchase up to 2,000,000 shares of the
Company's common stock, at an exercise price of $7.00 per share, but subject to
a 1,817,941 share maximum issuance limitation through "cashless" exercise, and
the right to receive upon satisfaction of certain conditions phantom stock
awards (the "Phantom Stock Awards") equivalent to 600,000 shares of common
stock, payable in cash, stock, or a combination of both at the Company's option.
The WorldCom Phantom Stock Awards are exercisable only on the following three
days: July 1, 2000, July 2, 2001, or July 2, 2002. WorldCom will be entitled to
receive any appreciation of the Common Stock over a base price of $5 3/32 per
share, but in no event shall the maximum payment exceed $25.00 per share. The
Phantom Stock Awards may be adjusted to be based on up to 700,000 shares and the
base price may be increased, but the maximum payment per share will not change.
The fair values of the WorldCom Option and Phantom Stock Awards were estimated
at the date of grant at $3.5 million and $0.6 million, respectively, and were
included as a component of the total consideration paid for the acquisition of
MFSNT.

The Phantom Stock Awards will be settled on a net basis and are payable in cash
or stock at the Company's option. In accordance with EITF 96-13, the Phantom
Stock Awards were initially measured at fair market value and reported as
permanent equity. Subsequent changes in fair value of the Phantom Stock Awards
will not be recognized. If the Phantom Stock Awards are ultimately settled in
a manner that requires that the Company deliver cash, the amount of cash paid
will be reported as a reduction of contributed capital.

Subsequent to the agreement to issue the Phantom Stock Awards, WorldCom agreed
not to exercise the Phantom Stock Awards until: (1) the registration statement
filed by the Company with respect to resale of shares of Common Stock issuable
upon conversion of the Series B Preferred Stock shall have been declared
effective, and (2) the Company shall obtain the consent or waiver of its
lenders under its secured credit facility permitting the Company to issue the
Phantom Stock Awards. Since it was considered remote that the Company would not
satisfy the above conditions, the Phantom Stock Awards were included in the
MFSNT purchase price.

On January 8, 1999, the Company and WorldCom agreed to convert the WorldCom
Option into stock appreciation rights ("SARs") with similar terms and
provisions, except that the SARs provide for the payment of cash to WorldCom
based upon the appreciation of the Company's common stock over a base price of
$7.00 per share. The SARs may revert back to the WorldCom Option allowing for
the exercise of all 2,000,000 shares (no longer subject to the 1,817,941 share
limitation) if required shareholder approval of the options is received. The
conversion of the WorldCom Option to SARs was treated as the reacquisition of
the WorldCom Option in exchange for a cash-settled obligation indexed to changes
in the fair market value of the Company's stock. The intrinsic value of the SARs
at the date of exchange of approximately $1.9 million was charged to equity and
reflected as a current liability. The liability will

                                      F-42
<PAGE>   108

be adjusted at each balance sheet date for increases or decreases in the
intrinsic value, with an offsetting charge or credit to income, until the SARs
are paid, or if approved by the shareholders, converted back to an Option. The
exercise period for the SARs granted commenced on July 1, 1999, and ends on
January 2, 2002. As of October 31, 1999, the intrinsic value of the stock
appreciation rights liability was $3.7 million. Changes in the valuation of the
SARs have resulted in non-cash charges of $1.8 million during the year ended
October 31, 1999.

In conjunction with the acquisition of MFSNT, the Company entered into a
five-year agreement with WorldCom to provide telecommunications infrastructure
services to WorldCom (the "WorldCom Master Services Agreements") for a minimum
of $40.0 million per year, provided that the aggregate sum payable to MFSNT
shall be not less than $325.0 million, including a fee of 12 percent of
reimbursable costs under the agreement ("Aggregate Sum"). If MFSNT declines any
of the first $130.0 million of contract work in any year of the agreement, the
value of the declined work reduces the Aggregate Sum. MFSNT has agreed that
WorldCom will have met all of its obligations to MFSNT to the extent that
payments to MFSNT reach an aggregate of $500.0 million at any time during the
five-year term. During the fiscal years ended October 31, 1999 and 1998, the
Company recognized revenues of approximately $61.6 million and $30.3 million,
respectively, from the WorldCom Master Services Agreement.

In compliance with a contractual obligation with WorldCom, effective February
2000, the names of all subsidiaries were changed to eliminate "MFS." MFS Network
Technologies, Inc. changed its name to Adesta Communications, Inc. ("Adesta
Communications"), MFS Transportation Systems, Inc. changed its name to Adesta
Transportation, Inc. ("Adesta Transportation") and MFS TransTech, Inc. changed
its name to TransTech, Inc.

PATTON MANAGEMENT CORPORATION

On April 1, 1998, the Company purchased all of the outstanding common stock of
Patton Management Corporation ("Patton") for a total purchase price of
approximately $4.0 million. The acquisition was accounted for using the purchase
method of accounting. Goodwill of approximately $4.3 million (as adjusted) was
recorded and is being amortized on a straight-line basis over 20 years. The
results of operations are included in the consolidated statements of operations
since the date of acquisition.

DIAL COMMUNICATIONS, INC.

On December 2, 1996, Able acquired all the outstanding common stock of Dial. As
consideration, the Company paid $3.0 million in cash, issued 108,489 shares of
common stock (fair value of $0.6 million) and issued a $0.9 million promissory
note with a three-year term. The acquisition was accounted for using the
purchase method of accounting. The results of operations are included in the
consolidated statements of operations since the date of acquisition. Goodwill of
$1.5 million was recorded in this transaction for amortization over 20 years
using the straight-line method.

As part of the Company's ongoing efforts to strategically align the profitable
portions of its business and as a result of significant turnover and the
deterioration of underlying contracts, the Company terminated the operations of
Dial during the fiscal year ended October 31, 1999. For the year ended October
31, 1999, Dial had negative contract margins of $1.6 million and losses before
income taxes of $8.4 million which included a $1.3 million write-off of
goodwill.

GEORGIA ELECTRIC COMPANY

On October 12, 1996, the Company, through a wholly owned subsidiary, acquired
all of the outstanding common stock of Georgia Electric Company ("GEC"). As
initial consideration, the Company paid $3.0 million in cash. Under the terms of
the earn-out provision of the acquisition agreement, the Company will issue
shares of common stock over a five-year period beginning in fiscal 1997,
contingent upon the operating performance of GEC and the market value of the
Company's stock. Such amounts will be accounted for as purchase price
adjustments. The acquisition was accounted for using the purchase method of
accounting. The results of operations are included in the consolidated
statements of operations since the date of acquisition.

The Company increased goodwill by $1.8 million, $4.6 million and $1.3 million
for the years ended October

                                      F-43
<PAGE>   109

31, 1999, 1998 and 1997, respectively, as a result of additional purchase price
due to the former owner of GEC under the terms of the earn-out provisions of the
acquisition agreement. The goodwill is being amortized over 20 years from the
acquisition date, using the straight-line method. Corresponding amounts are
reflected as accounts payable and accrued liabilities in the consolidated
balance sheets pending the issuance of the Company's common stock.

Pro Forma Financial Information (Unaudited)

Unaudited pro forma financial information for the Company is presented below as
if the acquisitions of MFSNT and Patton had taken place as of November 1, for
each of the following fiscal years ended October 31, (in thousands, except per
share amounts):

<TABLE>
<CAPTION>
                                                            1998             1997
-------------------------------------------------------------------------------------
<S>                                                       <C>               <C>
Revenues                                                  $388,905          $481,707
Net loss                                                   (44,497)          (26,796)
Loss applicable to common stock                            (53,384)          (37,031)
Basic loss applicable to common stock per share              (5.39)            (4.35)
</TABLE>

The reserves for losses on uncompleted MFSNT contracts established by the
Company through purchase accounting of $28.8 million have been included as
losses in the 1998 pro forma information.

This unaudited pro forma information does not purport to be indicative of the
results of operations which would have resulted had the acquisitions been
consummated at the dates assumed.

6.       ASSUMPTION OF COMSAT CONTRACTS:

On February 25, 1998, GEC assumed obligations to complete 12 contracts (the
"COMSAT Contracts") with the Texas Department of Transportation from CRSI
Acquisition, Inc., a subsidiary of COMSAT Corporation ("COMSAT"). The COMSAT
Contracts were for the installation of intelligent traffic management systems
and the design and construction of wireless communication networks. In exchange
for assuming the obligations to perform under the COMSAT Contracts, GEC received
consideration from COMSAT of approximately $15.0 million and assumed existing
payables of approximately $2.6 million.

On February 25, 1998, the date when GEC assumed the COMSAT contracts, the
remaining amounts billable to the customers for these contracts totaled $17.0
million. The estimated costs to complete these contracts for COMSAT was from
$17.0 million to $27.3 million. GEC made the following entry to reflect the
assumption of the COMSAT contracts (amounts in thousands):

<TABLE>
<S>                                                                               <C>
Consideration received:
     Cash                                                                         $  4,663
     Accounts receivable                                                             3,754
     Equipment and other assets                                                      6,548
-------------------------------------------------------------------------------------------
Subtotal                                                                            14,965
Accounts payable assumed                                                            (2,549)
-------------------------------------------------------------------------------------------
Deferred revenue (net amount received from COMSAT to complete the contracts)      $(12,416)
-------------------------------------------------------------------------------------------
</TABLE>

The following is a summary of revenues and costs associated with the COMSAT
contracts for the fiscal years ended October 31 (amounts in thousands):

<TABLE>
<CAPTION>
                                                          1999       1998
--------------------------------------------------------------------------
<S>                                                     <C>        <C>
Billings on the COMSAT contracts (1)                    $ 7,952    $11,327
Deferred revenue recognized                               3,935      8,481
--------------------------------------------------------------------------
Total revenues recognized                                11,887     19,808
Direct contract costs                                     8,675     10,672
--------------------------------------------------------------------------
Gross margin from COMSAT contracts                      $ 3,212    $ 9,136
--------------------------------------------------------------------------
</TABLE>

(1)  Billings on the COMSAT contracts also include approved change order
     revenues associated with these contracts but not anticipated when GEC
     assumed such contracts.

                                      F-44
<PAGE>   110

At October 31, 1999, all of the COMSAT Contracts were substantially complete.
The revenues, cost of revenues and gross margins are non-recurring and are not
generally indicative of returns the Company expects to achieve on future
contracts.

7.       UNCOMPLETED CONTRACTS:

Uncompleted contracts consist of the following at October 31, (in thousands):

<TABLE>
<CAPTION>
                                                    1999           1998
--------------------------------------------------------------------------
<S>                                              <C>             <C>
Costs incurred on uncompleted contracts          $ 212,590       $ 116,073
Earning recognized on uncompleted contracts         36,704          29,086
--------------------------------------------------------------------------
     Total                                         249,294         145,159
Less billings to date                             (229,557)        (97,120)
--------------------------------------------------------------------------
     Net                                         $  19,737       $  48,039
--------------------------------------------------------------------------
</TABLE>

Included in the accompanying consolidated balance sheets under the following
headings at October 31, (in thousands):

<TABLE>
<CAPTION>
                                                   1999           1998
-------------------------------------------------------------------------
<S>                                             <C>            <C>
Costs and profits in excess of billings on
    uncompleted contracts                       $ 71,808       $ 105,478
Billings in excess of costs and profits on
    uncompleted contracts                         (6,478)         (6,328)
Accruals for incurred job costs                  (45,593)        (51,111)
-------------------------------------------------------------------------
     Net                                        $ 19,737       $  48,039
-------------------------------------------------------------------------
</TABLE>

8.       NETWORK ASSETS HELD FOR SALE:

Assets held for sale at October 31, 1998, included approximately $26.0 million
of certain fiber optic conduit that was constructed by MFSNT prior to the MFSNT
Acquisition (the "NYSTA Network") and sold during the year ended October 31,
1999.

A portion (approximately 528 miles) of the NYSTA Network, was constructed on
rights of way obtained from the New York State Thruway Authority (i.e.,
"NYSTA"). This portion of the network is referred to as the "On-NYSTA network."
Separately, MFSNT was granted use of the right of way from others for a
contiguous network (the "Off-NYSTA" network) that connects the "On-NYSTA"
network to Cleveland, Ohio.

MFSNT owned or owns the conduit and equipment shelters installed in both
portions of the network. The conduit network was substantially complete and sold
at the date of acquisition in July 1998. As the system was constructed, the
costs had been initially deferred as "inventory" because it was MFSNT's
intention to sell undivided interests (indefeasible rights of use, or "IRU's")
in the owned ducts and shelters to other users. The fiber and electronics for
the network are generally owned by the users, although the Company retained
rights to a limited amount of excess capacity for some minor segments of the
network. The right of way for the On-NYSTA portion of the network is owned by
NYSTA (see revenue sharing with NYSTA below). Title to the On-NYSTA portion of
the network will transfer to NYSTA after twenty years.

The Company is not in the telephone or data distribution business, so no part of
the networks have been viewed as the construction of productive assets for their
own use.

The construction accounting was implemented with respect to the NYSTA Network as
follows:

-    Total construction costs were estimated and accumulated in the job cost
     ledgers as incurred. Costs incurred were effectively charged to cost of
     construction and maintenance or left on the balance sheet as "costs and
     profits in excess of billings on uncompleted contracts" based on signed
     contracts from users.
-    The approach treated each new contract signed as a sale of partially
     completed "inventory." Some of the revenue would be recognized on signing
     based on the calculated percentage complete and a proportionate part



                                      F-45
<PAGE>   111

     of the "inventory" costs would be charged off. In this way, revenues from
     each new contract were effectively recognized on a progress to completion
     basis.
-    When it became apparent that total revenues to be received from sale of the
     inventory, as well as profits from separate installation agreements with
     the users, would be less than the costs to construct the conduit network,
     an estimated loss expected to be incurred to complete the project was
     accrued.

As owner of the right of way, NYSTA shares in user fees from the "On-NYSTA"
system. The arrangement entitled MFSNT to retain 100% of user fees up to
approximately $50.7 million. Then, NYSTA was entitled to 10% of user fees until
MFSNT had received and retained, as cost recovery, approximately $95.5 million
(i.e., from cumulative user fees of approximately $101.3 million); thereafter,
NYSTA is entitled to 50% of user fees and 20% of revenues received by MFSNT for
performance under operation and maintenance ("O&M") contracts with the users.
The O&M contracts provide for installment payments to MFSNT, generally over
twenty years, to offset costs of providing this service.

As part of the agreement, MFSNT also installed and maintains for NYSTA, free of
charge, a 16-strand fiber optic communications network within the conduit system
owned by MFSNT for the sole use of NYSTA.

At the date of acquisition of MFSNT by the Company, negotiations were in process
with a telecommunications company for purchase of nearly all the remaining
network capacity. In purchase accounting, the Company applied a similar
conceptual "inventory" approach to the valuation of this asset. It was estimated
that the user would pay a one-time, up-front fee of $34.5 million for the IRU's
with respect to both the On-NYSTA and Off-NYSTA portions of the network. Of that
amount it was estimated that approximately $8.5 million would be payable to
NYSTA based on the revenue sharing arrangement. Consequently, the Company
allocated $26.0 million of the purchase price to this asset. When the sale
closed in April 1999, Able recorded actual revenues of $35.7 million, and costs
of approximately $34.7 million, equal to $26.0 million assigned to the conduit
in purchase accounting, plus a revenue sharing payment due NYSTA from the
transaction of approximately $8.7 million.

The agreement with NYSTA also provides for sharing of "profits" experienced by
MFSNT in excess of certain specified percentages of related costs with respect
to fiber and equipment installation contracts for the "On-NYSTA" system
separately entered into by MFSNT with the users. Disputes have arisen between
MFSNT and NYSTA with respect to sharing of revenues from a specific installation
contract. Upon closing the April 1999 sale of the remaining conduit inventory, a
Partial Release and Settlement Agreement was made with NYSTA. From those
proceeds, $6.8 million was placed into escrow until NYSTA's rights to share in
revenues equal to twice that amount can be decided through arbitration or
otherwise settled. The escrowed funds are included in other non-current assets
as of October 31, 1999.

With only two exceptions, user fees were paid in their entirety at or shortly
after the time of execution of the user agreements. However, two of the user
agreements provide for the fees to be paid in installments over twenty years.
MFSNT had included these amounts in unbilled receivables (costs and profits in
excess of billings) at their gross, undiscounted future amounts. Consequently,
an adjustment was recorded by the Company to reallocate the purchase price to
recognize a discount on these long-term receivables. The discounted (at 10%)
present value of these long-term receivables was approximately $3.8 million at
October 31, 1999. Interest income from amortization of the discount was
approximately $0.2 million for the year ended October 31, 1999.

While MFSNT and the Company have sold IRU's that constitute virtually all the
usuable value of the network, MFSNT is still the legal owner and responsible for
property taxes assessed on the network. Ownership of the On-NYSTA portion of the
network automatically transfers to NYSTA after twenty years. Consistent with the
concept of having sold the network, MFSNT accrued and expensed, prior to the
acquisition, the estimated present value of future property taxes that would be
payable over the twenty-year term of the agreements. The Company recorded this
liability in purchase accounting at approximately $15.0 million, using a
discount rate of 15%. Amortization of the discount is included in interest
expense and amounted to $2.3 million and $0.8 million for the years ended
October 31, 1999 and 1998, respectively.

Prospective Accounting for Sales of Iru's: FIN 43 broadens the definition of
real estate and will likely require that some or all elements of fiber optic
networks (e.g., right-of-way and conduit) must now be defined as real estate and
revenue recognition criteria for the sale or lease of IRU's will be provided by
SFAS No. 66,

                                      F-46
<PAGE>   112

"Accounting for Sales of Real Estate." SFAS 66 is a different accounting model
and is likely to result in the deferral and amortization of both costs and
revenues related to network assets that would have previously been accounted for
as described above. Among other requirements, SFAS 66 requires title to transfer
to the buyer for up-front revenue recognition to be appropriate. FIN 43 is
effective for all sales of real estate with property improvements or integral
equipment entered into after June 30, 1999. Consequently, none of the
transactions entered into by MFSNT prior to July 2, 1998, or the conduit sale
closed by the Company in April 1999 are subject to those provisions. However,
for transactions subsequent to June 30, 1999, the Company will be required to
apply the guidance of FIN 43.

Much of the conceptual basis for the IRU accounting historically followed by
MFSNT is that the arrangements for use of the conduit qualify for revenue
recognition as sales-type leases under SFAS No. 13. No part of the transaction
was viewed as a "real estate" transaction, so the legal transfer of title to the
"leased" assets was not considered determinative as to whether or not the
transactions could be recorded as sales versus operating leases.

9.       INVESTMENT IN KANAS (HELD FOR SALE):

An equity interest in Kanas was acquired in the MFSNT Acquisition, and has been
held for sale since that time. The original carrying value of the Company's
interest in Kanas, which was assigned in purchase accounting, represents the net
proceeds originally expected to be received from the sale of Kanas stock and was
based, in part, on active negotiations with potential buyers.

The Company is a 25% owner of Kanas, with the remaining 75 percent owned by
native corporations of Alaska. Kanas was established by its shareholders with a
$100,000 total equity contribution ($25,000 per shareholder) to construct a
telecommunications network along the Alaskan Pipeline system between Prudhoe
Bay, Alaska and Valdez, Alaska (the "Alyeska Network"). MFSNT had been
contracted by Kanas to build the fiber optic network which cost in excess of
$83.0 million and was funded by Kanas through a credit agreement that is
guaranteed by WorldCom.

While Kanas provided MFSNT with notice of substantial completion in December
1998, the owner of the Alyeska Network has yet to give Kanas final acceptance of
the system and significant outstanding claims exist among the parties. As
described in Note 4, "Review By the Securities and Exchange Commission," Note 5,
"Acquisitions," and Note 10, "Reserves For Losses on Uncompleted Contracts,"
reserves were provided in purchase accounting for estimated amounts payable by
the Company to complete the project and settle outstanding claims. While MFSNT
has outstanding claims against Alyeska for work it believes was outside the
scope of the contract of at least $15.8 million, no recognition has been given
to those claims in the accompanying consolidated financial statements as
resolution of those matters remains uncertain. The construction costs incurred
by MFSNT significantly exceeded the revenues recognizable under the contract
terms.

Kanas owns and is responsible for maintaining the Alyeska Network. While the
Company does not participate in the day-to-day management of Kanas, Kanas has
contracted with MFSNT to operate and maintain the Alyeska Network for 15 years.
The term of the Kanas O&M agreement began in December 1998. To date, service
contract revenues have been insufficient to cover costs of performance and are
not projected to be sufficient to do so for at least the foreseeable future. As
described in Note 2, "Summary of Significant Accounting Policies," and Note 4,
"Review By the Securities and Exchange Commission," these operating losses are
being recognized as incurred.

As of October 31, 1999, the unaudited financial statements of Kanas reflected
total assets, liabilities and net deficit of $80.1 million, $87.8 million and
$7.7 million, respectively. The deficit includes approximately $8.9 million of
network depreciation. Management has been informed that as of October 31, 1999,
Kanas was current with respect to payment of interest on its debt, but it was in
technical default of loan covenants and has been assessed interest at a default
rate.

At the date of the acquisition of MFSNT, the Company anticipated a near-term
sale of its interest in Kanas. Accordingly, the estimated amount expected to be
realized on sale was allocated to this investment in purchase accounting and, in
accordance with the guidance of EITF Issue 87-11, "Allocation of Purchase Price
to Assets to be Sold," the equity method of accounting was not employed.
However, the anticipated final acceptance of the network by Alyeska has yet to
occur and the timing of any sale of this interest by the Company is uncertain.
Consequently, effective one year from the date of acquisition, the Company began
to apply equity method accounting to this

                                      F-47
<PAGE>   113

investment based on the guidance of EITF Issue 90-06, "Accounting for Certain
Events Not Addressed in EITF 87-11 Relating to an Acquired Operating Unit to be
Sold."

In addition to equity in losses of Kanas, the Company is amortizing the
difference between the carrying value of the Kanas investment and its net equity
of Kanas over 19 years which is the remaining goodwill life related to the
acquisition of MFSNT. The amount of loss the Company recorded against the
carrying value of the asset was approximately $0.4 million, while the associated
amortization of the difference in carrying value was $0.2 million.

During the construction of the Alyeska Network, which was completed in December
1998, Kanas was a development-stage company. The Company has received no
dividends from Kanas.

WorldCom was and continues to be the guarantor of the payment obligations of
Kanas under its credit agreement. In conjunction with the acquisition of MFSNT,
the Company has agreed to indemnify WorldCom under its guarantee. The aggregate
commitment of the lenders under the Kanas credit agreement at October 31, 1999
was approximately $87.5 million.

10.      RESERVES FOR LOSSES ON UNCOMPLETED CONTRACTS:

As of July 2, 1998, the Company estimated the need for reserves for contract
losses with respect to MFSNT contracts of $40.5 million. These reserves relate
to specific MFSNT jobs identified as Loss Jobs. Revenues and costs recognized in
the Company's consolidated statement of operations related to these identified
Loss Jobs subsequent to the acquisition date have resulted in no net margin as
all losses were recorded against the reserve balance. The Company utilized the
reserves for losses on uncompleted contracts only on those jobs identified as
Loss Jobs at the date of acquisition. The following is a summary of the reserves
for losses on uncompleted contracts (amounts in thousands):

<TABLE>
<CAPTION>
                                         Network     Transportation
                                         Services       Services        Total
-------------------------------------------------------------------------------
<S>                                      <C>         <C>               <C>
Balance, July 2, 1998                      16,266         24,234         40,500
Amount utilized                            (8,237)        (6,873)       (15,110)
-------------------------------------------------------------------------------
Balance, October 31, 1998                   8,029         17,361         25,390
Valuation adjustments (1)                   2,463         (3,082)          (619)
Amount utilized                            (4,789)       (11,362)       (16,151)
-------------------------------------------------------------------------------
Balance, October 31, 1999                $  5,703       $  2,917       $  8,620
-------------------------------------------------------------------------------
</TABLE>

(1)  The valuation adjustments recorded during the fiscal year ended October 31,
     1999, were the result of final projected cost estimates on previously
     identified Loss Jobs unavailable at the date of acquisition.

11.       DEBT:

The Company's debt consists of the following at October 31, (in thousands):

<TABLE>
<CAPTION>
                                                                                                   1999       1998
---------------------------------------------------------------------------------------------------------------------
<S>                                                                                               <C>         <C>
Revolving Credit Facility with bank that is currently in default which gives the lender the
right to accelerate payment, maturing November 2000, interest payment dates and rates vary
(9.61 percent at October 31, 1999, including default interest of 2 percent and 7.69 percent
at October 31, 1998), secured by the Company's existing and future restricted subsidiaries        $35,000     $35,000
</TABLE>

                                      F-48
<PAGE>   114

<TABLE>
<S>                                                                                               <C>         <C>
Note payable to WorldCom maturing November 2000, interest is payable quarterly at an annual
rate of 11.5 percent. Subsequent to October 31, 1999, $25.5 million was converted to common
stock. Refer to Note 23, "Subsequent Events."                                                      30,000      30,000

Senior Subordinated Notes, repaid during fiscal year 1999, original agreement provided for
annual payments of $5.0 million January 6, 2004 and 2005, 12.0 percent interest per annum, in
arrears, paid semi-annually                                                                            --      10,000

Notes payable                                                                                         303         860
---------------------------------------------------------------------------------------------------------------------
                                                                                                   65,303      75,860

Capital leases                                                                                      1,069       1,350
---------------------------------------------------------------------------------------------------------------------
                                                                                                   66,372      77,210
Less discount on Senior Subordinated Notes                                                             --      (1,087)
---------------------------------------------------------------------------------------------------------------------
                                                                                                   66,372      76,123
Less current portion                                                                               35,754      14,438
---------------------------------------------------------------------------------------------------------------------
Long-term debt, non-current portion                                                               $30,618     $61,685
---------------------------------------------------------------------------------------------------------------------
</TABLE>

CREDIT FACILITIES

On June 11, 1998, the Company obtained a $35.0 million three-year senior secured
revolving credit facility ("Credit Facility") with a $5.0 million sub-limit for
the issuance of standby letter(s) of credit. The Credit Facility allows the
Company to select an interest rate based upon the prime rate or on a short-term
LIBOR, in each case plus an applicable margin, with respect to each draw the
Company makes thereunder. Interest is payable monthly in arrears on base rate
advances and at the expiration of each interest period for LIBOR advances. The
Credit Facility contains certain financial covenants which require, among other
conditions, that the Company maintain certain minimum ratios, minimum fixed
charge coverage, interest coverage, as well as limitations on total debt and
dividends to shareholders. The Credit Facility is secured by a perfected first
priority security interest on all tangible assets of the Company and a pledge of
the shares of stock of each of the Company's subsidiaries operating in the
United States. On June 30, 1998, the Credit Facility was amended to include (i)
the Company's acquisition of MFSNT and the related financing of such
transaction, (ii) changes in financial covenants related thereto, and (iii)
other amendments relating to investments, pledging and intercompany matters. At
October 31, 1998, and thereafter, the Company was in violation of certain of the
covenants in the Credit Facility, which were subsequently waived through
November 1, 1999.

At October 31, 1999, the Company is in technical default of certain provisions
of the Credit Facility. As such, the Credit Facility is immediately callable by
the holder and is therefore classified as a current liability in the
accompanying October 31, 1999, consolidated balance sheet. During the default
period, the Company is required to pay a default penalty of two percent per
annum on all outstanding balances.

WORLDCOM NOTE

In conjunction with the acquisition of MFSNT, the Company executed a $30.0
million promissory note to WorldCom ("WorldCom Note"). Subsequent to October 31,
1999, the Company entered into an agreement with WorldCom to convert
approximately $25.5 million of the WorldCom Note into the Company's Common
Stock. The Company issued a note for the difference between the $30.0 million
and $25.5 million with interest at 11.5 percent per annum due February 2001.
Refer to Note 23, "Subsequent Events."

SENIOR SUBORDINATED NOTES

Effective January 6, 1998, the Company issued $10.0 million of unsecured 12
percent Senior Subordinated Notes due January 6, 2005 (the "Senior Subordinated
Notes") with detachable warrants to purchase 409,505 shares of common stock at a
price of $8.25 per share, which were valued at approximately $1.2 million
resulting in a corresponding discount applicable to the Senior Subordinated
Notes.

In February 1999, the Company repurchased the Senior Subordinated Notes for
approximately $11.6 million using part of the proceeds from the WorldCom Advance
described in Note 12, "WorldCom Advance." The purchase of

                                      F-49
<PAGE>   115

Senior Subordinated Notes resulted in an extraordinary loss on the early
extinguishment of debt of approximately $3.0 million, net of tax of zero.

AGGREGATE MATURITIES

The aggregate maturities of long-term debt and capital leases for years
subsequent to October 31, 1999, are as follows:

<TABLE>
<S>                                                 <C>
2000                                                $35,754
2001                                                 30,321
2002                                                     75
2003                                                     19
2004                                                     19
Thereafter                                              184
-----------------------------------------------------------
                                                    $66,372
-----------------------------------------------------------
</TABLE>

12.       WORLDCOM ADVANCE:

In February 1999, WorldCom advanced the Company $32.0 million ("WorldCom
Advance") as an advance against amounts otherwise payable by WorldCom to the
Company pursuant to the WorldCom Master Services Agreement. The proceeds of the
WorldCom Advance were used to facilitate the purchase of 2,785 shares, or
approximately 78% of the outstanding shares of Series B Preferred Stock (refer
to Note 14, Preferred Stock), and the purchase of the outstanding Senior
Subordinated Notes.

The WorldCom Advance bears no interest and is subordinate to the Credit
Facility. Payments under the WorldCom Advance were further subordinated to
liabilities associated with certain construction projects that are expected to
be completed during fiscal 2001.

The WorldCom Advance agreement also provides for additional advances to the
Company through November 30, 1999, of up to $15.0 million against amounts
otherwise payable pursuant to the WorldCom Master Services Agreement. These
additional advances are non-interest bearing and, subject to the subordination
agreements described above, include a stated date for repayment to WorldCom of
November 30, 2000. To date, the Company has not received any additional advances
against the $15.0 million available.

13.       COMMITMENTS AND CONTINGENCIES:

LITIGATION

In 1998, SIRIT Technologies, Inc. ("SIRIT") filed a lawsuit in the United States
District Court for the Southern District of Florida, against the Company and
Thomas M. Davidson, who subsequently became a member of the Company's Board of
Directors. SIRIT asserts claims against the Company for tortuous interference,
fraudulent inducement, negligent misrepresentation and breach of contract in
connection with the Company's agreement to purchase the shares of MFSNT and
seeks injunction relief and compensatory damages in excess of $100.0 million.

In 1998, Shipping Financial Services Corp. ("SFSC") filed a lawsuit in the
United States District Court for the Southern District of Florida against the
Company, and certain of its officers. SFSC asserts claims under the federal
securities laws against the Company and four of its officers that the defendants
allegedly caused the Company to falsely represent and mislead the public with
respect to two acquisitions, COMSAT and MFSNT, and the ongoing financial
condition of the Company as a result of the acquisitions and the related
financing of those acquisitions. SFSC seeks certification as a class action on
behalf of itself and all others similarly situated and seeks unspecified damages
and attorneys' fees.

In 1997, Bayport Pipeline, Inc. ("Bayport") filed a lawsuit against MFSNT
seeking a declaratory judgment concerning the rights and obligations of Bayport
and MFSNT under a Subcontract Agreement that was entered into on May 1, 1997
related to the NYSTA contract. The matter was referred to arbitration in January
1999. The total amount sought was not less than $5.5 million and subsequent to
October 31, 1999, was increased to $19 million.

                                      F-50
<PAGE>   116

In 1997, U.S. Public Technologies, Inc. ("USPT") filed a lawsuit in the United
States District Court for the Southern District of California, (San Diego),
against MFSNT for breach of contract, breach of an alleged implied covenant of
good faith and fair dealing, tortuous interference, violation of the California
Unfair Competition Act, promissory estoppel and unjust enrichment in connection
with a Teaming Agreement between MFSNT and USPT concerning the Consortium
Regional Electronic Toll Collection Implementation Program in the state of New
Jersey. In this lawsuit, USPT seeks actual damages in excess of $8.5 million and
unspecified exemplary damages. Discovery has not yet commenced in this lawsuit.

In 1999, Newbery Alaska, Inc. ("Newbery") filed a demand for arbitration seeking
approximately $3.8 million. This dispute arises out of Newbery's subcontract
with MFSNT related to the fiber optic network constructed by MFSNT for Kanas.
Newbery's claims are for the balance of the subcontract, including retainage and
disputed claims for extras based on alleged deficiencies in the plans and
specifications and various other alleged constructive change orders. The parties
are currently conducting discovery. Arbitration hearings on this matter should
take place in the spring or summer of 2000.

In 1998, Alphatech, Inc. ("Alphatech") filed a lawsuit in the U.S. District
Court in Massachusetts. This suit alleges ten counts, including breach of
Teaming Agreements on the E-470 project and the New Jersey Regional Consortium
project, breach of implied duty of good faith and fair dealing on both projects,
misappropriation of trade secrets, deceit, violation of Massachusetts General
Laws Chapter 93A, promissory estoppel, quantum meruit, and unjust enrichment.
Alphatech's claim is for $15 million. A hearing for a summary judgment is
scheduled in May 2000.

In 1998, T.A.M.E. Construction, Inc. ("TAME") sued for breach of contract,
promissory estoppel, discrimination and defamation related to certain contracts
performed by GEC. TAME alleges that it was wrongfully terminated as a
subcontractor. TAME claims contract damages in the amount of $250,000, punitive
damages for discrimination of $1,000,000 and defamation damages of an additional
$1,000,000. GEC has moved for summary judgment. This matter is not set for
trial.

The Company is subject to a number of shareholder and other lawsuits and claims
for various amounts which arise out of the normal course of its business. The
Company intends to vigorously defend itself in these matters. The disposition of
all pending lawsuits and claims is not determinable and may have a material
adverse effect on the Company's financial position.

CONTRACTS

The Company has and will continue to execute various construction and other
contracts which may require the Company to, among other items, maintain specific
financial parameters, meet specific milestones and post adequate collateral
generally in the form of performance bonds. Failure by the Company to meet its
obligations under these contracts may result in the loss of the contract and
subject the Company to litigation and various claims, including liquidated
damages. WorldCom continues to provide performance bonds on certain contracts
acquired in the acquisition of MFSNT.

LEASED PROPERTIES

As of October 31, 1999, the Company leased office space and equipment under
various noncancellable long-term operating lease arrangements. Rental expense
for operating leases amounted to approximately $2.3 million, $2.4 million and
$0.8 million for the fiscal years ended October 31, 1999, 1998 and 1997,
respectively.

During fiscal year 1999, the Company leased certain equipment under capitalized
lease agreements, which have been included in Property and Equipment. Cost and
accumulated amortization of such assets as of October 31, 1999, totaled $3.2
million and $1.8 million, respectively.

Future minimum lease payments required under operating and capital leases with
initial terms in excess of one year are as follows (in thousands):

                                      F-51
<PAGE>   117

<TABLE>
<CAPTION>
YEARS ENDING OCTOBER 31,                                                          CAPITAL LEASES       OPERATING LEASES
-----------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>                  <C>

2000                                                                                  $  707               $ 3,549
2001                                                                                     488                 2,573
2002                                                                                      60                 1,938
2003                                                                                      --                 1,386
2004                                                                                      --                   811
Thereafter                                                                                --                    --
-----------------------------------------------------------------------------------------------------------------------
         Total minimum lease payments                                                 $1,255               $10,257
-----------------------------------------------------------------------------------------------------------------------
Present value of net minimum lease payments                                           $1,069
Less current installments or obligations under capital leases                            707
-----------------------------------------------------------------------------------------------------------------------
Obligations under capital leases, excluding current installments                      $  362
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

14.       PREFERRED STOCK:

SERIES A PREFERRED

Effective December 20, 1996, the Company completed a private placement
transaction of 1,000 shares of $10 par value, Series A Convertible Preferred
Stock (the "Series A Preferred Stock") and warrants to purchase 200,000 shares
of the Company's common stock at $9.82 per share. Proceeds from the offering
totaled $6.0 million. Each share of Series A Preferred Stock was convertible
into shares of the Company's common stock after April 30, 1997, at the lesser of
$9.82 per share or at a discount (increased to a maximum of 20 percent for
conversions after December 20, 1997) of the average closing bid price of a share
of common stock for three days preceding the date of conversion. The Company
recognized the discount attributable to the beneficial conversion privilege of
approximately $1.3 million by accreting the amount from the date of issuance,
December 20, 1996, through the last date the discount rate increase could occur,
December 20, 1997, as an adjustment of net income attributable to common
shareholders. This accretion adjustment, which also represents the adjustment
needed to accrete to the redemption value of the Preferred Stock, resulted in a
charge to retained earnings and accompanying credit to the Preferred Stock. The
Preferred Stock accrued dividends at an annual rate of five percent and was
payable quarterly in arrears in cash or through a dividend of additional shares
of Preferred Stock.

During fiscal 1998, all remaining Series A Preferred Stock was converted into
common stock pursuant to the terms thereof and the related number of warrants
was reduced to 62,000, due to either conversion or forfeiture.

SERIES B PREFERRED

Effective June 30, 1998, the Company completed a private placement transaction
of 4,000 shares of $0.10 par value, non-voting Series B Convertible Preferred
Stock bearing an annual dividend rate of four percent (the "Series B Preferred
Stock") and warrants to purchase 1,000,000 shares of the Company's common stock
at a then exercise price of $19.80 per share (the "Series B Preferred Stock
Warrants"). The net proceeds from the transaction, after transaction costs of
$1.9 million, totaled $18.1 million. The Series B Preferred Stock Warrants are
exercisable for a five-year period commencing June 30, 1998, and were assigned a
value of $5.4 million on the date of the transaction.

The Series B Preferred Stock was convertible immediately into shares of the
Company's common stock at 97 percent of the trading price of the common stock,
determined by a prescribed calculation, immediately preceding the conversion
date. The conversion amount of each share of Series B Preferred Stock was equal
to its face value of $5,000, plus any unpaid dividends thereon. The proceeds
from the Series B offering were allocated as follows (in millions):

<TABLE>
<S>                                                                                     <C>          <C>
Gross offering proceeds (face value of preferred stock)                                 $20.0
Offering costs                                                                           (1.9)
Value of Series B Preferred Stock warrants issued                                        (5.4)
----------------------------------------------------------------------------------------------------------
Amount attributable to preferred stock and beneficial conversion privilege               12.7        $12.7
Value of common stock issuable on conversion (face value divided by 97%)                   --         20.6
----------------------------------------------------------------------------------------------------------
Amount deemed paid for the beneficial conversion privilege                               (7.9)       $(7.9)
----------------------------------------------------------------------------------------------------------
Amount deemed paid for Series B Preferred Stock                                         $ 4.8
----------------------------------------------------------------------------------------------------------
</TABLE>

Because the Series B Preferred Stock was immediately convertible, the discount
attributable to the beneficial

                                      F-52
<PAGE>   118

conversion privilege was fully amortized at the date of issue and reflected as a
reduction in income applicable to common stock for the year ended October 31,
1998.

In September 1998, 436 shares of the Series B Preferred Stock were converted to
approximately 1.0 million shares of the Company's common stock.

The terms of the Series B Preferred Stock provided that if certain events of
default occurred, the holders could require the Company to redeem their shares
for cash at a premium price. During the first quarter of fiscal 1999, the
Company was deemed to be in technical violation of the Series B Preferred Stock
due to its failure to have a registration statement declared effective by
December 27, 1998, covering the common stock underlying the Series B Preferred
Stock and Warrants. During the first quarter of fiscal 1999, the holders of the
Series B Preferred Stock notified the Company of their intent to exercise their
redemption rights, however, the notice was subsequently deferred. The carrying
value of the Series B Preferred Stock was excluded from shareholders' equity at
October 31, 1998.

In February 1999, the Company purchased 2,785 shares of the Series B Preferred
Stock from the original holders for $18.9 million. The transaction was treated
as a repurchase of the shares and the related beneficial conversion feature. The
excess of the amount paid over the carrying value of the preferred stock and the
intrinsic value of the beneficial conversion privilege was recognized as an
additional loss applicable to common stock of approximately $4.5 million. The
holders of the remaining shares agreed to either waive all outstanding defaults
under the remaining Series B Preferred Stock or refrain from exercising any
remedies with respect to any such outstanding defaults until May 18, 1999.
During such period of time, the Company agreed to use its best efforts to have a
registration statement declared effective. Subsequent to May 18, 1999, the
Company received further extensions. As of October 31, 1999, the Company has not
been successful in getting a registration statement declared effective related
to the remaining Series B Preferred Stock.

In connection with the repurchase of the Series B Preferred Stock shares in
February 1999, the Company agreed to a modification of the conversion price with
respect to the remaining 779 shares of Series B Preferred Stock. The conversion
price was changed to a fixed amount of approximately $3.50 per share, which was
further reduced by 1.5 percent per month until a registration statement was
declared effective. The modification of the conversion price of the remaining
779 shares of Series B Preferred Stock resulted in a charge to income applicable
to common stock of approximately $6.4 million in the second quarter of fiscal
1999.

In February 1999, the Company also agreed to certain modifications in the
conversion price of the Series B Preferred Stock Warrants. The conversion price
of warrants to purchase 370,000 shares of the Company's common stock was reduced
to $13.25 per share and the conversion price of warrants to purchase 630,000
shares of the Company's common stock was reduced to $13.50 per share. The
modification of the conversion prices of the Series B Preferred Stock Warrants
resulted in a charge to income applicable to common stock of approximately $1.9
million in the second quarter of fiscal 1999. The charge was determined based on
valuation of the Series B Preferred Stock warrants immediately before the
modification and immediately after the modification using a Black Scholes
pricing model.

In May 1999, the Company repurchased the warrants to purchase 630,000 shares of
the Company's common stock for approximately $1.9 million, which amount was
approximately $2.7 million less than the previous valuations of those warrants
that was made when the warrants were issued and modified.

In May 1999, the Company acknowledged that it was in default on the Series B
Preferred Stock and agreed that further punitive default provisions included in
the terms of the Series B Preferred Stock had been triggered. Those provisions
effectively allowed the holders to convert their shares to common stock and put
the common stock to the Company for a redemption price per common share of
$12.125. Because of the put provision being invoked, the carrying value of the
Series B Preferred Stock was adjusted in May 1999 to reflect the calculated
redemption value. As the conversion price is decreased by 1.5 percent per month,
additional common shares issuable on conversion have been calculated and the
redemption amount has been increased as additional charges against income
applicable to common stock. As of October 31, 1999, the calculated redemption
price was approximately $16.3 million. The recharacterization of the Series B
Preferred Stock as a cash obligation of the Company resulted in charges to
income applicable to common stock of approximately $4.8 million and $1.1 million
in the third and fourth quarters of fiscal 1999, respectively.

                                      F-53
<PAGE>   119

A summary of the above described transactions and their effects on equity and
income applicable to common stock is presented below (amounts in $millions):

<TABLE>
<CAPTION>

                                                                                        Additional
                                                             Series B                    Paid-in      Charged to
                                                              Stock         Warrants      Capital       Earnings
----------------------------------------------------------------------------------------------------------------
<S>                                                          <C>            <C>         <C>           <C>
Proceeds from Series B offering                              $  12.7        $  5.4        $  7.9       $  (7.9)
Conversion of 436 Series B shares                               (1.4)           --           1.4            --
----------------------------------------------------------------------------------------------------------------
Balances at October 31, 1998                                    11.3           5.4           9.3          (7.9)
                                                                                                       ---------
Repurchase of 2,785 Series B shares                             (8.9)           --          (5.5)         (4.5)
February 1999 modifications of terms-
     Additional embedded dividend                                 --            --           6.4          (6.4)
     Additional warrant valuation                                 --           1.9            --          (1.9)
Repurchase of 630,000 warrants for $1.9 million                   --          (4.6)          2.7            --
May 1999 recharacterization of Series B Stock as put
liability                                                       13.9            --          (8.0)         (5.9)
                                                                                                       ---------
Total charged to earnings, year ended October 1999                                                       (18.7)
----------------------------------------------------------------------------------------------------------------
Balances at October 31, 1999                                 $  16.3        $  2.7        $  4.9       $ (26.6)
----------------------------------------------------------------------------------------------------------------
</TABLE>

As described in Note 23, "Subsequent Events," the Company repurchased the
remaining Series B Preferred Stock in February 1999. At October 31, 1999, the
original warrants to purchase 370,000 shares of the Company's common stock
remain outstanding.

15.      STOCK OPTIONS AND OTHER STOCK AWARDED TO EMPLOYEES:

In fiscal 1996, the Company's shareholders adopted a stock option plan for the
issuance of up to 550,000 shares which included provisions for both incentive
and non-qualified stock options (the "Stock Option Plan") and which expires on
September 19, 2005. On April 24, 1998, the Company's shareholders amended the
Stock Option Plan to increase the aggregate number of shares of Common Stock
issuable under the Stock Option Plan from 550,000 to 1,300,000. The Company
intends to file a registration statement under the Securities Act of 1933 to
register these 750,000 additional shares of Common Stock reserved for issuance
under the Stock Option Plan.

Stock options are generally granted with an exercise price equal to the fair
market value of the Common Stock as of the date of grant. All outstanding
options have an option term ranging from 3 to 10 years with an average
outstanding life of 4.8 years as of October 31, 1999. Vesting terms range from
immediately vested to three year vesting terms. Stock options are summarized
below (shares in thousands):

<TABLE>
<CAPTION>

                                                1999                         1998                       1997
-----------------------------------------------------------------------------------------------------------------------
                                                    Option Price                Option Price               Option Price
                                          Shares     Per Share         Shares    Per Share         Shares    Per Share
-----------------------------------------------------------------------------------------------------------------------
<S>                                       <C>       <C>                <C>      <C>                <C>     <C>
Outstanding, beginning of year               664     $6.20-$14.00       372     $6.00-$7.81         160    $5.75-$6.88
Grants                                     1,134      5.75-9.94         592      5.34-14.00         323     6.00-7.81
Exercises                                    (79)     5.75-7.25        (212)     5.34-7.81          (72)    6.00-6.88
Cancellations                               (647)     5.75-14.00        (88)     6.38-7.81          (39)    5.88-7.81
-----------------------------------------------------------------------------------------------------------------------
Outstanding, end of year                   1,072        5.75-9.94       664      6.20-14.00         372      6.00-7.81
-----------------------------------------------------------------------------------------------------------------------
Options exercisable, end of year             652        5.75-9.94        91      6.20-14.00          95      6.00-7.81
-----------------------------------------------------------------------------------------------------------------------
Weighted average fair value of
     options granted during the
     year                                            $       6.61               $      8.56                $        --
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      F-54
<PAGE>   120


<TABLE>
<CAPTION>
                      Options Outstanding                                 Options Exercisable
--------------------------------------------------------------------------------------------------
                                    Weighted
                                     Average                                           Weighted
   Range of          Number         Remaining         Average           Number         Average
Exercise Prices   Outstanding   Contractual Life   Exercise Price     Exercisable   Exercise Price
--------------------------------------------------------------------------------------------------
<S>               <C>           <C>                <C>                <C>           <C>
  $5.75-$5.75           780           4.81             $5.75               507          $5.75
   6.00- 7.25            90           5.31              7.04                67           6.97
   7.43- 8.75            67           8.73              8.05                32           7.57
   9.94- 9.94           135           2.73              9.94                46           9.94
--------------------------------------------------------------------------------------------------
  $5.75-$9.94         1,072           4.84             $6.59               652          $6.34
--------------------------------------------------------------------------------------------------
</TABLE>

The Board of Directors has committed to issue, subject to shareholder approval,
approximately 1.6 million options with strike prices ranging from $5.75 to $8.00
to directors, officers and consultants. The Company may report significant
compensation expense at or subsequent to the date of shareholder approval, if
and when obtained, for any excess of the fair market value at that date over the
strike prices of these options. The Company will occasionally issue options to
consultants. The expense related to options granted to consultants was
approximately $0.1 million in 1999 based on the fair value of the services or
the options in accordance with SFAS No. 123.

The Company accounts for stock options in accordance with APB No. 25. SFAS 123
requires supplemental disclosure of stock-based compensation determined based on
the fair value of options as of the date of grant. The compensation so
determined is recognized for pro forma purposes over the vesting period of the
options. For the purpose of determining the pro forma amounts shown below, the
fair value of each option was estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted average
assumptions for options granted in 1999, 1998 and 1997, respectively; risk-free
interest rates of 5.97 percent, 5.40 percent, 5.65 percent; dividend yield of
zero percent for each year; expected lives of 1.5 years, two to six years and
two years; volatility of .59, .549-.561 and .463. Had compensation expense been
recognized in accordance with SFAS No. 123 the Company's income (loss)
applicable to common stock would approximate the pro forma amounts shown below
(in thousands except per share amounts):

<TABLE>
<CAPTION>
                                                  Year Ended October 31,
----------------------------------------------------------------------------
                                              1999        1998         1997
----------------------------------------------------------------------------
<S>                                        <C>          <C>           <C>
Income (loss) applicable to common stock:
     As reported                            (36,758)     (5,840)       1,331
     Pro forma                              (38,302)     (7,303)       1,121
Diluted income (loss) applicable to
  common stock per share:
     As reported                           $  (3.10)    $ (0.59)      $ 0.16
     Pro forma                                (3.23)      (0.74)        0.13
</TABLE>

Subject to shareholder approval, the Board of Directors has approved a grant of
50,000 shares of common stock to the Company's Chief Executive Officer ("CEO")
at no cost to him. The Board has also approved the payment by the Company of
taxes that will be payable by the CEO with respect to the grant. When and if
shareholder approval is received, the Company will recognize compensation
expense, the amount of which may be significant, for the fair market value of
the shares, on the date of shareholder approval, and cash paid to tax protect
the CEO.

16.      FIBER MARKETING RIGHTS:

The following fiber optic network construction projects were executed by MFSNT
prior to the July 1998 acquisition of MFSNT and contain continuing fiber
marketing rights:

Bay Area Rapid Transit (San Francisco Bay Area) ("BART"). The network was fully
constructed at the date of acquisition and the Company has no ownership rights.
It does have a right to market excess capacity on the system and is entitled to
receive commissions from BART based on a percentage of any resulting user fees
received by BART. During the years ended October 31, 1999 and 1998, commissions
of approximately $0.4 million and $0.3 million were earned by the Company under
this arrangement.

Illinois State Toll Highway Authority ("ISTHA"). This conduit network was under
construction at the date of acquisition and the Company has no ownership rights.
The Company does have marketing rights and is entitled to a percentage of user
fees successfully negotiated on behalf of ISTHA. The Company can also separately
negotiate with users for installation of fiber and electronic equipment. During
the years ended October 31, 1999 and 1998, the Company earned commissions of
$2.0 million and $1.2 million. Revenues from separate installation contracts
with the users were approximately $10.1 million and zero during the fiscal years
ended October 31, 1999 and 1998, respectively.

17.      FINANCIAL ADVISORY SERVICES:

Two related firms, L. Dolcenea, Inc. and Platinum Advisory Services, Inc., were
paid approximately $1.0 million by the Company

                                      F-55
<PAGE>   121

for various advisory services during the year ended October 31, 1999, including
services related to extensions of default waivers under the Series B Preferred
Stock. L. Dolcenea, Inc. was also paid $1.0 million by the Company in July 1998
related to the original issuance of the Series B Preferred Stock. The services
billed to the Company include assistance with negotiation of a proposed
settlement with SIRIT (Refer to Note 13, "Commitments and Contingencies"),
involvement with potential business acquisitions, obtaining officers and
directors' liability insurance for the Company and proposals for the issuance of
additional securities by the Company with terms similar to the Series B and
Series C Preferred Stock. Amounts paid include both amounts designated as
retainers and success fees. The Company may be committed to pay these advisors
additional amounts or issue warrants to them for the purchase of the Company's
common stock related to future transactions for which the advisors may claim
compensation.

These advisors were paid an additional $1.7 million in February 2000, at the
time of conversion and redemption of the remaining outstanding Series B
Preferred stock and issuance of the Series C Preferred Stock. These advisors
also received 75,000 warrants to acquire the Company's common stock. Refer to
Note 23, "Subsequent Events"

18.      DEFINED CONTRIBUTION RETIREMENT PLAN AND POST-EMPLOYMENT OBLIGATIONS:

The Company sponsors a defined contribution retirement plan covering
substantially all employees of the Company. Participants may contribute up to
fifteen percent of their annual salaries, subject to certain limitations, as
pre-tax salary deferral. The Company makes certain matching and service related
contributions to the plan that totaled approximately $0.7 million during the
fiscal year ended October 31, 1999.

During the fiscal year ended October 31, 1999, the Company executed deferred
compensation arrangements with two former directors that provide for payments to
them of $60,000 to $75,000 per year plus fringe benefits for the number of years
equal to the years of service, subject to a minimum of ten years. During the
fiscal year ended October 31, 1999, the Company incurred expense of
approximately $0.8 million related to these arrangements and paid benefits to
one former employee of $0.1 million. The present value of these future
obligations, $0.8 million, was accrued as of October 31, 1999.

19.      INCOME TAXES:

An analysis of the components of income (loss) before income taxes and minority
interest is presented below for the fiscal years ended October 31 (amounts in
thousands):

<TABLE>
<CAPTION>
                                 1999         1998        1997
----------------------------------------------------------------
<S>                            <C>            <C>         <C>
Domestic                       $(18,285)      $6,084      $3,304
Foreign                             656          453         573
----------------------------------------------------------------
                               $(17,629)      $6,537      $3,877
----------------------------------------------------------------
</TABLE>

The provision (benefit) for income taxes is composed of the following for the
fiscal years ended October 31 (in thousands):

<TABLE>
<CAPTION>
                                                  1999         1998         1997
--------------------------------------------------------------------------------
<S>                                            <C>           <C>           <C>
Current:
    Federal                                    $  (540)      $ 1,937       $ --
     State                                         402           751         --
--------------------------------------------------------------------------------
                                                  (138)        2,688         --
--------------------------------------------------------------------------------
Deferred:
     Federal                                     4,003           792        657
     State                                         149           (75)        70
     Change in valuation allowance              (4,152)           --         --
--------------------------------------------------------------------------------
                                                    --           717        727
--------------------------------------------------------------------------------
Total provision (benefit) for income taxes     $  (138)      $ 3,405       $727
--------------------------------------------------------------------------------
</TABLE>

The difference between the provision (benefit) for income taxes computed at the
statutory federal income tax rate and the financial statement provision
(benefit) for income taxes is summarized as follows for the fiscal year ended
October 31:

                                      F-56
<PAGE>   122

<TABLE>
<CAPTION>
                                          1999          1998         1997
--------------------------------------------------------------------------
<S>                                      <C>            <C>          <C>
Expected statutory amount                (34.0)%        34.0%        34.0%
Change in valuation allowance             26.4            --           --
Non-deductible goodwill                    4.7           4.0          4.0
Foreign operations, net                    3.0           4.0        (20.0)
State income taxes                         1.5           7.0          0.2
Other                                     (2.4)          3.0          3.8
--------------------------------------------------------------------------
Actual tax provision (benefit)            (0.8)%        52.0%        22.0%
--------------------------------------------------------------------------
</TABLE>

Deferred tax assets and liabilities result from differences in the timing of the
recognition of certain income and expense items for tax and financial reporting
purposes. The sources of these differences are as follows at October 31 (amounts
in thousands):

<TABLE>
<CAPTION>
                                                          1999          1998
------------------------------------------------------------------------------
<S>                                                      <C>           <C>
Current deferred tax assets (liabilities):
     Allowance for doubtful accounts                     $ 1,243       $   312
     Accrued liabilities                                   1,029            --
     Other                                                   (25)          747
------------------------------------------------------------------------------
                                                           2,247         1,059
------------------------------------------------------------------------------
Non-current deferred tax assets (liabilities):
     Property and equipment                               (3,183)         (755)
     Net operating loss (NOL) carryforwards                2,806            --
     Stock appreciation rights payable                       744            --
     Accrued liabilities                                     389            --
     Other                                                   204           (39)
------------------------------------------------------------------------------
                                                             960          (794)
------------------------------------------------------------------------------
Net deferred tax asset prior to valuation allowance        3,207           265
Valuation allowance                                       (3,207)           --
------------------------------------------------------------------------------
                                                         $    --       $   265
------------------------------------------------------------------------------
</TABLE>

At October 31, 1997, the Company had NOL carryforwards for Federal income tax
purposes of approximately $3.3 million. These NOL carryforwards were fully
utilized in fiscal year 1998. During fiscal 1999, the Company had a NOL for
income tax purposes of approximately $9.7 million, approximately $2.0 million of
which will be carried back to fiscal 1998 and the remainder of approximately
$7.7 million will be carried forward and will expire in 2019. A valuation
allowance of $3.2 million has been recognized at October 31, 1999, due to the
uncertainty that the Company will realize the income tax benefit from its net
deferred tax assets.

20.      RELATED-PARTY TRANSACTIONS:

In payment of certain finders fees associated with the acquisition of MFSNT, the
Company issued a three-year, 10 percent note for $1.3 million to a third party
who subsequently became a member of the Company's Board of Directors. At October
31, 1998, the outstanding balance of this note was $1.2 million and is reflected
in current liabilities in the accompanying consolidated balance sheet. During
the year ended October 31, 1999, the Company issued 118,000 shares of Common
Stock to the Director in payment of the then remaining balance of the note of
$0.8 million.

In November 1997, a subsidiary of the Company assumed the obligations of Ten-Ray
Utility Construction, Inc. ("Ten-Ray"), a North Carolina corporation, as
contractor under two network construction contracts and paid the costs Ten-Ray
had accrued under the contracts of approximately $0.1 million. On January 30,
1998, the Company purchased from Ten-Ray certain construction equipment used in
connection with the contracts. The purchase price for the equipment was the
satisfaction of Ten-Ray's bank loans secured by the equipment in the amount of
$0.3 million, including principal and interest, which in the opinion of the
executives of the subsidiary was not more than the fair market value of the
equipment at the time of this transaction. The Company's then Chief Financial
Officer, beneficially owned approximately 7.7 percent of the voting stock of
Ten-Ray and had personally guaranteed the equipment loans to the bank.

21.      SEGMENT INFORMATION:

                                      F-57
<PAGE>   123

The Company currently operates primarily in two industry segments: network
services and transportation services. Transportation services are conducted
primarily in the United States with small projects in South America, Canada and
Asia, while telecommunication network services are conducted both in the United
States and Latin America. The Company manages and analyzes the operations of the
Company in four separate groups, Network Services Group, Transportation Services
Group, Construction Group and Communications Development Group. Subsequent to
October 31, 1999, the Company established the Network Development Group. Refer
to Note 1, "The Company," for descriptions of services provided by each
operating group. The Company's international operations are primarily within the
Communications Development Group and are immaterial to the Company's
consolidated operations.
<TABLE>
<CAPTION>
                                               For the Fiscal Year Ended October 31,
------------------------------------------------------------------------------------
                                                  1999           1998          1997
------------------------------------------------------------------------------------
<S>                                            <C>             <C>           <C>
Sales to unaffiliated customers:
Network Services                               $ 260,354       $ 62,243      $    --
Transportation Services                           39,394         24,639           --
Construction                                     113,948        125,270       82,171
Communication Development (International)          4,869          5,329        4,163
------------------------------------------------------------------------------------
                                               $ 418,565       $217,481      $86,334
------------------------------------------------------------------------------------
Income (loss) from operations:
Network Services                               $  14,746       $  6,272      $    --
Transportation Services                          (10,618)         2,586           --
Construction                                      (5,730)         1,718        4,824
Communication Development (International)            346            182           17
Unallocated Corporate Overhead                      (628)           651           --
------------------------------------------------------------------------------------
                                               $  (1,884)      $ 11,409      $ 4,841
------------------------------------------------------------------------------------
Identifiable assets:
Network Services                               $ 139,460       $159,660      $    --
Transportation Services                           50,178         48,830           --
Construction                                      66,667         71,941       44,751
Communication Development (International)          3,813          4,496        2,509
Corporate                                          1,915          5,833        3,086
------------------------------------------------------------------------------------
                                               $ 262,033       $290,760      $50,346
------------------------------------------------------------------------------------
</TABLE>

The Company derives a significant portion of its revenues from a few large
customers. Those customers are as follows:

<TABLE>
<CAPTION>
                                                                          Revenue for the    Percentage of Total Revenues
                                                                            Fiscal Year      During The Fiscal Years Ended
                                                                               Ended                October 31,
             Customer                        Operating Group             October 31, 1999     1999       1998       1997
--------------------------------------------------------------------------------------------------------------------------
<S>                                <C>                                   <C>                 <C>         <C>        <C>
New Jersey Consortium              Transportation and Network Services        $78,515          18%         8%        --
WorldCom                                    Network Services                   61,636          15%        14%        --
Williams Communications, Inc.               Network Services                   49,621          12%         --        --
Cooper Tire Company                           Construction                     13,050           3%         6%       15%
Florida Power Corp.                           Construction                     13,514           3%         7%        9%
State of Illinois (ISTHA)                   Network Services                   11,680           2%         5%        --
</TABLE>

MFSNT is party to multiple contracts with the New Jersey Consortium ("New Jersey
Consortium Contracts") which includes the New Jersey Turnpike Authority, New
Jersey Highway Authority, Port Authority of New York and New Jersey, South
Jersey Transportation Authority and the State of Delaware Department of
Transportation. The New Jersey Consortium Contracts provide for, among other
items, MFSNT to construct and maintain a fully integrated automated toll
collection system and supporting fiber optic network. The gross revenues the
Company has or expects to receive from the New Jersey Consortium Contracts are
estimated to be approximately $280.0 million. During the fiscal year ended
October 31, 1999, the Company incurred net losses related to the New Jersey
Consortium Contracts of approximately $4.0 million, including penalties of
approximately $4.9 million associated with the failure to meet certain
milestones provided for in the contracts. The Company is not currently incurring
additional penalties related to the New Jersey Consortium Contracts. However,
scheduled minimum payments due the Company for operation of the violations
processing center have been deferred until certain work is completed by the
Company and accepted by the Consortium and may not be recouped as minimum
payments.

At October 31, 1999, the Company had billed and unbilled receivables of
approximately $18.3 million and $20.4 million relating to the New Jersey
Consortium, $10.9 million and $8.7 million relating to WorldCom and $6.2
million and $1.1 million relating to Williams Communications, Inc.,
respectively.

                                      F-58

<PAGE>   124

The loss of the New Jersey Consortium, WorldCom or any other such customers
could have a material adverse effect on Able's business, financial condition and
results of operations.

22.      UNAUDITED QUARTERLY FINANCIAL DATA (amounts in thousands except per
         share data)

The fiscal 1999 quarterly unaudited amounts have been adjusted from amounts
previously reported by the Company in their quarterly filings with the
Securities and Exchange Commission. The adjustments relate to accounting errors
discovered subsequent to October 31, 1999. Their nature and effects on the
results of operations for each of the quarterly periods during fiscal 1999 are
summarized below (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                                As Reported     Adjustments       Adjusted
-------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>            <C>              <C>
First quarter:
         Revenues                                                $  91,777       $  1,303       $  93,080
         Operating income (loss)                                     5,363         (2,842)          2,521
         Net income (loss)                                            (581)        (4,737)         (5,318)
         Income (loss) applicable to common stock                     (761)        (4,737)         (5,498)
         Income (loss) applicable to common stock per share          (0.06)         (0.41)          (0.47)

Second quarter:
         Revenues                                                  124,481           (752)        123,729
         Operating income (loss)                                       536         (3,393)         (2,857)
         Net income (loss)                                              41         (1,636)         (1,595)
         Income (loss) applicable to common stock                  (15,151)           845         (14,306)
         Income (loss) applicable to common stock per share          (1.29)          0.07           (1.22)

Third quarter:
         Revenues                                                  102,562            219         102,781
         Operating income (loss)                                     6,546         (5,091)          1,455
         Net income (loss)                                             161         (5,646)         (5,485)
         Income (loss) applicable to common stock                      122        (10,387)        (10,265)
         Income (loss) applicable to common stock per share            .01          (0.88)          (0.87)

Fourth quarter:
         Revenues                                                   98,975             --          98,975
         Operating income (loss)                                    (3,003)            --          (3,003)
         Net income (loss)                                          (5,662)            --          (5,662)
         Income (loss) applicable to common stock                   (6,689)            --          (6,689)
         Income (loss) applicable to common stock per share          (0.56)            --           (0.56)
</TABLE>

<TABLE>
<CAPTION>

                                                                                               NET INCOME (LOSS) APPLICABLE
                                                                NET INCOME (LOSS)                      TO COMMON STOCK
                                                       ------------------------------------------------------------------------
                                                         FIRST       SECOND       THIRD         FIRST       SECOND      THIRD
                                                        QUARTER     QUARTER      QUARTER       QUARTER     QUARTER     QUARTER
                                                       ------------------------------------------------------------------------
<S>                                                    <C>          <C>          <C>         <C>         <C>           <C>
Amounts previously reported                            $  (581)     $    41      $   161     $   (761)   $ (15,151)    $    122
                                                       ------------------------------------------------------------------------
Adjustments:

     WorldCom SAR obligation (1)                        (1,906)         821         (687)      (1,906)         821         (687)
     Improperly deferred costs (2)                        (763)      (2,382)      (2,778)        (763)      (2,382)      (2,778)
     Costs improperly charged against reserves (3)        (132)         623       (1,514)        (132)         623       (1,514)
     Prior year accrual adjustment (4)                    (957)          --           --         (957)          --           --
     Equipment impairment loss (5)                          --       (1,146)          --           --       (1,146)          --
     Tax effects of other adjustments (6)                 (118)         807          309         (118)         807          309
     Series B redemption and modification (7)               --           --           --           --        2,481       (3,338)
     Series B liquidation value adjustment (8)              --           --           --           --           --       (1,403)
     Other adjustments (9)                                (625)         (18)         (92)        (625)         (18)         (92)
     Long-term service contract adjustments (10)          (236)        (341)        (884)        (236)        (341)        (884)
                                                       ------------------------------------------------------------------------
     Total adjustments                                  (4,737)      (1,636)      (5,646)      (4,737)         845      (10,387)
                                                       ------------------------------------------------------------------------
Restated Amount                                        $(5,318)     $(1,595)     $(5,485)     $(5,498)    $(14,306)    $(10,265)
                                                       ------------------------------------------------------------------------
</TABLE>

Quarterly adjustments:

(1)      The obligation under the WorldCom SARs (Note 5) was calculated using a
         Black-Scholes option-pricing model. The obligation should have been
         accounted for at "intrinsic value" determined as the difference between
         the closing price of the Company's common stock on the balance sheet
         date and the strike price of $7.00.

(2)      For the first three quarters, the Company deferred certain costs
         relating to its operation of the Violation Processing Center for the
         New Jersey Consortium that should have been expensed as incurred.

(3)      Indirect costs were not consistently allocated to Transportation
         Services Group jobs. In addition, costs were charged against reserves
         for Loss Jobs that were not related to those jobs.

(4)      A prior year consolidating adjustment to reduce accrued expenses was
         inappropriately not reversed in the preparation of the 1999
         consolidations.

(5)      An impairment loss for certain equipment for one of the Company's
         subsidiaries should have been recognized in the second quarter.

(6)      The tax provision for all quarters has been restated, including
         reversal of approximately $1.2 million tax benefit originally offset
         against the extraordinary loss on the early extinguishment of debt.

(7)      The February 1999 redemption of Series B Preferred Stock and the
         modification of the terms of the then remaining Series B shares was not
         correctly determined.

(8)      The Series B Preferred Stock should have been reflected at its
         liquidation value upon recharacterization as a default obligation in
         May 1999 Refer to Note 14, "Preferred Stock"

(9)      Other adjustments made as a result of the year-end audit affected the
         previously reported quarterly amounts as shown.

(10)     These adjustments recognize losses on long-term service contracts as
         incurred as discussed more fully in the following paragraph.

LONG-TERM SERVICE CONTRACTS

During the third quarter, an accrual of $8.4 million was made with an offsetting
increase to goodwill for projected losses on long-term service contracts
assumed as part of the acquisition of MFSNT for operation and maintenance of
fiber networks. The contracts extend for fifteen to twenty years. Performance
under these agreements, which were predominately executed in 1996 and 1997,
began during fiscal 1999. The Company subsequently determined that the costs to
perform under these contracts are expected to be greater than amounts presently
expected to be billable to network users under firm contractual commitments.
The appropriate accounting treatment for long-term service contracts of this
nature is not clearly defined, particularly when the contracts have been
assumed as part of a purchase business combination. However, based on the
Company's ongoing discussions with the SEC, the Company believes the SEC does
not believe accruals for future losses on these types of long-term service
obligations are appropriate. The Company has also subsequently determined that
such losses cannot be reasonably estimated due to potential changes in various
assumptions. Consequently, the Company has determined the appropriate accounting
for these obligations is to record any such losses in the periods in which the
losses are incurred. The Company has restated its quarterly results for the
first, second and third quarters of 1999 to reflect these losses as incurred and
to reverse the additional $8.4 million accrued for these obligations. The SEC
has not yet agreed with the Company that such accounting is appropriate and may
require the Company to further change its accounting policies for operations
and maintenance contracts.

Quarterly unaudited amounts for the fiscal years ended October 31, 1998 and 1997
are as follows (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                                   First         Second         Third        Fourth
                                                                  Quarter       Quarter        Quarter       Quarter
--------------------------------------------------------------------------------------------------------------------
<S>                                                               <C>           <C>            <C>          <C>
1998:
     Revenues                                                     $22,268       $34,552        $58,305      $102,356
     Operating income (loss)                                       (1,164)        2,180          4,319         6,074
     Net income (loss)                                               (927)          867            790         1,784
     Income (loss) applicable to common stock                      (1,081)          838         (7,186)        1,589
     Income (loss) applicable to common stock per share             (0.12)         0.09          (0.72)         0.16

1997:
     Revenues                                                      18,326        20,871         21,984        25,153
     Operating income (loss)                                        1,144         1,785          1,024           888
     Net income (loss)                                                507           851            932           567

     Income (loss) applicable to common stock                         470           337            491            33
     Income (loss) applicable to common stock per share              0.04          0.04           0.06          0.02
</TABLE>

                                      F-59
<PAGE>   125
23.        SUBSEQUENT EVENTS

WORLDCOM DEBT TO EQUITY CONVERSION

On January 11, 2000, WorldCom agreed to convert approximately $25.5 million of
its $30.0 million WorldCom Note into 3,050,000 shares of the Company's Common
Stock ("WorldCom Conversion Agreement"). The conversion was based on the January
8, 2000 closing price of the Company's Common Stock of $8.375 per share. The
remainder of the original WorldCom Note of approximately $4.5 million was
converted into an amended and restated 11.5 percent subordinated promissory note
due February 2001.

SERIES B AND SERIES C PREFERRED STOCK

In February 2000, the Company purchased the remaining Series B Preferred Stock
outstanding for a redemption price of approximately $16.8 million. The
consideration paid included cash of $10.9 million, 802,000 shares of the
Company's common stock, and warrants to purchase 267,000 shares of common stock.
The warrants are exercisable with respect to 200,000 shares at $10.13 per share.
The price for the remaining 67,000 shares will be established at the end of 100
trading days, using a market-based formula, but could be as low as $.01 per
share. To fund the Series B redemption, the Company issued a new class of Series
C Convertible Preferred Stock with detachable warrants ("Series C Stock") for
cash of $15.0 million.

The Series C Stock has a dividend rate of 5.9% and is convertible immediately at
$9.35 per common share. The conversion price is subject to change every six
months. If the common stock is trading below the previously adjusted conversion
price, the conversion price will be reduced, but not to less than $4.00 per
common share. Under certain terms and conditions, the Company may redeem the
Series C Stock beginning 60 days after a registration statement for the
underlying common shares is declared effective at a price of $15 million plus
10% for each full or partial six-month period elapsed until redemption. The
terms of the Series C Preferred Stock include certain punitive provisions in the
event of default, including interest to accrue at 3% per month. The Series C
Stock was issued with detachable warrants for the purchase of 200,000 shares of
the Company's common stock at a price of $10.75 per share. The Financial
Advisors (Note 17) also are entitled to warrants for 75,000 common shares at
$10.75 per share.

The pro forma effect of the WorldCom Conversion Agreement and the Series B and
Series C Transactions on the October 31, 1999, consolidated balance sheet is as
follows:

<TABLE>
<CAPTION>
                                           WorldCom
                          As Reported     Conversion       Series B        Series C          Pro Forma
------------------------------------------------------------------------------------------------------
<S>                       <C>             <C>             <C>              <C>               <C>
Cash                       $ 16,568        $     --       $(10,879)        $ 14,400          $ 20,089
Current assets              167,874              --        (10,879)          14,400           171,395
Total Assets                262,033              --        (10,879)          14,400           265,554
Current liabilities         166,772              --             --              --            166,772
Long-term debt               46,086         (25,500)            --              --             20,586
Preferred stock              16,322              --        (16,322)          13,637            13,637
Equity                          431          25,500          5,443              763            32,137
</TABLE>

ACQUISITION

On November 5, 1999, the Company acquired all of the outstanding common stock of
Southern Aluminum & Steel Corporation ("SASCO") along with Specialty Electronic
Systems, Inc. ("SES"). SASCO has operations in Birmingham, Cape Canaveral and
Atlanta and has 40 years' experience in surveillance systems, signalization,
Intelligent Transportation Systems ("ITS") and roadway lighting. It provides
expertise in design, installation, and project implementation of advanced
highway communication networks. SES is a systems/integration company in the ITS
market, having designed, fabricated, installed and integrated ITS systems in 11
states from the East Coast to Ohio and Texas.

Consideration for SASCO and SES was 75,000 shares of common stock with a value
of approximately $0.7 million. In addition to the initial consideration, the
Company has provided an earn-out provision to the prior shareholders whereby
additional consideration will be given based on certain performance
measurements. The additional consideration can be earned over a four year
period. The Company intends to record this transaction using the purchase method
of accounting. The pro forma effect on consolidated results of operations, from
the acquisition of SASCO and SES, is not material.

The earn-out consideration for year one (ending October 31, 2000) shall be
converted into the Company's common stock by dividing the earn-out consideration
by $8. The earn-out consideration for year two through year four shall be
converted into the Company's common stock by dividing the earn-out consideration
by the 52-week average of the closing market price of the Company's common stock
for each respective year.

The consideration shall be paid in shares of the Company's common stock.
However, the cumulative shares issued (initial and earn-out) may never exceed
19.9 percent of the total Company common stock issued and outstanding. Should
the 19.9 percent threshold be reached, any additional consideration earned will
be paid in cash or promissory notes with interest calculated at a market rate,
as mutually agreed upon by the Company and the former shareholders, at the time
of payment.

                                      F-60
<PAGE>   126

                   Able Telcom Holding Corp. and Subsidiaries

                                   Schedule II

                        Valuation and Qualifying Accounts

                   Years ended October 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>
                                                Balance at                       Charged to                    Balance at
                                               Beginning of                      Costs and                       End of
                                                  Period       Acquisitions       Expenses      Deductions       Period
-------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>             <C>               <C>            <C>            <C>
Allowance for doubtful accounts:
         October 31, 1999                           $866          $    --          $5,044        $2,396          $3,514
         October 31, 1998                            686               75             782           677             866
         October 31, 1997                            828               --             160           302             686

Restructuring and other acquisition reserves:
         October 31, 1999                          1,541               --              --           959             582
         October 31, 1998                             --            4,997              --         3,456           1,541
         October 31, 1997                             --               --              --            --              --

Reserves for litigation and claims:
         October 31, 1999                          4,014               --              --           700           3,314
         October 31, 1998                             --            5,000              --           986           4,014
         October 31, 1997                             --               --              --            --              --

Reserves for losses on uncompleted contracts:
         October 31, 1999                         25,390            2,463              --        19,233           8,620
         October 31, 1998                             --           40,500              --        15,110          25,390
         October 31, 1997                             --               --              --            --              --
</TABLE>


                                      F-61

<PAGE>   127


                                     PART II

                   INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following are estimated expenses (other than any discounts that may be
incurred by the Selling Shareholders) to be incurred in connection with the
offering described in this Registration Statement:


<TABLE>
              <S>                                           <C>
              SEC Registration Fee (actual)                 $ 28,613
              Accounting Fees and Expenses                   250,000
              Legal Fees and Expenses                        500,000
              Blue Sky Fees and Expenses                            (1)
              Nasdaq Listing Fees                                   (1)
              Printing                                              (1)
              Miscellaneous                                         (1)

              Total                                         $       (1)
</TABLE>

*  Estimated

(1)      To be filed by amendment.

The Company intends to pay all of the expenses of registration with respect to
the shares being offered hereby. The Selling Shareholders will pay their
respective expenses related to the sale of the shares offered hereby, including
any discounts, stock transfer taxes and independent legal fees.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 607.0850(1) of the Florida Business Corporation Act (the "FBCA") permits
a Florida corporation to indemnify any person who may be a party to any third
party proceeding by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation, against liability incurred in
connection with such proceeding (including any appeal thereof) if he or she
acted in good faith and in a manner he or she reasonably believed to be in, or
not opposed to, the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful.

Section 607.0850(2) of the FBCA permits a Florida corporation to indemnify any
person who may be a party to a derivative action if such person acted in any of
the capacities set forth in the preceding paragraph, against expenses and
amounts paid in settlement not exceeding, in the judgment of the board of
directors, the estimated expenses of litigating the proceeding to conclusion,
actually and reasonably incurred in connection with the defense or settlement of
such proceeding including appeals, provided that the person acted under the
standards set forth in the preceding paragraph. However, no indemnification
shall be made for any claim, issue or matter for which such person is found to
be liable unless, and only to the extent that, the court determines that,
despite the adjudication of liability, but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnification for
such expenses which the court deems proper.

Section 607.0850(4) of the FBCA provides that any indemnification made under the
above provisions, unless pursuant to a court determination, may be made only
after a determination that the person to be indemnified has met the standard of
conduct described above. This determination is to be made by a majority vote of
a quorum consisting of the disinterested directors of the board of directors, by
independent legal counsel, or by a majority vote of the disinterested
shareholders. The board of directors also may designate a special committee of
disinterested directors to make this determination.

Section 607.0850(3), however, provides that a Florida corporation must indemnify
any director or officer of a corporation who has been successful in the defense
of any proceeding referred to in Section 607.0850(1) or (2), or in the defense
of any claim, issue or matter therein, against expenses actually and reasonably
incurred by him or her in connection therewith.

Expenses incurred by a director or officer in defending a civil or criminal
proceeding may be paid by the corporation in advance of the final disposition
thereof upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it is ultimately determined that such director
or officer is not entitled to indemnification under Section 607.0850.

Section 607.0850 of the FBCA further provides that the indemnification
provisions contained therein are not exclusive and it specifically empowers a
corporation to make any other further indemnification or advancement of expenses
under any bylaw, agreement, vote of shareholders or disinterested directors or
otherwise, for actions in an official capacity and in other capacities while
holding an office. However, a corporation cannot indemnify or advance expenses
if a judgment or other final adjudication



                                       II-1
<PAGE>   128


establishes that the actions of the director or officer were material to the
adjudicated cause of action and the director or officer (a) violated criminal
law, unless the director or officer had reasonable cause to believe his conduct
was not unlawful, (b) derived an improper personal benefit from a transaction,
(c) was or is a director in a circumstance where the liability under Section
607.0834 (relating to unlawful distributions) applies, or (d) engages in willful
misconduct or conscious disregard for the best interests of the corporation in a
proceeding by or in right of the corporation to procure a judgment in its favor
or in a proceeding by or in right of a shareholder.

Pursuant to (i) the Registration Rights Agreement with respect to the shares of
common stock underlying the Series B Preferred Stock and the Series B Warrants,
(ii) the Warrant Agreement with respect to the John Hancock Warrants, and (iii)
the Merger Agreement, the Selling Shareholders have agreed to indemnify the
Company and its affiliates, officers, directors, and controlling persons,
against certain liabilities, including liabilities arising under the Securities
Act.

The Company's Bylaws provide that the Company shall indemnify the Company's
officers and directors against liability resulting from their service as an
officer or director of the Company, and the Company has entered into
indemnification agreements with its officers and directors, the form of which
is filed as an exhibit to this Registration Statement.

Reference is also made to the undertaking made with respect to indemnification
matters involving the Company's directors, officers and controlling persons, set
forth in Item 17(c) below.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

All of the following sales of unregistered securities were sold pursuant to an
exemption under Section 4(2) of the Securities Act of 1933, as amended, or
pursuant to Regulation D thereunder, as transactions by an issuer not
involving any public offering.

SERIES B PREFERRED STOCK

On June 30, 1998, the Company issued 4,000 shares of its Series B Convertible
Preferred Stock, par value $.10 per share. The Series B Preferred Stock was sold
at a price of $5,000 per share to accredited investors, as such term is defined
in Rule 501(a) under the Securities Act, for aggregate consideration of $20.0
million.

On June 30, 1998, as part of the Company's offering of its Series B Preferred
Stock, the Company issued to the holders thereof warrants to purchase in the
aggregate 1,000,000 shares of common stock, par value $.001 per share, to the
purchasers of the Series B Preferred Stock, for aggregate consideration to us of
$18.1 million. The warrants are immediately exercisable for a five year period
at a price of $19.80 per share, subject to certain adjustment as provided in the
warrant agreement.

During fiscal year 1998, the holders of Series B Preferred Stock converted
436 shares into 1,007,927 shares of common stock at a conversion price of
$2.18 per share.

In February 2000 we redeemed 779 shares of Series B Preferred Stock by issuing
801,787 shares of common stock, issuing warrants to purchase 66,246 shares of
common stock with an exercise price of $.01 per share, and paying cash. We also
agreed to issue 1,057,031 shares of common stock and warrants to purchase
200,000 shares of common stock with an exercise price of $10.125 per share,
also as part of the redemption price. These latter shares and warrants were
sold subject to receiving shareholder approval at our upcoming annual meeting.

In July 2000, we issued 66,246 shares of common stock upon the exercise of
outstanding warrants. We received aggregate consideration of $662.46 from the
holders.

SENIOR NOTES

On January 6, 1998, the Company sold $10.0 million in principal amount of its
12% Senior Subordinated Notes Due January 6, 2005 to a single accredited
investor.

As part of the Company's offering of the Senior Notes, the Company issued to the
holders thereof warrants to purchase in the aggregate 409,505 shares of common
stock. The warrants are exercisable at an exercise price of $8.25 per share.
The warrants were issued for no additional consideration.

SERIES A PREFERRED STOCK

In the last 3 months of 1997, we issued 921,000 shares of common stock to two
purchasers in conversion of 500 shares of Series A Convertible Preferred Stock
previously issued in 1997, at a conversion price of $7.40 per share.



                                       II-2
<PAGE>   129


STOCK OPTIONS

From time to time, the Company has issued and will continue to issue to certain
of the Company's employees, officers, directors, consultants and advisors
options to purchase common stock. As of August 30, 2000, options under the Stock
Option Plan to purchase 734,000 shares of common stock remain exercisable at
various exercise prices. The Company has registered on a Form S-8 registration
statement 550,000 shares of common stock for sale pursuant to the exercise of
options granted under the Stock Option Plan. In addition, the Company has issued
to employees options to purchase 2,189,897 shares of common stock outside the
Stock Option Plan that remain exercisable at various exercise prices. These
options issued outside the Stock Option Plan are subject to shareholder approval
at the Company's upcoming annual meeting.

THE WORLDCOM OPTION

As part of the MFSNT acquisition, we granted an option to WorldCom to purchase
up to 2,000,000 shares of the Company's common stock at an exercise price of
$7.00 per share.

THE WORLDCOM EQUITY AWARD

We also granted WorldCom an equity award in the form of stock appreciation
rights which is equivalent to 600,000 shares of common stock, payable in cash,
stock, or a combination of both at the Company's option. The exercise price for
these stock appreciation rights is $5.0938 per share. The issuance of the stock
appreciation rights was part of the consideration for the MFSNT acquisition.



                                      II-3

<PAGE>   130


SERIES C PREFERRED STOCK

In February 2000, the Company sold 5,000 shares of Series C Convertible
Preferred Stock and warrants to purchase 200,000 shares of common stock
exercisable at $10.75 per share. The aggregate consideration was $15.0 million.
The securities were sold to a small group of accredited investors affiliated
with each other. The Series C Preferred Stock has a conversion price of $4.00
per share.

In consideration of assistance with settling the Sirit litigation in February
2000, the Company issued the Series C holders additional warrants to purchase
375,000 shares of common stock at $6.00 per share and 375,000 shares of common
stock at $8.00 per share.

SERIES D PREFERRED STOCK

In August 2000, we issued 1,000 shares of Series D Convertible Preferred Stock
to WorldCom to pay off $37.0 million in debt owed to Worldcom. The Series D
Preferred Stock has a conversion price of $10.01 per share.

OTHER SALES OF COMMON STOCK

On April 30, 1999, the Company converted a payable to a Director of the Company
in the amount of $0.8 million into 118,286 shares of common stock, based upon a
conversion rate equal to the fair market value of the Company's common stock on
the date of conversion, or $7.00 per share.

In August 2000, we agreed to issue 5,011,511 shares of common stock to Sirit
Technologies, Inc. in settlement of a $31.2 million judgment Sirit obtained
against us. Issuance of these shares is subject to shareholder approval at our
upcoming annual meeting.



                                      II-4


<PAGE>   131


ITEM 16. EXHIBITS.

<TABLE>
<CAPTION>
EXHIBIT NO.       DESCRIPTION
-----------       -----------

<S>               <C>
2.1               Asset Purchase Agreement, dated November 26, 1997, among Able
                  Telcom Holding Corp., Georgia Electric Company, Transportation
                  Safety Contractors, Inc., COMSAT RSI Acquisitions, Inc. and
                  COMSAT Corporation(1)

2.2               Indemnification Agreement, dated February 25, 1998, among Able
                  Telcom Holding Corp., Georgia Electric Company, Transportation
                  Safety Contractors, Inc., COMSAT RSI Acquisitions, Inc. and
                  COMSAT Corporation(1)

2.3               Stock Purchase Agreement, dated as of April 1, 1998, among
                  Able Telcom Holding Corp., James P. Patton, Rick Boyle and
                  Claiborne K. McLemore III(2)

2.4               Closing Memorandum and Schedule, dated April 1, 1998, among
                  Able Telcom Holding Corp., James P. Patton, Rick Boyle and
                  Claiborne K. McLemore III(2)

2.5               Agreement and Plan of Merger by an among MFS Acquisition
                  Corp., Able Telcom Holding Corp., MFS Network Technologies,
                  Inc. and MFS Communications Company, Inc. dated as of April
                  22, 1998(9)

2.5.1             Amendment to Agreement and Plan of Merger among MFS
                  Acquisition Corp., Able Telcom Holding Corp., MFS Network
                  Technologies, Inc. and MFS Communications Company, Inc. dated
                  as of July 2, 1998(10)

2.5.1.1           Amendment No. 2 dated as of July 21, 1998 to Agreement and
                  Plan of Merger among MFS Acquisition Corp., Able Telcom
                  Holding Corp., MFS Network Technologies, Inc. and MFS
                  Communications Company, Inc.(11)

2.5.1.2           Agreement between WorldCom Network Services, Inc. and Able
                  Telcom Holding Corp. dated as of September 9, 1998(13)

2.5.1.3           Agreement between WorldCom Network Services, Inc. and Able
                  Telcom Holding Corp. dated January 26, 1999(12)

2.5.2             Promissory Note of Able Telcom Holding Corp. dated July 2,
                  1998 to MFS Communications Company, Inc.(10)

2.5.2.1           11.5% Promissory Note between Able Telcom Holding Corp., and
                  WorldCom Network Services, Inc. dated as of September 1, 1998(12)

2.5.3             Stock Pledge Agreement dated as of July 2, 1998 by Able Telcom
                  Holding Corp. in favor of WorldCom, Inc.(10)

2.5.4             Master Services Agreement between WorldCom Network Services,
                  Inc. and MFS Network Technologies, Inc. dated as of July 2,
                  1998 (exhibits omitted)(11)

2.5.5             Assumption and Indemnity Agreement dated as of July 2, 1998
                  among Able Telcom Holding Corp., WorldCom Inc., MFS
                  Communications Company, Inc., MFS Intelenet, Inc., MFS
                  Datanet, Inc., MFS Telcom, Inc. and MFS Communications, Ltd.
                  (schedule omitted)(10)

2.5.6             License Agreement between MFS Communications Company, Inc. and
                  Able Telcom Holding Corp. dated as of July 2, 1998(10)

2.5.7             Modification to Stock Option Agreement between the Company and
                  WorldCom, Inc. dated January 8, 1999(12)

2.5.8             Agreement to Enter Into Stock Appreciation Rights Agreement
                  between the Company and WorldCom, Inc. dated January 8, 1999(12)

2.5.9             Financing Agreement between WorldCom Network Services, Inc.
                  and Able Telcom Holding Corp. dated February 16, 1999(12)

2.5.9.1           Amendment and Restatement of Financing Agreement by and
                  between WorldCom Network Services, Inc. and Able Telcom
                  Holding Corp. dated February 16, 1999(12)

2.5.10            Modification to the WorldCom Option and WorldCom Equity Award,
                  dated March 15, 1999 between the Company and WorldCom,
                  modifying certain terms and extending the exercise period of
                  the WorldCom Option (16)

2.5.11            Amended and Restated Master Services Agreement by and between
                  MCI WorldCom Network Services, Inc. and Able Telcom Holding
                  Corp. dated as of August 24, 2000.

2.5.12            Second Amended and Restated Subordinated Promissory Note
                  between Able Telcom Holding Corp. and Worldcom Network
                  Services, Inc. dated as of August 24, 2000

2.6               Agreement and Plan of Merger dated as of August 23, 2000 among
                  Bracknell Corporation, Bracknell Acquisition Corporation and
                  Able Telcom Holding Corp.

</TABLE>



                                      II-5

<PAGE>   132


<TABLE>
<S>               <C>

3.1               Articles of Incorporation of Able Telcom Holding Corp., as
                  amended(3)(4)

3.1.1             Articles of Amendment to the Articles of Incorporation of Able
                  Telcom Holding Corp.(13)

3.1.2             Articles of Amendment to the Articles of Incorporation of
                  Able Telcom Holding Corp.

3.2               Bylaws of Able Telcom Holding Corp., as amended(3)

4.2               Specimen common stock Certificate(3)

4.3               Specimen Series A Preferred Stock Certificate(6)

4.4               Form of Warrant issued to Credit Suisse, First Boston and
                  Silverton International Fund Limited(4)

4.6               Able Telcom Holding Corp. 1995 Stock Option Plan(13)

4.7               Amendment to Able Telcom Holding Corp. 1995 Stock Option Plan,
                  dated April 24, 1998(13)

4.8               Series B Convertible Preferred Stock Purchase Agreement(13)

4.9               Registration Rights Agreement for Series B Convertible
                  Preferred Stock Purchase Agreement and 350,000 Warrants(13)

4.10              Registration Rights Agreement for 650,000 Warrants associated
                  with Series B Convertible Preferred Stock Purchase Agreement(13)

4.11              Form of common stock Purchase Warrants for 350,000 Shares in
                  connection with Series B Convertible Preferred Stock Purchase
                  Agreement(13)

4.12              Form of common stock Purchase Warrants for 650,000 Shares in
                  connection with Series B Convertible Preferred Stock Purchase
                  Agreement(13)

4.13              Preferred Stock Purchase Agreement by and among Able Telcom
                  Holding Corp., RGC International Investors, LDC, and Cotton
                  Communications, Inc. dated February 17, 1999(12)

4.14              Warrant Amendment between Able Telcom Holding Corp., and
                  Purchasers (as defined) dated February 17, 1999(12)

4.15              Securities Purchase Agreement by and between the Sellers (as
                  defined) and Cotton Communications, Inc. dated February 17,
                  1999(12)

4.15.1            Letter Agreement dated February 17, 1999 from Cotton
                  Communications, Inc. to John Hancock Mutual Life Insurance
                  Company(17)

4.15.2            Letter Agreement dated February 17, 1999 from Cotton
                  Communications, Inc. to Able Telcom Holding Corp.(17)

4.15.3            Termination Agreement dated March 22, 1999 by and between
                  Able Telcom Holding Corp. and Cotton Communications, Inc.(17)

4.16              Series B Convertible Preferred Stock Exchange Agreement by and
                  between Able Telcom Holding Corp. and the Palladin Group dated
                  February 4, 2000(17)

4.16.3            Letter Agreement dated February 17, 1999 from the Palladin
                  Group to Able Telcom Holding Corp.(17)

4.16.4            Letter dated March 19, 1999 from Able Telcom Holding Corp.
                  to the Palladin Group associated with the termination of
                  Financing Agreement dated February 17, 1999(17)

4.17              Form of First Common Stock Purchase Warrants in connection
                  with Series B Convertible Preferred Stock Exchange
                  Agreement with the Palladin Group(17)

4.18              Form of Second Common Stock Purchase Warrants in connection
                  with Series B Convertible Preferred Stock Exchange Agreement
                  with the Palladin Group(17)

4.19              Series B Convertible Preferred Stock Exchange Agreement by
                  and between Able Telcom Holding Corp. and the RoseGlen
                  Group dated February 4, 2000(17)

4.19.1            Amendment No. 1 to Securities Exchange Agreement and Related
                  Registration Rights Agreement of Able Telcom Holding Corp.
                  [RGC International Investors, LDC], dated July 7, 2000.(20)


4.20              Form of Common Stock Purchase Warrants in connection with
                  Series B Convertible Preferred Stock Exchange Agreement
                  with the RoseGlen Group(17)

4.21              Registration Rights Agreement associated with Series B
                  Convertible Preferred Stock Exchange Agreement(17)

4.21.1            Amendment No. 1 to Securities Exchange Agreement and Related
                  Registration Rights Agreement of Able Telcom Holding Corp.,
                  dated July 7, 2000.(20)

4.22              Series C Convertible Preferred Stock Purchase Agreement(17)

4.22.1            Amendment No. 1 to Able Telcom Holding Corp. Series C
                  Convertible Preferred Stock Purchase Agreement and Related
                  Agreements, dated July 7, 2000.(20)

4.23              Form of Common Stock Purchase Warrants in connection with
                  Series C Convertible Preferred Stock Purchase Agreement(17)

4.24              Registration Rights Agreement associated with Series C
                  Convertible Preferred Stock Purchase Agreement(17)

5.1               Opinion regarding legality of common stock*

10.15             Stock Purchase Agreement between Able Telcom Holding Corp.,
                  Traffic Management Group, Inc., Georgia Electric Company,
                  Gerry W. Hall and J. Barry Hall(5)

10.16             Stock Purchase Agreement between Able Telcom Holding Corp.,
                  Telecommunications Services Group, Inc., Dial Communications,
                  Inc., William E. Newton and Sybil C. Newton(8)

10.17             Promissory Note of Able Telcom Holding Corp. Payable to
                  William E. Newton and Sybil C. Newton(8)

10.23             Form of Stock Purchase Agreement among Able Telcom Holding
                  Corp., Traffic Management Group, Inc., Georgia Electric
                  Company, Gerry W. Hall and J. Barry Hall(5)

10.25             Securities Purchase Agreements, dated as of January 6, 1998,
                  between Able Telcom Holding Corp. and each of the Purchasers
                  named therein(6)

10.25.1           Letter Agreement dated July 2, 1998 related to Securities
                  Purchase Agreements dated as of January 6, 1998(13)

10.26             Senior Secured Revolving Credit Agreement dated as of April 6,
                  1998, between Able Telcom Holding Corp. and Suntrust Bank,
                  South Florida, N.A. and Bank of America, FSB(9)

10.27             Credit Agreement among Able Telcom Holding Corp., NationsBank,
                  N.A. and The Several Lenders from Time to Time Parties Hereto
                  dated as of June 11, 1998 (exhibits and schedules omitted)(13)

10.29             Employment Agreement with Jesus G. Dominguez, dated April 27,
                  1998(13)

10.30             Employment Agreement with Stacy Jenkins, dated July 16, 1998(13)
</TABLE>


                                      II-6
<PAGE>   133


<TABLE>
<S>               <C>
10.32             Amendment to June 11, 1998 Credit Agreement among Able Telcom
                  Holding Corp. NationsBank N.A., and the Several Lenders from
                  Time to Time Parties thereto, dated as of June 30, 1998(13)

10.32.1           Amendment and Amended and Restated Limited Waiver to June 11,
                  1998 Credit Agreement among Able Telecom Holding Corp.,
                  NationsBank N.A., and the Several Lenders from Time to Time
                  Parties thereto, dated as of June 30, 1998**

10.33             Employment Agreement with Billy V Ray, Jr., dated October 1,
                  1998(12)

10.34             Employment Agreement with Curtis A. "Butch" Dale, dated August
                  17, 1998(14)

10.35             Financial Advisor and Placement Engagement Letter, dated April
                  3, 1998, between Washington Equity Partners and Able Telcom
                  Holding Corp.(14)

10.36             Employment Agreement with G. Vance Cartee, dated January 4,
                  1999(12)

10.37             Employment Agreement with Edward Pollock, dated January 1,
                  1999(12)

10.38             Employment Agreement with Frazier L. Gaines, dated November
                  12, 1998(12)

10.39             Employment Agreement with Gideon D. Taylor, dated December 7,
                  1998(12)

10.40             Employment Agreement with Rick Boyle, dated April 1, 1998(12)

10.41             Financing Agreement between Able Telcom Holding Corp. and
                  Cotton Communications, Inc. dated February 17, 1999 (without
                  exhibits)(12)

10.41.1           Termination Agreement between Able Telecom Holding Corp. and
                  Cotton Communications, Inc. dated March 22, 1999**

10.42             11.5% Non-Recourse Promissory Note between Cotton
                  Communications, Inc. and Able Telcom Holding Corp. dated
                  February 17, 1999(12)

10.43             Stock Pledge Agreement between Able Telcom Holding Corp. and
                  Cotton Communications, Inc. dated February 17, 1999(12)

10.44             Employment Agreement with Michael Arp, dated January 1, 1999**

10.45             Consulting Agreement and Employment Agreement with James E.
                  Brands, dated March 15, 1999**

10.46             Employment Agreement with Billy V. Ray, Jr., dated
                  June 15, 2000

10.47             $2,000,000 Promissory Note between Billy V. Ray, Jr. and Able
                  Telcom Holding Corp., dated August 18, 2000.

10.48             Form of Indemnification Agreement between Able Telcom Holding
                  Corp. and certain officers and directors

10.49             Employment Agreement with Thomas Montgomery, dated
                  February 21, 2000(18)

10.50             Employment Agreement with Charles Maynard, dated February 21,
                  2000(18)

10.51             Employment Agreement with Philip Kernan, dated February 21,
                  2000(18)

10.52             Employment Agreement with Edwin D. Johnson, dated May 3,
                  2000(19)

10.53             Employment Agreement with Michael Brenner, dated May 3,
                  2000(19)

10.54             Settlement Agreement, between the Sirit Parties and the Able
                  Parties, dated July 7, 2000.(20)

11                Computation of Per Share Earnings(7)

16.1              Letter regarding change in certifying accountants(15)

21                Subsidiaries of Able Telcom Holding Corp.(13)

23.1              Consent of Ernst & Young LLP

23.2              Consent of Arthur Andersen LLP

23.3              Consent of Counsel (included with Exhibit 5.1)

</TABLE>

-------------------
 *       To be filed by amendment

**       Previously filed

(1)      Incorporated by reference from an exhibit to the Company's Current
         Report on Form 8-K (File No. 0-21986), dated February 25, 1998, as
         filed with the Commission on March 12, 1998, as amended by Form
         8-K/A-1, dated May 11, 1998, as filed with the Commission on April 14,
         1998.

(2)      Incorporated by reference from an exhibit to the Company's Current
         Report on Form 8-K (File No. 0-21986), dated April 1, 1998, as filed
         with the Commission on April 14, 1998.

(3)      Incorporated by reference from an exhibit to the Company's Registration
         Statement on Form S-1 (File No. 33-65854), as declared effective by the
         Commission on February 26, 1994.

(4)      Incorporated by reference from an exhibit to the Company's Current
         Report on Form 8-K (File No. 0-21986), dated December 20, 1996, as
         filed with the Commission on December 31, 1996.



                                      II-7
<PAGE>   134


(5)      Incorporated by reference from an exhibit to the Company's Current
         Report on Form 8-K (File No. 0-21986), dated October 12, 1996, as filed
         with the Commission on October 25, 1996.

(6)      Incorporated by reference from an exhibit to the Company's Annual
         Report on Form 10-K (File No. 0-21986) for the fiscal year ended
         October 31, 1997, as filed with the Commission on February 13, 1998, as
         amended by 10-K/A, as filed with the commission on March 20, 1998.

(7)      Incorporated by reference from Note 5 to the Condensed Consolidated
         Financial Statements (Unaudited) filed herewith.

(8)      Incorporated by reference from an exhibit to the Company's Current
         Report on Form 8-K (File No. 0-21986), dated December 2, 1996, as filed
         with the Commission on December 13, 1996, as amended by Form 8-K/A-1,
         dated February 11, 1997, as filed with the Commission on February 11,
         1997.

(9)      Incorporated by reference from an exhibit to the Company's Quarterly
         Report on Form 10-Q (File No. 0-21986), for the quarter ended April 30,
         1998, as filed with the Commission on June 14, 1998.

(10)     Incorporated by reference from an exhibit to the Company's Current
         Report on Form 8-K (File No. 0-21986), dated July 2, 1998, as filed
         with the Commission on July 16, 1998.

(11)     Incorporated by reference from an exhibit to the Company's Current
         Report on Form 8-K/A (File No. 0-21986), dated July 2, 1998, as filed
         with the Commission on August 3, 1998.

(12)     Incorporated by reference from an exhibit to the Company's Annual
         Report on Form 10-K/A (File No. 0-21986), for the fiscal year ended
         October 31, 1998, as filed with the Commission on March 1, 1999.

(13)     Incorporated by reference to an exhibit to the Company's Quarterly
         Report on Form 10-Q (File No. 0-21986), for the quarter ended July 31,
         1998, as filed with the Commission on September 21, 1998, as amended by
         Form 10-Q/A, as filed with the Commission on October 13, 1998.

(14)     Incorporated by reference to an exhibit to the Company's Form S-1 (File
         No. 333-65991), as filed with the Commission on October 22, 1998.

(15)     Incorporated by reference from an exhibit to the Company's Current
         Report on Form 8-K (File No. 0-21986), dated September 7, 1998, as
         filed with the Commission on September 14, 1998.

(16)     Incorporated by reference to an exhibit to the Company's Form 10-Q, as
         filed with the Commission on September 14, 1999.

(17)     Incorporated by reference to an exhibit to the Company's Annual Report
         on Form 10-K (File No. 0-21986), for the fiscal year ended October 31,
         1999, as filed February 22, 2000, as amended May 26, 2000.

(18)     Incorporated by reference to an exhibit to the Company's Quarterly
         Report on Form 10-Q (File No. 0-21986), for the quarter ended January
         31, 2000, as filed April 12, 2000.

(19)     Incorporated by reference to an exhibit to the Company's Quarterly
         Report on Form 10-Q (File No. 0-21986), for the quarter ended April 30,
         2000, as filed June 1, 2000.

(20)     Incorporated by reference to an exhibit to the Company's Current Report
         on Form 8-K (File No. 0-21986), dated July 7, 2000, as filed with the
         Commission on July 20, 2000.



                                      II-8
<PAGE>   135


ITEM 17. UNDERTAKINGS.

(a)      The undersigned Company hereby undertakes:

         (1)      To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:

                  (i)      To include any prospectus required by Section
10(a)(3) of the Securities Act;

                  (ii)     To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in this
Registration Statement; and

                  (iii)    To include any material information with respect to
the plan of distribution not previously disclosed in this Registration Statement
or any material change to such information in the Registration Statement.

         (2)      That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

         (3)      To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.

(b)      Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.



                                      II-9

<PAGE>   136


                                   SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
registration has duly caused the Amendment No. 2 to the Registration Statement
to be signed on its behalf by the undersigned thereunto duly authorized, in the
City of Roswell, State of Georgia, on August 31, 2000.

                                       ABLE TELCOM HOLDING CORP.

                                       BY: /s/ BILLY V. RAY, JR.
                                           -------------------------------------
                                           BILLY V. RAY, JR.,
                                           President and Chief Executive Officer


<TABLE>
<CAPTION>

           Signatures                                        Title                                  Date Signed

  <S>                                            <C>                                                <C>
  /s/ Billy V. Ray, Jr.                          Chief Executive Officer, Chairman
  -------------------------------                and a Director
  Billy V. Ray, Jr.                              (Principal Executive Officer)                      August 31, 2000


  /s/ Edwin D. Johnson                           President, Chief Financial Officer
  -------------------------------                and a Director
  Edwin D. Johnson                               (Chief Financial and Principal
                                                 Accounting Officer)                                August 31, 2000


  /s/ C. Frank Swartz                            Director                                           August 31, 2000
  -------------------------------
  C. Frank Swartz


  /s/ H. Alec McLarty                            Director                                           August 31, 2000
  -------------------------------
  H. Alec McLarty


  -------------------------------                Director
  Gerald Pye
</TABLE>



                                     II-10

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.5.11
<SEQUENCE>2
<FILENAME>g63952aex2-5_11.txt
<DESCRIPTION>AMENDED/RESTATED MASTER SERVICES AGREEMENT 8/24/00
<TEXT>

<PAGE>   1
                                                                    CONFIDENTIAL


                                                                  EXHIBIT 2.5.11
================================================================================






                              AMENDED AND RESTATED

                           MASTER SERVICES AGREEMENT



                                 BY AND BETWEEN



                      MCI WORLDCOM NETWORK SERVICES, INC.



                                      AND



                           ABLE TELCOM HOLDING CORP.



                              CONTRACT NO. C-6734




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


<PAGE>   2

                                                                   CONFIDENTIAL


                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                             PAGE
                                                                                             ----
<S>                                                                                          <C>
ARTICLE 1.     TERM.....................................................................       1

         1.1      TERM..................................................................       2
         1.2      TERMINATION...........................................................       2
         1.3      CONTRACT YEAR.........................................................       2
         1.4      AMENDED AND RESTATED AGREEMENT........................................       2

ARTICLE 2      CONTRACTOR SERVICES......................................................       2

         2.1      WORK..................................................................       2
         2.2      WORK ORDERS...........................................................       3
         2.3      OTHER WORK............................................................       3
         2.4      REFUSAL OF WORK.......................................................       4

ARTICLE 3      PERFORMANCE OF WORK......................................................       5

         3.1      CONTRACTOR'S FORCES...................................................       5
         3.2      SUBCONTRACTORS........................................................       6
         3.3      CONTRACT DOCUMENTS....................................................       6
         3.4      MATERIALS.............................................................       7
         3.5      PERMITS AND FEES......................................................       8
         3.6      PROGRESS AND PROCEDURE................................................       8
         3.7      CHANGES...............................................................      10
         3.8      COMMENCEMENT AND COMPLETION OF WORK...................................      11
         3.9      AS-BUILT DRAWINGS.....................................................      11
         3.10     SPECIFICATIONS AND STANDARDS..........................................      12
         3.11     LIEN WAIVERS..........................................................      12
         3.12     TIMING/DELAYS.........................................................      12
         3.13     CORRECTIVE ACTION PLAN................................................      12

ARTICLE 4      PAYMENT AND COSTS........................................................      13

         4.1      PAYMENT...............................................................      13
         4.2      COST CONTROL..........................................................      17
         4.3      MOST FAVORED NATION...................................................      17
</TABLE>

<PAGE>   3

                                                                   CONFIDENTIAL

<TABLE>

<S>                                                                                           <C>
         4.4      INDEPENDENT CONTRACTOR................................................      17
         4.5      ACCOUNTING SYSTEM.....................................................      18
         4.6      PROGRESS PAYMENT......................................................      19
         4.7      LATE PAYMENT..........................................................      20
         4.8      ANNUAL AND AGGREGATE PROJECT SUM......................................      20
         4.9      COMMITMENT FULFILLED..................................................      20
         4.10     CONTRACTOR'S FEE TRUEUP...............................................      20

ARTICLE 5      OWNER'S RESPONSIBILITIES.................................................      21

         5.1      AUTHORIZED REPRESENTATIVE.............................................      21
         5.2      PROVISION OF DATA.....................................................      21
         5.3      OWNER'S OWN FORCES....................................................      21
         5.4      PROMPT REPLY..........................................................      22
         5.5      FAILURE TO PROVIDE INFORMATION........................................      22

ARTICLE 6      OWNER'S AND CONTRACTOR'S REPRESENTATIONS.................................      22

         6.1      CONTRACTOR REPRESENTATIONS AND COVENANTS..............................      22
         6.2      OWNER REPRESENTATIONS AND COVENANTS...................................      22

ARTICLE 7      INSURANCE AND BONDS......................................................      23

         7.1      WORKER'S COMPENSATION AND EMPLOYER'S LIABILITY........................      23
         7.2      WATER OPERATIONS......................................................      23
         7.3      COMMERCIAL GENERAL LIABILITY..........................................      23
         7.4      BUSINESS AUTOMOBILE LIABILITY.........................................      23
         7.5      VESSELS OR BARGES.....................................................      24
         7.6      DIVING OPERATIONS.....................................................      24
         7.7      AIRCRAFT LIABILITY....................................................      24
         7.8      BUILDER'S RISK........................................................      24
         7.9      ERRORS AND OMISSIONS..................................................      24
         7.10     RAILROAD PROTECTIVE...................................................      25
         7.11     UMBRELLA EXCESS LIABILITY.............................................      25
         7.12     INSURANCE REQUIRED OF SUBCONTRACTORS..................................      25
         7.13     ADDITIONAL INSURED....................................................      25
         7.14     EVIDENCE OF COVERAGE..................................................      25
         7.15     BONDS.................................................................      26
</TABLE>


                                      2
<PAGE>   4
                                                                   CONFIDENTIAL



<TABLE>

<S>                                                                                           <C>
ARTICLE 8         DEFAULT AND TERMINATION...............................................      26

         8.1      DEFAULT...............................................................      26
         8.2      DISPUTE RESOLUTION / ARBITRATION......................................      29

ARTICLE 9      INDEMNIFICATION AND LIABILITY............................................      30

         9.1      INDEMNIFICATION BY CONTRACTOR.........................................      30
         9.2      INDEMNIFICATION BY OWNER..............................................      31
         9.3      NOTICE OF CLAIMS......................................................      31
         9.4      LIMITATION OF LIABILITY...............................................      31

ARTICLE 10     WARRANTY.................................................................      31

         10.1     WARRANTY..............................................................      31
         10.2     FREE FROM DEFECTS.....................................................      32
         10.3     NO OTHER WARRANTIES...................................................      32

ARTICLE 11     HAZARDOUS MATERIALS AND CONCEALED CONDITIONS.............................      32

         11.1     HAZARDOUS MATERIALS...................................................      32
         11.2     CONCEALED CONDITIONS..................................................      33

ARTICLE 12     MISCELLANEOUS............................................................      33

         12.1     TITLE.................................................................      33
         12.2     ASSIGNMENT............................................................      33
         12.3     SEVERABILITY..........................................................      33
         12.4     WAIVER................................................................      33
         12.5     NOTICES...............................................................      33
         12.6     CONFIDENTIALITY.......................................................      35
         12.7     COUNTERPARTS..........................................................      35
         12.8     NO CONSTRUCTION AGAINST DRAFTER.......................................      35
         12.9     COURSE OF DEALING.....................................................      35
         12.10    SURVIVAL..............................................................      36
         12.11    GOVERNING LAW.........................................................      36
         12.12    ENTIRE AGREEMENT......................................................      36
</TABLE>


                                      3
<PAGE>   5
                                                                   CONFIDENTIAL


                                LIST OF EXHIBITS

EXHIBIT A - LIST OF PROJECTS

EXHIBIT B - SAMPLE WORK ORDER

EXHIBIT C - INTENTIONALLY DELETED

EXHIBIT D - LABOR BURDEN FACTORS

EXHIBIT E - SAMPLE CHANGE ORDER

EXHIBIT F - SAMPLE CERTIFICATE OF COMPLETION

EXHIBIT G - CONTRACTOR'S LABOR POLICY

EXHIBIT H - TERMS AND CONDITIONS FOR SUBCONTRACTORS

EXHIBIT I - TERMS AND CONDITIONS FOR PROFESSIONAL SERVICES

EXHIBIT J - SAMPLE APPLICATION FOR PAYMENT


                                       4

<PAGE>   6
                                                                    CONFIDENTIAL

                              AMENDED AND RESTATED
                           MASTER SERVICES AGREEMENT
                              CONTRACT NO. C-6734

         THIS Amended and Restated Master Services Agreement ("Agreement") is
made as of this 24th day of August, 2000 by and between MCI WORLDCOM NETWORK
SERVICES, INC., a Delaware corporation with offices at 6929 N. Lakewood Avenue,
Tulsa, Oklahoma, 74117, including its affiliates and subsidiaries as
appropriate throughout (collectively referred to herein as "Owner"), Able
Telcom Holding Corp., a Florida corporation with offices at 1000 Holcomb Woods
Parkway, Suite 440, Roswell, Georgia 30076 hereinafter called the "Contractor."
The signatories to this Agreement will be referred to individually as the
"Party" and collectively as the "Parties."

                              W I T N E S S E T H:

         WHEREAS, the Owner is engaged in the business of providing
telecommunications services and intends to obtain services for the design,
engineering, procurement, construction, operation, maintenance, relocation and
replacement of various telecommunications network projects within the United
States (each, a "Project", together, the "Projects");

         WHEREAS, Contractor is engaged in the business of providing design,
engineering, procurement, construction, maintenance, relocation and replacement
of telecommunications facilities and desires to design, engineer, procure,
construct, maintain, relocate and replace certain of the Owner's Projects;

         WHEREAS, Owner desires Contractor to perform such work as is deemed
necessary by Owner to design, engineer, procure, construct, maintain, relocate
and/or replace each Project as the same shall be agreed by and between Owner
and Contractor;

         WHEREAS, Owner and Contractor desire to establish the general terms
and conditions under which each Project will be performed and to establish the
responsibilities of each Party hereto for each Project; and

         WHEREAS, Owner desires to engage Contractor for an agreed term and
commitment for Projects as set forth in this Agreement.

         NOW, THEREFORE, in consideration of the mutual covenants and other
considerations contained herein, the Parties hereto agree as follows:

<PAGE>   7
                                                                   CONFIDENTIAL

                                   ARTICLE 1.

                                     TERM

         1.1      TERM. The term of this Agreement shall be for a period of six
years commencing August 24, 2000 and continuing until August 24, 2006
(hereinafter the "Term").

         Provided that Contractor is not in default hereunder, the Contractor
and the Owner agree that on or after August 24, 2004 they will enter into good
faith negotiations to extend the Term of this Agreement. Contractor recognizes
that Owner's dissatisfaction with Contractor's performance would be sufficient
reason to terminate such good faith negotiations.

         1.2      TERMINATION. This Agreement may be terminated at any time
upon the mutual written agreement of the Parties. This Agreement may also be
terminated pursuant to Article 8.

         1.3      CONTRACT YEAR. A "Contract Year" shall be any twelve month
period beginning on the date of execution of the Agreement as first written
above or any anniversary date thereof.

         1.4      AMENDED AND RESTATED AGREEMENT. This Agreement was originally
dated as of July 2, 1998 and the terms of this Agreement as originally in
effect on that date, as heretofore amended, shall be binding on the Parties
hereto (and their predecessors and assignors) through the date hereof. This
Agreement as amended and restated shall be effective commencing on August 24,
2000.

                                   ARTICLE 2.

                              CONTRACTOR SERVICES

         2.1      WORK. The Contractor agrees to provide, as required by Owner,
all the labor, equipment, materials and expertise and to do all things
necessary for the proper performance and completion of each Project (the
"Work"). The Work may, as required by Owner, include but is not limited to,
Local Network Projects, Long Haul Projects, Engineering Services and Other Work
all as hereinafter defined.

                  2.1.1    LOCAL NETWORK PROJECTS. Local Network Projects may,
as required by Owner, include but are not limited to, design, engineering,
project management, material procurement, inspection, acceptance testing and
construction of local telecommunications network infrastructure which may
consist of both inside and outside plant work, and initial building laterals to
provide intracity or intraexchange telecommunications services to customers
within a local loop (hereinafter referred to as "Local Network Projects").
Local Network Projects do not include construction of isolated laterals or
points of presence ("POPs").

                  2.1.2    LONG HAUL PROJECTS. Long Haul Projects may, as
required by Owner, include but are not limited to, design, engineering, project
management, material procurement, inspection, acceptance testing and
construction of long distance telecommunications networks which may consist of
both inside and outside plant work, terminal and regen/amplifier facility
construction or expansion to provide intercity, interexchange or interLATA
telecommunications services (hereinafter referred to as "Long Haul Projects").


                                       2

<PAGE>   8
                                                                   CONFIDENTIAL


                  2.1.3    ENGINEERING SERVICES. Engineering Services may, as
required by Owner, include but are not limited to, the design, engineering and
procurement of transmission facilities, spaces, nodes and central office
equipment related to Local Network Projects and other special engineering
projects or research. Central office equipment includes, but is not limited to,
optical-electric equipment, cross connect systems, voice and data switching
systems, DC power systems, cabling, racking and ancillary equipment ("Central
Office Equipment"). Due to the unique nature of such Engineering Services,
Owner and Contractor agree that such services shall be performed at the actual
direct salary, subject to adjustments as set forth in Article 4, plus the labor
burden factor set forth in EXHIBIT D attached hereto and incorporated herein
which shall include applicable overhead and benefits. The Parties agree that
Contractor may, not more often than annually, update the labor burden factor
for Engineering Services based upon changes in Contractor's actual costs for
providing such services provided that Owner is given written notice and a
written justification of any change in such labor burden factor. The charges
for Engineering Services set forth herein shall be considered Reimbursable
Costs as defined in Article 4 hereof.

                  2.1.4    CURRENT PROJECTS. Owner and Contractor agree that
all Work or Projects being performed under a contract executed between
Contractor and Owner before August 24, 2000, which work has been or will be
performed after August 24, 2000, including but not limited to those Projects
set forth in EXHIBIT A, shall be treated in accordance with the terms and
conditions of this Agreement. The Parties agree that any commitments concerning
volume of work or annual payments in any such contracts shall immediately
become void and of no effect due to the Annual Project Sum and Aggregate
Project Sum commitments contained in Article 4 hereof.

         2.2      WORK ORDERS. The Work shall be set forth in a detailed Work
Order (each, a "Work Order" or, together the "Work Orders"), for each
individual Local Network Project, Long Haul Project, or Engineering Services
Project executed by Owner (or Owner's affiliate or subsidiary as appropriate)
and Contractor. Where appropriate, Owner and Contractor will enter into a Work
Order to develop a description of Work to be performed, Project Staffing Plan,
Project Budget and Project Schedule for Project development. No Work Order
shall be effective nor shall Owner or Contractor incur any liability hereunder
unless the Work Order is executed by duly authorized representatives of each
Party hereto.

                  2.2.1    Each Work Order shall be substantially in the form
of and shall contain the information contained in the Sample Work Order
attached hereto as EXHIBIT B. At a minimum, each Work Order shall contain the
Project name, description of the Work to be performed, Project Staffing Plan
(as hereafter defined), Project budget, Project schedules and a list of work to
be subcontracted. Upon execution of a Work Order it shall become a part of and
shall be governed by this Agreement. Each Work Order shall be labeled so that,
for example, the first executed Work Order may be Work Order No. C-6734.001,
the second Work Order shall be Work Order No. C-6734.002 and so on.

         2.3      OTHER WORK. In addition to Local Network Projects, Long Haul
Projects and Engineering Services, Owner may enter into agreements with
Contractor to provide, among other things, all the labor, equipment, materials
and expertise and to do all things necessary for the proper performance and
completion of other Projects. Such other Projects may


                                       3
<PAGE>   9
                                                                   CONFIDENTIAL


include but are not limited to the engineering, procurement or construction of
telecommunications networks or facilities or services required for the
maintenance, expansion or operation of either Local Network Projects or Long
Haul Projects or other Projects not specifically defined in this Agreement,
hereinafter collectively referred to as "Other Work." The Contractor may from
time to time bring projects to the attention of Owner whereby Contractor acting
on behalf of a third party right-of-way or facility owner, is offering for sale
or lease telecommunications facilities. Should Owner elect to enter into an
agreement with Contractor for such facilities such agreement shall not be
subject to this Agreement.

                  2.3.1.   The Contractor may from time to time bring Projects
to the attention of the Owner where the Contractor is the owner of the
right-of-way or of the facilities regarding which there is an offering for sale
or lease telecommunications facilities. In the event Owner elects in its sole
discretion to enter in to an agreement to purchase or lease such facilities
from Contractor, the dollar amount of such purchase or lease shall apply to the
minimum Annual Project Sums so long as the Minimum Local Network Percentage is
awarded under Article 2.4.2. Such Projects will count toward the Minimum Local
Network Percentage.

                  2.3.2.   The details for all Other Work shall be set forth in
an agreement which shall be executed by Owner (or Owner's affiliate or
subsidiary as appropriate) and Contractor. No agreement for Other Work shall be
effective nor shall Owner or Contractor incur any liability hereunder unless
the agreement is executed by duly authorized representatives of each Party
hereto.

                  2.3.3.   Each agreement for Other Work shall become a part of
and shall be governed by this Agreement unless expressly stated in such
agreement for Other Work. In the event of a conflict between this Agreement and
an agreement for Other Work, the agreement for Other Work shall prevail.
Notwithstanding the foregoing, all payments made or due by Owner to Contractor
pursuant to an agreement for Other Work without regard to the terms of such
agreement for Other Work, shall become part of the Aggregate Project Sum as
defined in Article 4. Each agreement for Other Work shall be labeled in the
same manner as Work Orders.

                  2.3.4.   Owner agrees that Contractor shall have the
opportunity to bid without restrictions, as a preferred vendor of Owner, on all
Local, Long Haul or Engineering Services Projects not assigned to Contractor
via a Work Order and offered by Owner for bidding, during the Term (such other
projects referred to hereinafter as "Other Work"). Other Work awarded to
Contractor shall apply to the Annual Project Sum and the Aggregate Project Sum.
Owner shall have sole discretion whether to award Other Work to Contractor or a
third party.


         2.4      REFUSAL OF WORK.

                  2.4.1    During each Contract Year, Contractor shall accept
and execute all Work Orders offered to Contractor by Owner hereunder without
regard to quantity, schedule or cost throughout the Term until such time as the
Annual Project Sum (as defined in Article 4.8 hereof) reaches One Hundred Sixty
Million Dollars ($160,000,000.00) per Contract Year. If Contractor refuses or
fails to accept any Work Order for Work or Other Work as defined in this
Article 2, prior to such time, the value of the Work Order (including the
applicable Contractor's Fee) shall be added as a credit to the Aggregate
Project Sum (as defined in Article 4.8 hereof) as


                                       4
<PAGE>   10
                                                                   CONFIDENTIAL


if such Work Order had been accepted and performed by Contractor pursuant to
the terms of this Agreement. For the purpose of determining whether such a
credit is due, the Annual Project Sum shall be as calculated at the time
Contractor declines such Work Order.

                  2.4.2.   The Owner agrees to award Contractor a minimum volume
of seventy five percent (75%) of all outside plant work related to Owner's
Local Network Projects. Such percentage hereinafter shall be referred to as the
"Minimum Local Network Percentage." For the purpose of determining this
percentage, the percentage shall include all Local Network Projects that
Contractor declines to perform.

                  2.4.3.   In the event the Annual Project Sum for all Work
Orders and agreements for Other Work reaches One Hundred Sixty Million Dollars
($160,000,000.00) in any year of the Term and Owner offers a Long Haul Project,
Engineering Services or Other Work to Contractor, Contractor may decline to
accept such additional Work, without penalty. This Article 2.4.3. does not
apply to Work Orders and agreements for Other Work related to Owner's Local
Network Projects.

                                   ARTICLE 3.

                              PERFORMANCE OF WORK

         3.1      CONTRACTOR'S FORCES. The Contractor shall perform project
management, supervisory functions, contract and document preparation, drafting,
material procurement, and all portions of the Work which are similar to those
stated herein with its own employees except as mutually agreed by Owner and
Contractor.

                  3.1.1.   Owner and Contractor acknowledge that as part of the
consideration given by Owner to Contractor hereunder, Owner is relying on and
expects to continue to rely upon a high level of experience, skill and
expertise existing in the personnel currently in Contractor's employ.
Contractor shall staff Key Positions only with qualified persons with prior
experience in the position to be filled. For purposes of this Agreement, "Key
Positions" are defined as Project Manager, Construction Manager, Business
Manager and Contract Manager. However, Contractor may propose and Owner may
reasonably approve the use of individuals having no prior experience in a Key
Position.

                  3.1.2.   Contractor agrees to provide Owner with a detailed
plan for the staffing of each Project (hereinafter the "Project Staffing Plan")
Work Order. Each Project Staffing Plan shall identify the individuals who will
fill Key Positions and other positions which will be required for the Project.
Contractor shall provide Owner with relevant employee information upon request.
Contractor shall follow Owner's reasonable recommendations concerning the
Project Staffing Plan for each Work Order. All unscheduled or voluntary changes
by Contractor in the staffing of Key Positions or other Contractor employees on
a Project shall be subject to the prior written approval of Owner, which shall
not be unreasonably withheld.

                  3.1.3.   Owner shall have the right to request in writing that
Contractor remove any of its employees from any Project at any time provided
such request is reasonable,


                                       5
<PAGE>   11
                                                                   CONFIDENTIAL


lawful and nondiscriminatory. Contractor shall comply with such request
immediately upon receipt of the written request from Owner.

         3.2      SUBCONTRACTORS. Unless specifically permitted in a Work Order
or agreement for Other Work and except as set forth in Article 3.2.4, Owner and
Contractor agree that Contractor shall perform all actual construction for all
Projects and Work performed hereunder with unaffiliated third party contractors
hereinafter referred to as "Subcontractors."

                  3.2.1.   As part of the Work performed under a Work Order or
agreement for Other Work, the Contractor shall develop a list of qualified
bidders for each Project and establish bidding schedules. The Owner shall, upon
written notice to Contractor, have the right, in its sole discretion, to
review, approve, disapprove, add to or delete from the list of bidders. Unless
otherwise stated in a Work Order or agreement for Other Work, the Contractor
shall obtain competitive bids from a minimum of three (3) bidders for each
phase or portion of work for a Project or obtain a written waiver of this
requirement before proceeding with less than three (3) bids.

                  3.2.2.   Upon the prior written request of Owner, Owner shall
have the option to pre-approve all bidding documents, addenda and other
documents related to the bidding process at any time prior to Contractor's
award of a subcontract.

                  3.2.3.   The Contractor shall prepare a bid evaluation
analyzing all bids received for a Project and shall notify Owner regarding
selection of the successful bidder. The Contractor shall award the work to be
subcontracted to the lowest priced, qualified, responsive bidder unless written
approval is obtained from Owner approving an award on some other basis. The
Owner shall have the right, upon prior written notice to Contractor, to
determine the successful bidder for any Work subcontracted hereunder. In no
event shall Contractor award a contract to a bidder which exceed the limits set
forth in Article 3.7.1 unless approved in writing by Owner.

                  3.2.4.   Notwithstanding the foregoing provisions of this
Article 3.2, Owner agrees that Contractor (by itself or through an affiliate of
Contractor) shall at the sole discretion of the Owner have the right to perform
the actual construction for all Projects and Work performed hereunder upon
notice to, and acceptance by, Owner ("Self-Performed Work").

         3.3      CONTRACT DOCUMENTS. The Contractor shall prepare all
Subcontractor related contracts for the Work (the "Contract Documents"). All
Contract Documents shall conform to all laws and requirements of any
right-of-way providers, permitting authorities and other requirements of the
Work Order or agreement for Other Work.

         3.3.1.   All Contract Documents shall include the terms and conditions
attached hereto as EXHIBIT H (for Subcontractors) and EXHIBIT I (for
professional services). The content of such Contract Documents shall comply
with generally accepted industry standards. In no event shall any Contract
Document including but not limited to agreements with Subcontractors, expose
Owner to any premium payment for early completion of a Project by
Subcontractor, costs for Subcontractor errors, liquidated damages or other
penalty payments of


                                       6
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                                                                   CONFIDENTIAL


any kinds without the prior written consent of Owner which may be withheld by
Owner in its sole discretion.

                  3.3.2.   The Contractor shall report to Owner any error,
inconsistency or omission in the Contract Documents which may have a material
impact on any Project immediately upon discovery thereof.

                  3.3.3.   Upon written notice to Contractor by Owner prior to
execution of the Contract Documents, Owner shall have the right to approve any
and all Contract Documents. Contractor shall provide Owner with copies of the
documents upon such request and, Owner shall have five (5) business days from
receipt thereof to approve or disapprove said documents. Unless Owner gives
Contractor written notice to the contrary, failure of Owner to approve or
disapprove the Contract Documents within such five (5) day period shall be
deemed approval. Owner shall not be responsible for the completeness, accuracy
or context of the Contract Documents except where such completeness, accuracy
or context is affected by changes to Contract Documents directed, dictated or
otherwise made by Owner. Contractor shall use commercially reasonable efforts
to ensure that all disputes concerning errors, inconsistencies or omissions in
the Contract Documents shall be resolved in favor of Owner.

                  3.3.4.   The Contractor shall maintain copies of all Contract
Documents at the site of each Project in good order and marked reasonably
current to record all changes made during the Work.

         3.4      MATERIALS. The Contractor will buy, as the procurement agent
on behalf of Owner, on a competitive-bid basis from the lowest priced,
qualified, responsible provider, in accordance with the same bidding procedure
outlined in Article 3.2 hereof, all major items of construction materials
necessary for the Work. All anticipated purchases, rentals or other contracts
for material shall be described in the applicable Work Order or agreement for
Other Work and included in the appropriate budget for each. Contractor and its
Subcontractors will only purchase and install materials which conform to
Owner's specifications which will be included in the Work Order. For purposes
of economy, Contractor may enter into volume purchase agreements to purchase
major material items, such as fiber optic cable, conduit, manholes, handholes,
duct and innerduct, to be used in multiple projects provided that such volume
purchase agreements are competitively bid at reasonable intervals during the
Term but in no event less frequently than every 18 months. Any material
deviation from Owner's specifications included in the Work Order must be
approved in writing by Owner.

                  3.4.1.   Notwithstanding anything herein to the contrary,
including but not limited to Article 4 hereof, Contractor shall order, as the
procurement agent on behalf of Owner, major material items limited to fiber
optic cable, manholes, duct, innerduct, handholes, and conduit only as
described in and budgeted for in an applicable Work Order or agreement for
Other Work. Contractor shall count all quantities toward its own volume
purchasing agreements with suppliers as appropriate. Contractor shall reimburse
to Owner as a credit, any such volume discounts for such materials received by
Contractor after billing. Owner shall receive all supplier warranties and
guarantees.


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                                                                   CONFIDENTIAL


                  3.4.2.   Owner hereby reserves the right, at its sole
discretion, to purchase or provide directly any and all materials necessary for
the Work if deemed necessary by Owner due to its tax status, availability of
surplus material already owned, ordered, or purchased directly by Owner or the
Contractor's inability to secure the materials by the stated due date.

                  3.4.3.   All materials purchases made hereunder, including
payments of Contractor's Fees shall be credited to the Aggregate Project Sum as
defined in Article 4. Notwithstanding the foregoing, the Contractor's fee shall
be reduced from twelve percent (12%) to six percent (6%) only for circumstances
where the Owner reserves the right to purchase material directly pursuant
Article 3.4.2 above. This reduction in Contractor's fee shall not apply
anywhere else in this Agreement. Further, materials moved from one Project to
another Project will not be subject to a second Contractor's Fee.

                  3.4.4.   Contractor shall properly inspect, receive and handle
any materials ordered pursuant to this Article. For Engineering Services
Central Office Equipment projects, Contractor will be responsible for all
material handling and inventory control, will use off-site facilities for
warehousing services prior to the installation start date as designated by
Owner; and will minimize the amount of materials stored on site during the
implementation of the Project.

         3.5      PERMITS AND FEES. As required by Owner and specified in the
Work Order, the Contractor shall secure on Owner's behalf and the Owner shall
pay for, as Reimbursable Costs, all permits and governmental fees, licenses and
inspections necessary for the proper execution and completion of the Work which
are customarily secured after execution of the Work Order and which are legally
required.

                  3.5.1.   Where the local law at the site of the building
requires a Certificate or Statement of Occupancy, the Contractor shall obtain
and pay for such Certificate and deliver it to the Owner. Any costs for such
Certificate shall be treated as a Reimbursable Cost pursuant to Article 4
hereof.

                  3.5.2.   Contractor shall not enter into or accept any license
agreement, joint-use agreement, ordinance, resolution, franchise, or other
agreement for the use of public or private right-of-way with any federal,
state, local, public or private entity for any Project without the written
approval of Owner it being agreed that Owner or its duly authorized
representation shall execute any such agreements. Contractor shall immediately
notify Owner if, or when, it discovers any such agreement is required.

         3.6      PROGRESS AND PROCEDURE. The Contractor shall, unless otherwise
stated in a Work Order or agreement for Other Work, follow these procedures:

                  3.6.1.   The Contractor will maintain current estimates of
costs and progress schedules. The Contractor shall furnish information
regarding availability of materials, when requested by the Owner, and furnish
any information to the Owner to assist in arriving at the most economical
construction.

                  3.6.2.   The Contractor shall provide administrative,
management, and related services to coordinate scheduled activities and
responsibilities of the Subcontractors with each other and with those of the
Contractor, Owner, or others involved in the Project to use


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                                                                   CONFIDENTIAL


commercially reasonable efforts to manage each Project in accordance with the
approved estimate for costs, the Project schedule and the Contract Documents.

                  3.6.3.   Utilizing the Project Schedule, the Contractor shall
update all schedules incorporating the activities of the Subcontractors and
others on the Project including activity sequences and durations, allocation of
labor and materials, processing of shop drawings, product data and samples, and
delivery of materials or equipment requiring long lead time and procurement.
The Project Schedule shall include the Owner's requirements and
responsibilities showing portions of the Project having priority. The
Contractor shall update and reissue each Project Schedule as required by Owner
to show current conditions and percentages of completion. The Contractor shall
keep a daily log containing a record of weather, each Subcontractor on the
site, number of workers, identification of equipment, Work accomplished,
problems encountered, and other similar relevant data as the Owner may require.
If an update indicates that the previously approved Project Schedule may not be
met, the Contractor shall immediately notify Owner and recommend corrective
action. The Contractor shall schedule and conduct meetings to discuss such
matters as progress and scheduling with Owner as set forth in the Work Order or
as requested by Owner.

                  3.6.4.   Consistent with the various bidding documents,
Contract Documents and utilizing information from the Subcontractors, the
Contractor shall coordinate the sequence of construction and assignment of
space in areas where the Subcontractors are performing work.

                           3.6.4.1  The Contractor shall at all times enforce
strict discipline and good order among its employees and shall not employ on
any Project any person not skilled in the task assigned to him or her. The
Contractor shall be responsible to maintain and observe and to require its
Subcontractors to maintain and observe, sound labor and safety practices and
shall require each Subcontractor to take all steps reasonably necessary to
avoid labor disputes or work stoppages. For Engineering Services Central Office
Equipment projects, Contractor agrees to use personnel and Subcontractors who
have been certified in certain high skill procedures under Owner's mandatory
training program. The expense of obtaining such certification is to be paid by
the Subcontractor for Subcontractor's forces and as a Reimbursable Cost for
Contractor's personnel. Owner shall make such training available at a nominal
cost.

                           3.6.4.2  The Contractor shall coordinate and
supervise the Work performed by Subcontractors to the end that the Work is
carried out without conflict between trades or jurisdictional disputes and so
that no Subcontractor, at any time, causes delay to the general progress of a
Project. The Contractor and all Subcontractors shall at all times afford each
other Subcontractor, any separate (Sub)contractor, and the Owner, every
reasonable opportunity for the installation of work and the storage of
materials, and shall provide access to and the use of necessary loading dock
and hoist facilities, adequate storage room and necessary utilities and other
services. Wherever the work of a Subcontractor is dependent upon the work of
other Subcontractors, the Contractor shall require the Subcontractor to:

                                    (a)      coordinate his work with the
                           dependent work;

                                    (b)      provide necessary dependent data
                           and requirements;


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                                                                   CONFIDENTIAL


                                    (c)      supply and/or install items to be
                           built into dependent work of others;

                                    (d)      make provisions for dependent work
                           of others;

                                    (e)      examine dependent drawings and
                           specifications;

                                    (f)      examine previously placed dependent
                           work;

                                    (g)      check and verify dependent
                           dimensions of previously placed work;

                                    (h)      notify Contractor of previously
                           placed dependent work or dependent dimensions which
                           are unsatisfactory or will prevent a satisfactory
                           installation of this Work; and

                                    (i)      not proceed with this Work until
                           the unsatisfactory dependent condition has been
                           corrected.

                           3.6.4.3  The Contractor shall develop and implement
procedures for the review and processing of applications by Subcontractor for
progress and final payments.

                           3.6.4.4  Based on the Contractor's observations and
evaluations of each Subcontractor's application for payment, the Contractor
shall review, certify and pay the amounts due the respective Subcontractor.

                  3.6.5.   The Contractor shall manage the performance of each
of the Subcontractors with all due diligence to ensure that the requirements of
the Contract Documents are met. The Contractor shall take appropriate action
against Subcontractor(s) when requirements of a Contract Document are not being
fulfilled and shall take commercially reasonable steps to assure compliance
with the Contract Documents.

         3.7      CHANGES. The Owner may, at any time, by written change order
("Change Order"), make changes in the drawings, specifications, schedule or
other aspects of a Project. The Contractor may also, through the course of
performance of Work, recommend changes to the design, schedule or budget for
any Project for approval by Owner. Contractor will utilize commercially
reasonable efforts to minimize the effect on costs and schedules in
accommodating such change. The purpose of a Change Order is to provide control
in changes in Work, Project configuration, budget and/or schedules on a formal
basis. No changes shall be made to any Project without an appropriate Change
Order. All Change Orders shall be in the form attached hereto as EXHIBIT E and
executed by both Parties. The time and schedule for completion of the Project
affected shall be extended as reasonably required to complete the Work so
changed. If the changes desired change the Work contemplated including, but not
limited to: (a) changes in, substitutions for, additions to or deletions of any
Work; (b) changes in the specifications or drawings, (c) changes in the
schedule or acceleration, deceleration or suspension of performance of any
Work; and (d) substantial changes in the location, alignment, dimensions or
design of items in the Work and/or if the Owner requests the Contractor to
perform added Work outside the scope of such Project, then, prior to the
performance of such


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                                                                   CONFIDENTIAL


additional Work an equitable adjustment in the Project Schedule, Project Budget
and Project Staffing Plan will be negotiated by the Parties for such Work and
included in the applicable Change Order.

                  3.7.1.   In the event the estimated costs of a Work Order or
agreement for Other Work exceed or are likely to exceed the total budget for
the Project or one hundred ten percent (110%) of the budget for any individual
budget line item, the Contractor will promptly notify Owner of such condition
so the appropriate action can be taken by Owner in response to the variance.

         3.8      COMMENCEMENT AND COMPLETION OF WORK. The Contractor shall
commence Work on the commencement date reasonably set by Owner in the Work
Order and shall complete the Work and turn the Project over to the Owner (after
final inspection and testing) ready for acceptance by Owner no later than the
date specified for completion in the applicable Work Order, except as this date
may be changed pursuant to a Change Order or to delays beyond the reasonable
control of Contractor.

                  3.8.1.   FINAL INSPECTION, TESTING AND ACCEPTANCE:

                           3.8.1.1  Upon completion of construction of any
Project hereunder, Contractor shall conduct acceptance testing, in accordance
with the requirements of the Work Order, to demonstrate that the Work has been
performed in accordance with the specification of the Work Order, including a
review of all Contract Documents, drawings, specifications and other related
documents. Owner reserves the right to attend and observe all final inspections
and testing. After completion of acceptance testing, Contractor shall forward
to Owner one copy of all test results for approval.

                           3.8.1.2  Upon completion of all Project requirements,
Contractor shall provide Owner with a Certificate of Completion that signifies
the Project is completed and shall assist the Owner with the final inspection
of the Project. Once the Owner has completed the final inspection and accepted
the test results and as-builts, Owner shall signify its final acceptance of the
Project by approving a Certificate of Completion in the form attached hereto as
EXHIBIT F.

                           3.8.1.3  The Certificate of Completion shall identify
all currently known and outstanding liabilities, charges, claims made by
Subcontractors and potential financial obligations that have not been resolved
at the time of final completion.

                           3.8.1.4  Notwithstanding anything to the contrary in
this Agreement, acceptance of any Work performed by Contractor for Owner
hereunder shall not affect the warranties set forth in Article 10 hereof.

         3.9      AS-BUILT DRAWINGS. Drawings showing all facilities and
elements as built by Contractor for Owner for a Project ("As-Builts") shall
meet Owner specifications as set forth in the Work Order and shall be prepared
in a computerized format acceptable to Owner. Contractor shall turn over within
thirty (30) calendar days after completion of testing, two (2) hard copies and
one (1) soft electronic copy of the entire set of As-Builts for each Project.
For a period of three (3) years after Notice of Acceptance, Contractor will
also maintain a full set of


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<PAGE>   17
                                                                   CONFIDENTIAL


As-Builts in both hard copy and soft electronic copy in its files for each
Project. Final acceptance of any Project shall be subject to Owner's acceptance
of As-Builts from Contractor.

         3.10     SPECIFICATIONS AND STANDARDS. All Work for any Work Order or
agreement for Other Work performed hereunder shall be performed in addition to
all requirements and specifications set forth in the Work Order or agreement
for Other Work, in accordance with the requirements and specifications of the
National Electric Code, the National Electric Safety Code (both as they
currently exist or are amended) and any other requirements imposed by any
governmental authority or agency having jurisdiction.

         3.11     LIEN WAIVERS. Unless otherwise prohibited by law, Contractor
will waive all rights to place any lien and will require all Subcontractors to
waive all rights to place any lien against the equipment, materials, or other
property used in a Project and shall provide a written statement in the
Contract Documents evidencing such waivers to Owner prior to the commencement
of any Work hereunder. Any failure by Contractor to secure such waivers which
are not otherwise prohibited by law, without the written consent of Owner shall
be promptly corrected at Contractor's expense. Contractor may, at its option,
correct by bonding over its failure to receive such waivers.

         3.12     TIMING/DELAYS.

                  3.12.1.  Time shall be of the essence for Owner and Contractor
in the performance of this Agreement.

                  3.12.2.  It is specifically agreed that neither Contractor nor
Owner shall be held responsible or liable for any loss, damage, detention or
delay ("Loss"), arising from causes beyond the control and without the fault or
negligence of the Contractor or Owner, including but not limited to acts of
God, acts of the public enemy, acts of another contractor in the performance of
a contract with the Owner which is not performed pursuant to a Work Order
hereunder, fires, floods, epidemics, quarantine restrictions, strikes, freight
embargoes, or unusually severe weather or delays of Subcontractors or
suppliers. Contractor shall not be held responsible or liable for any Loss
resulting from suspension of Work by or acts or neglect of Owner. In the event
of such Loss, Contractor or Owner shall promptly give written notice to the
other Party and the time and/or cost for performance of each affected Project,
shall be adjusted by Change Order pursuant to Article 3.7 hereof.

         3.13     CORRECTIVE ACTION PLAN. If Contractor consistently fails to
comply with any non-material provision of the Agreement, any Work Order or any
agreement for Other Work, Owner may, at its sole discretion and with sufficient
written description of the failure, direct that Contractor produce a corrective
action plan to remedy such failure within fifteen (15) days of receipt of such
request. In the event that such corrective action plan performed by Contractor
does not remedy such failure, Owner may escalate the issue in accordance with
the provisions of Article 8.2 of this Agreement.


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                                                                   CONFIDENTIAL


                                   ARTICLE 4.

                               PAYMENT AND COSTS

         4.1      PAYMENT. The Parties intend for this Agreement to be a "Cost
Plus" Agreement and that, except as otherwise provided herein, Contractor shall
not be obligated to incur any costs which will not be reimbursed by Owner as
set forth herein nor shall Contractor charge Owner any costs not directly
related to a Work Order. For each Work Order, the Owner shall pay the
Contractor the Project Sum, which shall be comprised of the reimbursable costs
("Reimbursable Costs") as defined below, and a fee ("Contractor's Fee"), which
shall be twelve percent (12%) of the total of the Reimbursable Costs for such
Project.

                  4.1.1.   REIMBURSABLE COSTS. The Reimbursable Costs shall be
all actual direct costs necessarily incurred and paid by the Contractor for
Owner in the proper performance of the Work for a Work Order. Such Reimbursable
Costs allowable under this Agreement shall be the costs and expenses which are
actually incurred by the Contractor in the performance of a Project pursuant to
a Work Order hereunder. Reimbursable Costs shall include but shall not be
limited to all actual direct costs incurred by the Project office, Project
staff, and other items directly related to a specific Project performed
hereunder, including prorated costs for general liability, worker's
compensation and other insurance coverage required for Owner's Work which
insurance is carried at a corporate level by Contractor. Failure to mention any
item of Reimbursable Costs herein shall not bear upon a determination of its
allowability. All Reimbursable Costs must be documented and copies of invoices
including a detailed summary of charges shall be sent to Owner prior to the
making of any payment by Owner therefor.

                           4.1.1.1  LABOR AND LABOR-RELATED ITEMS.

                                    (a)      Labor cost shall be the actual
                           direct cost of Project staff, including salary or
                           wages, benefits, payroll insurance and payroll
                           taxes. The positions included as Reimbursable Cost
                           are limited to those positions listed in the Project
                           Staffing Plan. Other positions such as any corporate
                           office support staff and other corporate level
                           supervisory personnel are considered to be overhead
                           to the Project and are, therefore, explicitly not
                           Reimbursable Cost. Vacation, personal day pay,
                           holiday pay, sick leave pay, bonus and rest and
                           relaxation ("R&R") pay shall be charged as incurred.
                           Owner shall have the right on an annual basis and at
                           Owner's expense to conduct an independent audit of
                           Project timesheets and payroll records to determine
                           whether a materially disproportionate amount of
                           vacation pay, personal day pay, holiday pay, sick
                           leave pay, bonus and R&R pay is being charged to
                           Owner's Projects. In the event such an audit
                           discloses such a disproportionate charge, Owner
                           shall be entitled to an equitable adjustment to
                           charges for labor costs and associated Contractor's
                           Fees. If the disproportionate charge is three
                           percent (3%) or more than what should be charged to
                           Owner's projects hereunder then Contractor shall
                           reimburse Owner for the actual direct cost of such


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                                                                   CONFIDENTIAL


                           audit. Contractor agrees that during its normally
                           scheduled annual review process it shall determine
                           the average annual salary paid in the previous year
                           for its field employees. Contractor further agrees
                           that the change in salary or wages over a Contract
                           year shall not increase on a percentage basis more
                           than the percentage increase in the Consumer's Price
                           Index for all urban consumers (CPIU), unless such a
                           change in salary or wages is made in response to
                           remain competitive with any increase in salary and
                           wages or other remuneration for comparable personnel
                           in the marketplace. Owner will be provided with
                           written documentation prior to such increase
                           becoming effective. In the event the Contractor
                           desires to change salary or wages of its Project
                           Staff in excess of the CPIU percentage increase for
                           any Contract Year, then Contractor shall provide
                           notice and justification for such increase to Owner.
                           Owner shall promptly review such information and
                           shall not unreasonably withhold its consent to such
                           request. Bonus amounts paid to Contractor employees
                           assigned to Owner's Projects will be consistent with
                           Bonus amounts paid to all of Contractor's employees
                           in comparable positions.

                                    (b)      Cost of Living Adjustment ("COLA")
                           applied to labor costs where applicable will be
                           consistent with Contractor's policy set forth in
                           EXHIBIT G.

                                    (c)      The cost of moving supervisory and
                           administrative employees who are assigned to the
                           Work for a specific Project from their last place of
                           employment in accordance with the Contractor's
                           current moving policy which is attached hereto and
                           incorporated herein as part of EXHIBIT G shall be a
                           Reimbursable Cost. Owner shall not pay relocation
                           costs for the movement of any Contractor employee
                           from Owner's Project Site. However, Owner shall pay
                           the costs of demobilization for a Project if the
                           project is canceled or substantially reduced in
                           scope prior to completion.

                                    (d)      Travel Expenses in connection with
                           the following shall be reimbursable costs:

                                             (i)      Trips included in
                                    Contractor's current R&R policy attached
                                    hereto and incorporated herein as part of
                                    EXHIBIT G;

                                             (ii)     Trips to various
                                    fabricating plants, Subcontractor or
                                    material supplier locations to inspect
                                    their facilities and/or financial condition
                                    in regard to the Work on a Project which
                                    Work is approved by Owner via a Work Order
                                    and trips to various fabricating plants,
                                    Subcontractor


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<PAGE>   20
                                                                   CONFIDENTIAL


                                    or material supplier locations to inspect
                                    the progress of the Work being prepared for
                                    a Project and to consult on methods of
                                    fabrication, shipment, etc.;

                                             (iii)    Trips for Project
                                    Management Staff for training purposes
                                    including training courses, Project
                                    Management Meetings to be held not more
                                    often than once per calendar quarter not to
                                    exceed One Hundred Fifty Thousand Dollars
                                    ($150,000.00) per Contract Year provided
                                    such training is directly related to the
                                    improvement of the Project Management
                                    Staff's skills in the performance of Work
                                    for Owner's Projects; and/or

                                             (iv)     Trips conducted as part of
                                    the relocation provisions of Article
                                    4.1.1.1(b) above.

                                    (e)      In order to reduce the number of
                           personnel assigned to the job site or to expedite
                           the performance of the Work hereunder, Contractor
                           may, as agreed to and stated in the applicable Work
                           Order, perform off-job site engineering, drafting
                           clerical and/or accounting work, in which case the
                           costs of such Work shall be charged to the Project
                           based on actual labor costs marked up by the
                           percentages in EXHIBIT D, supported by time cards,
                           expense reports, and expense vouchers. These charges
                           shall be considered Reimbursable Costs as defined in
                           Article 4.

                           4.1.1.2  MATERIALS AND MATERIAL-RELATED ITEMS.
Reimbursable materials and material-related items shall include:

                                    (a)      The cost of all permanent
                           materials, equipment and supplies directly related
                           to a Work Order. Credit shall be given the Owner for
                           all trade or quantity discounts obtained from
                           vendors by Contractor for the purchase of materials,
                           equipment or supplies for a Project.

                                    (b)      The actual cost of all temporary
                           and other expendable services, materials and
                           supplies, including, fuel, oil and grease, which are
                           normally consumed in performance of the Work. Any
                           such expendable materials and supplies for which the
                           Contractor has been reimbursed by the Owner and
                           which remain after completion of the Work will be
                           disposed of as directed by the Owner.

                                    (c)      The cost of all necessary
                           inspections, tests, loading, handling, permits,
                           transportation and insurance of whatever character
                           or description paid by the Contractor for materials
                           and supplies used in the construction of a Project.


                                      15
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                                                                    CONFIDENTIAL


                                            (d)       All materials, equipment
                                    and supplies shall be delivered, handled,
                                    stored, installed protected and disposed of
                                    in such a manner to prevent damage in
                                    accordance with current practice in the
                                    industry, in accordance with manufacturer's
                                    specifications and recommendations, in
                                    accordance with the Work Order requirements
                                    and in accordance with all laws. The
                                    Contractor will haul and store packaged
                                    materials and equipment in their original
                                    and sealed containers, marked with the brand
                                    and manufacturer's name, until ready for
                                    use, and haul and deliver such materials and
                                    equipment in ample time to facilitate
                                    inspections and tests prior to installation.
                                    The "delivery" in reference to any item
                                    specified or indicated means the unloading
                                    and storing with proper protection at the
                                    Project site. Damaged materials or equipment
                                    will be rejected and removed from the site
                                    by the Contractor.

                                    4.1.1.3 EQUIPMENT AND EQUIPMENT RELATED
ITEMS. Reimbursable equipment and equipment-related items shall include:

                                    The cost of rental of all equipment
including but not limited to vehicles required for the Work. The cost of rental
of equipment charged to Owner for equipment owned by the Contractor for a
Project shall be consistent with the current market rate for renting or leasing
similar items from nationally recognized third party rental companies. The cost
of rental of equipment charged to Owner for use by Contractor from third parties
shall be the actual rental rate charged. The actual rental rate for the
equipment shall be consistent with the current market rates for renting or
leasing similar items from a nationally recognized third party rental company.
As part of any Work Order or agreement for Other Work, the Contractor shall
prepare a utilization chart listing all equipment to be used on the Project,
together with the corresponding fully maintained (excluding consumable items
such as oil, grease and fuel) rental rates for such equipment, and submit same
to the Owner for its approval.

                                    4.1.1.4 MISCELLANEOUS. Reimbursable
miscellaneous items shall include:

                                            (a)       For any Contractor Project
                                    office supporting more than one Project or
                                    in conjunction with a third party's project,
                                    direct actual costs for such Project office
                                    shall be prorated to each Project or project
                                    based on a methodology specified in the Work
                                    Order.

                                            (b)       The budgeted fees of any
                                    consultants engaged in a professional
                                    capacity pursuant to a Work Order.

                                            (c)       Losses and expenses, not
                                    compensated by insurance or otherwise and
                                    actual, direct costs associated with the
                                    recovery or collection of such Losses and
                                    expenses, including but not limited to the
                                    deductible amount of any insurance required
                                    by Article 7 sustained by the Contractor in
                                    connection with the Work


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<PAGE>   22


                                                                    CONFIDENTIAL


                                    provided they have resulted from causes
                                    other than the fault or negligence of the
                                    Contractor, its Subcontractors, agents or
                                    employees.

                                            (d)       All federal, state and
                                    local sales taxes, use taxes, excise taxes,
                                    personal property taxes or special
                                    assessments, except taxes on Contractor's
                                    income, in connection with the Work or
                                    materials to be performed pursuant to a Work
                                    Order or agreement for Other Work.

                                            (e)       Such other items properly
                                    chargeable to the cost of the Project to
                                    which Owner and Contractor have previously
                                    agreed to as part of an executed Work Order.

                  4.2      COST CONTROL. The Contractor recognizes the
relationship of trust and confidence established between it and the Owner by
this Agreement and agrees to furnish its best skill and judgment and to
cooperate with the Owner. Contractor agrees to furnish efficient business
administration and superintendence, and to use commercially reasonable efforts
to minimize expense to the Owner, to keep upon the location for each Project at
all times an adequate supply of qualified workers as specified in the Project
Staffing Plan, tools, equipment and materials and to promote the progress of the
work in the most expeditious and economical manner consistent with the interests
of the Owner.

                  4.3      MOST FAVORED NATION. The cost basis for labor and
associated cost items and equipment rental rates charged to Owner under this
Agreement or any Work Order or agreement for Other Work (except for charges by
Subcontractors or other third parties not employees of Contractor, or any
Self-Performed Work) shall be no greater than the lowest cost basis charged for
similar work or services to other customers (including Contractor's subsidiaries
and affiliates) of Contractor. Owner shall have the right to audit Contractor's
records periodically to ensure compliance with this Article 4.3.

                  4.4      INDEPENDENT CONTRACTOR. It is the intention of this
Agreement that the Contractor shall be and remain an independent contractor and
nothing herein is intended to be construed as inconsistent with that status.
Contractor and Owner, expressly intending that no employment, partnership, or
joint venture relationship is created by this Agreement, hereby agree as
follows:

                           (a)      Contractor shall act at all times as an
                  independent contractor hereunder;

                           (b)      Neither Contractor nor anyone employed by or
                  acting for or on behalf of Contractor shall ever be construed
                  as an employee of Owner and Owner shall not be liable for
                  employment or withholding taxes respecting Contractor or any
                  employee of Contractor;

                           (c)      Except as otherwise provided herein,
                  Contractor shall determine when, where and how Contractor
                  shall perform the Work;


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                                                                    CONFIDENTIAL


                           (d)      Contractor shall take all steps to ensure
                  that Contractor and Contractor's employees are treated as
                  independent contractors of Owner;

                           (e)      Owner shall have the right to conduct
                  inspections and reviews of, and determine satisfactory
                  performance of, the Contractor's services;

                           (f)      Contractor shall provide Contractor's own
                  materials, tools and equipment in performing the services;

                           (g)      Contractor shall, as an allocated cost,
                  maintain workers compensation insurance for Contractor and for
                  all others employed by or acting for or on behalf of
                  Contractor only to the extent and in the amounts required by
                  law;

                           (h)      Contractor shall be free to contract with,
                  and provide Contractor's services to, Parties other than Owner
                  during the term of this Agreement, subject to the
                  confidentiality restrictions delineated herein;

                           (i)      Contractor shall not make any commitment or
                  incur any charge or expense in the name of Owner without the
                  prior written approval of Owner; and

                           (j)      Contractor, for Contractor and for anyone
                  claiming through Contractor, waives any and all rights to any
                  consideration, compensation or benefits, except as provided
                  for herein.

                  4.5      ACCOUNTING SYSTEM. The Contractor shall keep accurate
and detailed books of account for all Work performed for each Project for the
duration of this Agreement, and for a period of five (5) years after completion
of each project, at its offices in Omaha, Nebraska or Atlanta, Georgia, open to
the inspection of the Owner at reasonable times and frequency during Contractors
regular business hours to verify all Reimbursable Costs, and Contractor's Fees
due to Contractor hereunder. Contractor shall make its books and records
available at Owner's election, to an independent certified public accountant
reasonably acceptable to Contractor for the purpose of auditing the Reimbursable
Cost including the labor burden factors as shown on EXHIBIT D, and Contractor's
Fees. Contractor shall keep such full and detailed accounts and Project costs as
may be necessary for proper financial management by the Contractor under this
Agreement in a manner and pursuant to methods which are reasonably satisfactory
to the Owner. Owner shall have the right to request other reports as are deemed
necessary by Owner and Contractor shall comply with such request. Owner shall be
responsible for and shall reimburse Contractor for any direct costs associated
with such requested reports. The Contractor shall also monitor the approved cost
estimate for each Project and shall show actual costs for activities in progress
and estimates for uncompleted tasks by way of comparison with such approved
estimate. In the event the results of any audit show Contractor's costs to be in
error to the material detriment of Owner, Contractor shall credit to Owner any
such differentials and Contractor shall also reimburse Owner for the costs of
the audit.

                  Contractor shall at all times act in good faith and to the
best advantage of the Owner in the purchase of materials, in the employment of
labor, and in all its conduct and activities relative to any work on Projects
performed pursuant to this Agreement.


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                                                                    CONFIDENTIAL


                  4.6      PROGRESS PAYMENT. As soon as is possible after the
first of each month, the Contractor shall submit to the designated office of the
Owner an application for payment for the Work performed for each Project in the
preceding month less any retainage held for Contractor's Subcontractors.
Contractor may, subject to approval of Owner, submit an aggregate progress
payment application for Projects or a separate application for each Project, but
in any event, costs for each Project shall be separately stated.

                           4.6.1.   Monthly payments to the Contractor for the
Work performed to such date will be made within thirty (30) days after receipt
of each invoice by the Owner. Such applications for payment shall be submitted,
in a form satisfactory to the Owner which form is attached hereto as EXHIBIT J
and shall be accompanied by documentation of all Reimbursable Costs including
but not limited to weekly payrolls and time sheets, showing the amounts paid to
each worker or employee, and allocation of each employee's time to the Project
and bills for materials delivered to each Project site and payments made or due
to Subcontractors. Contractor and Owner shall use commercially reasonable
efforts to resolve any disputed items within five (5) business days after the
payment due date. Any disputes not resolved within this time frame shall be
handled in accordance with Article 8.2 hereof. Owner may withhold payment for
any disputed items until all such issues relating thereto are resolved, but
shall pay all undisputed amounts promptly in accordance with the provisions of
this Agreement. Owner shall act in good faith and not in an arbitrary or
capricious manner in disputing any amount. The basis for disputed amounts shall
be documented to Contractor. As used in this Article 4.6.1, "amount" shall be
defined as a specific line item or items in a relevant invoice, not the total
amount of the invoice, unless all line items in the invoice are reasonably
disputed. Monthly payments to the Contractor shall, in addition to payment for
Reimbursable Costs for Work Performed, include the Contractor's Fee to be paid
to the Contractor for such Work performed in the applicable month.
Notwithstanding the foregoing, until such time as Contractor's Current Ratio of
current assets to current liabilities is 1.7:1 or its Quick Ratio (defined as
cash, cash equivalents and receivables divided by current liabilities) is 1:1,
Owner agrees to make Progress Payments, that would otherwise be due monthly
under this Article 4.6.1, such that eighty percent (80%) of Contractor's
approved application for payment shall be paid upon presentation of the
documentation required hereunder and the balance as set forth above.

                           4.6.2.   The Contractor's application for payment
shall constitute a representation to the Owner, based on its determinations at
the Project site, that to the best of the Contractor's knowledge, information
and belief, the Work has progressed to the point indicated and the quality of
the Work is in accordance with the Work Order. The foregoing representations are
subject to an evaluation of the Work for conformance with the Work Order upon
substantial completion, the results of subsequent tests and inspections, to
minor deviations from the Work Order correctable prior to acceptance.

                           4.6.3.   ADVANCES.  At Owner's sole discretion, in
order to facilitate Contractor's performance of the Work on Owner's Projects,
Owner may make non-interest bearing advances ("MSA Advances") to be applied to
payment for Work to be performed hereunder. Subject to consents required from
Sureties, if any, Owner shall have the right to deduct MSA Advances from any
Progress Payments upon ninety (90) days notice to Contractor.


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                                                                    CONFIDENTIAL


                  4.7      LATE PAYMENT. Any payment not made by Owner to
Contractor within forty-five (45) days after the date of invoice shall bear
interest on a monthly basis from the date due until the date paid at the rate of
the sum of the prime rate then current as published in the Wall Street Journal
plus four percent (4%) divided by twelve (12). Any payment not made by Owner to
Contractor with ninety (90) days after the date of the invoice shall bear
interest on a monthly basis beginning on the 90th day at the rate of the sum of
the prime rate then current as published in the Wall Street Journal plus eight
percent (8%) divided by twelve (12) but in no event shall this amount be greater
than the maximum interest amount allowed by applicable laws. Payment shall be
deemed made on the date received by Contractor. Owner shall also pay
Contractor's actual costs incurred for collection of any late payment or fees
due hereunder, including reasonable attorneys' fees. Interest or collection
costs paid hereunder shall not be applied to the Aggregate Project Sum. Any
failure by Owner to make payments when due within ninety (90) days of the date
of invoice three (3) or more times during each Contract Year may be an Event of
Default pursuant Article 8 hereof.

                  4.8      ANNUAL AND AGGREGATE PROJECT SUM. Owner hereby agrees
to execute sufficient Work Orders and agreements for Other Work with Contractor
under this Agreement so that the Annual Project Sum shall total no less than
Fifty-Five Million Dollars ($55,000,000.00) per Contract Year and the Aggregate
Project Sum shall total no less than Three Hundred Ninety Million Dollars
($390,000,000.00) during the Term. The Annual Project Sum shall be defined as
the sum of all payments due by Owner to Contractor for Work actually performed
by Contractor during a Contract Year including Reimbursable Costs and
Contractor's Fees for each Project (hereinafter "Annual Project Sum"). The
Aggregate Project Sum shall be defined the sum of all payments paid or due by
Owner to Contractor for Work actually performed by Contractor hereunder
including Reimbursable Costs and Contractor's Fee for each Project (hereinafter
"Aggregate Project Sum") for all Work Orders and agreements for Other Work
executed during the Term. Both the Annual Project Sum and the Aggregate Project
Sum shall include any Contractor's Fee Trueup amounts as set forth in Article
4.10. Contractor releases Owner from any annual and aggregate requirements, and
minimum percentage volume requirements in effect prior to August 24, 2000.

                  4.9      COMMITMENT FULFILLED. Owner and Contractor agree that
Owner shall have met the Annual Project Sum commitment when the total Annual
Project Sum is Fifty-Five Million Dollars ($55,000,000.00). Owner and Contractor
agree that Owner shall have met the Aggregate Project Sum Commitment when the
total Aggregate Project Sum is Three Hundred Ninety Million Dollars
($390,000,000.00) at the end of the Term. Notwithstanding the foregoing, Owner
will have a continuing obligation to provide Minimum Local Network Percentage
pursuant to Article 2.4.2. The Parties agree that the Aggregate Project Sum and
the Annual Project Sum for applicable Contract Years shall include all amounts
for Work performed by Contractor subsequent to August 24, 2000.

                  4.10     CONTRACTOR'S FEE TRUEUP. In the event Owner fails to
execute Work Orders or commitments for Other Work sufficient to reach the Annual
Project Sum or the Aggregate Project Sum, upon expiration of the Contract Year
or Term, as appropriate, Owner shall pay Contractor, in addition to all other
sums due by Owner to Contractor hereunder the "Contractor's Fee Trueup", which
shall be computed as follows:


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<PAGE>   26


                                                                    CONFIDENTIAL


                           4.10.1.  Revenue Shortfall

                                    (a)      Annual Project Sum commitment minus
                           all amounts paid, invoiced or otherwise due by Owner
                           to Contractor for completed portions of Work Orders
                           and/or agreements for Other Work during a Contract
                           Year; and/or

                                    (b)      Aggregate Project Sum commitment
                           minus all amounts paid, invoiced or otherwise due by
                           Owner to Contractor during the Term minus any amounts
                           for Work in progress at the end of the Term which
                           Work is performed and payment is made or due within
                           twelve (12) months after the end of the Term.

                                    (c)      For purposes of computing Revenue
                           Shortfall, Revenue Shortfall shall equal X, and
                           Contractor's Fee Trueup shall equal .12X.

                           4.10.3.     The Contractor's Fee Trueup due for each
Contract Year, if any, shall be due within forty-five (45) days after the date
of invoice and late payments shall be treated in accordance with Article 4.7. An
estimated final Contractor's Fee Trueup, if any, shall be due at the end of the
Term within forty-five (45) days after the date of invoice and late payments
shall be treated in accordance with Article 4.7. The final Contractor's Fee
Trueup, if any, shall be invoiced twelve (12) months after the completion of the
Term and shall also be treated in accordance with Article 4.7. The amount of any
Trueup payment shall be reduced by the amount of any unpaid MSA Advance.

                                   ARTICLE 5.

                            OWNER'S RESPONSIBILITIES

                  5.1      AUTHORIZED REPRESENTATIVE. The Owner shall designate
a representative authorized to act on the Owner's behalf with respect to each
Project. The Owner, or such authorized representative, shall render decisions in
a timely manner pertaining to documents submitted by the Contractor in order to
avoid unreasonable delay in the orderly and sequential progress of the Work.

                  5.2      PROVISION OF DATA. Owner shall provide any and all
relevant plans, specifications, facts and other data to the Contractor as agreed
to in the Work Order promptly upon request of Contractor to enable the
Contractor to complete the Work by the completion date specified in the Work
Order.

                  5.3      OWNER'S OWN FORCES. The Owner reserves the right to
perform construction and operations related to a Project with Owner's own
forces, and to award Contracts in connection with the Project which are not part
of the Contractor's responsibilities pursuant to a Work Order. Owner will notify
Contractor in writing of such election. The Contractor shall notify the Owner if
any such independent action will interfere with the Contractor's
responsibilities under this Agreement and Owner agrees to cooperate reasonably
with Contractor and all Subcontractors.


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<PAGE>   27


                                                                    CONFIDENTIAL


                  5.4      PROMPT REPLY. Information or services under the
Owner's control shall be furnished by the Owner with reasonable promptness to
avoid delay in the orderly progress of the Contractor's services and the
progress of the Work.

                  5.5      FAILURE TO PROVIDE INFORMATION. If Owner fails to
provide in a timely manner any information or services necessary to the progress
of a Project or makes an election under Article 5.3, Contractor shall be
entitled to an equitable adjustment, by way of a Change Order, in the budget and
schedule for such project.

                                   ARTICLE 6.

                    OWNER'S AND CONTRACTOR'S REPRESENTATIONS

                  6.1      CONTRACTOR REPRESENTATIONS AND COVENANTS. Contractor
represents to and covenants with Owner as follows:

                           (a)      Contractor is duly organized and validly
                  existing and Contractor has the authority to execute this
                  Agreement and has access to sufficient personnel and expertise
                  to perform its obligations hereunder;

                           (b)      Contractor will use its commercially
                  reasonable efforts, in good faith, to keep all required
                  authorities in full force and effect during the Term and to
                  obtain any additional authorities, permissions or
                  certifications which may be required in connection with this
                  Agreement; and

                           (c)      There are no pending, or to Contractor's
                  knowledge threatened, claims, actions, suits, audits,
                  investigations or proceedings by or against Contractor which
                  would have a material adverse effect on Contractor's
                  performance under or ability to comply with this Agreement.

                  6.2      OWNER REPRESENTATIONS AND COVENANTS. Owner represents
to and covenants with Contractor as follows:

                           (a)      Owner is duly organized and validly existing
                  and Owner has the authority to execute this Agreement and
                  perform its obligations hereunder;

                           (b)      Owner will use its commercially reasonable
                  efforts, in good faith, to keep all required authorizations in
                  full force and effect during the Term and to obtain any
                  additional authorizations, permissions or certifications which
                  may be required in connection with this Agreement; and

                           (c)      Other than as set forth in Contractor's
                  filings with the SEC, there are no pending, or to Owner's
                  knowledge threatened, claims, actions, suits, audits,
                  investigations or proceedings by or against Owner which would
                  have a material adverse effect on Owner's performance under or
                  ability to comply with this Agreement.


                                       22
<PAGE>   28


                                                                    CONFIDENTIAL


                                   ARTICLE 7.

                               INSURANCE AND BONDS

                  Prior to commencement of any Work for any Project hereunder,
Contractor shall procure and maintain, with insurers reasonably acceptable to
the Owner, the following insurance protecting the Owner, Contractor and all
other Parties required by the Owner against liability from damages because of
injuries, including death, to persons, and liability for damages to property
arising from Contractor's operations, including its employees, agents,
Subcontractors and suppliers operations, in connection with the performance of
this Agreement. This insurance shall be kept in good standing during the term of
this Agreement. Owner reserves the right to have an Owner-controlled Insurance
Program for all Work performed by Contractor and Contractor agrees to cooperate
reasonably with such efforts. Additional insurance requirements, if any,
required by third parties shall be set forth in the applicable Work Order or
agreement for Other Work. The cost of insurance (including co-insurance and
deductibles paid) shall be a Reimbursable Cost hereunder and coverage for the
Projects shall be provided as follows:

                  7.1      WORKER'S COMPENSATION AND EMPLOYER'S LIABILITY.
Contractor shall procure and maintain Worker's Compensation insurance complying
with the laws of the state or states of operation, whether or not such coverage
is required by law, and Employer's Liability insurance with limits of $1,000,000
each accident, including occupational disease coverage with a limit of
$1,000,000 each employee and $1,000,000 disease policy limit. If Work is to be
performed in Nevada, North Dakota, Ohio, Wyoming, Washington or West Virginia,
Contractor will purchase Worker's Compensation in the State Fund established in
the respective States. Stop Gap Coverage or Employers Overhead coverage will be
purchased by Contractor.

                  7.2      WATER OPERATIONS. When any Work Order calls for water
operations, Contractor shall procure and maintain Longshoreman's and Harbor
Worker's Compensation insurance, Jones Act, and Maritime Coverage providing for
transportation, wages, maintenance and cure, with the limits of $500,000 each
employee ($500,000 more than one employee, shall be included). An endorsement
shall be attached evidencing that a claim "in rem" shall be treated as a claim
against the employer.

                  7.3      COMMERCIAL GENERAL LIABILITY. Contractor shall
procure and maintain Commercial General Liability insurance with a combined
single limit for bodily injury and property damage of $2,000,000 each occurrence
and $4,000,000 annual aggregate. Annual aggregate shall apply on a per Project
basis. Such policy shall include coverage for all operations of Contractor,
including products and completed operations coverage, blanket contractual
liability and independent contractor coverage, and will be endorsed to delete
exclusion for work, construction or demolition within 50 feet of railroad
trackage. This policy shall include no modifications that reduce the standard
coverages provided under a Commercial Guaranty Liability policy form.

                  7.4      BUSINESS AUTOMOBILE LIABILITY. Contractor shall
procure and maintain Business Automobile Liability insurance with a combined
single bodily injury and


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<PAGE>   29


                                                                    CONFIDENTIAL


property damage single limit of $2,000,000 each occurrence. This policy shall
include coverage for owned, non-owned, and hired vehicles.

                  7.5      VESSELS OR BARGES. When vessel(s) or barge(s) are
used by the Contractor for the performance of Work, Contractor shall procure and
maintain protection and indemnity, collision and towers liability insurance if
applicable, on such vessel(s) or barge(s) both owned and non-owned, in a single
limit of not less than $5,000,000 or the value of the vessel(s) or barge(s),
whichever is greater, shall be provided.

                  When vessel or barges are used, the Contractor will provide
hull insurance in amounts to the full value of the vessel(s) or barge(s) owned
and/or operated by or for the Contractor.

                  7.6      DIVING OPERATIONS. In the event Contractor conducts
diving operations, with the divers who are employees, agents or servants of
Contractor, from Owner's vessels, Contractor's vessels or any other marine
equipment, they shall only do so at the express written request of the Owner
Representative. Contractor agrees to indemnify and save Owner harmless from any
liability, loss, cost or damage, including cost of defense, arising from or
connected with such diving operations.

                  Seaworthiness of Owner's vessel(s) used herein for such diving
operations is acknowledged and agreed to by Contractor, and neither Contractor
nor its insurance carrier shall contest this.

                  7.7      AIRCRAFT LIABILITY. When aircraft is used by the
Contractor for performance of the Work, the Contractor shall procure and
maintain Aircraft Liability insurance on both owned and non-owned aircraft,
including helicopters, with combined single limit of $1,000,000 per seat for
bodily injury and property damage, including passenger legal liability.

                  When any aircraft is used by the Contractor for the
performance of the Work, Aircraft Hull insurance in amounts to the full value of
each aircraft will be maintained by the Contractor on such aircraft owned and/or
operated by or for the Contractor.

                  7.8      BUILDER'S RISK. As requested by Owner, Contractor
shall procure and maintain during the term of a Work Order or an agreement for
Other Work, an all risk builders' risk insurance policy protecting the Owner,
Contractor and all Subcontractors, as their interests may appear, from loss due
to damage to the Work or to any equipment supplies or material including any
such items directly provided by Owner pursuant to Article 4 hereof going into
the Work, while at the Project site, or while in transit to or from the Project
site. The limit of liability of this insurance shall be no less than the greater
of the value of the Project after the Work has been performed or the approved
Project Budget estimate in the applicable Work Order per occurrence and shall
contain a deductible of no more than $500,000 per occurrence. If coverage is
requested by Owner, cost for builder's risk insurance shall be a Reimbursable
Cost.

                  7.9      ERRORS AND OMISSIONS. If requested in writing by
Owner, Contractor shall procure and maintain during the term of a Work Order or
agreement for Other Work insurance against the errors or omissions of Contractor
or any of Contractor's employees, agents or subcontractors performing Work
hereunder with limits satisfactory to Owner. If


                                       24
<PAGE>   30


                                                                    CONFIDENTIAL


coverage is requested by Owner, cost for Errors and Omissions insurance shall be
a Reimbursable Cost. If coverage is written on a "claims made" basis, all
renewals during the life of this Agreement will include "prior acts coverage."

                  7.10     RAILROAD PROTECTIVE. If requested in writing by
Owner, Contractor shall procure and maintain during the term of a Work Order or
agreement for Other Work, Railroad Protective Insurance protecting Owner,
Contractor and Subcontractor and in such limits as specified in the applicable
Work Order.

                  7.11     UMBRELLA EXCESS LIABILITY. Contractor shall procure
and maintain Umbrella or Excess Liability Insurance applying in excess of
Articles 7.1 through 7.10 above subject to a limit of $5,000,000. The
maintenance of insurance by the Contractor and the limits of coverage required
shall in no way limit or affect the extent of the Contractor's liability. Limits
required above may be obtained through various primary and umbrella structures.

                  7.12     INSURANCE REQUIRED OF SUBCONTRACTORS. Except as may
be waived or modified by Owner in writing, the Contractor shall require all
Subcontractors to provide and maintain the insurance required above subject to
all requirements set forth in this Article 7, provided however, that Builder's
Risk, Errors and Omissions, Railroad Protective, Owners Contractors Protective
Liability and Contractors Pollution Liability insurance shall only be required
of Subcontractors if requested by Owner as part of the Work Order agreement for
Other Work or if required pursuant to Article 3.5 hereof. Contractor and Owner
shall be listed as additional insureds on Subcontractor's policies. Owner's
approval of any Subcontractor shall be conditioned upon a Subcontractor having
the required insurance coverage. Except as may be waived or modified by Owner in
writing, each Subcontractor shall also require its subcontractors, if any, to
provide and maintain insurance as required above.

                  7.13     ADDITIONAL INSURED. Owner shall be listed as an
additional insured on Contractor's and Subcontractor's policies. Contractor
hereby waives its right, and agrees to require its underwriter and any and all
Subcontractors to waive all such rights, of subrogation against Owner, its
officers, directors, agents, and employees thereof, and corporate shareholders
and officers, directors, agents and employees thereof. Such waiver shall also
extend to all companies and other legal entities that control, are controlled
by, are subsidiaries of, or are affiliated with Owner (each an "Affiliate"), and
the respective officers, directors, agents, employees and shareholders of such
companies or entities. Contractor's insurance is understood to be primary as
respects the interest of additional insureds.

                           7.13.1.  Neither Owner or its Affiliates shall be
required to insure or be responsible for any loss or damage to property of any
kind owned or leased by Contractor or its employees, servants, and agents. Any
policy of insurance covering the property owned or leased by Contractor against
loss by physical damage shall provide that the underwriters have given their
permission to waive their rights of subrogation against Owner, its Affiliates
and their directors, officers, and employees, as well as their subsidiaries and
affiliates, including directors, officers, and employees thereof.

                  7.14     EVIDENCE OF COVERAGE. Certificates of insurance or
certified copies of the insurance policies will be provided to the Owner prior
to Contractor beginning any Work


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<PAGE>   31


                                                                    CONFIDENTIAL


under this Agreement. Such certificate shall contain a provision that the
insurer will give the Owner at least thirty (30) days prior written notice of
any material changes, reductions, non-renewal or cancellation of the coverage.
Contractor shall obtain certificates from its Subcontractor(s) and deliver them
to Owner, if requested to do so. In the event of any failure by Contractor to
comply with the provisions of this paragraph, Owner may, at its option on notice
to Contractor, suspend the affected Work Orders or agreement for Other Work
until there is full compliance with this paragraph or contract for such
insurance at Contractor's expense.

                  7.15     BONDS. A payment bond from the Contractor shall be
required for each Work Order executed hereunder. The cost shall be a
Reimbursable Cost of the Project, and such bond shall be delivered to the Owner
prior to the performance of any Work. The amount of each bond shall be set by
Owner but in no event shall such amount exceed the amount of the Work Order. The
Owner may waive this bond requirement or, if a bond cannot be obtained for a
Work Order, require a letter of credit or other form of security as an
alternative in its sole discretion for any Work Order performed hereunder. In
lieu of individual bonds for each Project, Contractor and Owner may mutually
agree to elect to provide Owner a blanket payment bond in a face amount to be
determined.

                           7.15.1.  Unless and only if Owner waives in writing
the requirement of Article 7.15 for a bond, the Contractor will require payment
bonds of all Subcontractors. Upon Owner's request, copies of all such bonds
shall be provided to Owner for review. The costs of such bonds shall be included
in the Subcontractor's bid price and as such are a Reimbursable Cost. In the
event that Owner waives this requirement for a bond from a Subcontractor, Owner
shall be responsible for any payment default of such unbonded Subcontractor
which is not otherwise cured by legal or equitable remedies.

                                   ARTICLE 8.

                             DEFAULT AND TERMINATION

                  8.1      DEFAULT. The following events shall constitute an
Event of Default hereunder.

                           8.1.1    CONTRACTOR DEFAULT.  The Contractor shall be
in default of the Agreement if:

                                    8.1.1.1  Contractor becomes insolvent, is
adjudged a bankrupt, or makes a general assignment for the benefit of its
creditors, or becomes a subject of any proceeding (voluntary or involuntary)
commenced under any statute or law for the relief of debtors, or a receiver,
trustee or liquidator of any of the property or income of Contractor shall be
appointed which judgment, assignment, proceeding or receivership is not
dismissed or discharged within ninety (90) days of the date of notice thereof.

                                    8.1.1.2  Contractor refuses or fails to
prosecute the Work in accordance with the Work Order or agreement for Other
Work, or this Agreement in any material respect; or


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                                                                    CONFIDENTIAL


                                    8.1.1.3  Contractor fails in any material
respect to observe any other terms, provisions, conditions, covenants,
representations, warranties or agreements in this Agreement, any Work Order or
any agreement for Other Work to be observed and performed on the part of the
Contractor ("Material Default"). A Material Default under Articles 8.1.1.2 and
8.1.1.3 may include but is not limited to the following:

                                            (a)       Failure by Contractor to
                                    make proper payment to Subcontractors or
                                    others for undisputed amounts due for
                                    services, materials or labor (provided Owner
                                    shall have paid to Contractor any payments
                                    for such Work for which payment is demanded
                                    by Subcontractor); or

                                            (b)       Failure by Contractor to
                                    comply with laws, ordinances, rules and
                                    regulations or orders of any public
                                    authority having jurisdiction of which
                                    Contractor has or should have knowledge
                                    after making reasonably diligent inquiries
                                    and except as directed by Owner and which
                                    failure has a material adverse effect on a
                                    Project; or

                                            (c)       Failure to use
                                    commercially reasonable efforts to prosecute
                                    the Work in compliance with the budget or
                                    scheduling requirements, set forth in a Work
                                    Order or agreement for Other Work subject to
                                    any equitable adjustments in the budget or
                                    schedule as provided herein; or

                                            (d)       Failure to correct any
                                    incomplete or unacceptable items during any
                                    final inspection and testing which failure
                                    has a materially adverse effect on the
                                    Project.

                           8.1.2    OWNER'S REMEDIES. Owner shall notify
Contractor in writing when Contractor has committed an Event of Default as
defined in Article 8.1.1 and its subsection ("Default Letter"). If, thirty (30)
calendar days after the date of the Default Letter, Owner believes that
Contractor has not cured the Event of Default or that Contractor has not made
good faith efforts to cure the Event of Default, Owner may send Contractor
written notification of such failures ("Failure to Cure Letter"). Owner may then
resort to the remedies available in Articles 8.1.2.1, 8.1.2.2 and/or 8.1.2.3,
unless Contractor provides written notification to Owner within fifteen (15)
days of the date of the Failure to Cure Letter that Contractor disputes the
assertions in the Failure to Cure Letter ("Dispute Letter"). If Contractor
provides a timely Dispute Letter, Owner shall submit the dispute to arbitration
pursuant to Article 8.2.2 of this Agreement. Upon determination by the
arbitrator that an Event of Default has not been corrected or that Contractor
has not used good faith efforts to cure such Event of Default, such default
shall be considered "a strike" for purposes of Article 8.1.3 and Owner may
without prejudice to any other right or remedy:

                                    8.1.2.1  With or without terminating a Work
Order or agreement for Other Work, take over and/or subcontract such Work or any
portion thereof and furnish such materials and/or employ such workers as may be
necessary to remedy the noncompliance.


                                       27
<PAGE>   33


                                                                    CONFIDENTIAL


Notwithstanding the foregoing, all costs expended by Owner hereunder, including
the value of the Contractor's Fee applicable thereto, shall be applied to the
Annual Project Sum and Aggregate Project Sum;

                                    8.1.2.2  Terminate the Work Order for the
Project in default and/or agreement for Other Work in default, and have only the
obligation to pay Contractor payments due for portions of Work completed
pursuant to the requirements set forth in the applicable Work Order or
agreements for Other Work up to the date of termination; and/or

                                    8.1.2.3  Make a claim against Contractor's
or Subcontractor's bond or other security.

                           8.1.3    CONTRACTOR'S THREE STRIKES. Owner's right to
terminate the Agreement may be exercised only if Contractor is insolvent and is
petitioned into bankruptcy; or Contractor commits three (3) Events of Default
pursuant to Article 8.1.1 and its subsections.

                           8.1.4    OWNER DEFAULT.  The Owner shall be in
default of the Agreement if:

                                    8.1.4.1  Owner fails to make any payment due
to Contractor hereunder three (3) or more times during a Contract Year within
ninety (90) days after the date of invoice, unless such nonpayment is the
subject of a good faith dispute; or

                                    8.1.4.2  Owner becomes insolvent, is
adjudged a bankrupt, or makes a general assignment for the benefit of creditors,
or becomes the subject of any proceeding (voluntary or involuntary) commenced
under any statute or law for the relief of debtors, or a receiver, trustee or
liquidator of any of the property or income of Contractor shall be appointed,
which judgment, assignment, proceeding or receivership is not dismissed or
discharged within ninety (90) days of the date of notice thereof.

                           8.1.5    CONTRACTOR'S REMEDIES. Contractor shall
notify Owner in writing when Owner has committed an Event of Default as defined
in Article 8.1.4 and its subsections ("Default Letter"). If, thirty (30)
calendar days after the date of the Default Letter, Contractor believes that
Owner has not cured the Event of Default or that Owner has not made good faith
efforts to cure the Event of Default, Contractor may send Owner written
notification of such failures ("Failure to Cure Letter"). If Owner disputes the
assertions in the Failure to Cure Letter, Owner shall provide written
notification to Contractor of such dispute within fifteen (15) days of the date
of the Failure to Cure Letter ("Dispute Letter"). If Owner provides a timely
Dispute Letter, Contractor shall submit the dispute to arbitration pursuant to
Article 8.2.2 of this Agreement. Upon determination by the arbitrator that an
Event of Default has not been corrected or that Owner has not used good faith
efforts to cure such Event of Default, such default shall be considered "a
strike" for purposes of Article 8.1.6 of this Agreement and Contractor may
without prejudice to any other right or remedy:

                                    8.1.5.1  Terminate the applicable Work Order
or agreement for Other Work for default, without terminating this Agreement, in
which case Owner shall be


                                       28
<PAGE>   34


                                                                    CONFIDENTIAL


responsible for all payments due to Contractor as of the date of termination of
the affected Work Order or agreement for Other Work; or

                                    8.1.5.2  Terminate this Agreement for
default, but only if Article 8.1.6 hereof has been satisfied.

                           8.1.6    OWNER'S THREE  STRIKES. Contractor's right
to terminate this Agreement may be exercised only if Owner is insolvent and is
petitioned into bankruptcy; or Owner commits three (3) Events of Default
pursuant to Article 8.1.4 and its subsections.

                           8.1.7    In the event of a termination of any Work
Order or agreement for Other Work for default pursuant to Article 8.1.5,
Contractor shall be entitled to receive reimbursement of all costs for Work
performed prior to the date of termination.

                           8.1.8    In the event of a termination of this
Agreement for default pursuant to Articles 8.1.5 and 8.1.6, Contractor shall be
entitled to receive reimbursement of all costs for Work performed prior to the
date of termination, including the entire minimum Contractor's Fee Trueup due
for the balance of the Term pursuant to Article 4 hereof.

                           8.1.9    In no event shall Contractor suspend its
performance for any Work under any Work Order or agreement for Other Work prior
to termination of the applicable Work Order, or agreement for Other Work or this
Agreement, as applicable.

                  8.2      DISPUTE RESOLUTION / ARBITRATION

                           8.2.1.   MANAGEMENT MEETINGS.  Except with respect to
payments of undisputed amounts due to Contractor by Owner, in the event of a
dispute, claim or other matter arising out of or relating to this Agreement or
breach thereof, the Parties agree that in addition to the remedies available to
each Party as outlined above, the Parties may contemporaneously provide the
other Party with a written notice outlining the nature of the dispute. Within
five (5) business days of the receipt of such notice the Contractor's Project
Manager and Owner's designee shall meet in a good faith effort to resolve the
dispute. If the dispute cannot be resolved at such meeting, the Parties agree
that within twenty (20) business days of the initial meeting, a second meeting
shall take place with a Vice President or person with similar decision making
authority representing each of the Contractor and Owner. If the dispute remains
unresolved after such second meeting and the Parties have used good faith
efforts to otherwise resolve the dispute, then the Parties shall participate in
Arbitration as set forth below.

                           8.2.2.   ARBITRATION.  All claims, disputes and other
matters in question arising out of, or relating to, this Agreement or the breach
thereof which are not resolved pursuant to Article 8.2.1 above, shall be decided
by expedited arbitration in accordance with the Construction Industry
Arbitration Rules of the American Arbitration Association then in effect unless
the Parties mutually agree in writing otherwise. This agreement to arbitrate
shall be specifically enforceable under the prevailing arbitration law. The
award rendered by the arbiters shall be final, and judgment may be entered upon
it in accordance with applicable law in any court having jurisdiction thereof.


                                       29
<PAGE>   35


                                                                    CONFIDENTIAL


                                    8.2.2.1  Notice of demand for arbitration
shall be filed in writing with the other Party and with the American Arbitration
Association. The demand for arbitration shall be made within a reasonable time
after the claim, dispute or other matter in question has arisen, and in no event
shall it be made after the date when institution of legal or equitable
proceedings based on such claim, dispute or other matter in questions would be
barred by the applicable statute of limitations. The Contractor shall carry on
the Work and maintain the progress schedule during any arbitration proceedings
(provided Owner is not otherwise in breach of this Agreement) and Owner shall
continue to pay any undisputed sums to Contractor.

                                    8.2.2.2  The foregoing notwithstanding,
either Party may seek injunctive relief from a court of competent jurisdiction
which may be necessary to protect its rights under this Agreement without being
required to show any actual damages or to post an injunction bond.

                                    8.2.2.3  The laws of the State of Delaware
shall apply to any dispute, between the Parties, resolved by arbitration,
irrespective of Delaware's choice of law rules.

                                   ARTICLE 9.

                          INDEMNIFICATION AND LIABILITY

                  9.1      INDEMNIFICATION BY CONTRACTOR. Contractor shall be
liable for and shall defend, indemnify and hold harmless the Owner and its
officers, directors, agents and employees from and against any and all claims,
demands, causes of action, losses, damages, costs and expenses (including
reasonable attorneys' fees) of every kind and character arising in favor of any
person including Contractor, Owner's employees, Contractor's employees,
Subcontractors or other persons on account of personal injuries or death or
damage to any property (hereinafter "Claims") in any way incident to, arising
out of, or claimed to have arisen out of, occurring in, in connection with, or
relating to the services performed by Contractor hereunder (including Claims in
any way incident to, arising out of, or claimed to have arisen out of, occurring
in, in connection with, or relating to the services performed by any and all
Subcontractors), except if directly or indirectly due to Owner's or Owner's
employees' negligence. Owner shall have a direct right of action against
Contractor in the event Contractor fails to perform under this Article 9.1 and
Owner may recover all of the reasonable costs of such action, including
reasonable attorneys' fees. Contractor shall obtain a written agreement from
anyone (including Subcontractors) retained or employed by Contractor which shall
include this indemnification in favor of Owner.

                           9.1.1.   Contractor further agrees to indemnify and
hold Owner harmless against the payment of any and all penalties, interest,
liens or indebtedness or claims against Owner's property, or for work performed,
or materials furnished, or measured by the work performed, growing out of or
incident to Contractor's operations hereunder. Contractor agrees to reimburse
Owner and Owner's employees for each and every reasonable cost or charge,
including court costs, all expenses of litigation and reasonable attorneys'
fees, if any, which Owner, its successors, assigns or employees, may incur in
defending against or prosecuting any


                                       30
<PAGE>   36


                                                                    CONFIDENTIAL


such claims, demands, causes of action or suits brought pursuant to services
performed under this Agreement.

                           9.1.2.   Contractor shall release, indemnify, and
hold the Owner harmless from and against any and all claims arising from or
relating to any loss or damage to property of any kind owned or leased by
Contractor or its employees, servants, agents and Subcontractors unless directly
or indirectly due to Owner's or Owner's employee's negligence.

                           9.1.3.   All obligations to assume, protect, defend,
indemnify, and save the Owner harmless shall extend to the Owner's officers,
directors, employees, agents, shareholders, and to companies and other legal
entities that control, are controlled by, are subsidiaries of, or are affiliated
with Owner and the respective officers, directors, agents, and employees of such
companies or entities and shall continue for so long as any of the named
indemnities may be subjected to claims or suits calling for such obligations,
notwithstanding the completion, acceptance or payment for the Work.

                  9.2      INDEMNIFICATION BY OWNER. Owner shall be liable for
and shall defend, indemnify and hold harmless the Contractor and its officers,
directors, agents and employees from and against any Claims to the extent they
arise from the negligence and/or willful misconduct of the Owner, its employees
or agents.

                  9.3      NOTICE OF CLAIMS. Each Party shall notify the other
promptly of written Claims or demands of which the other Party is responsible
hereunder. The indemnifying Party shall have the right to defend the Claim with
counsel of its own choosing but no settlement or compromise of any Claims
hereunder shall be completed without the consent of the indemnified Party.

                  9.4      LIMITATION OF LIABILITY. In no event shall either
Party hereto be liable for any consequential, incidental, special, indirect or
remote damages including, but not limited to, loss of use, lost revenues or
profits (except for Contractor's Fee Trueup payable under Article 4.10 hereof)
or interest on borrowed funds, arising out of or in connection with its
performance of this Agreement whether arising in contract, warranty, tort
(including negligence) or strict liability.

                                   ARTICLE 10.

                                    WARRANTY

                  10.1     WARRANTY. Any equipment, materials, and services
supplied by Contractor, its agents, employers, suppliers, or Subcontractors, are
warranted by Contractor or its suppliers or Subcontractors as appropriate, to be
of good quality and workmanship and will be properly installed by Contractor or
its Subcontractors as appropriate. To the extent possible, Contractor shall also
assign to Owner all manufacturers, suppliers or Subcontractor's warranties for
any services, equipment and materials. All warranties made hereunder shall be
for a minimum period of one (1) year following Owner's acceptance of the Work
for such Project unless otherwise specified in a Work Order, provided however,
that any warranty for materials or services not provided directly by Contractor
shall be the warranty of the Subcontractor or


                                       31
<PAGE>   37


                                                                    CONFIDENTIAL


supplier which Contractor shall pass through to Owner. Where a Certificate of
Occupancy is issued by Contractor to Owner, the warranty period shall commence
upon the date the Certificate of Occupancy is issued for equipment, materials,
or services which are directly related to such Certificate of Occupancy.
Contractor shall not be obligated to continue these warranty obligations for any
equipment (including software), materials and/or services which have been
improperly repaired or altered, abused, misused or improperly handled by Owner
unless such repair or alteration was necessitated by an act or omission of
Contractor, Subcontractor or their respective employees or agents.
Notwithstanding the foregoing, all fiber optic cable purchased by Contractor for
Owner hereunder shall have a minimum three (3) year warranty assignable to Owner
unless otherwise agreed to in a Work Order.

                  10.2     FREE FROM DEFECTS. The Contractor warrants to the
Owner that all materials and equipment furnished under this Agreement will be
new unless otherwise specified in a Work Order or agreement for Other Work, free
from faults and defects and in conformance with the Work Order, agreement for
Other Work and/or this Agreement. All Work not conforming to these requirements,
including substitutions not properly approved and authorized, may be considered
defective and must be cured by Contractor at Contractor's expense. If required
by the Owner, Contractor shall furnish satisfactory evidence as to the kind and
quality of materials and equipment furnished hereunder.

                  10.3     NO OTHER WARRANTIES. EXCEPT AS OTHERWISE PROVIDED
HEREIN, THE FOREGOING WARRANTIES AND THOSE CONTAINED IN ANY WORK ORDER OR
AGREEMENT FOR OTHER WORK CONSTITUTE THE ONLY WARRANTIES WITH RESPECT TO THE WORK
PERFORMED HEREUNDER, OR ANY STATEMENT OF WORK, THERE BEING NO OTHER WARRANTIES,
EXPRESSED OR IMPLIED, INCLUDING NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.

                                   ARTICLE 11.

                  HAZARDOUS MATERIALS AND CONCEALED CONDITIONS

                  11.1     HAZARDOUS MATERIALS. In the event Contractor
encounters toxic or hazardous materials in performance of any Project, any
resulting delays and costs shall be considered to be beyond its control, without
its fault and outside the scope of such Project unless such encounter is due to
the gross negligence or willful misconduct of Contractor, its employees,
officers or directors or Subcontractors. Such toxic or hazardous materials shall
be removed or otherwise dealt with by Owner or by the appropriate government
agency, organization or third party. Contractor shall have no obligation,
responsibility or liability with respect to such materials. Notwithstanding the
foregoing, Contractor agrees that it will be responsible for the cleanup or any
other cost, damage or liability arising from any toxic or hazardous materials
generated or used by Contractor, its employees or Subcontractors in the course
of its performance of any Work under this Agreement. Contractor agrees in any
event to cooperate fully with Owner and to perform reasonable and customary
investigations as to the existence of hazardous materials prior to the
performance of any Work hereunder.


                                       32
<PAGE>   38


                                                                    CONFIDENTIAL


                  11.2     CONCEALED CONDITIONS. The Contractor shall promptly,
upon discovery, and before any such conditions are disturbed, notify the Owner
in writing of: (1) subsurface or latent physical conditions at the site of Work
differing materially from those indicated in the Contract Documents, or (2)
unknown physical conditions at such site, of an unusual nature, differing
materially from those ordinarily encountered and generally recognized as
inherent in work of the character provided for in this Agreement. The Contractor
shall, at Owner's direction, promptly investigate the conditions, and if it
finds that such conditions do materially so differ and cause an increase or
decrease in the Contractor's cost of, or the time for, performance of any part
of the Work under the applicable Work Order an equitable adjustment of time
shall be made and the Work Order modified accordingly. Owner and Contractor
acknowledge that all costs incurred in investigating the conditions and
performing such Work are Reimbursable Costs.

                                   ARTICLE 12.

                                  MISCELLANEOUS

                  12.1     TITLE. Title to all Work completed pursuant to a Work
Order or agreement for Other Work hereunder and to all materials and supplies on
account of which payment in full has been made by Owner shall be and vest in the
name of Owner.

                  12.2     ASSIGNMENT. Owner may not transfer, assign or
otherwise delegate its obligations under this Agreement without the express
written consent of the Contractor which consent shall not be unreasonably
withheld; provided, however, that Owner may assign its rights, including the
obligation of payment to Contractor and Owner's rights under any Work Order or
agreement for Other Work, under this Agreement to its subsidiaries, affiliates
or successors in interest without prior written consent of Contractor.
Contractor may not transfer, assign or otherwise delegate its obligations under
this Agreement without the express written consent of Owner which may be
withheld by Owner in its sole discretion. Any assignment by any Party hereunder
shall not release the assigning Party from its obligations under this Agreement.

                  12.3     SEVERABILITY. If any provision of this Agreement is
adjudicated to be invalid or unenforceable, the remainder shall be valid and
enforceable, and the Parties shall negotiate in good faith to recreate such
provision in a valid and enforceable form to provide for the intent of such
provision.

                  12.4     WAIVER. Failure of Owner or Contractor at any time to
require strict performance of any provision of this Agreement shall not
constitute a waiver of that provision nor in any way limit enforcement of that
provision.

                  12.5     NOTICES. Except as otherwise set forth herein, when
any notice or other communication is required or authorized to be given
hereunder, such notice shall, for all purposes, be in writing and either
delivered personally to the addressee, by telex or facsimile transmission
followed by mailing, or sent by registered or certified mail return receipt
requested, or by express mail, postage prepaid and shall be deemed given when so
delivered personally, when such telex or facsimile transmission is received or,
if mailed, five (5) days after the date of mailing to the address of the
respective Parties at the following addresses:


                                       33
<PAGE>   39


                                                                    CONFIDENTIAL


             (i)      If sent by Owner to Contractor, addressed as follows:

                               Adesta Communications, Inc.
                               1200 Landmark Center
                               Suite 1300
                               Omaha, NE 68102
                               Attn:  Vice President, Operations

                      With a copy to:

                               Able Telcom Holding Corp.
                               1601 Forum Place
                               Suite 1110
                               West Palm Beach, FL  33401
                               Attn:  President With a copy to:

                               Able Telcom Holding Corp.
                               1643 North Harrison Parkway
                               Sunrise, Florida 33323
                               Attn: General Counsel


             (ii)     If sent by Contractor to Owner, addressed as follows:

                               MCI WORLDCOM Network Services, Inc.
                               Purchasing & Contracts
                               MD 1.1-131F
                               6929 N. Lakewood Avenue
                               Tulsa, OK 74117
                               Attn: Contract Administrator

                      With a copy to:

                               MCI WORLDCOM Network Services, Inc.
                               6929 N. Lakewood Avenue
                               Tulsa, OK 74117
                               Attn: Vice President, Construction and Facilities

                      and

                               WorldCom, Inc.
                               1133 19th Street, NW
                               Washington, DC  20036
                               Attn: Senior Commercial Counsel


                                       34
<PAGE>   40


                                                                    CONFIDENTIAL


                  12.6     CONFIDENTIALITY

                           12.6.1.  Owner and Contractor agree to hold and will
use their commercially reasonable efforts to cause their respective officers,
directors, employees, accountants, counsel, consultants, advisors and agents to
hold, in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of law, all confidential documents and
information concerning this Agreement and any Work or Project performed
hereunder, except to the extent that such information can be shown to have been
(i) in the public domain through no fault of the receiving Party, or (ii) later
lawfully acquired by the receiving Party from third parties without an
obligation of confidentiality. The obligation of Owner and Contractor to hold
any such information in confidence shall be satisfied if it exercises the same
care with respect to such information as it would take to preserve the
confidentiality of its own similar information.

                           12.6.2.  The drawings, specifications and other
documents are instruments of service through which the Work to be performed by
the Contractor is described. The Contractor may retain one record set. The
Contractor shall not own or claim a copyright or any other right in the
drawings, specifications and other documents. All copies of them, except the
record set, shall be returned to Owner on request upon completion of the
Project. The drawings, specifications and other documents and copies thereof
furnished to the Contractor, are for use solely with respect to a Project. They
are not to be used by the Contractor on other projects without the specific
written consent of the Owner. The Contractor is granted a limited license to use
and reproduce applicable portions of the drawings, specifications and other
documents prepared for a Project appropriate to and for use in the performance
of the Contractor's services under this Agreement. All drawings, specifications
and other documents relating to the Project are owned by the Owner, including
drawings, specifications and other documents generated by Contractor for Owner
or used to perform work for Owner prior to the date of this Agreement.

                           12.6.3.  Subject to the confidentiality requirements
stated herein, neither Party shall reference or use any part of this Agreement
or the names of the Parties hereto in any press release, marketing, advertising
or other sales or promotional materials without the express written consent of
the other Party, which will not be unreasonably withheld or delayed.

                  12.7     COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

                  12.8     NO CONSTRUCTION AGAINST DRAFTER. The Parties
acknowledge that this Agreement and all the terms and conditions contained
herein have been fully reviewed and negotiated by the Parties and that each
Party has been represented by counsel. Having acknowledged the foregoing, the
Parties agree that any principle of construction or rule of law that provides
that, in the event of any inconsistency or ambiguity, an agreement shall be
construed against the drafter of the agreement shall have no application to the
terms and conditions of this Agreement.

                  12.9     COURSE OF DEALING. The Parties acknowledge that due
to the previous relationship between Contractor and Owner, the sequence of
previous acts and conduct


                                       35
<PAGE>   41


                                                                    CONFIDENTIAL


between Contractor and Owner related to the Work to be performed pursuant to
this Agreement and any Work Orders or agreements for Other Work executed
hereunder, is fairly to be regarded as establishing a common basis of
understanding for interpreting each Party's expressions and other conduct as
further described in the Uniform Commercial Code.

                  12.10    SURVIVAL. The provisions of Articles 9, 10, 11 and 12
shall survive the expiration or termination of the Agreement and Owner and
Contractor each agree to be bound thereto as appropriate.

                  12.11    GOVERNING LAW. The Agreement, and all the rights and
duties of the Parties arising from or relating in any way to the subject matter
of this Agreement or the transaction(s) contemplated by it, shall be governed
by, construed, and enforced in accordance with the laws of the State of
Delaware, irrespective of Delaware's choice of law rules.

                  12.12    ENTIRE AGREEMENT. This Agreement and all Exhibits and
Schedules attached hereto constitute the entire agreement between the Parties
with respect to the subject matter hereof. This Agreement shall be binding upon
the Parties hereto and their permitted successors and assigns.


                                       36
<PAGE>   42


                                                                    CONFIDENTIAL


                  IN WITNESS WHEREOF, the Parties hereto have executed this
instrument, through their authorized officers, effective as of the date first
above written.

                                    OWNER:

                                    MCI WORLDCOM NETWORK SERVICES, INC.

                                    By:
                                       --------------------------------------

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


                                    CONTRACTOR:

                                    ABLE TELCOM HOLDING CORP.

                                    By:
                                       --------------------------------------

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


                                       37
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.5.12
<SEQUENCE>3
<FILENAME>g63952aex2-5_12.txt
<DESCRIPTION>2ND AMENDED/RESTATED SUBORDINATED PROMISSORY NOTE
<TEXT>

<PAGE>   1
                                                                  EXHIBIT 2.5.12


                           SECOND AMENDED AND RESTATED
                          SUBORDINATED PROMISSORY NOTE

Principal Amount: $4,456,250                              As of August ___, 2000

         For value received, Able Telcom Holding Corp. ("Able") hereby agrees to
pay to the order of WorldCom Network Services, Inc., its successors or assigns
("WorldCom"), in lawful money of the United States of America and immediately
available funds, at its offices in Tulsa, Oklahoma (or at such other place or
places WorldCom may designate) the principal amount of Four Million Four Hundred
Fifty Six Thousand Two Hundred Fifty and No/100 Dollars ($4,456,250) on July 12,
2007 ("Maturity Date"). Subject to the subordination terms herein, all principal
and accrued interest shall be payable on the Maturity Date.

1.       DEFINITIONS

         1.1      "AGENT" means the Administrative Agent under that certain
Credit Agreement, dated as of July 11, 1998, among NationsBank, as
Administrative Agent, Able, and the Several Lenders from time to time parties
thereto, as the same may be or may have been amended, restated, modified,
renewed or replaced from time to time (the "Credit Agreement").

         1.2      "BANKS" means the lenders from time to time identified as a
"Lender" in the Credit Agreement.

         1.3      "BORROWER" shall have the meaning given in the Credit
Agreement.

         1.4      "OBLIGATIONS" shall have the meaning given in the Credit
Agreement.

         1.5      "SUBORDINATED DEBT" shall mean at any time, all principal of
and interest on and premiums (if any) related to this Second Amended and
Restated 11.5% Subordinated Promissory Note (this "Note") and any collateral
securing the payment of the same.

         1.6      "SUPERIOR DEBT" shall mean the Obligations of the Borrower
under the Credit Agreement, including all principal of and interest on and
premiums (if any) related thereto and any collateral securing the payment of the
same.

2.       AMENDMENT This Note amends and restates that certain "Amended and
Restated 11.5% Subordinated Promissory Note" by Able dated as of January 11,
2000, payable to the order of WorldCom in the principal amount of $4,456,250
(the "Prior Note"). The Prior Note replaced that certain "11.5% Promissory Note"
of Able dated as of September 1, 1998, payable to the order of WorldCom in the
principal amount of $30,000,000, the balance of which was converted to equity in
Able. This note replaced that certain promissory note of Able dated as of July
2, 1998, payable to the order of MFS Communications Corporation, Inc. in the
original principal amount of $86,405,217. The instruments described in this
paragraph have been cancelled.


<PAGE>   2

3.       SUBORDINATION.

         3.1      Able and WorldCom (the "Subordinated Lender") acknowledge and
agree that notwithstanding anything to the contrary herein, at all times, the
principal amount of any outstanding debt of Able to the Subordinated Lender
shall be subordinated to the Superior Debt. Until the indefeasible payment in
full of the Superior Debt: (a) the payment of the principal amount or fees and
premiums, if any (including payments of interest), on all Subordinated Debt
shall be subordinated to the payment in full of all Superior Debt; (b) Able will
not make and the Subordinated Lender will not take or receive from Able, in any
manner, payment of the whole or any part of the principal of and interest on and
fees and premiums, if any, of the Subordinated Debt; and (c) the Subordinated
Lender will not take any action towards the enforcement of any liens in respect
of any or all of the Subordinated Debt, or exercise any rights granted under
such liens in respect of the collateral subject thereto.

         3.2      Upon any distribution of assets of Able to its creditors upon
any dissolution, winding-up, total or partial liquidation, readjustment of debt,
reorganization or similar proceeding of Able or its property, or in any
bankruptcy, insolvency, receivership, assignment for the benefit of creditors,
marshaling of assets and liabilities of Able, or other proceeding, whether any
of the foregoing is voluntary or involuntary, partial or complete, all amounts
due on the Superior Debt including all interest, fees and costs of collections,
including attorneys' fees and expenses shall first be paid in full before the
Subordinated Lender shall be entitled to receive or retain any payment or
distribution from Able in respect of the Subordinated Debt.

         3.3      Notwithstanding the foregoing paragraphs and without any
derogation thereof, if upon any such dissolution, winding-up, liquidation,
readjustment, reorganization or other proceeding, any payment or distribution of
assets or securities of Able of any kind or character, whether in cash, property
or securities, shall be received by the Subordinated Lender in respect of the
Subordinated Debt before all the Superior Debt is indefeasibly paid in full,
such payment or distribution will be held in trust for the benefit of, and shall
promptly be paid over in trust for the benefit of, and in the form received
(duly endorsed, if necessary, to the holders of the Superior Debt) to the
holders of the Superior Debt (or their appointed trustee or agent) for
application to the payment of the Superior Debt until all the Superior Debt
shall have been paid in full.

4.       INTEREST.

         4.1      Interest on the unpaid principal amount hereof from time to
time shall accrue at an annual rate of 8% from the date hereof. Interest
hereunder shall be computed on the basis of the actual number of days elapsed
over a year of 360 days.

         4.2      Any amount hereunder that becomes due on a Saturday, Sunday or
other day when banks in New York are not open for business shall be payable on
the next business day when such banks are open for business (a "Business Day")
with interest accruing until the date of payment.

         4.3      If any amount owned by Able hereunder is not paid when due,
such amount will bear interest at a rate equal to 10.5% per annum (the "Default
Rate"), payable on demand by


                                      -2-
<PAGE>   3

WorldCom. Nothing herein contained shall be construed or so operate as to
require Able to pay any interest, fees, costs or charges at a rate or in an
amount greater than is permitted by applicable law.

         4.4      Upon a default in payment of principal, interest or other
amounts owing hereunder when due, the unpaid principal amount of this
subordinated note, together with all accrued but unpaid interest thereon, may
become, or may be declared to be, (and in the case of a bankruptcy or insolvency
proceeding naming Able as debtor, shall, without action on the part of WorldCom,
become), immediately due and payable, without presentation, demand, protest or
notice of any kind, all of which are hereby waived by Able.

         4.5      Able agrees to pay on demand all direct out-of-pocket losses,
and reasonable out-of-pocket costs and expenses, if any (including reasonable
fees and expenses of outside counsel), of WorldCom in connection with the
enforcement (whether by legal proceedings, negotiation or otherwise) of this
Note and other documents delivered hereunder.

         4.6      Upon the occurrence and during the continuance of any default
hereunder, but subject to the subordination provisions hereof, WorldCom is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all amounts of other indebtedness
at any time owning by WorldCom to or for the credit or the account of Able
against any and all of the obligations of Able now or hereafter existing under
this Note, irrespective of whether or not WorldCom shall have made any demand
under this Note and of whether or not such obligations may be matured. Such set
off amounts shall be applied first to principal and then to interest. WorldCom
agrees promptly to notify Able and the Agent after such set off and application
made by WorldCom, but the failure to give such notice shall not affect the
validity of such set-off and application subject to all liens in favor of the
Agent or the Banks. The rights of the WorldCom under this paragraph are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which WorldCom may have and are subject to any rights any
holders of Superior Debt may have.

5.       NO PREPAYMENT. No principal hereof or interest thereon shall be
prepayable.

6.       WAIVER.

         6.1      In the event this Note is transferred, assigned or pledged,
Able hereby waives, as against such transferee, assignee or pledges, any
defenses and counterclaim that Able may have against the prior holder hereof.

         6.2      The Subordinated Lender hereby waives: (i) notice of
acceptance by the holders of the Superior Debt hereof, (ii) notice of the
existence or creation or nonpayment of all or any of the Superior Debt; and
(iii) all diligence in collection or protection of or realization upon the
Superior Debt or any thereof or any security therefor.

7.       NO IMPAIRMENT OF RIGHTS. Nothing herein contained shall impair, as
between Able and the Subordinated Lender, the obligation of Able, which
(although it is restricted hereby) is absolute and unconditional, to make
payments of the Subordinated Debt as and when the same shall become due


                                      -3-
<PAGE>   4

and payable in accordance with its terms (as restricted hereby), or affect the
relative rights of the Subordinated Lender and creditors of Able other than
holders of Superior Debt.

8.       BINDING AGREEMENT. The provisions hereof shall be binding upon the
Subordinated Lender and Able and upon their successors. All references to Able
and the Subordinated Lender, respectively, shall be deemed to include their
respective successors, whether immediate or remote, and all references to Able
and the Subordinated Lender shall be deemed to include their respective
subsidiaries.

9.       CHOICE OF LAW, VENUE. Any suit, action or proceeding arising out of or
in connection with the provisions hereof relating to subordination may be
brought against Able or the Subordinated Lender in a court in Florida of record
of the State of Florida, or a United States District Court sitting in Florida
and each of the Able and the Subordinated Lender hereby irrevocably submits and
consents to the jurisdiction of each such court and agrees that any summons,
complaint, writ, judgment or other notice or service of legal process may be
sufficiently served upon it in connection with any such suit, action or
proceeding. In any suit, action or proceeding relating to the subordination
hereunder, each of Able and the Subordinated Lender waives, to the fullest
extent not prohibited by applicable law, any objection which it may now or
hereafter have to the laying of the venue of any suit, action or proceeding
brought in such court and any claim that the same was brought in an inconvenient
forum. The submission to the said jurisdiction shall not (and shall not be
construed so as to) limit the right of the holders of the Superior Debt, or any
of them, or any agent on their behalf, to take proceedings against Able or the
Subordinated Lender. This Note shall be governed by and construed in accordance
with the laws of the state of Florida without regard to conflicts of law
provisions thereof.

10.      SURVIVAL. If any provision or obligations of this Note shall be
determined to be invalid, ineffective of unenforceable, the validity,
effectiveness and enforceability of the remaining provisions or obligations
shall not in way be affected or impaired thereby.

11.      RELATION TO AGREEMENT. This Note is the "Subordinated Note" referred to
in the Amended and Restated Agreement Regarding Promissory Note, dated as of
April 1, 1999 (the "Related Agreement"), between Able and WorldCom which
provides, among other things, for the source of payments hereon subject to the
subordination provisions hereof and thereof.

12.      ENTIRE AGREEMENT. THIS NOTE, TOGETHER WITH THE RELATED AGREEMENT,
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

                            [Signature page follows]


                                      -4-
<PAGE>   5

         IN WITNESS WHEREOF, Able has caused this Note to be executed and
delivered by its duly authorized officer as of the date first above written.

                            ABLE TELCOM HOLDING CORP.


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

         IN WITNESS WHEREOF, WorldCom hereby affirms by execution below,
WorldCom's agreement to the terms and conditions stated herein, reaffirms the
Subordination provisions of Section 3 hereof and waives any rights WorldCom may
have had under the Prior Note in exchange for the rights provided WorldCom under
this Note.

                            WORLDCOM NETWORK SERVICES, INC.



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

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.6
<SEQUENCE>4
<FILENAME>g63952aex2-6.txt
<DESCRIPTION>AGREEMENT & PLAN OF MERGER, AUGUST 23, 2000
<TEXT>

<PAGE>   1
                                                                    EXHIBIT 2.6

                          AGREEMENT AND PLAN OF MERGER

                          DATED AS OF AUGUST 23, 2000,

                                      AMONG

                             BRACKNELL CORPORATION,

                       BRACKNELL ACQUISITION CORPORATION,

                                       AND

                            ABLE TELCOM HOLDING CORP.


<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                      Page

<S>                                                                                                   <C>
ARTICLE I.       INTERPRETATION.........................................................................7

ARTICLE II.      THE MERGER............................................................................15
         SECTION 2.01   The Merger.....................................................................15
         SECTION 2.02   Conversion of Shares...........................................................16
         SECTION 2.03   Surrender and Payment..........................................................17
         SECTION 2.04   Adjustments....................................................................18
         SECTION 2.05   Fractional Shares..............................................................18
         SECTION 2.06   Dissenting Shares..............................................................19

ARTICLE III.     THE SURVIVING CORPORATION.............................................................19
         SECTION 3.01   Certificate of Incorporation...................................................19
         SECTION 3.02   Bylaws.........................................................................19
         SECTION 3.03   Directors and Officers.........................................................19

ARTICLE IV.      REPRESENTATIONS AND WARRANTIES OF ABLE................................................20
         SECTION 4.01   Corporate Existence and Power..................................................20
         SECTION 4.02   Corporate Authorization........................................................20
         SECTION 4.03   Governmental Authorization.....................................................20
         SECTION 4.04   Non-Contravention..............................................................21
         SECTION 4.05   Capitalization.................................................................21
         SECTION 4.06   Subsidiaries...................................................................22
         SECTION 4.07   SEC Filings....................................................................22
         SECTION 4.08   Financial Statements...........................................................23
         SECTION 4.09   Proxy Statement/Prospectus; Registration Statement.............................23
         SECTION 4.10   Absence of Certain Changes.....................................................23
         SECTION 4.11   No Undisclosed Material Liabilities............................................25
         SECTION 4.12   Real Property..................................................................26
         SECTION 4.13   Personal Property..............................................................28
         SECTION 4.14   Accounts Receivable............................................................28
         SECTION 4.15   Contracts......................................................................28
         SECTION 4.16   Litigation.....................................................................29
         SECTION 4.17   Taxes..........................................................................29
         SECTION 4.18   Tax Free Merger................................................................30
         SECTION 4.19   ERISA..........................................................................31
         SECTION 4.20   Environmental Matters..........................................................33
         SECTION 4.21   Intellectual Property..........................................................33
         SECTION 4.22   Employees......................................................................34
         SECTION 4.23   Intercompany Agreements........................................................34
         SECTION 4.24   Certain Payments...............................................................34
         SECTION 4.25   Customers and Suppliers........................................................34
         SECTION 4.26   Canadian Competition Act.......................................................34
</TABLE>


<PAGE>   3

<TABLE>
<S>                                                                                                    <C>
         SECTION 4.27   Rights Plan....................................................................34
         SECTION 4.28   Compliance With Other Applicable Laws..........................................35
         SECTION 4.29   Insurance......................................................................35
         SECTION 4.30   Bonds..........................................................................31
         SECTION 4.31   Bankruptcy and Insolvency Proceedings..........................................31
         SECTION 4.32   Broker's Fees..................................................................35
         SECTION 4.33   Vote Required..................................................................36
         SECTION 4.34   Opinion of Financial Advisor...................................................32

ARTICLE V.       REPRESENTATIONS AND WARRANTIES OF BRACKNELL AND SUBCO.................................36
         SECTION 5.01   Corporate Existence and Power..................................................36
         SECTION 5.02   Corporate Authorization........................................................36
         SECTION 5.03   Governmental Authorization.....................................................36
         SECTION 5.04   Non-Contravention..............................................................37
         SECTION 5.05   Capitalization.................................................................37
         SECTION 5.06   Canadian Securities Law and Bracknell Financial Statements.....................38
         SECTION 5.07   Proxy Statement/Prospectus; Registration Statement.............................39
         SECTION 5.08   No Undisclosed Material Liabilities............................................39
         SECTION 5.09   Absence of Certain Changes.....................................................40
         SECTION 5.10   Litigation.....................................................................40
         SECTION 5.11   Taxes..........................................................................41
         SECTION 5.12   Tax Free Merger................................................................41
         SECTION 5.13   Compliance With Other Applicable Laws..........................................42
         SECTION 5.14   Brokers........................................................................43
         SECTION 5.15   Certain Payments...............................................................43
         SECTION 5.16   Interim Operations of Subco....................................................43
         SECTION 5.17   Authorization for Bracknell Common Stock.......................................43

ARTICLE VI.      COVENANTS OF ABLE.....................................................................43
         SECTION 6.01   Conduct of Able................................................................43
         SECTION 6.02   Stockholder Meeting............................................................45
         SECTION 6.03   Access to Information..........................................................45
         SECTION 6.04   Other Offers...................................................................45
         SECTION 6.05   Notice of Certain Events.......................................................47
         SECTION 6.06   Affiliates.....................................................................48
         SECTION 6.07   Litigation.....................................................................48
         SECTION 6.08   Officers.......................................................................48
         SECTION 6.09   Able Options and Able Warrants.................................................48
         SECTION 6.10   Bracknell Option...............................................................48
         SECTION 6.11   Certain Rights to Acquire Able Shares..........................................49
         SECTION 6.12   Sirit Settlement...............................................................49
         SECTION 6.13   Employee Stock Options.........................................................49
         SECTION 6.14   Series C Conversion............................................................49
         SECTION 6.15   Support Agreements from Series C Stockholders..................................49
</TABLE>


                                       2
<PAGE>   4

<TABLE>
<S>                                                                                                    <C>
         SECTION 6.16   New Jersey Contract............................................................49
         SECTION 6.17   World Com Series D Debt........................................................49
         SECTION 6.18   Canadian Competition Act.......................................................49
         SECTION 6.19   Opinion of Financial Advisor...................................................50
         SECTION 6.20   Bankruptcy and Insolvency Proceedings..........................................50

ARTICLE VII.     COVENANTS OF BRACKNELL AND SUBCO......................................................50
         SECTION 7.01   Conduct of Bracknell and Subco.................................................50
         SECTION 7.02   Access to Information..........................................................51
         SECTION 7.03   Obligations of Subco...........................................................51
         SECTION 7.04   Stock Exchange Listing.........................................................51
         SECTION 7.05   Notice of Certain Events.......................................................51
         SECTION 7.06   Financing Relating to the Merger...............................................51
         SECTION 7.08   Opinion of Financial Advisor...................................................51
         SECTION 7.09   Replacement Options............................................................48

ARTICLE VIII.    COVENANTS OF BRACKNELL AND ABLE.......................................................52
         SECTION 8.01   Commercially Reasonable Best Efforts...........................................52
         SECTION 8.02   Certain Filings................................................................52
         SECTION 8.03   Public Announcements...........................................................53
         SECTION 8.04   Further Assurances.............................................................53
         SECTION 8.05   Preparation of the Proxy Statement/Prospectus and Registration Statement.......53

ARTICLE IX.      CONDITIONS TO THE MERGER..............................................................53
         SECTION 9.01   Conditions to the Obligations of Each Party....................................53
         SECTION 9.02   Additional Conditions Precedent to the Obligations of Bracknell................54
         SECTION 9.03   Additional Conditions Precedent to the Obligations of Able.....................57

ARTICLE X.       TERMINATION...........................................................................57
         SECTION 10.01  Termination by Bracknell or Able...............................................57
         SECTION 10.02  Termination by Able............................................................59
         SECTION 10.03  Termination by Bracknell.......................................................59
         SECTION 10.04  Effect of Termination..........................................................59

ARTICLE XI.      MISCELLANEOUS.........................................................................60
         SECTION 11.01  Notices........................................................................60
         SECTION 11.02  Survival of Representations and Warranties.....................................62
         SECTION 11.03  Amendments; No Waivers.........................................................62
         SECTION 11.04  Fees and Expenses..............................................................62
         SECTION 11.05  Successors and Assigns.........................................................63
         SECTION 11.06  Governing Law..................................................................63
         SECTION 11.07  Counterparts; Effectiveness....................................................63
         SECTION 11.08  Entire Agreement...............................................................63
         SECTION 11.09  Exhibits and Schedules.........................................................63
</TABLE>


                                       3
<PAGE>   5

<TABLE>
         <S>                                                                                           <C>
         SECTION 11.10  Headings.......................................................................63
         SECTION 11.11  Severability of Provisions.....................................................63
</TABLE>


                                       4
<PAGE>   6

                                    EXHIBITS

<TABLE>
<S>                 <C>
Exhibit A           Form of Warrant
Exhibit B           Form of Option
Exhibit C           Sirit Support Agreement
Exhibit D           Support Agreement from Series C Stockholders
Exhibit E           Commitment Agreement
Exhibit F           Support Agreements with Directors and Officers
Exhibit G           Amended and Restated Master Services Agreement
Exhibit H           Form of Opinion - Paul, Hastings, Janofsky & Walker LLP
Exhibit I           Form of Opinion - Torys
Exhibit J           Terms of Series D Shares
</TABLE>
                                    SCHEDULES

<TABLE>
<S>                       <C>
Schedule 2.02(e)          Stock Appreciation Rights
Schedule 4.04             Non-Contravention
Schedule 4.05(a)(i)       Options Inside Stock Option Plan
Schedule 4.05(a)(ii)      Options Outside Stock Option Plan
Schedule 4.05(a)(iii)     Additional Options, Warrants or Other Rights
Schedule 4.05(a)(iv)      Phantom Stock and Stock Appreciation Rights
Schedule 4.05(c)          Stockholder Agreements
Schedule 4.06(i)          Subsidiaries
Schedule 4.06(ii)         Subsidiary Stock
Schedule 4.06(iii)        Ownership of Subsidiary Stock
Schedule 4.10             Absence of Certain Changes
Schedule 4.10(m)          Severances
Schedule 4.11             Liabilities
Schedule 4.12(a)          Owned Real Property
Schedule 4.12(b)          Leased Real Property
Schedule 4.12(c)          Easements
Schedule 4.12(d)          Real Property subject to a Lease, Sublease, License or
                          other Agreement
Schedule 4.12(g)          Title Policies
Schedule 4.13(b)          Leased Personal Property
Schedule 4.14             Accounts Receivable
Schedule 4.15(i)          Material Contracts
Schedule 4.15(ii)         Material Breaches of Contracts
Schedule 4.17(i)          Filing of Tax Returns
Schedule 4.17(ii)         Tax Deficiencies
Schedule 4.17(iii)        Deferred Intercompany Transactions
Schedule 4.17(iv)         Tax Audits
Schedule 4.19(a)          Employee Plans
</TABLE>


                                       5
<PAGE>   7

<TABLE>
<S>                       <C>
Schedule 4.19(h)          Severance Pay
Schedule 4.20             Environmental Mattes
Schedule 4.21             Intellectual Property Assets
Schedule 4.22             Collective Bargaining/Labor Union Agreement
Schedule 4.23             Intercompany Agreements
Schedule 4.28             Compliance with Laws
Schedule 4.30             Bonds
Schedule 4.32             Broker's Fees
Schedule 5.04             Non-Contravention
Schedule 5.05(a)          Existing Options, Warrants or other Rights
Schedule 5.05(b)          Capital Stock and Ownership Interests
Schedule 5.08             Liabilities
Schedule 5.09             Absence of Certain Changes
Schedule 5.10             Litigation
Schedule 5.11(i)          Tax Returns
Schedule 5.11(ii)         Tax Deficiencies
Schedule 5.13             Compliance with Laws
Schedule 5.14             Broker's Fees
Schedule 6.01(e)          Permitted Subsidiary Security Transactions
Schedule 6.09             Outstanding Rights to Acquire Able Securities
Schedule 6.11             Former Stockholders of GEC, SASCO and SES
Schedule 9.02(c)          Officers, Directors and other Signatories to Support Agreements
</TABLE>


                                       6
<PAGE>   8

                          AGREEMENT AND PLAN OF MERGER

                  AGREEMENT AND PLAN OF MERGER, dated as of August 23, 2000,
among Bracknell Corporation, an Ontario corporation ("Bracknell"), Bracknell
Acquisition Corporation, a Florida corporation and a wholly owned subsidiary of
Bracknell ("Subco"), and Able Telcom Holding Corp., a Florida corporation
("Able").

                  WHEREAS, the Boards of Directors of Bracknell, Subco and Able
each have determined that it is in the best interests of their respective
stockholders for Subco to merge with and into Able (the "Merger") upon the terms
and subject to the conditions of this Agreement; and

                  WHEREAS, for U.S. federal income tax purposes, it is intended
that the Merger shall qualify as a reorganization within the meaning of Section
368(a) of the Code (as defined below).

                  NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, the parties hereto, intending to be legally bound, agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

                  For purposes of this Agreement, the capitalized terms used in
this Agreement shall have the meanings set forth below:

                  "Able" shall have the meaning set forth in the preface above.

                  "Able Authorized Capital Stock" shall have the meaning set
forth in Section 4.05(a).

                  "Able Employees" shall have the meaning set forth in Section
4.22.

                  "Able's Knowledge" means the actual knowledge, after making
due inquiry, of the following officers of Able and its Subsidiaries: Billy V.
Ray, James Brands, Michael Brenner, Edward Pollock, Robert Sommerfeld, Edwin
Johnson, Barry Hall, Philip Kiernan, Charles Maynard, Harold Alvord, Phillip
Galpin and Richard Boyle.

                  "Able Material Adverse Change" shall have the meaning set
forth in Section 4.01.

                  "Able Material Adverse Effect" shall have the meaning set
forth in Section 4.01.

                  "Able Preferred Stock" shall have the meaning set forth in
Section 4.05(a).



                                       7
<PAGE>   9

                  "Able SEC Filings" shall have the meaning set forth in Section
4.07(a).

                  "Able Securities" means any equity, debt or other securities
issued by Able, or rights to acquire such securities.

                  "Able Shares" shall have the meaning set forth in Section
2.02(b).

                  "Able Significant Subsidiary" shall have the meaning set forth
in Section 4.01.

                  "Able Stock Options" shall have the meaning set forth in
Section 4.05(a).

                  "Able Subsidiary Securities" means any equity, debt or other
securities issued by a Subsidiary of Able, or rights to acquire such securities.

                  "Able 10-K" shall have the meaning set forth in Section
4.07(a).

                  "Accounts Receivable" means all accounts receivable, trade
receivables, notes receivable and other receivables, which in any case are
payable as a result of goods sold or services provided, or billed for, in
connection with the Business.

                  "Acquisition Proposal" shall have the meaning set forth in
Section 6.04(a).

                  "Action" means any action, suit, arbitration, inquiry,
proceeding or investigation by or before any Governmental Authority or
arbitrator.

                  "Affiliate" means, with respect to any Person, any other
Person controlling, controlled by, or under common control with such Person. For
purposes of this Agreement, the term "control" (including, with correlative
meanings, the terms "controlled by" and "under common control with" as used with
respect to any Person) means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person whether through ownership of voting securities, by contract or otherwise.

                  "Agreement" means this Agreement together with the attached
Appendices, Schedules and Exhibits.

                  "Authorized Bracknell Capital Stock" shall have the meaning
set forth in Section 5.05(a).

                  "Benefit Arrangement" shall have the meaning set forth in
Section 4.19(g).

                  "Bracknell" shall have the meaning set forth in the preface
above.

                  "Bracknell Common Stock" shall have the meaning set forth in
Section 2.02(b).

                  "Bracknell Disclosure Documents" shall have the meaning set
forth in Section 5.06(a).


                                       8
<PAGE>   10

                  "Bracknell Material Adverse Change" shall have the meaning set
forth in Section 5.01.

                  "Bracknell Material Adverse Effect" shall have the meaning set
forth in Section 5.01.

                  "Bracknell Option" shall have the meaning set forth in Section
6.10.

                  "Bracknell's Knowledge" means the actual knowledge, after
making due inquiry, of any of the following officers of Bracknell: Paul D.
Melnuk, John D. Amodeo, John Naccarato, Frederick Green, Jon Taylor, David Smith
and the President of each of Bracknell's customer categories as of the date
hereof.

                  "Bracknell Stock Options" shall have the meaning set forth in
Section 5.05(a).

                  "Bracknell Voting Debt" shall have the meaning set forth in
Section 5.05(b).

                  "Business" means (a) with respect to Able or its Subsidiaries,
all business conducted by Able or any of its Subsidiaries prior to the Closing
Date, and (b) with respect to Bracknell and its Subsidiaries, all business
conducted by Bracknell or any of its Subsidiaries prior to the Closing Date.

                  "Canadian GAAP" means Canadian generally accepted accounting
principles in effect at the time and applied on a basis consistent with past
periods.

                  "Closing" means the consummation of the Merger and the other
transactions contemplated hereby.

                  "Closing Date" shall have the meaning set forth in Section
2.01(c).

                  "Code" means the U.S. Internal Revenue Code of 1986, as
amended from time to time, and the rules and regulations promulgated thereunder.

                  "Conversion Number" shall have the meaning set forth in
Section 2.02(b).

                  "Dissenting Shares" shall have the meaning set forth in
Section 2.06(a).

                  "Dollars" or "$" means lawful currency of the U.S., unless
otherwise specified.

                  "Easement" shall have the meaning set forth in Section 4.12
(c).

                  "Easement Contract" shall have the meaning set forth in
Section 4.12(c).

                  "Effective Time" shall have the meaning set forth in Section
2.01(c).

                  "Employee Plans" shall have the meaning set forth in Section
4.19(a).


                                       9
<PAGE>   11

                  "Environment" means all air (including indoor air), surface
water (including navigable waters, ocean waters, streams, ponds, drainage
basins, and wetlands), groundwater, drinking water supplies, land and soil
(surface or subsurface), any other environmental medium, all plant and animal
life, biota and all other natural resources.

                  "Environmental Claim" means any and all Actions, Orders,
claims, Liens, notices, notices of violation, investigations, complaints,
requests for information, proceedings or other communications (written or oral),
whether criminal or civil, pursuant to or relating to any applicable
Environmental Law by any Person (including any Governmental Authority or
citizen's group) based upon, alleging, asserting, or claiming any actual or
potential (i) violation of or liability under any Environmental Law, (ii)
violation of or liability under any Environmental Permit, or (iii) liability for
investigation costs, cleanup costs, removal costs, remediation costs, response
costs, natural resource damages, property damage, personal injury, fines or
penalties arising out of, based on, resulting from, or relating to the presence,
Release, or threatened Release in or into the Environment, of any Hazardous
Materials at any location, including any off-Site location to which Hazardous
Materials or materials containing Hazardous Materials were sent for handling,
recycling, storage, treatment or disposal.

                  "Environmental Cleanup Site" means any location which is
listed or proposed for listing on the National Priorities List, the
Comprehensive Environmental Response, Compensation and Liability Information
System, or on any similar list maintained by any jurisdiction of sites requiring
investigation or cleanup, or which is the subject of any pending or threatened
Action related to or arising from any alleged violation of any Environmental
Law.

                  "Environmental Law" means any Law governing or relating to
pollution, protection of human health or the Environment, air emissions, water
discharges, hazardous or toxic substances, solid or hazardous waste, or
occupational health and safety, or any similar Law of foreign jurisdictions
where Able or its Subsidiaries do business, including without limitation the
U.S. Federal Water Pollution Control Act, the U.S. Clean Air Act, the U.S. Solid
Waste Disposal Act as amended by the Resource Conservation and Recovery Act
(RCRA), the Hazardous Materials Transportation Act (HMTA), the Federal
Insecticide, Fungicide, and Rodenticide Act (FIFRA), the U.S. Comprehensive
Environmental Response, Compensation and Liability Act (CERCLA), as amended by
the Superfund Amendment and Reauthorization Act (SARA), the U.S. Emergency
Planning and Community Right-To-Know Act (EPCRA), the U.S. Toxic Substances
Control Act (TSCA), the U.S. Safe Drinking Water Act (SDWA), and the U.S.
Occupational Safety and Health Act (OSHA), all as amended, and the rules and
regulations thereunder as interpreted by Governmental Authorities.

                  "Environmental Permit" means any Permit relating to any
Environmental Law and includes any and all Orders, consents, or settlements
issued by or entered into with a Governmental Authority under any Environmental
Law.

                  "ERISA" shall have the meaning set forth in Section 4.19(a).

                  "Exchange Act" means the U.S. Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.


                                       10
<PAGE>   12

                  "Exchange Agent" shall have the meaning set forth in Section
2.03(a).

                  "Exchange Filing Requirements" shall have the meaning set
forth in Section 5.06(a).

                  "First Able Stockholder Meeting" shall have the meaning set
forth in Section 6.02(a).


                  "Florida General Corporation Law" means the general
corporation laws of the State of Florida.

                  "GAAP" means U.S. generally accepted accounting principles in
effect at the time and applied on a basis consistent with past periods.

                  "GEC" means Georgia Electric Corporation.

                  "Governmental Authority" means, with respect to any country,
any federal, state, provincial, or local government, any of its subdivisions,
agencies, authorities, commissions, boards, bureaus or other governmental
entity, and any federal, state, provincial or local court or tribunal and any
arbitrator.

                  "Hazardous Material" means petroleum, petroleum hydrocarbons
or petroleum products, petroleum by-products, radioactive materials, asbestos or
asbestos-containing materials, gasoline, diesel fuel, pesticides, radon, urea
formaldehyde, lead or lead-containing materials, polychlorinated biphenyls, and
any other chemicals, materials, substances or wastes in any amount or
concentration which are categorized, classified, defined as or included in the
definition of "hazardous substances," "hazardous materials," "hazardous wastes,"
"toxic substances," "toxic pollutants," "pollutants," "regulated substances,"
"solid wastes," or "contaminants" under any Environmental Law.

                  "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the regulations promulgated thereunder.

                  "Intellectual Property" means trademarks, service marks,
patents, patent applications, software, registered copyrights and applications
therefor, together with trade secrets, know-how and other similar property
whether registered or unregistered.

                  "Intellectual Property Assets" shall have the meaning set
forth in Section 4.21.

                  "Law" means, with respect to any country, any federal, state,
provincial, local or other statute, rule, regulation or ordinance, and any
requirement or obligation under common law.

                  "Lease" means any lease or sublease of real or personal
property.

                  "Leased Personal Property" shall have the meaning set forth in
Section 4.13(b).


                                       11
<PAGE>   13

                  "Leased Real Property" shall have the meaning set forth in
Section 4.12(b).

                  "Liability" means any debt, obligation, duty or liability of
any nature (including any undisclosed, unfixed, unliquidated, unsecured,
unmatured, unaccrued, unasserted, contingent, conditional, inchoate, implied,
vicarious, joint, several or secondary liability), regardless of whether such
debt, obligation, duty or liability would be required to be disclosed on a
balance sheet prepared in accordance with GAAP or Canadian GAAP.

                  "Lien" means any lien, mortgage, deed of trust, security
interest, charge, pledge, retention of title agreement, easement, encroachment,
condition, reservation, covenant or other encumbrance affecting title or the
use, benefit or value of the asset in question.

                  "Material Contracts" shall have the meaning set forth in
Section 4.15.

                  "Material Lease" means (i) all Leases relating to the Leased
Real Property and (ii) a Lease relating to Leased Personal Property involving a
term of more than one (1) year or rental obligations exceeding $100,000 per
annum.

                  "Material Litigation" means any Action (involving Able or any
of its Subsidiaries) by any Person or by or before any Governmental Authority
that involves claims in excess of $1,000,000 or that could reasonably be
expected to result in an Able Material Adverse Change or an Able Material
Adverse Effect.

                  "Merger" shall have the meaning set forth in the preface
above.

                  "Merger Consideration" shall have the meaning set forth in
Section 2.02(b).

                  "New Jersey Contract" means the contract between Adesta and
the New Jersey Turnpike Authority dated March 10, 1998, as amended.

                  "Option Recipients" shall have the meaning set forth in
Section 7.08.

                  "Order" means any order, judgment, injunction, decree,
determination or award of any Governmental Authority or arbitrator.

                  "Other Applicable Law" means any Law applicable to the
Business other than an Environmental Law or a law relating to (a) Taxes or (b)
ERISA.

                  "Owned Real Property" shall have the meaning set forth in
Section 4.12(a).

                  "Permit" means any permit, license, certificate (including a
certificate of occupancy), registration, authorization, consent, or approval
issued by a Governmental Authority.

                  "Permitted Liens" means (a) Liens for Taxes that are not yet
due and payable or that are being contested in good faith by appropriate
proceedings and as to which adequate reserves have been established in
accordance with GAAP or Canadian GAAP, as the case may


                                       12
<PAGE>   14

be, consistently applied, (b) workers', repairmen's and similar Liens imposed by
Law that have been incurred in the ordinary course of business and consistent
with past practice which in the aggregate will not have an Able Material Adverse
Effect or Bracknell Material Adverse Effect, as the case may be, (c) Liens and
other title defects, easements, encroachments and encumbrances that do not,
individually or in the aggregate, materially impair the value or continued use
of the property (as currently used) to which they relate, (d) the rights of
others to customer deposits which in the aggregate will not have an Able
Material Adverse Effect or Bracknell Material Adverse Effect, as the case may
be, (e) any of the Liens described in the foregoing clauses (a) through (d) of
this definition incurred in the ordinary course of business and consistent with
past practice, after the date hereof which in the aggregate will not have an
Able Material Adverse Effect or Bracknell Material Adverse Effect, as the case
may be, and (f) any Liens relating to that certain Credit Agreement by and among
Able, the Lenders (as defined therein) from time to time parties thereto, and
Bank of America N.A. (successor to NationsBank N.A.), as amended from time to
time, (g) Liens of Governmental Authorities which are parties to rights of way
or easement agreements with Able or its Subsidiaries, except for any Liens which
result from a default under or breach by Able or its Subsidiaries of such
agreements, and (h) any Liens obtained by Able or its Subsidiaries that sureties
may have pursuant to surety bonds obtained by Able or its Subsidiaries, provided
that Able or its Subsidiaries are not in default under the contracts (or
indemnity agreements) that those bonds relate to.

                  "Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or any agency or instrumentality thereof.

                  "Proxy Statement/Prospectus" shall have the meaning set forth
in Section 4.09.

                  "Real Property" shall have the meaning set out in Section
4.12(d).

                  "Registration Statement" shall have the meaning set forth in
Section 4.09.

                  "Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or
disposing of a Hazardous Material into the Environment.

                  "Replacement Options" shall have the meaning set forth in
Section 7.08.

                  "Returns" means all returns, reports, declarations or other
filings that must be filed with any Governmental Authority with respect to
Taxes.

                  "SASCO" means Southern Aluminum & Steel Corporation.

                  "SEC" means the U.S. Securities and Exchange Commission.

                  "Second Able Stockholder Meeting" shall have the meaning set
forth in Section 6.02(b).

                  "Securities Act Affiliate" shall have the meaning set forth in
Section 6.06.


                                       13
<PAGE>   15

                  "Securities Act Affiliate Agreement" shall have the meaning
set forth in Section 6.06.

                  "Securities Act of 1933" means the U. S. Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.

                  "Series C Shares" shall have the meaning set forth in Section
4.05(a).

                  "Series C Stockholders" means Halifax Fund, L.P., The
Gleneagles Fund Company, Palladin Overseas Fund Limited, Palladin Partner I,
L.P., Lancer Securities (Cayman) Limited, PGEP III, LLC, and Quatro Fund
Limited.

                  "Series D Conversion Number" shall have the meaning set forth
in Section 2.02(d).

                  "Series D Shares" shall have the meaning set forth in Section
2.02(d).

                  "SES" means Specialty Electronic Systems, Inc.

                  "Sirit" means Sirit Technologies, Inc.

                  "Sirit Settlement" means the agreement dated July 7, 2000
between Able, Sirit and certain other parties entered into to settle certain
outstanding litigation between them.

                  "Site" means any of the real properties currently or
previously owned, leased or operated by Able or its Subsidiaries for purposes of
conducting their Business, including the Owned Real Property and the Leased Real
Property.

                  "Subco" shall have the meaning set forth in the preface above.

                  "Subco Common Stock" shall have the meaning set forth in
Section 2.02(a).

                  "Subsidiary" of a party means any corporation or other
organization, whether incorporated or unincorporated, of which such party or any
Subsidiary of such party is a general partner or of which such party or one or
more of its Subsidiaries or such party and one or more of its Subsidiaries,
directly or indirectly, owns or controls at least a majority of the securities
or other interests having by their terms ordinary voting power to elect a
majority of the Board of Directors or others performing similar functions with
respect to such corporation or other organization.

                  "Superior Proposal" shall have the meaning set forth in
Section 6.04(a).

                  "Surviving Corporation" shall have the meaning set forth in
Section 2.01(b).

                  "Tax" or "Taxes" means all federal, state, county, local and
foreign taxes (including, without limitation, income, profits, premium,
estimated, excise, sales, use, occupancy, gross receipts, franchise, ad valorem,
severance, capital levy, production, transfer,


                                       14
<PAGE>   16

withholding, employment, unemployment compensation, payroll related and property
taxes and import duties), whether or not measured in whole or in part by net
income, and including deficiencies, interest, additions to tax or interest, and
penalties with respect thereto.

                  "Terminating Party" shall have the meaning set forth in
Section 10.01(e).

                  "Title Policies" shall have the meaning set forth in Section
4.12(g).

                  "TSE" shall have the meaning set forth in Section 2.05.

                  "U.S." means the United States of America.

                  "Violation" shall have the meaning set forth in Section 4.04.

                  "Voting Debt" shall have the meaning set forth in Section
4.05(b).

                  "WorldCom" means WorldCom, Inc. or one of its Subsidiaries, as
the context requires.

                  "WorldCom Equity Interest" shall have the meaning set forth in
Section 2.02(e).

                  "WorldCom Series D Debt" shall have the meaning set forth in
Section 6.18.

                                   ARTICLE II

                                   THE MERGER

                  SECTION 2.01 The Merger.

                  (a)      Immediately prior to the Effective Time, Bracknell
         shall contribute the Merger Consideration to Subco in exchange for
         Subco Common Stock.

                  (b)      At the Effective Time, Subco shall be merged with and
         into Able in accordance with the Florida General Corporation Law,
         whereupon the separate existence of Subco shall cease, and Able shall
         be the surviving corporation (the "Surviving Corporation").

                  (c)      As soon as practicable after satisfaction or, to the
         extent permitted hereunder, waiver of all conditions to the Merger,
         Subco and Able will file a certificate of merger with the Secretary of
         State of the State of Florida and make all other filings or recordings
         required by the Florida General Corporation Law in connection with the
         Merger. The Closing will take place at the offices of Torys, 237 Park
         Avenue, New York, New York 10017-3142, unless another place is agreed
         to in writing by the parties hereto. The Merger shall become effective
         at such time as the certificate of merger is duly filed with the
         Secretary of State of the State of Florida or at such later time as is
         specified in the certificate of merger (the "Effective Time"). The date
         of the Closing is referred to herein as the "Closing Date".


                                       15
<PAGE>   17

                  (d) From and after the Effective Time, the Surviving
         Corporation shall possess all the assets (except for the Merger
         Consideration which the Able stockholders are entitled to receive),
         rights, privileges, powers and franchises and be subject to all of the
         liabilities, restrictions, disabilities and duties of Able and Subco,
         all as provided under the Florida General Corporation Law.

                  SECTION 2.02 Conversion of Shares. At the Effective Time:

                  (a) Each issued and outstanding share of the common stock of
         Subco (the "Subco Common Stock"), shall, by virtue of the Merger and
         without any action on the part of Bracknell, Subco or Able, be
         converted into one fully paid and non-assessable share of common stock
         of the Surviving Corporation.

                  (b) Except as set forth in Section 2.06, each share of common
         stock, par value $.001 per share, of Able ("Able Shares"), issued and
         outstanding immediately prior to the Effective Time (other than (i)
         Able Shares held by Able and (ii) Able Shares held by Bracknell or
         Subco) shall, by virtue of the Merger and without any action on the
         part of Bracknell, Subco, Able or any holder thereof, be converted into
         the right to receive 0.6 (the "Conversion Number") of a fully paid and
         non-assessable common share of Bracknell (the "Bracknell Common
         Stock"). The Bracknell Common Stock to be provided to Able stockholders
         pursuant to this Section 2.02(b) and Section 2.02(d), together with the
         warrants described in Section 2.02(e), is referred to herein as the
         "Merger Consideration."

                  (c) Each Able Share held by Able, Bracknell or Subco shall be
         cancelled and extinguished without any consideration therefor.

                  (d)      Each Series D Convertible Preferred Share of Able
         (the "Series D Shares") issued and outstanding immediately prior to the
         Effective Time (other than (i) Series D Shares held by Able and (ii)
         Series D Shares held by Bracknell or Subco) shall be converted into the
         right to receive the number of shares of Bracknell Common Stock
         determined by dividing the aggregate face value of all Series D Shares
         by $8.25 Canadian dollars and then dividing that quotient by the number
         of Series D Shares issued and outstanding immediately before the
         Effective Time (the "Series D Conversion Number"). For the purposes of
         this calculation, the exchange rate between U.S. dollars and Canadian
         dollars shall be the exchange rate published by the Bank of Canada at
         the close of business on the day before the Closing Date.

                  (e)      The stock appreciation rights described on Schedule
         2.02(e) (or, if such stock appreciation rights have been exchanged for
         options to acquire Able Shares, such options) (the "WorldCom Equity
         Interest") shall be converted into warrants to purchase 1,200,000
         shares of Bracknell Common Stock at an exercise price of $11.66 per
         share in cash. The terms of such warrants shall otherwise be as set
         forth in Exhibit A.


                                       16
<PAGE>   18

                  SECTION 2.03 Surrender and Payment.

                  (a)      Prior to the Effective Time, Bracknell shall appoint
         an agent reasonably acceptable to Able (the "Exchange Agent") for the
         purpose of exchanging certificates representing Able Shares and Series
         D Shares. As of the Effective Time, Subco shall deposit with the
         Exchange Agent for the benefit of the holders of Able Shares and Series
         D Shares, for exchange in accordance with this Section 2.03, through
         the Exchange Agent, certificates representing the shares of Bracknell
         Common Stock issuable pursuant to Section 2.02 in exchange for
         outstanding Able Shares and Series D Shares. Promptly after the
         Effective Time, Subco will send, or will cause the Exchange Agent to
         send, to each holder of Able Shares or Series D Shares at the Effective
         Time a letter of transmittal for use in such exchange (which shall
         specify that the delivery shall be effected, and risk of loss and title
         shall pass, only upon proper delivery of the certificates representing
         Able Shares or Series D Shares to the Exchange Agent).

                  (b)      Each holder of Able Shares or Series D Shares that
         have been converted into a right to receive Bracknell Common Stock,
         upon surrender to the Exchange Agent of a certificate or certificates
         representing such Able Shares or Series D Shares, together with a
         properly completed letter of transmittal covering such Able Shares or
         Series D Shares, will be entitled to receive in exchange therefor that
         number of whole shares of Bracknell Common Stock which such holder has
         the right to receive pursuant to Section 2.02, and the certificate or
         certificates for Able Shares or Series D Shares so surrendered shall be
         cancelled. Until so surrendered, each such certificate shall, after the
         Effective Time, represent for all purposes, only the right to receive
         upon such surrender a certificate representing shares of Bracknell
         Common Stock and cash in lieu of any fractional shares of Bracknell
         Common Stock as contemplated by this Section 2.03 and Section 2.05.

                  (c)      If any shares of Bracknell Common Stock are to be
         issued to a Person other than the registered holder of Able Shares or
         Series D Shares represented by the certificate or certificates
         surrendered in exchange therefor, it shall be a condition to such
         issuance that the certificate or certificates so surrendered shall be
         properly endorsed or otherwise be in proper form for transfer and that
         the Person requesting such issuance shall pay to the Exchange Agent any
         transfer Tax or other Taxes required as a result of such issuance to a
         Person other than the registered holder of such Able Shares or Series D
         Shares or establish to the satisfaction of the Exchange Agent that such
         Tax has been paid or is not payable.

                  (d)      After the Effective Time, there shall be no further
         registration of transfers of Able Shares or Series D Shares. If, after
         the Effective Time, certificates representing Able Shares or Series D
         Shares are presented to the Surviving Corporation, they shall be
         cancelled and exchanged as provided for, and in accordance with the
         procedures set forth, in this Article II.

                  (e)      Any shares of Bracknell Common Stock made available
         to the Exchange Agent pursuant to Section 2.03(a) that remain unclaimed
         by the holders of Able Shares or


                                       17
<PAGE>   19

         Series D Shares six months after the Effective Time shall be returned
         to Bracknell, upon demand, and any such holder who has not exchanged
         his Able Shares or Series D Shares in accordance with this Section
         prior to that time shall thereafter look only to Bracknell to exchange
         such Able Shares or Series D Shares. Notwithstanding the foregoing, the
         Surviving Corporation and Bracknell shall not be liable to any holder
         of Able Shares or Series D Shares for any amount paid, or any shares of
         Bracknell Common Stock delivered, to a public official pursuant to
         applicable abandoned property Laws. Any shares of Bracknell Common
         Stock or other amounts remaining unclaimed by holders of Able Shares or
         Series D Shares two years after the Effective Time (or such earlier
         date immediately prior to such time as such amounts would otherwise
         escheat to or become property of any Governmental Authority) shall, to
         the extent permitted by applicable Law, become the property of
         Bracknell free and clear of any claims or interest of any Person
         previously entitled thereto.

                  (f)      No dividends or other distributions on shares of
         Bracknell Common Stock shall be paid to the holder of any unsurrendered
         certificates representing Able Shares or Series D Shares until such
         certificates are surrendered as provided in this Section. Upon such
         surrender, there shall be paid, without interest, to the Person in
         whose name the certificates representing the shares of Bracknell Common
         Stock into which such Able Shares or Series D Shares were converted are
         registered, all dividends and other distributions paid in respect of
         such Bracknell Common Stock on a date subsequent to, and in respect of
         a record date after, the Effective Time.

                  SECTION 2.04 Adjustments. If at any time during the period
between the date of this Agreement and the Effective Time, any change in the
outstanding shares of Bracknell Common Stock, Able Shares or Series D Shares
shall occur, including by reason of any reclassification, recapitalization,
stock split or combination, exchange or readjustment of shares, or any stock
dividend thereon with a record date during such period, the Conversion Number
and the Series D Conversion Number shall be appropriately adjusted.

                  SECTION 2.05 Fractional Shares. No fractional shares of
Bracknell Common Stock shall be issued in the Merger. All fractional shares of
Bracknell Common Stock that a holder of Able Shares would otherwise be entitled
to receive as a result of the Merger shall be aggregated and if a fractional
share results from such aggregation, such holder shall be entitled to receive,
in lieu thereof, an amount in cash determined by multiplying the average of the
daily closing sale prices per share of Bracknell Common Stock on The Toronto
Stock Exchange (the "TSE") for the ten trading days next preceding the Effective
Time by the fraction of a share of Bracknell Common Stock to which such holder
would otherwise have been entitled. Alternatively, the Surviving Corporation
shall have the option of instructing the Exchange Agent to aggregate all
fractional shares of Bracknell Common Stock, sell such shares in the public
market and distribute to holders of Able Shares a pro rata portion of the
proceeds of such sale; provided that Bracknell shall pay all transaction costs
associated therewith. No such cash in lieu of fractional shares of Bracknell
Common Stock shall be paid to any holder of Able Shares until certificates
representing such Able Shares are surrendered and exchanged in accordance with
Section 2.03.


                                       18
<PAGE>   20

                  SECTION  2.06 Dissenting Shares.


                  (a)      Notwithstanding any other provisions of this
         Agreement to the contrary, Able Shares and Series D Shares that are
         outstanding immediately prior to the Effective Time and which are held
         by Able stockholders who shall have not voted in favor of the Merger or
         consented thereto in writing and who shall be entitled to and shall
         have demanded properly in writing, appraisal for such shares in
         accordance with the Florida General Corporation Law (collectively, the
         "Dissenting Shares") shall not be converted into or represent the right
         to receive Bracknell Common Stock. Such stockholders instead shall be
         entitled to receive payment of the appraised value of such Able Shares
         or Series D Shares held by them in accordance with the provisions of
         the Florida General Corporation Law, except that all Dissenting Shares
         held by such stockholders, who shall have failed to perfect or who
         effectively shall have withdrawn, forfeited, or lost their rights to
         appraisal of such Able Shares or Series D Shares under the Florida
         General Corporation Law, shall thereupon be deemed to have been
         converted into and to have become exchangeable for, as of the Effective
         Time, the right to receive, without any interest thereon, Bracknell
         Common Stock in the manner provided in Section 2.03 above.

                  (b)      Able shall give Bracknell prompt notice of any
         demands for appraisal received by it, withdrawals of such demands, and
         any other instruments served pursuant to the Florida General
         Corporation Law and received by Able and relating thereto. Able shall
         direct all negotiations and proceedings with respect to demands for
         appraisal rights under the Florida General Corporation Law and shall
         keep Bracknell informed regarding the progress thereof.


                                   ARTICLE III

                            THE SURVIVING CORPORATION

                  SECTION 3.01 Certificate of Incorporation. Effective
immediately following the Merger, the certificate of incorporation of Subco, as
in effect immediately prior to the Effective Time, shall be the certificate of
incorporation of the Surviving Corporation until amended in accordance with
applicable Law; provided, however, that the certificate of incorporation of the
Surviving Corporation shall be amended to read: "The name of the corporation is
Able Telcom Holding Corp."

                  SECTION 3.02 Bylaws. Effective immediately following the
Merger, the bylaws of Subco in effect at the Effective Time shall be the bylaws
of the Surviving Corporation until amended in accordance with applicable Law.

                  SECTION 3.03 Directors and Officers. From and after the
Effective Time, until successors are duly elected or appointed and qualified in
accordance with applicable Law, (i) the directors of Subco at the Effective Time
shall be the directors of the Surviving Corporation, and (ii) the officers of
Subco at the Effective Time shall be the officers of the Surviving Corporation.


                                       19
<PAGE>   21

                                   ARTICLE IV

                     REPRESENTATIONS AND WARRANTIES OF ABLE

                  Able represents and warrants to Bracknell and Subco that:

                  SECTION 4.01 Corporate Existence and Power. Able and each of
its Subsidiaries is a corporation or other entity duly organized, validly
existing and in good standing under the Laws of its jurisdiction of
incorporation or organization, has all requisite power and authority to own,
lease and operate its properties and to carry on its Business as now being
conducted, and is duly qualified and in good standing to do business in each
jurisdiction in which the Business it is conducting, or the operation, ownership
or leasing of its properties, makes such qualification necessary, other than in
such jurisdictions where the failure to so qualify would not have an Able
Material Adverse Effect. For purposes of this Agreement, an "Able Material
Adverse Change" or "Able Material Adverse Effect," means any change or effect,
either individually or in the aggregate, that is or may be reasonably expected
to be materially adverse to the Business, assets, liabilities, properties,
financial condition or results of operations of Able or an Able Significant
Subsidiary. For the purposes of this Agreement, an "Able Significant Subsidiary"
means a Subsidiary of Able which individually accounted for 10% or more of the
total revenues, net income, cash flows from operations or assets of Able and its
Subsidiaries on a consolidated basis in either of Able's previous two fiscal
years. Able has heretofore delivered to Bracknell true and complete copies of
Able's articles of incorporation and bylaws as currently in effect.

                  SECTION 4.02 Corporate Authorization. Able has all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have, except for
any required approval by Able's stockholders in connection with the Merger, been
duly authorized by all necessary corporate action on the part of Able. Able's
Board of Directors has authorized Able to enter into this Agreement, has
determined that this Agreement is in the best interests of Able and its
stockholders and has recommended that Able's stockholders vote in favor of the
Merger and the other transactions contemplated hereby. This Agreement has been
duly executed and delivered by Able and constitutes a valid and binding
obligation of Able enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and
similar Laws now or hereafter in effect, affecting creditors' rights and
remedies and to general principles of equity.

                  SECTION 4.03 Governmental Authorization. No consent, approval,
Order or authorization of, or registration, declaration or filing with, or
Permit from, any Governmental Authority is required by or with respect to Able
or any of its Subsidiaries in connection with the execution, delivery and
performance of this Agreement by Able or the consummation of the Merger or other
transactions contemplated hereby, other than (i) compliance with the applicable
requirements of the HSR Act and the Exchange Act, and (ii) the filing of a
certificate of merger with the Secretary of State of the State of Florida,
except where the failure of any action to be taken by any Governmental Authority
or filing to be made would not have an Able Material


                                       20
<PAGE>   22

Adverse Effect or prevent consummation of the Merger or the other transactions
contemplated hereby.

                  SECTION 4.04 Non-Contravention. The execution and delivery of
this Agreement by Able does not, and the consummation of the transactions
contemplated hereby by Able will not, conflict with, or result in any violation
of, or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any obligation
or the loss of a material benefit under, or the creation of a Lien on assets or
property or right of first refusal with respect to any asset or property (any
such conflict, violation, default, right of termination, cancellation or
acceleration, loss, creation or right of first refusal, a "Violation"), pursuant
to any provision of the articles of incorporation or bylaws of Able or any of
its Subsidiaries or, except as set forth on Schedule 4.04 hereto, or as to which
requisite waivers or consents have been obtained and assuming the consents,
approvals, authorizations or Permits and filings or notifications referred to in
Section 4.03 are duly and timely obtained or made, result in any Violation of
any loan or credit agreement, note, mortgage, indenture, Lease, Benefit
Arrangement or other agreement, obligation, instrument, Permit, concession,
franchise, Order or Law applicable to Able or any of its Subsidiaries or their
respective properties or assets, except for any Violations which would not have
an Able Material Adverse Effect.

                  SECTION 4.05  Capitalization.

                  (a)      The entire authorized capital stock of Able consists
         of (i) 25,000,000 shares of common stock, par value $.001 per share,
         and (ii) 1,000,000 shares of preferred stock, par value $.01 per share,
         issuable in series ("Able Preferred Stock") (collectively, the "Able
         Authorized Capital Stock"). Of the Able Authorized Capital Stock:
         16,374,504 Able Shares are validly issued and outstanding and 5,000
         shares of Series C Convertible Preferred Stock (the "Series C Shares")
         are validly issued and outstanding. Each of the aforesaid shares has
         been validly issued, is fully paid and nonassessable, and has not been
         issued in violation of any preemptive rights. 1,000 Series D Shares
         will be issued by Able after the date hereof. Upon their issuance, each
         of the Series D Shares will be validly issued, fully paid,
         nonassessable, and will not be issued in contravention of any
         preemptive rights. Able has also granted options to purchase 3,322,885
         Able Shares (the "Able Stock Options") to the Persons (who are present
         or former officers, directors, employees or advisors), at the exercise
         prices and in the amounts listed on Schedule 4.05(a)(i), of which
         2,260,000 were granted outside of Able's Stock Option Plan and
         1,062,885 were granted under Able's Stock Option Plan. Able has also
         issued warrants and other options to purchase 4,777,031 Able Shares to
         other Persons, at the exercise prices and in amounts listed on Schedule
         4.05(a)(ii). Except as set forth in Schedules 4.05(a)(i) and
         4.05(a)(ii) hereto, no options, warrants or other rights to acquire,
         sell, or issue shares of capital stock of Able are outstanding, and
         except as disclosed in Schedule 4.05(a)(iii), between the date hereof
         and the Effective Time, no shares of capital stock of Able and no such
         options, warrants or rights will be issued. Except as set forth in
         Schedule 4.05(a)(iv), Able has not issued, granted or awarded any
         phantom stock, stock appreciation rights, or any similar instruments to
         any Person.


                                       21
<PAGE>   23

                  (b)      No bonds, debentures, notes or other indebtedness
         having the right to vote (or convertible into securities having the
         right to vote) on any matters on which stockholders may vote ("Voting
         Debt") that were issued by Able are outstanding. Except as set forth in
         this Section 4.05, there are outstanding (A) no shares of capital
         stock, Voting Debt or other voting securities of Able, (B) no
         securities of Able or any Subsidiary of Able convertible into or
         exchangeable for shares of capital stock, Voting Debt or other voting
         securities of Able or any Subsidiary of Able, and (C) no options,
         warrants, calls, rights (including preemptive rights), commitments or
         agreements pursuant to which Able or any Subsidiary of Able is
         obligated to issue, deliver, sell, purchase, redeem or acquire, or
         cause to be issued, delivered, sold, purchased, redeemed or acquired,
         additional shares of capital stock or any Voting Debt or other voting
         securities of Able or of any Subsidiary of Able or obligating Able or
         any Subsidiary of Able to grant, extend or enter into any such option,
         warrant, call, right, commitment or agreement.

                  (c)      Except as listed in Schedule 4.05(c), there are not
         as of the date hereof and there will not be at the Effective Time any
         stockholder agreements, voting trusts or other agreements or
         understandings to which Able is a party or by which it is bound
         relating to the voting of any shares of the capital stock of Able which
         will limit in any way the granting of proxies by or on behalf of or
         from, or the casting of votes by, Able stockholders with respect to the
         Merger. There are no restrictions on the ability of Able to vote the
         stock of any of its Subsidiaries.

                  SECTION 4.06 Subsidiaries. Schedule 4.06(i) sets forth the
name and jurisdiction of incorporation or organization of each Subsidiary of
Able. The authorized and issued and outstanding shares of capital stock of each
Subsidiary of Able are set forth on Schedule 4.06(ii). Except as set forth in
Schedule 4.06(iii), all of the outstanding capital stock of, or other ownership
interests in, each Subsidiary of Able is owned by Able, directly or indirectly,
free and clear of any Lien and free of any other limitation or restriction
(including any restriction on the right to vote, sell or otherwise dispose of
such capital stock or other ownership interests).

                  SECTION 4.07 SEC Filings.

                  (a)      Able has delivered to Bracknell (i) Able's annual
         report on Form 10-K for the fiscal year ended October 31, 1999 (amended
         May 26, 2000) (the "Able 10-K"), (ii) its quarterly reports on Form
         10-Q for its fiscal quarters ended January 31, 2000 and April 30, 2000,
         as amended, (iii) its current reports on Form 8-K dated May 30, 2000,
         June 7, 2000 and July 20, 2000, (iv) its proxy or information
         statements relating to meetings of, or actions taken without a meeting
         by, the stockholders of Able held since April 1998, and (v) all of its
         other reports, statements, schedules and registration statements filed
         with the SEC since its initial public offering, including without
         limitation, the Registration Statement on Form S-1 (Registration Number
         333-65991), as amended, and all materials incorporated therein by
         reference (the filings referred to in clauses (i) through (v) above and
         delivered to Bracknell prior to the date hereof being hereinafter
         referred to as the "Able SEC Filings").


                                       22
<PAGE>   24

                  (b)      As of its filing date or with respect to any proxy
         statements, as of the date it was first mailed to Able stockholders,
         each such report or statement filed pursuant to the Exchange Act
         complied as to form in all material respects with the requirements of
         the Exchange Act and did not contain any untrue statement of a material
         fact or omit to state any material fact necessary in order to make the
         statements made therein, in the light of the circumstances under which
         they were made, not misleading.

                  (c)      Each such registration statement and any amendment
         thereto filed pursuant to the Securities Act of 1933, as of the date
         such statement or amendment became effective, complied as to form in
         all material respects with the Securities Act of 1933 and did not
         contain any untrue statement of a material fact or omit to state any
         material fact required to be stated therein or necessary to make the
         statements therein not misleading.

                  SECTION 4.08 Financial Statements. The audited consolidated
financial statements and unaudited consolidated interim financial statements of
Able and its consolidated Subsidiaries included in the Able 10-K and the
quarterly reports on Form 10-Q referred to in Section 4.07 fairly present, in
conformity with GAAP (except as may be indicated in the notes thereto), the
consolidated financial position of Able and its consolidated Subsidiaries as of
the dates thereof and their consolidated results of operations and cash flows
for the periods then ended (subject, in the case of any unaudited interim
financial statements, to normal year-end adjustments, none of which,
individually or in the aggregate, would have an Able Material Adverse Effect).

                  SECTION 4.09 Proxy Statement/Prospectus; Registration
Statement. None of the information supplied by Able for inclusion in (a) the
proxy statement relating to the Second Able Stockholder Meeting (also
constituting the prospectus in respect of the Bracknell Common Stock to be
exchanged for Able Shares in the Merger) (the "Proxy Statement/Prospectus"), to
be filed by Able and Bracknell with the SEC, and any amendments or supplements
thereto, or (b) the Registration Statement on Form F-4 (the "Registration
Statement") to be filed by Bracknell with the SEC in connection with the Merger,
and any amendments or supplements thereto, will, at the respective times such
documents are filed, and, in the case of the Proxy Statement/Prospectus, at the
time the Proxy Statement/Prospectus or any amendment or supplement thereto is
first mailed to stockholders of Able, at the time of the Second Able Stockholder
Meeting and at the Effective Time, and, in the case of the Registration
Statement, when it becomes effective under the Securities Act of 1933, contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. All documents that
Able is responsible for filing with the SEC in connection with the Merger will
comply as to form in all material respects with the applicable provisions of the
Exchange Act, the Securities Act of 1933 and state securities Laws.

                  SECTION 4.10 Absence of Certain Changes. Except as set forth
on Schedule 4.10 since April 30, 2000, Able and its Subsidiaries have conducted
their business in all material respects in the ordinary course consistent with
past practices and there has not been:


                                       23
<PAGE>   25

                  (a)      any event, occurrence or development or state of
         circumstances or facts, which affects or relates to Able or any of its
         Subsidiaries, which has had or would reasonably be expected to have an
         Able Material Adverse Effect;

                  (b)      any declaration, setting aside or payment of any
         dividend or other distribution with respect to any shares of capital
         stock of Able, or any repurchase, redemption or other acquisition by
         Able or any of its Subsidiaries of any outstanding shares of capital
         stock or other securities of, or other ownership interests in, Able or
         any of its Subsidiaries;

                  (c)      any amendment of any term of any outstanding security
         of Able or any of its Subsidiaries;

                  (d)      any incurrence, assumption or guarantee by Able or
         any of its Subsidiaries of any indebtedness for borrowed money other
         than in the ordinary course of business and in amounts and on terms
         consistent with past practices;

                  (e)      any creation or assumption by Able or any of its
         Subsidiaries of any Lien (other than a Permitted Lien) on any material
         asset;

                  (f)      any making of any loan, advance or capital
         contributions to or investment in any Person other than loans, advances
         or capital contributions to or investments in wholly owned Subsidiaries
         made in the ordinary course of business consistent with past practices;

                  (g)      any material amendment or termination of any Material
         Contract or Material Lease relating to the Business or any material
         capital expenditure;

                  (h)      to Able's Knowledge, any claim or threatened claim
         against Able or one or more of its Subsidiaries in respect of a
         Material Contract where the liability of Able or one or more of its
         Subsidiaries exceeds, or could reasonably be expected to exceed,
         $1,000,000;

                  (i)      any material destruction, damage or other loss to any
         of the assets of Able or any of its Subsidiaries that is not covered by
         insurance;

                  (j)      any material sale, lease or other disposition of any
         of the assets of Able or any of its Subsidiaries, other than assets
         sold, leased or otherwise disposed of in the ordinary course of
         business consistent with past practice which would not, in the
         aggregate, have an Able Material Adverse Effect;

                  (k)      any material purchase or lease of any assets by Able
         or any of its Subsidiaries, other than assets purchased or leased in
         the ordinary course of business consistent with past practice;

                  (l)      any change in any method of accounting or accounting
         practice by Able or any of its Subsidiaries, except for any such change
         required by reason of a concurrent


                                       24
<PAGE>   26

         change in GAAP or to conform a Subsidiary's accounting policies and
         practices to those of Able;

                  (m)      except for contractual obligations existing on the
         date hereof or disclosed on Schedule 4.10(m), any (i) grant of any
         severance or termination pay to any director, officer or employee of
         Able, (ii) entering into of any employment, deferred compensation or
         other similar agreement (or any amendment to any such existing
         agreement) with any director, officer or employee of Able or any of its
         Subsidiaries except in the ordinary course of business consistent with
         past practice with persons who are not executive officers, (iii)
         increase in benefits payable under any existing severance or
         termination pay policies or employment agreements, (iv) increase in
         compensation, bonus or other benefits payable to directors, officers or
         employees of Able or any of its Subsidiaries, other than in the
         ordinary course of business consistent with past practice, or (v)
         acceleration of the exercisability or vesting of any options, as the
         case may be;

                  (n)      any labor dispute, other than individual grievances,
         or any activity or proceeding by a labor union or representative
         thereof to organize any employees of Able or any of its Subsidiaries,
         which employees were not subject to a collective bargaining agreement
         at April 30, 2000 or any lockouts, strikes, slowdowns, work stoppages
         or threats thereof by or with respect to such employees;

                  (o)      any actual or, to Able's Knowledge, threatened
         dispute between Able or any of its Subsidiaries and any vendor or
         customer, other than disputes which would not have or reasonably be
         expected to have, individually or in the aggregate, an Able Material
         Adverse Effect;

                  (p)      any actual or, to Able's Knowledge, threatened
         suspension or cancellation of any Permit, other than those the
         suspension or cancellation of which would not have or reasonably be
         expected to have, individually or in the aggregate, an Able Material
         Adverse Effect;

                  (q)      any amendment to Able's articles of incorporation or
         bylaws;

                  (r)      any change in any Law applicable to Able or any of
         its Subsidiaries, or in the interpretation or application thereof,
         which individually or in the aggregate has had or would reasonably be
         expected to have an Able Material Adverse Effect; or

                  (s)      any agreement or commitment by Able or any of its
         Subsidiaries to take any action described in this Section 4.10.

                  SECTION 4.11 No Undisclosed Material Liabilities. Except as
described in Schedule 4.11, there are no Liabilities of Able or any of its
Subsidiaries, and there is no existing condition, situation or set of
circumstances which, individually or in the aggregate, have or would reasonably
be expected to have an Able Material Adverse Effect, other than:


                                       25
<PAGE>   27

                  (a)      Liabilities disclosed or provided for in Able's
         consolidated balance sheet dated as of April 30, 2000 included in
         Able's quarterly report on Form 10-Q for the fiscal quarter ended April
         30, 2000;

                  (b)      Liabilities incurred in the ordinary course of
         business consistent with past practices since April 30, 2000, which in
         the aggregate are not material to Able or an Able Significant
         Subsidiary; and

                  (c)      Liabilities under this Agreement.

                  SECTION 4.12 Real Property.

                  (a)      A complete and accurate list and description of all
         real property owned by Able or its Subsidiaries (other than Easements),
         in each case which is used or useful in the conduct of the Business, is
         set forth in Schedule 4.12(a) (the "Owned Real Property"). Able or one
         of its Subsidiaries has good, valid and marketable title in fee simple
         to each Owned Real Property free and clear of all Liens except
         Permitted Liens.

                  (b)      A complete and accurate list and description of all
         the real property leased to Able or its Subsidiaries (other than
         Easements), in each case which is used or useful in the conduct of the
         Business (the "Leased Real Property"), is set forth in Schedule
         4.12(b). Except as set forth on Schedule 4.12(b), all Material Leases
         are in writing and are valid, effective, binding and in full force and
         effect. There has been no material breach of, or default under, any
         Material Lease by Able or one of its Subsidiaries or, to Able's
         Knowledge, any other Person, which breach or default has not been cured
         or waived (and no event has occurred which, with due notice or lapse of
         time or both, may constitute a breach or default), and no party to any
         Material Lease has given Able or one of its Subsidiaries written notice
         or made a claim with respect to any breach or default under a Material
         Lease. A true and complete copy of each of the Material Leases, as
         amended to date, has been furnished to Bracknell. Able or one of its
         Subsidiaries is the lessee or sublessee under all Material Leases or
         has succeeded (or will succeed prior to the Closing Date) to the rights
         of the lessee under such Material Leases and owns the leasehold
         interest created pursuant to such Leases free and clear of all Liens
         except Permitted Liens. Able or one of its Subsidiaries validly
         occupies any improvements located on the Leased Real Property in
         accordance with the terms of the relevant Leases free and clear of all
         Liens except Permitted Liens. All consents required under the Material
         Leases in connection with the transactions contemplated by this
         Agreement have been, or as of the Closing Date will be, obtained and
         furnished in writing to Bracknell.

                  (c)      A complete and accurate list and description of all
         easements, the beneficial interest of which is owned by Able or one of
         its Subsidiaries, in each case which is used or useful in the conduct
         of the Business is listed in Schedule 4.12(c) (the "Easements").
         Schedule 4.12(c) also lists, with respect to each Easement, all
         contracts or other agreements (collectively, the "Easement Contracts")
         pursuant to which Able or one of its Subsidiaries (i) acquired rights
         to the Easement, and/or (ii) granted rights to others to use or access
         any wires, cables, or other conduit located within the respective


                                       26
<PAGE>   28

         Easement areas. Able or one of its Subsidiaries has good, valid, and
         marketable title in and to each Easement free and clear of all Liens
         except Permitted Liens. Each Easement is valid, effective and binding
         and in full force and effect. There has been no material breach of any
         Easement or Easement Contract by Able or its Subsidiaries or, to Able's
         Knowledge, any other Person, which breach has not been cured or waived.
         A true and complete copy of each Easement Contract, as amended to date,
         has been furnished to Bracknell. Able or one of its Subsidiaries
         validly occupies and uses the Easements and any improvements located on
         the Easements in accordance with the terms of the Easement Contracts.
         All consents required under the Easements and Easement Contracts in
         connection with the transactions contemplated by this Agreement have
         been, or as of the Closing Date will be, obtained and furnished in
         writing to Bracknell.

                  (d)      Schedules 4.12(a), 4.12(b) and 4.12(c) describe all
         real property owned or leased by Able or its Subsidiaries (the "Real
         Property"), and the nature of the interest of Able or its Subsidiaries
         in those properties. There is no real property (other than the Real
         Property) the use or possession of which is necessary for Able or its
         Subsidiaries to carry on the Business. Except as provided in Schedule
         4.12(d), none of the Real Property is subject to a Lease, sublease,
         license or other agreement granting any Person any right to the use,
         occupancy or enjoyment thereof (or any portion thereof), except where
         such Lease, sublease, license or other agreement would not materially
         detract from the value of the applicable property, materially impair
         the present and continued use, operation or maintenance of the property
         subject thereto, or materially impair the operations of Able or one of
         its Subsidiaries.

                  (e)      The buildings, driveways and all other structures and
         improvements upon the Real Property are all within the boundary lines
         of the applicable property or have the benefit of valid easements or
         other legal rights and there are no encroachments thereon that would
         materially affect the use thereof.

                  (f)      All buildings, structures, improvements and fixtures
         owned, leased or used by Able or its Subsidiaries in the conduct of the
         Business conform in all material respects to all applicable building,
         zoning, health, safety, environmental and other Laws, regulations,
         codes and rules adopted by national and local associations and boards
         and insurance underwriters, and all such buildings, structures,
         improvements and fixtures and the electrical, plumbing, HVAC and other
         systems thereat are in good operating condition and repair. There are
         no outstanding requirements or recommendations by any insurance company
         which has issued a policy covering any such property, or by any board
         of fire underwriters or other body exercising similar functions,
         requiring or recommending any material repairs or work to be done on
         any such property.

                  (g)      Schedule 4.12(g) lists all policies of title
         insurance insuring the interest of Able and its Subsidiaries in the
         Real Property (the "Title Policies"). All of the Title Policies are in
         full force and effect and neither Able nor any of its Subsidiaries have
         taken or will take any action that would adversely affect the coverage
         afforded the insured thereunder. Able will provide copies of each of
         the Title Policies and any related surveys to Bracknell promptly after
         the date hereof. Able will cooperate with


                                       27
<PAGE>   29

         Bracknell to obtain any new policies or amendments or endorsements to
         the Title Policies as may reasonably be required by Bracknell.

                  SECTION 4.13 Personal Property.

                  (a)      Subject to Permitted Liens, Able or its Subsidiaries
         have marketable and indefeasible title to all personal property owned
         by Able or its Subsidiaries and used in the conduct of the Business,
         other than (A) property that has been disposed of in the ordinary
         course of business, (B) property that has been disposed of in
         transactions disclosed to Bracknell in writing prior to the date
         hereof, and (C) Leased Personal Property.

                  (b)      Schedule 4.13(b) lists all of the Material Leases of
         leased personal property used in the Business conducted by Able and its
         Subsidiaries (the "Leased Personal Property"). All such Material Leases
         of Leased Personal Property are valid and binding and in full force and
         effect. There has been no material breach of any such Material Lease by
         Able or its Subsidiaries or, to Able's knowledge, any other Person,
         which breach has not been cured or waived.

                  SECTION 4.14 Accounts Receivable. Except as set forth on
Schedule 4.14, all Accounts Receivable of Able and its Subsidiaries reflected on
the balance sheet included in Able's Form 10-Q as of April 30, 2000 and all
Accounts Receivable of Able and its Subsidiaries generated after April 30, 2000
that are reflected in the accounting records of Able and its Subsidiaries as of
the Closing Date represent or will represent valid obligations arising from
sales actually made or services actually performed or billed for in the ordinary
course of business. All Accounts Receivable not paid prior to the Closing Date
are current and collectible in the ordinary course of business, except to the
extent reflected in the reserve for doubtful accounts in the financial
statements include in Able's SEC Filings. The reserve for doubtful accounts
reflected in the financial statements included in Able's SEC Filings has been
determined consistent with past practices and in accordance with GAAP. Able and
its Subsidiaries have good and valid title to the Accounts Receivable free and
clear of all Liens except Permitted Liens.

                  SECTION 4.15 Contracts. Except for (i) purchase orders,
invoices, confirmations and similar documents involving the purchase or sale of
goods or services for less than $250,000 over a period of 12 months or less,
(ii) Leases, (iii) Benefit Arrangements, and (iv) contracts relating to
intercompany obligations, Schedule 4.15(i) sets forth a list of all of the
following contracts ("Material Contracts") (A) to which Able or any of its
Subsidiaries is a party or (B) by which any of the assets of Able or any of its
Subsidiaries are bound: (1) contracts pertaining to the borrowing of money; (2)
contracts creating Liens; (3) contracts creating guarantees; (4) contracts
relating to material employment or consulting services; (5) contracts relating
to any single capital expenditure in excess of $250,000 or aggregate capital
expenditures in excess of $500,000; (6) contracts for the purchase or sale of
real property, any business or line of business or for any merger or
consolidation; (7) joint venture or partnership agreements; (8) contracts that
individually require by their respective terms after the date hereof the payment
or receipt of $250,000 or more; (9) any agreement involving derivatives, hedging
or futures under


                                       28
<PAGE>   30

which the obligations of Able or one of its Subsidiaries could reasonably be
expected to exceed $250,000; (10) any contract that limits the freedom of Able
or its Subsidiaries to compete in any line of business or to conduct business in
any geographic location; or (11) any contract for the purchase or sale of all or
substantially all of the assets or stock of any company or operating division.
All Material Contracts are valid and binding and in full force and effect.
Except as disclosed in Schedule 4.15(ii), there has been no material breach of
any contract by Able or its Subsidiaries or, to Able's Knowledge, any other
Person, which breach has not been cured or waived. Able will make available to
Bracknell true and complete copies of the Material Contracts.

                  SECTION 4.16 Litigation. Except as set forth on Schedule 4.16,
there is no Action by any Person or by or before any Governmental Authority that
is pending or, to Able's Knowledge, threatened by, against or affecting Able or
its Subsidiaries or any of their respective assets which would have or
reasonably be expected to have an Able Material Adverse Effect. Except as set
forth on Schedule 4.16, neither Able nor any of its Subsidiaries is subject to
any Order that would have an Able Material Adverse Effect.

                  SECTION 4.17 Taxes. Except as set forth on Schedule 4.17(i),
Able and its Subsidiaries have timely filed all Returns and reports required to
be filed by them on or before the date hereof, or requests for extensions to
file such Returns have been timely filed and granted and have not yet expired.
All such Returns are complete and accurate. Able and its Subsidiaries have paid,
or have set up an adequate reserve for the payment of, all Taxes due, whether or
not shown as due, on such Returns and have properly withheld and paid over to
the appropriate Governmental Authority all applicable withholding Taxes. The
interim balance sheet contained in Able's Form 10-Q for its fiscal quarter ended
April 30, 2000 contains an adequate reserve for all Taxes accrued by Able and
its Subsidiaries through April 30, 2000. Except as set forth on Schedule
4.17(ii), no deficiencies for any Taxes have been asserted, proposed or
otherwise settled or reserved against, Able has not received any notice of and
has no reason to believe that any deficiency for any Taxes will be proposed or
threatened, and no waivers of the time to assess any such Taxes are pending.
There are no material Liens for Taxes (other than Permitted Liens for current
Taxes not yet due and payable) on the assets of Able or any of its Subsidiaries.
No election under Section 341(f) of the Code has been or will be made to treat
Able or any of its Subsidiaries as a "consenting corporation" as defined in such
Section 341(f). Neither Able nor any of its Subsidiaries is a party to any
agreement, contract or arrangement that has resulted or could result in any
disallowance of a deduction for employee remuneration under Section 162(m) of
the Code or that would result, separately or in the aggregate, in any payment
(whether or not in connection with any termination of employment or otherwise)
of any "excess parachute payment" within the meaning of Section 280G of the
Code. Except as set forth on Schedule 4.17(iii), neither Able nor any of its
Subsidiaries has been a party to any deferred intercompany transaction pursuant
to which it realized but did not recognize a gain, and no excess loss account
exists with respect to the shares of stock of any member of the federal
consolidated income tax group of which Able is the common parent. Neither Able
nor any of its Subsidiaries is or has been a party to any Tax sharing agreement
or has or could have any liability for Taxes pursuant to Section 1.1502-6 of the
regulations promulgated pursuant to the Code for the Taxes of any Person other
than a corporation that is currently a member of the federal consolidated income
Tax group of which Able is the common parent. Able has no reason to believe that
any of its net


                                       29
<PAGE>   31

operating loss carryforwards, foreign Tax credit carryforwards or other similar
Tax attributes would be reduced or disallowed by any taxing authority if its
Returns for the years in which such Tax attributes were created were audited.
Except as set forth on Schedule 4.17(iv), no audit of Able or any of its
Subsidiaries by any taxing authority is currently pending or threatened, and no
issues have been raised by any taxing authority in connection with any Returns
of Able or any of its Subsidiaries.

                  SECTION 4.18 Tax Free Merger.

                  (a)      Following the Merger, the Surviving Corporation will
         hold at least 90 percent of the fair market value of the net assets,
         and at least 70 percent of the fair market value of the gross assets,
         held by Able prior to the Merger. For purposes of this representation,
         amounts used by Able to pay reorganization expenses and all
         redemptions, distributions and payments, in cash or property, made by
         Able in connection with the Merger shall be included as assets of Able
         prior to the Merger.

                  (b)      Able has no plan or intention to issue additional
         shares of it stock that would result in Bracknell losing control of
         Able within the meaning of Section 368(c) of the Code. At the time of
         the Merger, Able will not have outstanding any warrants, options,
         convertible securities, or any other type of right pursuant to which
         any Person could acquire stock in Able that, if exercised or converted,
         would affect Bracknell's acquisition or retention of such control.

                  (c)      There is no intercorporate indebtedness existing
         between Bracknell and Able or between Subco and Able. Able is not an
         investment company as defined in Section 368(a)(2)(F)(iii) and (iv) of
         the Code. On the date of the Merger, the fair market value of the
         assets of Able will exceed the sum of its liabilities plus the
         liabilities, if any, to which its assets are subject. Able is not under
         the jurisdiction of a court in a Title 11 or similar case within the
         meaning of Section 368(a)(3)(A) of the Code.

                  (d)      Able agrees to treat the Merger as a reorganization
         within the meaning of Section 368(a) of the Code. This Agreement is
         intended to constitute a "plan of reorganization" within the meaning of
         Section 1.368-2(g) of the income Tax regulations promulgated under the
         Code. Able has not knowingly taken any action that would jeopardize the
         qualification of the Merger as a reorganization within the meaning of
         Section 368(a) of the Code. During the period from the date of this
         Agreement through the Effective Time, unless all parties hereto shall
         otherwise agree in writing, Able shall not knowingly take or fail to
         take any action which action or failure would jeopardize the
         qualification of the Merger as a reorganization within the meaning of
         Section 368(a) of the Code. Able shall cause one or more of its
         responsible officers to execute and deliver certificates to confirm the
         accuracy of certain relevant facts as may be reasonably requested by
         counsel in connection with the preparation and delivery of the Tax
         opinion described in Section 9.01(f).


                                       30
<PAGE>   32

                  SECTION 4.19 ERISA.

                  (a)      "Employee Plans" shall mean each "employee benefit
         plan", as defined in Section 3(3) of the Employee Retirement Income
         Security Act of 1974 ("ERISA"), which (i) is subject to any provision
         of ERISA and (ii) is maintained, administered or contributed to by Able
         or any affiliate (as defined below) and covers any employee or former
         employee of Able or any affiliate or under which Able or any affiliate
         has any liability. Schedule 4.19(a) lists all Employee Plans. True and
         complete copies of such plans (and, if applicable, related trust
         agreements) and all amendments thereto have been furnished to
         Bracknell. For purposes of this Section, "affiliate" of any Person
         means any other Person which, together with such Person, would be
         treated as a single employer under Section 414 of the Code.

                  (b)      No Employee Plan individually or collectively
         constitutes a "defined benefit plan" as defined in Section 3(35) of
         ERISA.

                  (c)      No Employee Plan constitutes a "multi-employer plan",
         as defined in Section 3(37) of ERISA, and no Employee Plan is
         maintained in connection with any trust described in Section 501(c)(9)
         of the Code. No Employee Plan is subject to Title IV of ERISA. Neither
         Able nor any of its affiliates has incurred, nor has reason to expect
         to incur, any liability under Title IV of ERISA arising in connection
         with the termination of, or complete or partial withdrawal from, any
         plan previously covered by Title IV of ERISA.

                  (d)      Nothing done or omitted to be done and no transaction
         or holding of any asset under or in connection with any Employee Plan
         has or will make Able or any of its Subsidiaries or any officer or
         director of Able or any of its Subsidiaries subject to any liability
         under Title I of ERISA or liable for any Tax pursuant to Section 4975
         of the Code that would have, or reasonably be expected to have,
         individually or in the aggregate, an Able Material Adverse Effect.

                  (e)      Each Employee Plan which is intended to be qualified
         under Section 401(a) of the Code is so qualified and has been so
         qualified during the period from its adoption to date, and each trust
         forming a part thereof is exempt from Tax pursuant to Section 501(a) of
         the Code, and each Employee Plan has been maintained in material
         compliance with its terms and with the requirements prescribed by any
         and all statutes, Orders, final rules and final regulations, including
         but not limited to ERISA and the Code, which are applicable to such
         Employee Plan.

                  (f)      There is no contract, agreement, plan or arrangement
         covering any employee or former employee of Able or any affiliate that,
         individually or collectively, could give rise to the payment of any
         amount that would not be deductible pursuant to the terms of Section
         280G of the Code.

                  (g)      "Benefit Arrangement" shall mean each employment,
         severance or other similar contract, arrangement or policy and each
         plan or arrangement (written or oral)


                                       31
<PAGE>   33

         providing for compensation, bonus, profit-sharing, or other forms of
         incentive or deferred compensation, vacation benefits, insurance
         coverage (including any self-insured arrangements), health or medical
         benefits, disability benefits, workers' compensation with the exception
         of the stock options disclosed in Schedule 4.05(a)(i) or Schedule
         4.05(a)(ii), supplemental unemployment benefits, severance benefits and
         post-employment or retirement benefits (including compensation, health
         or medical insurance or other benefits) which (i) is not an Employee
         Plan, (ii) is entered into, maintained or contributed to, as the case
         may be, by Able or any of its affiliates, and (iii) covers any employee
         or former employee of Able or any of its affiliates. Copies or
         descriptions of the Benefit Arrangements have been furnished to
         Bracknell. Each Benefit Arrangement has been maintained in compliance
         with its terms and with the requirements prescribed by any and all Laws
         that are applicable to such Benefit Arrangement.

                  (h)      Except as disclosed in Schedule 4.19(h), the
         transactions contemplated hereby will not result in any liability for
         severance pay to any employee or accelerate the exercisability, vesting
         or payment of any options, warrants, stock appreciation rights, phantom
         stock awards or any similar instruments, as the case may be, nor will
         any employee be entitled to any payment solely by reason of such
         transactions.

                  (i)      All contributions required to be made to trusts in
         connection with any Employee Plan that would constitute a "defined
         contribution plan" (within the meaning of Section 3(34) of ERISA) have
         been made in a timely manner in compliance with applicable law and
         regulations;

                  (j)      Other than claims in the ordinary course for benefits
         with respect to the Employee Plans or Benefit Arrangements, there are
         no Actions, suits or claims (including claims for income Taxes,
         interest, penalties, fines or excise Taxes with respect thereto)
         pending with respect to any Employee Plan or Benefit Arrangement, or
         any circumstances which might give rise to any such Action, suit or
         claim (including claims for income Taxes, interest, penalties, fines or
         excise Taxes with respect thereto);

                  (k)      All reports, returns and similar documents with
         respect to the Employee Plans or Benefit Arrangements required to be
         filed with any governmental agency have been so filed by the due date
         for such filings;

                  (l)      Able has no obligation to provide health or other
         welfare benefits to former, retired or terminated employees, except as
         specifically required under Section 4980B of the Code or Section 601 of
         ERISA. Able has complied with the notice and continuation requirements
         of Section 4980B of the Code and Section 601 of ERISA and the
         regulations thereunder.

                  (m)      Except as disclosed in writing to Bracknell prior to
         the date hereof and subject to the provisions of Section 4.10(l), there
         has been no amendment to, written interpretation or announcement
         (whether or not written) by Able or any of its affiliates relating to,
         or change in employee participation or coverage under, any Employee
         Plan or Benefit Arrangement which in the aggregate would increase the
         per employee expense of


                                       32
<PAGE>   34

         maintaining such Employee Plan or Benefit Arrangement above the level
         of the expense incurred on a per employee basis in respect thereof for
         the six months ended on April 30, 2000 except to the extent, with
         respect to all employees, as would not have, or reasonably be expected
         to have, individually or in the aggregate, an Able Material Adverse
         Effect.

                  SECTION 4.20 Environmental Matters. Except as set forth in
Schedule 4.20, and to the best of Able's Knowledge, (a) Able and its
Subsidiaries have obtained and maintain all Material Environmental Permits
necessary operate their Business; (b) Able and its Subsidiaries are and at all
times have been in material compliance with, and have not been and are not in
violation of or liable under, any Environmental Permit or any Environmental Law;
(c) there are no past, pending, or threatened Environmental Claims against Able
or its Subsidiaries in connection with the Business or any Site; (d) no Releases
of Hazardous Materials have occurred at, from, in, to, on or under any Site and
no Hazardous Materials are present in, on, about or migrating to or from any
Site that could give rise to an Environmental Claim against Able or its
Subsidiaries; (e) neither Able, its Subsidiaries, their predecessors have
generated, recycled, discharged or released any Hazardous Material, or
transported or arranged for the treatment, storage, handling, disposal or
transportation of any Hazardous Material to any off-Site location, which is
reasonably likely to result in an Environmental Claim against Able or its
Subsidiaries; (f) no Site or any property to which Able or any of its
Subsidiaries has, directly or indirectly, transported or arranged for the
transportation of any Hazardous Material, is a current or proposed Environmental
Cleanup Site; (g) there are no Liens arising under or pursuant to any
Environmental Law on any Site and there are no facts, circumstances or
conditions that could restrict or encumber, or result in the imposition of use
restrictions under any Environmental Law with respect to the ownership,
occupancy, development, use or transferability of any Site currently owned or
operated by Able or its Subsidiaries; (h) there are no underground storage
tanks, active or abandoned, polychlorinated biphenyl containing equipment, or
asbestos or asbestos-containing materials at any Site; and (i) Able and its
Subsidiaries have provided Bracknell with all audits, assessments, reports,
reviews and investigations relating to Able and each of its Subsidiaries,
whether prepared internally or by external consultants, relating to the
existence or management of any issues or circumstances relevant to the
Environment, including without limitation any such documentation relating to any
Site.

                  SECTION 4.21 Intellectual Property. Able and its Subsidiaries
own sufficient right, title and interest in and to, or have valid licenses of
sufficient scope and duration for, all patents, patent rights, copyrights,
trademarks, service marks, trade names, software, trade secrets, confidential
information and other Intellectual Property material to the operation of the
Business as currently conducted or proposed to be conducted (the "Intellectual
Property Assets"). The Intellectual Property Assets are free and clear of all
Liens which would materially impair the ability of Able or its Subsidiaries to
use the Intellectual Property Assets in the Business currently conducted or
proposed to be conducted. Able has granted no third party any rights in and to
the Intellectual Property Assets except for rights which would not have an Able
Material Adverse Effect. Except as set forth on Schedule 4.21, none of the
Intellectual Property Assets owned or licensed by Able or its Subsidiaries
infringes upon or conflicts with, or to Able's Knowledge, is alleged to infringe
upon or conflict with, the Intellectual Property rights of any third party,
which infringement or alleged infringement could have an Able Material Adverse
Effect.


                                       33
<PAGE>   35

                  SECTION 4.22 Employees. Schedule 4.22 sets forth each
collective bargaining or other labor union agreement applicable to any employees
of Able or any of its Subsidiaries ("Able Employees"). No material work stoppage
or material labor dispute against Able or any of its Subsidiaries in connection
with the Business is pending or, to Able's Knowledge, threatened and, to Able's
Knowledge, except as set forth on Schedule 4.22, there is no related
organizational activity by any Able Employees. Neither Able nor any of its
Subsidiaries has, except as set forth on Schedule 4.22, received any written
notice of any unfair labor practice in connection with the Business, and no such
complaints are pending before the National Labor Relations Board or other
similar Governmental Authority.

                  SECTION 4.23 Intercompany Agreements. Schedule 4.23 lists each
and every contract between Able and any of its stockholders or, to Able's
Knowledge, any Affiliate of Able and any of its stockholders which is currently
in effect.

                  SECTION 4.24 Certain Payments. Neither Able, nor any of its
Subsidiaries, directors, officers, agents, or employees, or any other Person
associated with or acting for or on behalf of Able or any of its Subsidiaries,
has directly or indirectly (i) made any contribution, gift, bribe, rebate,
payoff, influence payment, kickback, or other payment to any Person, private or
public, regardless of form, whether in money, property or services (A) to obtain
favorable treatment in securing business, (B) to pay for favorable treatment or
for business secured, or (C) to obtain special concessions or for special
concessions already obtained for or in respect of Able or any of its
Subsidiaries, or (ii) established or maintained any fund or asset that has not
been appropriately recorded in the books and records of Able or its
Subsidiaries, which in the case of either clause (i) or (ii) would be in
violation of Law.

                  SECTION 4.25 Customers and Suppliers. Since October 31, 1999,
there has been no termination (except by completion of performance) or
cancellation of, and no material modification or change in, any Material
Contract with (i) any customer or group of related customers which singly or, in
the aggregate, provided more than 2% of the consolidated gross revenues of Able
and its Subsidiaries for the fiscal year ended October 31, 1999, or (ii) any
suppliers to Able or its Subsidiaries which singly or in the aggregate
constituted more than 2% of the consolidated cost of services for such fiscal
year.

                  SECTION 4.26 Canadian Competition Act. The aggregate value of
the assets in Canada of Able and its Subsidiaries, determined in accordance with
the Competition Act (Canada), does not exceed $35 million Canadian Dollars. The
aggregate gross annual revenues from sales in or from Canada generated by those
assets, determined in accordance with the Competition Act (Canada), does not
exceed $35 million in Canadian Dollars.

                  SECTION 4.27 Rights Plan. To Able's Knowledge, none of Able's
stockholders are acting jointly or in concert with each other or have any
agreement, arrangement, commitment or understanding (whether formal or informal
and whether or not in writing) with any other Able stockholder or with any other
Person acting jointly or in concert with any other Able stockholder for the
purpose of acquiring Bracknell Common Stock pursuant to the Merger. For the
purpose hereof, the phrase "jointly or in concert" shall be interpreted
consistent with Section 91 of the Securities Act (Ontario).


                                       34
<PAGE>   36

                  SECTION 4.28 Compliance With Other Applicable Laws. Able and
its Subsidiaries have in effect all Permits necessary for them to own, lease or
operate the properties and assets of Able and its Subsidiaries and to carry on
the Business as now conducted, and there has not occurred any default under any
Permit, except for the absence of Permits and for defaults under Permits that
have not had an Able Material Adverse Effect. Able and its Subsidiaries are in
compliance with all Other Applicable Law, except where failure to so comply
would not reasonably be expected to have an Able Material Adverse Effect. Except
as set forth in Schedule 4.28, no investigation or review by any Governmental
Authority with respect to Able or any of its Subsidiaries is pending or to
Able's Knowledge, threatened.

                  SECTION 4.29 Insurance. Able and each of its Subsidiaries
maintains insurance with responsible and reputable insurers in such amounts and
covering such risks and with such deductibles as are generally maintained by
like businesses, the failure of which to maintain would or would have reasonably
be expected to have an Able Material Adverse Effect. The coverage under each
such policy is in full force and effect and Able and each of its Subsidiaries is
in good standing under such policies, unless the lack of such coverage or good
standing would not have or would not reasonably be expected to have an Able
Material Adverse Effect. Neither Able nor any of its Subsidiaries has received
notice of, or has any knowledge of, any fact, condition or circumstance which
might reasonably form the basis of any claim against Able or any of its
Subsidiaries which is not fully covered by insurance (subject to deductibles)
maintained by any of them unless such fact, condition or circumstance could not
reasonably be expected to have an Able Material Adverse Effect.

                  SECTION 4.30 Bonds. Schedule 4.30 lists all surety bonds
(including, without limitation, performance bonds, bid bonds, payment bonds,
labor and materials bonds, lien bonds, warranty bonds, maintenance bonds and any
replacement bonds) with respect to which Able or any of its Subsidiaries has
liability or indemnification obligations for an amount greater than $250,000.

                  SECTION 4.31. Bankruptcy and Insolvency Proceedings. No
proceeding (including a private proceeding) has been commenced by or against
Able or a Subsidiary of Able (i) seeking to adjudicate it bankrupt or insolvent;
(ii) seeking liquidation, dissolution, winding-up, reorganization, arrangement,
protection, relief or composition of it or any of its property or debt or making
a proposal with respect to it under any Law relating to bankruptcy, insolvency,
reorganization, or compromise of debts or other similar Laws (including, without
limitation, any case under Chapter 7 or Chapter 11 of the United States
Bankruptcy Code or any similar proceeding under applicable state Law); or (iii)
seeking appointment of a receiver, trustee, agent or custodian or other similar
official for it or for any substantial part of its properties and assets.

                  SECTION 4.32 Broker's Fees. Except as disclosed on Schedule
4.32, there is no investment banker, broker, finder or other intermediary which
has been retained by or is authorized to act on behalf of Able, any of its
stockholders or any of its Subsidiaries who might be entitled to any fee or
commission in connection with the transactions contemplated by this Agreement.


                                       35
<PAGE>   37

                  SECTION 4.33 Vote Required. Except as contemplated by this
Agreement, the affirmative vote of the holders of a majority of the outstanding
Able Shares and Series D Shares (once issued), voting together as a single
class, at the Second Able Stockholder Meeting is the only vote of the holders of
any class or series of Able's capital stock necessary to approve this Agreement
and the transactions contemplated hereby.

                  SECTION 4.34 Opinion of Financial Advisor. Able has received
from a qualified financial advisor, a verbal opinion to the effect that, as of
the date hereof, the Conversion Number is fair to Able's Stockholders from a
financial point of view.

                                    ARTICLE V

              REPRESENTATIONS AND WARRANTIES OF BRACKNELL AND SUBCO

                  Bracknell and Subco, jointly and severally, represent and
warrant to Able that:

                  SECTION 5.01 Corporate Existence and Power. Bracknell and each
of its Subsidiaries (including Subco) is a corporation duly organized, validly
existing and in good standing under the laws of its province or other
jurisdiction of incorporation or organization, has all requisite power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted, and is duly qualified and in good standing to do
business in each jurisdiction in which the business it is conducting, or the
operation, ownership or leasing of its properties, makes such qualification
necessary, other than in such jurisdictions where the failure so to qualify
would not have a Bracknell Material Adverse Effect. For purposes of this
Agreement, a "Bracknell Material Adverse Change" or "Bracknell Material Adverse
Effect" means any change or effect, either individually or in the aggregate,
that is or may be reasonably expected to be materially adverse to the Business,
assets, liabilities, properties, financial condition or results of operations of
Bracknell and its Subsidiaries taken as a whole.

                  SECTION 5.02 Corporate Authorization. Bracknell and Subco have
all requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of Bracknell
and Subco, other than the approval of Bracknell's stockholders, if required by
regulatory authorities or under applicable Law. This Agreement has been duly
executed and delivered by Bracknell and Subco and constitutes a valid and
binding obligation of Bracknell and Subco enforceable in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium and similar Laws, now or hereafter in effect, affecting creditors'
rights and remedies and to general principles of equity.

                  SECTION 5.03 Governmental Authorization. No consent, approval,
order or authorization of, or registration, declaration or filing with, or
Permit from any Governmental Authority is required by or with respect to
Bracknell or any of its Subsidiaries in connection with the execution, delivery
and performance of this Agreement by Bracknell or the consummation of the Merger
or the other transactions contemplated hereby, other than (i) compliance with
the applicable requirements of the HSR Act, the Exchange Act and the Securities
Act of 1933, (ii)


                                       36
<PAGE>   38

the filing of the certificate of merger with the Secretary of State of the State
of Florida, and (iii) the filing with, and approval by, the TSE of the
conditional listing application and satisfaction of the conditions contained
therein, except where the failure of any action to be taken by any Governmental
Authority or any filing to be made would not have a Bracknell Material Adverse
Effect or prevent consummation of the Merger or the other transactions
contemplated hereby.

                  SECTION 5.04 Non-Contravention. The execution and delivery of
this Agreement by Bracknell and Subco does not, and the consummation of the
transactions contemplated hereby by Bracknell and Subco will not result in any
Violation pursuant to any provision of the certificate or articles of
incorporation or bylaws of Bracknell or any of its Subsidiaries or, except as
set forth on Schedule 5.04, or as to which requisite waivers or consents have
been obtained and assuming the consents, approvals, authorizations or permits
and filings or notifications referred to in this Section 5.04 are duly and
timely obtained or made, result in any Violation of any loan or credit
agreement, note, mortgage, indenture, Lease, Benefit Arrangement or other
agreement, obligation, instrument, Permit, concession, franchise, Order, or Law,
applicable to Bracknell or any of its Subsidiaries or their respective
properties or assets, except for any Violations which would not have a Bracknell
Material Adverse Effect.

                  SECTION 5.05  Capitalization.

                  (a)      The entire authorized capital stock of Bracknell
         consists of an unlimited number of common shares and an unlimited
         number of preferred shares issuable in series (collectively the
         "Authorized Bracknell Capital Stock"). Of the Authorized Bracknell
         Capital Stock: 40,586,760 shares of Bracknell Common Stock and 0
         preferred shares are validly issued and outstanding. Bracknell has
         granted options to purchase 4,185,594 shares of Bracknell Common Stock
         within the reserves of Bracknell's stock option plan at a weighted
         average exercise price of $5.36 in Canadian dollars per share and has
         granted options to purchase 610,000 shares of Bracknell Common Stock
         outside the reserves of Bracknell's stock option plan (subject to the
         approval of Bracknell's stockholders to increase the reserves under the
         plan) at a weighted average exercise price of $7.52 in Canadian dollars
         per share (collectively, the "Bracknell Stock Options"). Bracknell has
         also issued warrants to purchase 385,824 shares of Bracknell Common
         Stock at an exercise price of $4.25 per share. Each of the aforesaid
         outstanding shares has been validly issued, is fully paid and
         nonassessable, and has not been issued in violation of any preemptive
         rights. Except as set forth on Schedule 5.05(a), no options, warrants
         or other rights to acquire, sell or issue shares of capital stock of
         Bracknell are outstanding, and between the date hereof and the
         Effective Time, (i) no shares of capital stock of Bracknell and no such
         options, warrants or rights will be issued, and (ii) none of such
         options shall vest or become exercisable as a result of the Merger or
         change in ownership of Bracknell Common Stock or change in composition
         of the Bracknell Board of Directors. At the Effective Time, the holders
         of Able Shares and Series D Shares will receive good and valid title to
         the shares of Bracknell Common Stock (constituting the "Merger
         Consideration"), free and clear of all Liens and with no proxies or
         restrictions on the voting or other rights pertaining thereto.


                                       37
<PAGE>   39

                  (b)      No bonds, debentures, notes or other indebtedness
         having the right to vote (or convertible into securities having the
         right to vote) on any matters on which stockholders of Bracknell may
         vote ("Bracknell Voting Debt") were issued or outstanding. Except as
         set forth on Schedule 5.05(b), all outstanding shares of capital stock
         or other ownership interests of the Subsidiaries of Bracknell are owned
         by Bracknell or a direct or indirect wholly owned Subsidiary of
         Bracknell, free and clear of all Liens. Except as set forth in this
         Section 5.05, there are outstanding (i) no shares of capital stock,
         Bracknell Voting Debt or other voting securities of Bracknell, (ii) no
         securities of Bracknell or any Subsidiary of Bracknell convertible into
         or exchangeable for shares of capital stock, Bracknell Voting Debt or
         other voting securities of Bracknell or any Subsidiary of Bracknell, or
         (iii) no options, warrants, calls, rights (including preemptive
         rights), commitments or agreements to which Bracknell or any Subsidiary
         of Bracknell is a party or by which it is bound obligating Bracknell or
         any Subsidiary of Bracknell to issue, deliver, sell, purchase, redeem
         or acquire, or cause to be issued, delivered, sold, purchased, redeemed
         or acquired, additional shares of capital stock or any Bracknell Voting
         Debt or other voting securities of Bracknell or any Subsidiary of
         Bracknell or obligating Bracknell or any Subsidiary of Bracknell to
         grant, extend or enter into any such option, warrant, call, right,
         commitment or agreement. Except as set forth on Schedule 5.05(b), there
         are no restrictions on the ability of Bracknell to vote the stock of
         any of its Subsidiaries.

                  SECTION 5.06 Canadian Securities Law and Bracknell Financial
Statements

                  (a)      Bracknell is a reporting issuer under the Securities
         Act (Ontario), is not on the list of defaulting reporting issuers
         maintained under such Act, and will deliver to Able after the date
         hereof a true and complete copy of each quarterly, annual or other
         form, report, filing or document filed by Bracknell with the
         Governmental Authorities under the Securities Act (Ontario), or under
         the rules, policies, listing agreements or other requirements of the
         TSE or any other stock exchange on which any of Bracknell's securities
         are listed and posted for trading ("Exchange Filing Requirements"),
         since November 1, 1995, which are all the forms, reports, filings or
         documents (other than preliminary material) that Bracknell was required
         to file with the Governmental Authorities under the Securities Act
         (Ontario), or pursuant to Exchange Filing Requirements, since November
         1, 1995. Bracknell will deliver to Able after the date hereof, a true
         and complete copy of each quarterly, annual or other report or filing
         filed by Bracknell with the Governmental Authorities under the
         Securities Act (Ontario), or Exchange Filing Requirements, subsequent
         to the date of this Agreement and prior to the Closing Date. All of
         such forms, reports, filings or documents filed prior to the date of
         this Agreement are hereinafter referred to as the "Bracknell Disclosure
         Documents." Bracknell has not filed any confidential material change
         reports still maintained on a confidential basis. Bracknell is in
         compliance in all material respects with applicable securities Laws of
         Ontario and other applicable jurisdictions. Except with respect to the
         Merger, Bracknell is not required to file any form, report, filing or
         other documents with the SEC.


                                       38
<PAGE>   40

                  (b)      As of their respective filing dates, the Bracknell
         Disclosure Documents complied in all material respects with the
         requirements of the Securities Act (Ontario), other applicable Law, and
         Exchange Filing Requirements. As of their respective filing dates, none
         of the Bracknell Disclosure Documents contained any untrue statement of
         a material fact or omitted to state a material fact required to be
         stated therein or necessary to make the statements therein, in light of
         the circumstances under which they were made, not misleading.

                  (c)      As of their respective filing dates, the financial
         statements of Bracknell and its consolidated Subsidiaries included in
         the Bracknell Disclosure Documents complied as to form in all material
         respects with the Securities Act (Ontario) and the rules and
         regulations of the Governmental Authorities under the Securities Act
         (Ontario) with respect thereto, were prepared in accordance with
         Canadian GAAP (except as disclosed in the notes to such financial
         statements) and fairly present in accordance with applicable
         requirements of Canadian GAAP (subject, in the case of the unaudited
         financial statements, to normal year-end adjustments on a basis
         comparable with past periods, the effect of which will not,
         individually or in the aggregate, have a Bracknell Material Adverse
         Effect) the consolidated financial position of Bracknell and its
         consolidated Subsidiaries as of their respective dates and the
         consolidated results of operations and the consolidated cash flows of
         Bracknell and its consolidated Subsidiaries for the periods presented
         therein.

                  SECTION 5.07 Proxy Statement/Prospectus; Registration
Statement. None of the information supplied by Bracknell for inclusion in (a)
the Proxy Statement/ Prospectus to be filed by Able and Bracknell with the SEC
and any amendments or supplements thereto or (b) the Registration Statement to
be filed by Bracknell with the SEC and any amendments or supplements thereto,
will, at the respective times when such documents are filed, and, in the case of
the Proxy Statement/Prospectus, at the time the Proxy Statement/Prospectus or
any amendment or supplement thereto is first mailed to stockholders of Able, at
the time of the Second Able Stockholder Meeting and at the Effective Time, and,
in the case of the Registration Statement, when it becomes effective under the
Securities Act of 1933, contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. All documents that Bracknell is responsible for filing with the SEC
in connection with the Merger will comply as to form in all material respects
with the applicable provisions of the Exchange Act, the Securities Act of 1933
and state securities Laws.

                  SECTION 5.08 No Undisclosed Material Liabilities. Except as
set forth in Schedule 5.08, there are no Liabilities of Bracknell or any of its
Subsidiaries and there is no existing condition, situation or set of
circumstances which, individually or in the aggregate, have or would reasonably
be expected to have a Bracknell Material Adverse Effect, other than:

                  (a)      Liabilities disclosed or provided for in Bracknell's
         unaudited consolidated balance sheet contained in Bracknell's Second
         Quarter Interim Report for the three months ended April 30, 2000;


                                       39
<PAGE>   41

                  (b)      Liabilities incurred in the ordinary course of
         business consistent with past practices since April 30, 2000, which in
         the aggregate are not material to Bracknell or its Subsidiaries taken
         as a whole; and

                  (c)      Liabilities under this Agreement.

                  SECTION 5.09 Absence of Certain Changes. Except as set forth
on Schedule 5.09 or as described in any of the Bracknell Disclosure Documents,
since, April 30, 2000, Bracknell and its Subsidiaries have conducted their
business in all material respects in the ordinary course consistent with past
practices and there has not been:

                  (a)      any event, occurrence or development or state of
         circumstances or facts, which affects or relates to Bracknell, its
         Subsidiaries or the industries in which any of them operate, which has
         had or would reasonably be expected to have a Bracknell Material
         Adverse Effect;

                  (b)      any material amendment or termination of any material
         contact or material Lease relating to the Business other than in the
         ordinary course of business and which would, in the aggregate, not have
         a Bracknell Material Adverse Effect;

                  (c)      any material destruction, damage or other loss to any
         of the assets of Bracknell or any of its Subsidiaries that is not
         covered by insurance and which would not, in the aggregate, have a
         Bracknell Material Adverse Effect;

                  (d)      any material sale, lease or other disposition of any
         of the assets of Bracknell or any of its Subsidiaries, other than
         assets sold, leased or otherwise disposed of in the ordinary course of
         business consistent with past practice and which would not, in the
         aggregate, have a Bracknell Material Adverse Effect;

                  (e)      any material purchase or lease of any assets by
         Bracknell or any of its Subsidiaries, other than assets purchased or
         leased in the ordinary course of business consistent with past practice
         which would not, in the aggregate, have a Bracknell Material Adverse
         Effect;

                  (f)      any material increase in the compensation payable to
         any of the employees of Bracknell or any of its Subsidiaries, except
         for increases in the ordinary course of business and consistent with
         past practice and which would, in the aggregate, not have a Bracknell
         Material Adverse Effect; or

                  (g)      any agreement or commitment by Bracknell or any of
         its Subsidiaries to take any action described in this Section 5.09.

                  SECTION 5.10 Litigation. Except as set forth on Schedule 5.10
there is no Action by any Person or by or before any Governmental Authority that
is pending or, to Bracknell's Knowledge, threatened by, against or affecting
Bracknell or its Subsidiaries or any of their respective assets that would have
a Bracknell Material Adverse Effect. Except as set


                                       40
<PAGE>   42

forth on Schedule 5.10, neither Bracknell nor any of its Subsidiaries is subject
to any Order that would have a Bracknell Material Adverse Effect.

                  SECTION 5.11 Taxes. Except as set forth on Schedule 5.11(i),
Bracknell and its Subsidiaries have timely filed all Returns required to be
filed by them on or before the date hereof, except where failure to timely file
would not have a Bracknell Material Adverse Effect. All such Returns are
complete and accurate except where the failure to be complete or accurate would
not have a Bracknell Material Adverse Effect. Bracknell and its Subsidiaries
have paid, or have set up an adequate reserve for the payment of, all Taxes
shown as due on such Returns, except where the failure to do so would not have a
Bracknell Material Adverse Effect. Bracknell's Second Quarter Interim Report for
the three months ended April 30, 2000 contains an adequate reserve for all Taxes
accrued by Bracknell and its Subsidiaries through April 30, 2000. Except as set
forth on Schedule 5.11(ii), no deficiencies for any Taxes have been asserted,
proposed or assessed against Bracknell or its Subsidiaries in writing that have
not been paid or otherwise settled or reserved against, except for deficiencies
the assertion, proposing or assessment of which would not have a Bracknell
Material Adverse Effect, and no waivers of the time to assess any such Taxes are
pending (other than for current Taxes not yet due and payable) on the assets of
Bracknell or any of its Subsidiaries.

                  SECTION 5.12  Tax Free Merger.

                  (a)      Following the Merger, and as a result thereof, the
         Surviving Corporation will hold at least 90 percent of the fair market
         value of the net assets and at least 70 percent of the fair market
         value of the gross assets held by Subco prior to the Merger (excluding
         the Merger Consideration).

                  (b)      Bracknell will acquire Able stock solely in exchange
         for Bracknell voting stock, and in the Merger, shares of Able stock
         representing control of Able, as defined in Section 368(c) of the Code,
         will be exchanged solely for voting stock of Bracknell.

                  (c)      Subco will have no liabilities assumed by the
         Surviving Corporation, and will not transfer to the Surviving
         Corporation in the Merger any assets subject to liabilities.

                  (d)      There is no intercorporate indebtedness existing
         between Bracknell and Able or between Subco and Able. Bracknell does
         not own, directly or indirectly, nor has it owned during the past five
         years, directly or indirectly, any stock of Able.

                  (e)      Neither Bracknell nor Subco is an investment company
         as defined in Section 368(a)(2)(F)(iii) and (iv) of the Code.

                  (f)      Prior to the Merger, Bracknell will be in control of
         Subco within the meaning of Section 368(c) of the Code.

                  (g)      Bracknell has no plan or intention as part of the
         plan of the Merger to cause the Surviving Corporation to issue after
         the Effective Time additional shares of stock that would result in
         Bracknell losing control of the Surviving Corporation within


                                       41
<PAGE>   43

         the meaning of Section 368(c) of the Code, or any warrants, options,
         convertible securities, or any other type of right pursuant to which
         any person could acquire stock in the Surviving Corporation that, if
         exercised or converted, would affect Bracknell's acquisition or
         retention of control of the Surviving Corporation, as defined in
         Section 368(c) of the Code.

                  (h)      Bracknell has no plan or intention to reacquire any
         of the Bracknell Common Stock issued in the Merger.

                  (i)      Bracknell has no plan or intention to liquidate the
         Surviving Corporation, to merge the Surviving Corporation with or into
         another corporation or to sell or otherwise dispose of the Surviving
         Corporation stock except for transfers of stock to a corporation
         controlled by Bracknell.

                  (j)      Bracknell will cause the Surviving Corporation to
         attach to a timely filed U.S. income Tax Return for the taxable year in
         which the Merger occurs the statement required by Section
         1.367(a)-3(c)(6) of the Treasury regulations issued under Section
         367(a) of the Code.

                  (k)      Following the Merger, the Surviving Corporation will
         continue Able's historic business or use a significant portion of its
         historic business assets in a business.

                  (l)      Bracknell agrees to treat the Merger as a
         reorganization within the meaning of Section 368(a) of the Code. This
         Agreement is intended to constitute a "plan of reorganization" within
         the meaning of Section 1.368-2(g) of the income Tax regulations
         promulgated under the Code. Neither Bracknell nor Subco has knowingly
         taken any action that would jeopardize the qualification of the Merger
         as a reorganization within the meaning of Section 368(a) of the Code.
         During the period from the date of this Agreement through the Effective
         Time, unless all parties hereto shall otherwise agree in writing,
         neither Bracknell nor Subco shall knowingly take or fail to take any
         action which action or failure would jeopardize the qualification of
         the Merger as a reorganization within the meaning of Section 368(a) of
         the Code. Bracknell shall cause one or more of its responsible officers
         to execute and deliver certificates to confirm the accuracy of certain
         relevant facts as may be reasonably requested by counsel in connection
         with the preparation and delivery of the tax opinion described in
         Section 9.01(f).

                  (m)      Following the Effective Time, Bracknell shall use its
         commercially reasonable best efforts, and shall cause the Surviving
         Corporation to use its commercially reasonable best efforts, to conduct
         its business and the Surviving Corporation's business in a manner which
         would not jeopardize the characterization of the Merger as a
         reorganization within the meaning of Section 368(a) of the Code.

                  SECTION 5.13 Compliance With Other Applicable Laws. Bracknell
and its Subsidiaries have in effect all Permits necessary for them to own, lease
or operate the properties and assets of Bracknell and its Subsidiaries and to
carry on the Business as now conducted, and


                                       42
<PAGE>   44

there has not occurred any default under any Permit, except for the absence of
Permits and for defaults under Permits that have not had a Bracknell Material
Adverse Effect. Bracknell and its Subsidiaries are in compliance with all Other
Applicable Law, except where failure to so comply would not have a Bracknell
Material Adverse Effect. Except as set forth in Schedule 5.13, no investigation
or review by any Governmental Authority with respect to Bracknell or any of its
Subsidiaries is pending, or to Bracknell's Knowledge, threatened.

                  SECTION 5.14 Brokers. Except as disclosed in Schedule 5.14, no
Person is or will become entitled to receive any brokerage or finder's fee,
advisory fee or other similar payment for the transactions contemplated by this
Agreement by virtue of having been engaged by or acted on behalf of Bracknell or
any of its Subsidiaries.

                  SECTION 5.15 Certain Payments. Excluding any matters that have
been resolved, to Bracknell's Knowledge, neither Bracknell, nor any of its
Subsidiaries, directors, officers, agents, employees, or any other Person
associated with or acting for or on behalf of Bracknell or any of its
Subsidiaries, has directly or indirectly (i) made any contribution, gift, bribe,
rebate, payoff, influence payment, kickback, or other payment to any Person,
private or public, regardless of form, whether in money, property, or services
(A) to obtain favorable treatment in securing business, (B) to pay for favorable
treatment in securing business, or (C) to obtain special concessions or for
special concessions already obtained, for or in respect of Bracknell or any of
its Subsidiaries, or (ii) established or maintained any fund or asset that has
not been appropriately recorded in the books or records of Bracknell or its
Subsidiaries, which in the case of either clause (i) or (ii) would be in
violation of Law.

                  SECTION 5.16 Interim Operations of Subco. Subco was formed
solely for the purpose of engaging in the transactions contemplated hereby, has
engaged in no other business activities and has conducted its operations only as
contemplated hereby.

                  SECTION 5.17 Authorization for Bracknell Common Stock. Prior
to the Closing Date, Bracknell will have taken all necessary action to permit it
to issue the number of shares of Bracknell Common Stock to be issued pursuant to
the terms of this Agreement. Shares of Bracknell Common Stock issued pursuant to
the terms of this Agreement will, when issued, be validly issued, fully paid and
nonassessable and no person will have any preemptive right of subscription or
purchase in respect thereof. Such shares of Bracknell Common Stock will be
conditionally listed on the TSE.

                                   ARTICLE VI

                                COVENANTS OF ABLE

                  Able agrees that:

                  SECTION 6.01 Conduct of Able. Except as expressly contemplated
by this Agreement or as disclosed in writing by Able prior to the date of this
Agreement, from the date hereof until the Effective Time, Able and its
Subsidiaries shall conduct their business in the ordinary course consistent with
past practice and shall use commercially reasonable efforts to


                                       43
<PAGE>   45

preserve intact their business organizations and relationships with third
parties and to keep available the services of their present officers and
employees. Except as otherwise approved in writing by Bracknell or as expressly
contemplated by this Agreement, and without limiting the generality of the
foregoing, from the date hereof until the Effective Time:

                  (a)      Able will not adopt or propose any change in its
         articles of incorporation or bylaws;

                  (b)      Able will not, and will not permit any of its
         Subsidiaries to, merge or consolidate with any other Person (other than
         another wholly owned Subsidiary) or acquire a material amount of stock
         or assets of any other Person;

                  (c)      Able will not, and will not permit any of its
         Subsidiaries to, sell, lease, license or otherwise dispose of any
         material assets or property except (i) pursuant to existing contracts
         or commitments, (ii) in the ordinary course consistent with past
         practice, or (iii) transfers between Able and/or its Subsidiaries;

                  (d)      Able will not declare or pay any dividends or make
         any distributions on its issued and outstanding capital stock;

                  (e)      except as set forth in Schedule 6.01(e), Able will
         not, and will not permit any of its Subsidiaries to, (i) issue, deliver
         or sell, or authorize or propose the issuance, delivery or sale of, any
         Able Securities or Able Subsidiary Securities, (ii) split, combine or
         reclassify any Able Securities or Able Subsidiary Securities or (iii)
         except as required or permitted by this Agreement, repurchase, redeem
         or otherwise acquire any Able Securities or, any Able Subsidiary
         Securities;

                  (f)      except as otherwise expressly permitted hereby, Able
         will not make any commitment or enter into any contract or agreement
         material to Able and its Significant Subsidiaries except in the
         ordinary course of business consistent with past practice;

                  (g)      Able will not, and will not permit any of its
         Subsidiaries to, incur, assume or guarantee any further indebtedness
         (i) in an amount equal to or less than $250,000 other than in the
         ordinary course of business consistent with past practice and unless
         Able notifies Bracknell promptly after any such obligation arises, or
         (ii) in an amount greater than $250,000 (in any one transaction or a
         series of related transactions);

                  (h)      Able will not, and will not permit any of its
         Subsidiaries to, take or agree to or commit to take any action that
         would make any representation and warranty of Able hereunder inaccurate
         in any material respect at, or as of any time prior to, the Effective
         Time; and

                  (i)      Able will not, and will not permit any of its
         Subsidiaries to, agree or commit to do any of the foregoing.


                                       44
<PAGE>   46

                  SECTION 6.02 Stockholder Meetings.

                  (a)      Able shall cause a meeting of its stockholders to be
         duly called and held as soon as reasonably practicable, but in no event
         later than October 31, 2000 (the "First Able Stockholder Meeting"), for
         the purpose of voting on and approving the issuance of Able Shares to
         Sirit pursuant to the Sirit Settlement, an increase in the number of
         authorized Able Shares to permit the issuance of the Able Shares
         Bracknell is entitled to receive upon the exercise of the Bracknell
         Option, and any other item of business required by or consented to in
         writing by Bracknell acting reasonably. In connection with such
         meeting, Able will, subject to the foregoing and Section 6.04, use its
         commercially reasonable best efforts to obtain the necessary approvals
         by its stockholders of the matters referred to above in this Section
         6.02(a) and such other matters as are required by the Florida General
         Corporation Law, and will otherwise comply with all legal requirements
         applicable to such meetings.

                  (b)      Able shall cause a meeting of its stockholders to be
         duly called and held at least 30 days after the First Able Stockholder
         Meeting and in no event later than January 15, 2001, for the purpose of
         voting on the approval and adoption of this Agreement and the Merger
         (the "Second Able Stockholder Meeting"). The directors of Able shall,
         unless otherwise required in accordance with their fiduciary duties as
         advised by counsel, recommend approval and adoption of this Agreement
         and the Merger by Able's stockholders. In connection with such meeting,
         Able will, subject to the foregoing and Section 6.04, use its
         commercially reasonable best efforts to obtain the necessary approvals
         by its stockholders of this Agreement, the transactions contemplated
         hereby and such other matters as are contemplated by the terms of this
         Agreement or required by the Florida General Corporation Law, and will
         otherwise comply with all legal requirements applicable to such
         meetings.

                  SECTION 6.03 Access to Information. From the date hereof until
the Effective Time, Able will give Bracknell, its counsel, financial advisors,
environmental consultants, auditors and other authorized representatives access
to the offices, properties, books and records of Able and its Subsidiaries, will
furnish to Bracknell, its counsel, financial advisors, environmental
consultants, auditors and other authorized representatives such financial and
operating data and other information as such Persons may reasonably request and
will instruct Able's employees, counsel and financial advisors to cooperate with
Bracknell in its investigation of the business of Able and its Subsidiaries;
provided that no investigation pursuant to this Section shall affect any
representation or warranty given by Able to Bracknell hereunder; and further
provided that, such access is at normal business hours and does not materially
interfere with the conduct of Able's Business.

                  SECTION 6.04 Other Offers.

                  (a)      Able will not, nor will it permit any of its
         Subsidiaries to, nor will it authorize or permit any officer, director
         or employee of, or any investment banker, attorney, accountant or other
         advisor or representative of, Able or any of its Subsidiaries to,
         directly or indirectly, (i) solicit, initiate or encourage the
         submission of any


                                       45
<PAGE>   47

         Acquisition Proposal (as defined below) or (ii) participate in any
         discussions or negotiations regarding, or furnish to any person any
         information in respect of, or take any other action to facilitate, any
         Acquisition Proposal or any inquiries or the making of any proposal
         that constitutes, or may reasonably be expected to lead to, any
         Acquisition Proposal; provided, however, that nothing contained in this
         Section 6.04(a) shall prohibit the Able Board of Directors from
         furnishing any information to, or entering into discussions or
         negotiations with, any person that makes an unsolicited bona fide
         Acquisition Proposal if, and only to the extent that (A) the Second
         Able Stockholder Meeting shall not have occurred, (B) the Able Board of
         Directors, after consultation with outside legal counsel, determines in
         good faith that the failure to take such action would be inconsistent
         with its fiduciary duties to Able's stockholders under applicable Law,
         as such duties would exist in the absence of any limitation in this
         Agreement, (C) the Able Board of Directors determines in good faith
         that such Acquisition Proposal is reasonably likely to lead to a
         transaction that, if accepted, is reasonably likely to be consummated
         taking into account all legal, financial, regulatory and other aspects
         of the proposal and the person making the proposal, and believes in
         good faith, after consultation with its financial advisor and after
         taking into account the strategic benefits to be derived from the
         Merger and the long-term prospects of Bracknell and its Subsidiaries,
         based on the information available to the Able Board of Directors at
         the time, that such Acquisition Proposal would, if consummated, result
         in a transaction more favorable to Able's stockholders than the Merger
         (any such more favorable Acquisition Proposal being referred to herein
         as a "Superior Proposal"), and (D) prior to taking such action, Able
         (x) provides reasonable notice to Bracknell to the effect that it is
         taking such action and (y) receives from the Person submitting such
         Acquisition Proposal an executed confidentiality/standstill agreement
         in reasonably customary form and in any event containing terms at least
         as stringent as those contained in the Term Sheet between Bracknell and
         WorldCom and Able. "Acquisition Proposal" means an inquiry, offer or
         proposal regarding any of the following (other than the transactions
         contemplated by this Agreement) involving Able or any of its
         Subsidiaries: (w) any merger, consolidation, share exchange,
         recapitalization, business combination or other similar transactions;
         (x) any sale, lease, exchange, mortgage, pledge, transfer or other
         disposition of all or substantially all the assets of Able and its
         Subsidiaries, taken as a whole, in a single transaction or series of
         related transactions; (y) any tender offer or exchange offer for 20% or
         more of the outstanding Able Shares or the filing of a registration
         statement under the Securities Act of 1933 in connection therewith; or
         (z) any public announcement of a proposal, plan or intention to do any
         of the foregoing or any agreement to engage in any of the foregoing.

                  (b)      Able shall notify Bracknell of any Acquisition
         Proposal (including, the material terms and conditions thereof and the
         identity of the Person making it) as promptly as practicable (but in no
         case later than 24 hours) after its receipt thereof, and shall
         thereafter inform Bracknell on a prompt basis of the status of any
         discussions or negotiations with such third party, and any material
         changes to the terms and conditions of such Acquisition Proposal, and
         shall promptly give Bracknell a copy of any information delivered to
         such Person which has not previously been reviewed by Bracknell.


                                       46
<PAGE>   48

                  (c)      Able has ceased and terminated, and has caused its
         Subsidiaries and Affiliates, and their respective officers, directors,
         employees, investment bankers, attorneys, accountants and other agents
         and representatives to cease and terminate, any existing activities,
         discussions or negotiations with any parties conducted heretofore in
         respect of any possible Acquisition Proposal. Able shall take all
         necessary steps to promptly inform the individuals or entities referred
         to in the first sentence of Section 6.04(a) of the obligations
         undertaken in this Section 6.04.

                  (d)      The Able Board of Directors will not withdraw or
         modify, or propose to withdraw or modify, in a manner adverse to
         Bracknell, its approval or recommendation of the Merger unless the Able
         Board of Directors, after consultation with outside legal counsel,
         determines in good faith that the failure to take such action would be
         inconsistent with its fiduciary duties to Able's stockholders under
         applicable Law; provided, however, that the Able Board of Directors may
         not approve or recommend an Acquisition Proposal (and in connection
         therewith, withdraw or modify its approval or recommendation of the
         Merger) unless such an Acquisition Proposal is a Superior Proposal (and
         Able shall have first complied with its obligations set forth in
         Section 10.02 and the time referred to in the last sentence of Section
         10.02 has expired) and unless it shall have first consulted with
         outside legal counsel, and have determined that the failure to take
         such action would be inconsistent with its fiduciary duties to Able's
         stockholders.

                  (e)      Nothing contained in this Section 6.04 shall prohibit
         Able from taking and disclosing to its stockholders a position
         contemplated by Rule 14d-9 or Rule 14e-2(a) promulgated under the
         Exchange Act or from making any disclosure to Able's stockholders
         which, in the good faith reasonable judgment of the Able Board of
         Directors, after consultation with outside legal counsel, is required
         under applicable Law; provided, however, that except as otherwise
         permitted in this Section 6.04, Able does not withdraw or modify, or
         propose to withdraw or modify, its position in respect of the Merger or
         approve or recommend, or propose to approve or recommend, an
         Acquisition Proposal.

                  (f)      Notwithstanding anything contained in this Agreement
         to the contrary, any action by the Able Board of Directors permitted
         by, and taken in accordance with, this Section 6.04 shall not
         constitute a breach of this Agreement by Able. Nothing in this Section
         6.04 shall (i) permit Able to terminate this Agreement (except as
         provided in Article X hereof) or (ii) affect any other obligations of
         Able under this Agreement.

                  SECTION 6.05 Notice of Certain Events. Able shall promptly
notify Bracknell in writing of:

                           (i)      any notice or other communication from any
                  Person alleging that the consent of such Person (or another
                  Person) is or may be required in connection with the
                  transactions contemplated by this Agreement;


                                       47
<PAGE>   49

                           (ii)     any notice or other communication from any
                  Governmental Authority or regulatory agency or authority in
                  connection with the transactions contemplated by this
                  Agreement; and

                           (iii)    any Actions, suits, claims, investigations
                  or proceedings commenced or, to Able's Knowledge threatened
                  against, relating to or involving or otherwise affecting Able
                  or any of its Subsidiaries which, if pending on the date of
                  this Agreement, would have been required to have been
                  disclosed pursuant to Section 4.16 or Section 6.20 or which
                  relate to the consummation of the transactions contemplated by
                  this Agreement.

                  SECTION 6.06 Affiliates. To ensure that the issuance of
Bracknell Common Stock in the Merger complies with the Securities Act of 1933,
prior to the Effective Time, Able shall cause to be delivered to Bracknell a
list identifying each Person who might at the time of the Second Able
Stockholder Meeting be deemed to be an "affiliate" of Able for purposes of Rule
145 under the Securities Act of 1933 (each, a "Securities Act Affiliate"). Able
shall use its commercially reasonable best efforts to obtain from each Person
who is identified as a possible Securities Act Affiliate prior to the Effective
Time an agreement (a "Securities Act Affiliate Agreement") providing that such
person (i) has not made and will not make any disposition of Able Shares in the
30 day period prior to the Effective Time and (ii) will not offer to sell, or
otherwise dispose of any Bracknell Common Stock issued to such person in the
Merger in violation of the Securities Act of 1933.

                  SECTION 6.07 Litigation. Able shall use its commercially
reasonable best efforts to resolve all Material Litigation as reasonably
directed by Bracknell.

                  SECTION 6.08 Officers. Able shall use its commercially
reasonable best efforts to cause the officers and employees of Able and its
Subsidiaries identified in writing by Bracknell after the date hereof to enter
into, as applicable, (i) severance agreements on economic terms which are
substantially similar to the severance entitlements those officers and employees
have under their existing employment contracts with Able or its Subsidiaries,
and (ii) retention agreements which are reasonably satisfactory to Bracknell.

                  SECTION 6.09 Able Options and Able Warrants. Able shall use
its commercially reasonable best efforts to cause the holders of all outstanding
rights to acquire Able securities (except for the Bracknell Option and the
WorldCom Equity Interest), including the rights set forth in Schedule 6.09, to
consent to the termination of the rights on terms and conditions reasonably
satisfactory to Bracknell.

                  SECTION 6.10 Bracknell Option. Able shall take all necessary
action to cause an increase in the authorized number of Able Shares and the
reservation of a sufficient number of authorized and unissued Able Shares to
permit the issuance to Bracknell of that number of Able Shares that Bracknell is
entitled to acquire at any time upon the exercise of the option in the form of
Exhibit B which was granted to Bracknell as of the date hereof (the "Bracknell
Option"). Able shall not take any action which would prevent the exercise of the
Bracknell Option or the


                                       48
<PAGE>   50

issuance of the number of Able Shares that Bracknell is entitled to acquire upon
the exercise of the Bracknell Option at any time.

                  SECTION 6.11 Certain Rights to Acquire Able Shares. Able shall
use its commercially reasonable best efforts to cause the former stockholders of
GEC, SASCO and SES set forth in Schedule 6.11 to consent to accept Bracknell
Common Stock in lieu of any rights they may have had to receive Able Shares on
terms reasonably satisfactory to Bracknell.

                  SECTION 6.12 Sirit Support Agreement. Able shall use its
commercially reasonable best efforts (i) to cause Sirit to enter into the Sirit
Support Agreement in the form attached as Exhibit C, and (ii) to satisfy all of
its applicable obligations under the Sirit Settlement.

                  SECTION 6.13 Employee Stock Options. Able shall provide
written notice at least 30 days prior to the Closing Date to all (i) current
officers and directors, (ii) employees, and (iii) all other Persons who have or
may have been granted options to acquire Able Shares of the Merger and of the
termination of all options granted pursuant to Able's Stock Option Plan (or
other options that would terminate in accordance with their terms) upon
consummation of the Merger.

                  SECTION 6.14 Series C Conversion. Able shall use its
commercially reasonable best efforts to effect the conversion of the Series C
Shares into Able Shares in accordance with the terms of the Amendment No. 1 to
Able Telecom Holding Corp. Series C Convertible Preferred Stock Purchase
Agreement and Related Agreements, dated July 7, 2000.

                  SECTION 6.15 Support Agreements from Series C Stockholders.
Able shall use its commercially reasonable best efforts to cause the Series C
Stockholders to enter into support agreements in the form attached as Exhibit D.

                  SECTION 6.16 New Jersey Contract. Able shall use its
commercially reasonable best efforts to cooperate with Bracknell to facilitate a
transaction, if available, involving the sale, assignment, transfer or other
disposition of the New Jersey Contract and the related assets and liabilities of
Adesta.

                  SECTION 6.17 WorldCom Series D Debt. Able shall use its
commercially reasonable best efforts to effect the conversion, on or prior to
the record date for the Second Able Stockholder Meeting, of $37,000,000 of
indebtedness owing from Able to WorldCom pursuant to an amended and restated
Finance Agreement between WorldCom and Able, dated as of April 1, 1999 (the
"WorldCom Series D Debt") into Series D Shares with an aggregate face value of
$37,000,000. The Series D Shares shall be issued only if the terms and
conditions of the Series D Shares are those which are set out in Exhibit J.

                  SECTION 6.18 Canadian Competition Act. Able shall notify
Bracknell promptly if (i) the aggregate value of the assets in Canada of Able
and its Subsidiaries, determined in accordance with the Competition Act
(Canada), exceeds $35 million Canadian dollars; or (ii) the aggregate gross
annual revenues from sales in or from Canada generated by those assets,


                                       49
<PAGE>   51

determined in accordance with the Competition Act (Canada), exceed $35 million
Canadian dollars.

                  SECTION 6.19 Opinion of Financial Advisor. Able shall obtain
from a qualified financial advisor, prior to the finalization of the Proxy
Statement/Prospectus, a written opinion of a type customary in transactions
similar to those contemplated hereby, regarding whether the Conversion Number is
fair to Able's stockholders from a financial point of view. Able shall provide a
copy of such opinion to Bracknell promptly after it becomes available.

                  SECTION 6.20 Bankruptcy and Insolvency Proceedings. Without
Bracknell's prior written consent, Able shall not, and shall not permit any of
its Subsidiaries to, institute any proceeding (i) seeking to adjudicate Able or
any of its Subsidiaries bankrupt or insolvent, or (ii) seeking liquidation,
dissolution, winding-up, reorganization, arrangement, protection, relief or
composition of its property or debt or making a proposal with respect to it
under any Law relating to bankruptcy, insolvency, reorganization or compromise
of debts or other similar Laws (including, without limitation, any case under
Chapter 7 or Chapter 11 of the United States Bankruptcy Code or any similar
proceeding under applicable state Law). Able shall promptly provide written
notice to Bracknell if any Person commences a proceeding against Able or any of
its Subsidiaries described under clause (i) or (ii) of this Section 6.20 or
seeks to appoint a receiver, trustee, agent, custodian or other similar official
for Able or any of its Subsidiaries or for any substantial part of their
properties and assets.

                                   ARTICLE VII

                        COVENANTS OF BRACKNELL AND SUBCO

                  Bracknell and Subco agree that:

                  SECTION 7.01 Conduct of Bracknell and Subco. Except as
expressly contemplated by this Agreement, from the date hereof until the
Effective Time, Bracknell and its Subsidiaries shall conduct their business in
the ordinary course consistent with past practice and shall use their
commercially reasonable best efforts to preserve intact their business
organizations and relationships with third parties and to keep available the
services of their present officers and employees. Except as otherwise approved
in writing by Able or as expressly contemplated by this Agreement, and without
limiting the generality of the foregoing, from the date hereof until the
Effective Time:

                  (a)      Bracknell and Subco will not adopt or propose any
         change in their certificates of incorporation or bylaws;

                  (b)      Bracknell will not, and will not permit any of its
         Subsidiaries to, take or agree or commit to take any action that would
         make any representation and warranty of Bracknell or Subco hereunder
         inaccurate in any material respect at, or as of any time prior to, the
         Effective Time; and


                                       50
<PAGE>   52

                  (c)      Bracknell will not, and will not permit any of its
         Subsidiaries to, agree or commit to do any of the foregoing.

                  SECTION 7.02 Access to Information. From the date hereof until
the Effective Time, Bracknell will give Able, its counsel, financial advisors,
auditors and other authorized representatives access to the offices, properties,
books and records of Bracknell and its Subsidiaries, will furnish to Able, its
counsel, financial advisors, auditors and other authorized representatives such
financial and operating data and other information as such Persons may
reasonably request and will instruct Bracknell's employees, counsel and
financial advisors to cooperate with Able in its investigation of the business
of Bracknell and its Subsidiaries; provided that no investigation pursuant to
this Section shall affect any representation or warranty given by Bracknell to
Able hereunder; and provided further that, such access is at normal business
hours and does not materially interfere with the conduct of Bracknell's
Business.

                  SECTION 7.03 Obligations of Subco. Bracknell will take all
action necessary to cause Subco to perform its obligations under this Agreement
and to consummate the Merger on the terms and conditions set forth in this
Agreement.

                  SECTION 7.04 Stock Exchange Listing. Bracknell shall use its
commercially reasonable best efforts to cause the shares of Bracknell Common
Stock to be issued in the Merger and those to be issued upon the exercise of the
Replacement Options to be conditionally approved for listing on the TSE prior to
the Effective Time.

                  SECTION 7.05 Notice of Certain Events. Each of Bracknell and
Subco shall promptly notify Able in writing of:

                  (a)      any notice or other communication from any Person
         alleging that the consent of such Person (or another Person) is or may
         be required in connection with the transactions contemplated by this
         Agreement;

                  (b)      any notice or other communication from any
         Governmental Authority or regulatory agency or authority in connection
         with the transactions contemplated by this Agreement; and

                  (c)      any Actions, suits, claims, investigations or
         proceedings commenced or, to the best of its knowledge threatened
         against, relating to or involving or otherwise affecting it or any of
         its Subsidiaries which, if pending on the date of this Agreement, would
         have been required to have been disclosed pursuant to Section 5.10 or
         which relate to the consummation of the transactions contemplated by
         this Agreement.

                  SECTION 7.06 Financing Relating to the Merger. Bracknell shall
use commercially reasonable best efforts to obtain the financing necessary to
complete the transactions contemplated by this Agreement on terms satisfactory
to it.

                  SECTION 7.07 Opinion of Financial Advisor. Bracknell shall use
commercially reasonable efforts to obtain from a qualified financial advisor, an
opinion of a type customary in transactions similar to those contemplated
hereby, regarding whether the Merger Consideration


                                       51
<PAGE>   53

to be provided pursuant to this Agreement is fair to Bracknell and its
stockholders from a financial point of view. Bracknell shall provide a copy of
such opinion to Able promptly after it becomes available.

                  SECTION 7.08 Replacement Options. Bracknell will use its
commercially reasonable best efforts to grant options to acquire Bracknell
Common Stock (the "Replacement Options"), in acknowledgement of the
cancellation, waiver or other termination of existing options to acquire Able
Shares, to various directors, officers and employees of Able who hold options to
acquire Able Shares as of the date hereof (the "Option Recipients"). Bracknell
will grant the Replacement Options with substantially similar vesting criteria
and on substantially similar economic terms (having regard to the Conversion
Number, the exercise price of the existing options to acquire Able Shares
relative to the market price of the Able Shares at the close of business on
August 22, 2000 and the market price of Bracknell Common Stock at the close of
business on August 22, 1000) as the options to acquire Able Shares held by the
Option Recipients as of the date hereof. The Replacement Options will be granted
subject to the approval of the Bracknell Board of Directors, the approval of the
Bracknell stockholders of an increase in the reserves under Bracknell's existing
stock option plan and the approval of the TSE. The Replacement Options will be
issued pursuant to the terms and conditions of Bracknell's existing stock option
plan.

                                  ARTICLE VIII

                     COVENANTS OF BRACKNELL, SUBCO AND ABLE

                  The parties hereto agree that:

                  SECTION 8.01 Commercially Reasonable Best Efforts. Subject to
the terms and conditions of this Agreement, each party will use its commercially
reasonable best efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable under applicable
Laws to consummate the transactions contemplated by this Agreement.

                  SECTION 8.02 Certain Filings. Bracknell and Able shall
cooperate with one another (a) in connection with the preparation of the
Registration Statement and Proxy Statement/Prospectus, and (b) in determining
whether any action by or in respect of, or filing with, any Governmental
Authority is required, or any actions, consents, approvals or waivers are
required to be obtained from parties to any Material Contracts, in connection
with the consummation of the transactions contemplated by this Agreement and (c)
in seeking any such actions, consents, approvals or waivers or making any such
filings, furnishing information required in connection therewith or with the
Registration Statement and Proxy Statement/Prospectus and seeking timely to
obtain any such actions, consents, approvals or waivers.


                                       52
<PAGE>   54

                  SECTION 8.03 Public Announcements. Bracknell and Able will
consult with each other before issuing any press release or making any public
statement with respect to this Agreement and the transactions contemplated
hereby and, except as may be required by applicable Law or any listing agreement
with any applicable securities exchange or interdealer quotation system, will
not issue any such press release or make any such public statement prior to such
consultation.

                  SECTION 8.04 Further Assurances. At and after the Effective
Time, the officers and directors of the Surviving Corporation will be authorized
to execute and deliver, in the name and on behalf of Able or Subco, any deeds,
bills of sale, assignments or assurances and to take and do, in the name and on
behalf of Able or Subco, any other actions and things to vest, perfect or
confirm of record or otherwise in the Surviving Corporation any and all right,
title and interest in, to and under any of the rights, properties or assets of
Able acquired or to be acquired by the Surviving Corporation as a result of, or
in connection with, the Merger.

                  SECTION 8.05 Preparation of the Proxy Statement/Prospectus and
Registration Statement. Bracknell and Able shall promptly prepare and file with
the SEC a preliminary version of the Proxy Statement/Prospectus and will use
their commercially reasonable best efforts to respond to the comments of the SEC
in connection therewith and to furnish all information required to prepare the
definitive Proxy Statement/Prospectus. After receiving comments from the SEC,
Bracknell shall promptly file with the SEC the Registration Statement containing
the Proxy Statement/Prospectus. Each of Bracknell and Able shall use its
commercially reasonable best efforts to have the Registration Statement declared
effective under the Securities Act of 1933 as promptly as practicable after such
filing. Bracknell shall also take any action (other than qualifying to do
business in any jurisdiction in which it is not now so qualified or filing a
general consent to service of process in any jurisdiction) required to be taken
under any applicable state securities Laws in connection with the issuance of
Bracknell Common Stock in the Merger and Able shall furnish all information
concerning Able and the holders of Able Shares as may be reasonably requested in
connection with any such action. Promptly after the effectiveness of the
Registration Statement, Able will cause the Proxy Statement/Prospectus to be
mailed to its stockholders, and if necessary, after the definitive Proxy
Statement/Prospectus shall have been mailed, promptly circulate amended,
supplemented or supplemental proxy materials and, if required in connection
therewith, resolicit proxies.

                                   ARTICLE IX

                            CONDITIONS TO THE MERGER

                  SECTION 9.01 Conditions to the Obligations of Each Party. The
obligations of Bracknell, Able and Subco to consummate the Merger are subject to
the satisfaction on or before the Closing Date of each of the following
conditions:

                  (a)      this Agreement shall have been adopted by the
         requisite vote of the stockholders of Able in accordance with the
         Florida General Corporation Law;


                                       53
<PAGE>   55

                  (b)      any applicable waiting period under the HSR Act
         relating to the Merger shall have expired;

                  (c)      no provision of any applicable Law and no Order of a
         court of competent jurisdiction shall restrain or prohibit the
         consummation of the Merger;

                  (d)      the Registration Statement shall have been declared
         effective and no stop order suspending the effectiveness of the
         Registration Statement shall be in effect and no proceedings for such
         purpose shall be pending before the SEC;

                  (e)      the shares of Bracknell Common Stock to be issued in
         the Merger and those to be issued on the exercise of the Replacement
         Options shall have been conditionally approved for listing on the TSE;

                  (f)      Bracknell and Able shall have received an opinion
         from Paul, Hastings Janofsky & Walker, LLP, counsel to Able, or other
         recognized tax counsel, based upon certain assumptions and factual
         representations of Able, Bracknell and Subco reasonably requested by
         such counsel, dated the Closing Date, to the effect that the Merger
         will be treated for U.S. federal income Tax purposes as a
         reorganization within the meaning of Section 368(a) of the Code, in
         form and substance reasonably satisfactory to Able and Bracknell; and

                  (g)      this Agreement shall not have been terminated
         pursuant to Article X.

                  SECTION 9.02 Additional Conditions Precedent to the
Obligations of Bracknell. The obligations of Bracknell to consummate the Merger
and complete the transactions contemplated hereby shall be also subject to the
fulfillment, or waiver by Bracknell, on or before the Closing Date, of each of
the following additional conditions:

                  (a)      Able shall have performed in all material respects
         all of its obligations hereunder required to be performed by it on or
         prior to the Closing Date, the representations and warranties of Able
         contained in this Agreement shall be true in all material respects at
         and as of the Closing Date as if made on and as of such date, and
         Bracknell shall have received a certificate signed by an executive
         officer of Able to the foregoing effect;

                  (b)      WorldCom shall not be in breach of any term of the
         Commitment Agreement in the form attached as Exhibit E;

                  (c)      the officers and directors of Able and its
         Subsidiaries and the other individuals listed on Schedule 9.02(c) shall
         not be in breach of any term of the support agreements in the form
         attached as Exhibit F;

                  (d)      the Series C Stockholders shall have entered into
         support agreements with Able in the form attached as Exhibit D and
         shall not be in breach of those agreements;


                                       54
<PAGE>   56

                  (e)      neither Able nor WorldCom Network Services, Inc.
         shall be in breach of any term of the Amended and Restated Master
         Services Agreement in the form attached as Exhibit G;

                  (f)      Able shall not be in breach of the applicable terms
         of the Sirit Settlement, Sirit shall have entered into the Sirit
         Support Agreement in the form attached as Exhibit C, and neither Able
         nor Sirit shall be in breach of the terms of the Sirit Support
         Agreement in the form attached as Exhibit C;

                  (g)      Bracknell shall have obtained financing necessary to
         complete the transactions contemplated by this Agreement on terms
         reasonably satisfactory to it;

                  (h)      except as agreed in writing by Bracknell, all
         outstanding Material Litigation shall have been settled or otherwise
         resolved on terms reasonably satisfactory to Bracknell;

                  (i)      the officers and employees of Able and its
         Subsidiaries identified by Bracknell pursuant to Section 6.08 shall
         have entered into, as applicable, (i) severance agreements on economic
         terms which are substantially similar to the severance entitlements
         those officers and employees have under their existing employment
         contracts with Able or its Subsidiaries, and (ii) retention agreements
         which are on terms reasonably satisfactory to Bracknell;

                  (j)      all of the outstanding rights to acquire Able
         securities, including those rights set forth in Schedule 6.09 (and
         excluding the Bracknell Option), shall have been terminated or
         cancelled;

                  (k)      the former stockholders of GEC, SASCO and SES set
         forth in Schedule 6.11 shall have agreed in writing to accept Bracknell
         Common Stock in lieu of any rights they may have had to receive Able
         Shares on terms reasonably satisfactory to Bracknell;

                  (l)      holders of no more than 5% of the Able Shares
         outstanding immediately prior to the Closing Date shall have complied
         with all requirements for perfecting stockholders' rights of appraisal
         as set forth under the Florida General Corporation Law with respect to
         such shares;

                  (m)      the Series C Shares shall have been converted into
         Able Shares in accordance with the terms of Amendment No. I to Able
         Telcom Holding Corp. Series C Convertible Preferred Stock Purchase
         Agreement and Related Agreements, dated July 7, 2000;

                  (n)      notwithstanding any of the representations and
         warranties of Able contained herein (and the information set out in any
         of the corresponding schedules), as a result of Bracknell's due
         diligence review of (a) each of the documents and materials required to
         be made available pursuant to Article IV and Section 6.03, (b) any
         document or material referenced in any Schedule, and (c) any report
         prepared by Bracknell's environmental consultants, or any other events
         or circumstances which Bracknell


                                       55
<PAGE>   57

         becomes aware of, Bracknell shall not have learned prior to the
         Effective Time any information which, in the reasonable judgement of
         Bracknell, individually, or in the aggregate, constitutes or would
         reasonably be expected to constitute an Able Material Adverse Effect or
         an Able Material Adverse Change;

                  (o)      notwithstanding any of the representations and
         warranties of Able contained herein (and the information set out in any
         of the corresponding schedules), there shall not be, and there shall
         not have occurred, any circumstance, event, condition, change or
         development or any set of circumstances, events, conditions, changes or
         developments, which, in the reasonable judgement of Bracknell, has or
         have or would reasonably be expected to have, individually or in the
         aggregate, an Able Material Adverse Effect or an Able Material Adverse
         Change;

                  (p)      on or prior to the record date for the Second Able
         Stockholder Meeting, the WorldCom Series D Debt shall have been
         converted into Series D Shares with an aggregate face value of
         $37,000,000;

                  (q)      Bracknell shall have obtained the requisite approval
         from its stockholders to enter into this Agreement if such approval is
         required by any regulatory authority or under applicable Law;

                  (r)      Able shall have obtained from a qualified financial
         advisor, a written opinion of a type customary in transactions similar
         to those contemplated hereby, to the effect that the Conversion Number
         is fair to Able's stockholders from a financial point of view, and Able
         shall have provided a copy of such opinion to Bracknell;

                  (s)      Bracknell shall have obtained from a qualified
         financial advisor, an opinion of a type customary in transactions
         similar to those contemplated hereby, to the effect that the Merger
         Consideration to be provided pursuant to this Agreement is fair to
         Bracknell and its stockholders from a financial point of view.

                  (t)      Bracknell shall have received the necessary consents
         to enter into the transactions contemplated hereby and by the WorldCom
         Support and Commitment Agreement and the Amended and Restated Master
         Services Agreement pursuant to the Second Amended and Restated Credit
         Agreement, dated as of July 21, 2000 between Bracknell, Nationwide
         Electric, Inc. and The State Group Limited as borrowers, certain
         financial institutions as lenders and Royal Bank of Canada as
         administrative agent;

                  (u)      no proceeding (including a private proceeding) shall
         have been commenced by or against Able or an Able Significant
         Subsidiary (i) seeking to adjudicate it bankrupt or insolvent; (ii)
         seeking liquidation, dissolution, winding-up, reorganization,
         arrangement, protection, relief or composition of it or any of its
         property or debt or making a proposal with respect to it under any Law
         relating to bankruptcy, insolvency, reorganization, or compromise of
         debts or other similar Laws (including, without limitation, any case
         under Chapter 7 or Chapter 11 of the United States Bankruptcy Code or
         any similar proceeding under state Law); or (iii) seeking appointment
         of a receiver,


                                       56
<PAGE>   58

         trustee, agent or custodian or other similar official for it or for any
         substantial part of its properties and assets;

                  (v)      Bracknell shall have received the opinion of Paul,
         Hastings, Janofsky & Walker, LLP, counsel to Able, dated the Closing
         Date, addressed to Bracknell, substantially in the form of Exhibit H,
         and an opinion relating to the Subsidiaries of Able substantially in
         the form of Exhibit H by counsel to Able reasonably satisfactory to
         Bracknell;

                  (w)      Bracknell shall have received a copy of the
         resolutions of the Board of Directors of Able authorizing the Merger,
         the issuance of the Bracknell Option and the other transactions
         contemplated hereby, which copy shall be certified by an executive
         officer of Able.

                  SECTION 9.03 Additional Conditions Precedent to the
Obligations of Able. The obligations of Able to consummate the Merger and
complete the transactions contemplated hereby shall also be subject to the
fulfillment, or waiver by Able, on or before the Closing Date, of each of the
following additional conditions:

                  (a)      Bracknell and Subco shall have performed in all
         material respects all of their respective obligations hereunder
         required to be performed by them at or prior to the Closing Date, the
         representations and warranties of Bracknell and Subco contained in this
         Agreement shall be true in all material respects at and as of the
         Closing Date as if made on and as of such date, and Able shall have
         received a certificate signed by an executive officer of each of
         Bracknell and Subco to the foregoing effect;

                  (b)      Able shall have received the opinion of Torys,
         counsel to Bracknell, dated the Closing Date, addressed to Able,
         substantially in the form of Exhibit I; and

                  (c)      Able shall have received copies of the resolutions of
         the Board of Directors of Bracknell and the Board of Directors of Subco
         authorizing the Merger, which copies shall be certified by an executive
         officer of Bracknell and Subco, respectively.

                                   ARTICLE X

                                  TERMINATION

                  SECTION 10.01 Termination by Bracknell or Able. This Agreement
may be terminated and the Merger may be abandoned at any time prior to the
Closing (notwithstanding any approval of this Agreement by the stockholders of
Able):

                  (a)      by mutual written consent of Bracknell and Able;

                  (b)      by either Bracknell or Able in writing, if any one or
         more of the conditions to its obligation to consummate the Merger has
         not been fulfilled by February 1, 2001


                                       57
<PAGE>   59

         (provided that the right to terminate this Agreement under this clause
         shall not be available to any party whose failure to fulfill any of its
         obligations under this Agreement has been the cause of or resulted in
         the non-fulfillment of one or more of the conditions referred to above
         by such date);

                  (c)      by either Bracknell or Able, if there shall be any
         applicable Law that makes consummation of the Merger illegal or
         otherwise prohibited or if any Order of a court of competent
         jurisdiction shall restrain or prohibit the consummation of the Merger,
         and such Order shall become final and nonappealable;

                  (d)      by either Bracknell or Able in writing, if the
         stockholder approval referred to in Section 9.01(a) shall not have been
         obtained by February 1, 2001, by reason of the failure to obtain the
         requisite vote at the Second Able Stockholder Meeting or at any
         adjournment thereof;

                  (e)      (i)      by Bracknell in writing, if (x) there has
                                    been a breach by Able of any representation
                                    or warranty of Able contained in this
                                    Agreement which, in the reasonable judgement
                                    of Bracknell, would have or would be
                                    reasonably likely to have an Able Material
                                    Adverse Effect, or (y) there has been any
                                    material breach of any of the covenants or
                                    agreements of Able set forth in this
                                    Agreement, which breach is not curable or,
                                    if curable is not cured within 30 days after
                                    written notice of such breach is given by
                                    Bracknell to Able; provided that Able shall
                                    not have the right to cure any such Breach
                                    after February 1, 2001; or

                           (ii)     by Able in writing, if (x) there has been a
                                    breach by Bracknell of any representation or
                                    warranty of Bracknell contained in this
                                    Agreement which would have or would be
                                    reasonably likely to have a Bracknell
                                    Material Adverse Effect, or (y) there has
                                    been any material breach of any of the
                                    covenants or agreements of Bracknell set
                                    forth in this Agreement, which breach is not
                                    curable or, if curable, is not cured within
                                    30 days after written notice of such breach
                                    is given by Able to Bracknell; provided that
                                    Bracknell shall not have the right to cure
                                    any such Breach after February 1, 2001; or

                  (f)      (i)      by Bracknell in writing, if there shall have
                                    been after the date hereof (x) a change,
                                    event or occurrence on or before the date of
                                    such termination which, in the reasonable
                                    judgement of Bracknell, would constitute an
                                    Able Material Adverse Change, or (y) any
                                    change of Law on or before the date of such
                                    termination shall have occurred which, in
                                    the reasonable judgement of Bracknell has or
                                    will have an Able Material Adverse Effect,
                                    excluding however, any change, condition,
                                    event or occurrence which affects the
                                    industry of Able generally and also affects
                                    Bracknell; or


                                       58
<PAGE>   60

                           (ii)     by Able in writing, if there shall have been
                                    after the date hereof (x) a change, event or
                                    occurrence on or before the date of such
                                    termination which would constitute a
                                    Bracknell Material Adverse Change, or (y)
                                    any change of Law on or before the date of
                                    such termination shall have occurred which,
                                    in the reasonable judgement of Able has or
                                    will have a Bracknell Material Adverse
                                    Effect, excluding however, any change,
                                    condition, event or occurrence which affects
                                    the industry of Bracknell generally and also
                                    affects Able.

                  SECTION 10.02 Termination by Able. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Closing by
action of the Able Board of Directors in writing, if (i) Able is not in breach
of Section 6.04, (ii) the Merger shall not have been approved by the Able
stockholders, (iii) the Able Board of Directors authorizes Able, subject to
complying with the terms of this Agreement, to enter into a binding written
agreement concerning a transaction that constitutes a Superior Proposal and Able
promptly notifies Bracknell in writing that it intends to enter into such an
agreement, attaching the most current version of such agreement to such notice,
and (iv) during the three business day period after Able's notice, (A) Able
shall have negotiated with, and shall have caused its respective financial and
legal advisors to negotiate with, Bracknell to attempt to make such commercially
reasonable adjustments in the terms and conditions of this Agreement as would
enable Able to proceed with the transactions contemplated hereby, and (B) the
Able Board of Directors shall have concluded, after considering the results of
such negotiations, that any Superior Proposal giving rise to Able's notice
continues to be a Superior Proposal. Able may not effect such termination unless
contemporaneously therewith Able pays to Bracknell in immediately available
funds the fees required to be paid pursuant to Section 10.04. Able agrees (x)
that it will not enter into a binding agreement referred to in clause (iii)
above until at least the day following the third business day after it has
provided the notice to Bracknell required thereby, and (y) to notify Bracknell
promptly if its intention to enter into a written agreement referred to in its
notification shall change at any time after giving such notification.

                  SECTION 10.03 Termination by Bracknell. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Closing by
Bracknell in writing, if either (i) Able enters into a binding agreement for a
Superior Proposal, or (ii) the Able Board of Directors shall have withdrawn or
adversely modified its approval or recommendation of the Merger.

                  SECTION 10.04 Effect of Termination.

                  (a)      If this Agreement is terminated pursuant to Sections
         10.01, 10.02, or 10.03, this Agreement shall become void and of no
         effect with no liability on the part of any party hereto, except that
         (i) the agreements contained in Section 11.04 and Section 10.04 shall
         survive the termination hereof, and (ii) the parties shall be liable
         for any willful breaches hereof.


                                       59
<PAGE>   61

                  (b)      In the event that (i) a bona fide Acquisition
         Proposal shall have been made or any person shall have publicly
         announced an intention (whether or not conditional) to make a bona fide
         Acquisition Proposal in respect of Able or any of its Subsidiaries and
         thereafter this Agreement is terminated by either Bracknell or Able
         pursuant to Section 10.01(d) or by Bracknell pursuant to Section
         10.01(e) as a result of a material breach by Able of any of the
         covenants set forth in Section 6.04 hereof, or (ii) this Agreement is
         terminated by Able pursuant to Section 10.02, or (iii) this Agreement
         is terminated by Bracknell pursuant to Section 10.03, then on the date
         of such termination Able shall pay Bracknell a termination fee of
         $3,000,000 as liquidated damages in immediately available funds and the
         Bracknell Option shall become exercisable according to its terms.

                  (c)      In the event that this Agreement is terminated by
         Bracknell or Able pursuant to Section 10.01(d) or by Bracknell pursuant
         to Section 10.01(e) (other than as described in clause 10.04(b)(i) and
         other than as a result of a breach of Section 6.08 by Able), then Able
         shall pay Bracknell a termination fee of $3,000,000 as liquidated
         damages in immediately available funds on the date of such termination.

                  (d)      Able acknowledges that the agreements contained in
         Sections 10.04(b) and (c) are an integral part of the transactions
         contemplated by this Agreement, and that, without these agreements,
         Bracknell and Subco would not have entered into this Agreement;
         accordingly, if Able fails to promptly pay the amount due pursuant to
         Section 10.04(b) or (c), and, in order to obtain such payment,
         Bracknell commences a suit which results in a judgment against Able for
         the fee set forth in Section 10.04(b) or (c), Able shall pay to
         Bracknell its costs and expenses (including attorneys' fees) in
         connection with such suit, together with interest from the date of
         termination of this Agreement on the amounts owed at the rate of 8.5%
         per annum.

                                   ARTICLE XI

                                  MISCELLANEOUS

                  SECTION 11.01 Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile,
telex or similar writing) and shall be given, if to Bracknell or Subco, to:

                                  Paul D. Melnuk
                                  President and Chief Executive Officer
                                  Bracknell Corporation
                                  150 York Street, Suite 1506
                                  Toronto, Ontario M5H 3S5 CANADA
                                  Telephone: (416) 956-0100
                                  Facsimile: (416) 362-3290

                  and to:

                                 John R. Naccarato, Esq.


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<PAGE>   62

                                 Corporate Counsel and Secretary
                                 Bracknell Corporation
                                 150 York Street, Suite 1506
                                 Toronto, Ontario M5H 3S5 CANADA
                                 Telephone: (416) 956-0104
                                 Facsimile: (416) 362-3290

                  with a copy to:

                                  Philip J. Brown, Esq.
                                  Torys
                                  Suite 3000 Maritime Life Tower
                                  P.O. Box 270
                                  Toronto-Dominion Centre
                                  Toronto, Ontario
                                  CANADA
                                  M5K 1N2
                                  Telephone: (416) 865-8238
                                  Facsimile: (416) 865-7380

                  if to Able, to:

                                  Michael Brenner, Esq.
                                  Executive Vice President and General Counsel
                                  Able Telcom Holding Corp.
                                  1643 N. Harrison Parkway
                                  Sunrise, FL 33323
                                  Telephone: (954) 838-5070
                                  Facsimile: (888) 387-7606

                  with a copy to:

                                 Wayne Shortridge, Esq.
                                 Paul, Hastings, Janofsky & Walker, LLP
                                 660 Peachtree Street, N.E.
                                 Suite 2400
                                 Atlanta, GA 30308
                                 Telephone: (404) 815-2214
                                 Facsimile: (404) 815-2358

or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. Each such notice, request
or other communication shall be effective (i) if given by facsimile, when such
facsimile is transmitted to the facsimile number


                                       61
<PAGE>   63

specified in this Section and the appropriate confirmation is received or (ii)
if given by any other means, when delivered at the address specified in this
Section.

                  SECTION 11.02 Survival of Representations and Warranties. The
representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto shall not survive the
Effective Time, except Section 6.04, Section 7.05 and Article I.

                  SECTION 11.03 Amendments; No Waivers.

                  (a)      Any provision of this Agreement may be amended or
         waived prior to the Closing if, and only if, such amendment or waiver
         is in writing and signed, in the case of an amendment, by Bracknell,
         Subco and Able or, in the case of a waiver, by the party against whom
         the waiver is to be effective; provided that (i) any waiver or
         amendment shall be effective against a party only if the Board of
         Directors of such party approves such waiver and (ii) after the
         adoption of this Agreement by the stockholders of Able, no such
         amendment or waiver shall, without the further approval of such
         stockholders and each party's Board of Directors, alter or change (x)
         the amount or kind of consideration to be received in exchange for any
         shares of capital stock of Able, (y) any term of the certificate of
         incorporation of the Surviving Corporation, or (z) any of the terms or
         conditions of this Agreement if such alteration or change would
         adversely affect the holders of any shares of capital stock of Able.

                  (b)      No failure or delay by any party in exercising any
         right, power or privilege hereunder shall operate as a waiver thereof
         nor shall any single or partial exercise thereof preclude any other or
         further exercise thereof or the exercise of any other right, power or
         privilege. The rights and remedies herein provided shall be cumulative
         and not exclusive of any rights or remedies provided by law.

                  SECTION 11.04 Fees and Expenses.

                  (a)      Except as otherwise provided in this Section, all
         costs and expenses incurred in connection with this Agreement shall be
         paid by the party incurring such cost or expense.

                  (b)      Bracknell agrees promptly to reimburse Able in
         immediately available funds for all of Able's reasonable documented
         out-of-pocket expenses (up to a maximum of $250,000), but in no event
         later than three business days after the termination of this Agreement,
         in the event that Bracknell does not consummate the transactions
         contemplated by this Agreement other than as a result of a condition to
         Bracknell's obligation to consummate the Merger not being satisfied.

                  (c)      Able and Bracknell shall each pay one-half of all
         costs and expenses related to compliance with the requirements of the
         HSR Act, printing, filing and mailing the Registration Statement and
         the Proxy Statement/Prospectus and all SEC and other regulatory filing
         fees.


                                       62
<PAGE>   64

                  SECTION 11.05 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other parties hereto.

                  SECTION 11.06 Governing Law. This Agreement shall be construed
in accordance with and governed by the Law of the State of Florida.

                  SECTION 11.07 Counterparts; Effectiveness. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.

                  SECTION 11.08 Entire Agreement. This Agreement and the Term
Sheet Agreement dated July 7, 2000 between Bracknell, Able and WorldCom
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior agreements, understandings and
negotiations, both written and oral, between the parties with respect to the
subject matter of this Agreement. No representation, inducement, promise,
understanding, condition or warranty not set forth herein has been made or
relied upon by either party hereto. Neither this Agreement nor any provision
hereof is intended to confer upon any Person other than the parties hereto any
rights or remedies hereunder except for the provisions of Article I, which are
intended for the benefit of Able's stockholders.

                  SECTION 11.09 Exhibits and Schedules. The Exhibits and
Schedules are a part of this Agreement as if fully set forth herein. All
references herein to Sections, Exhibits and Schedules shall be deemed references
to such parts of this Agreement, unless the context shall otherwise require.

                  SECTION 11.10 Headings. The headings in this Agreement are for
reference only, and shall not affect the interpretation of this Agreement.

                  SECTION 11.11 Severability of Provisions. If any provision or
any portion of any provision of this Agreement shall be held invalid or
unenforceable, the remaining portion of such provisions and the remaining
provisions of this Agreement shall not be affected thereby. If the application
of any provision or any portion of any provision of this Agreement to any Person
or circumstance shall be held invalid or unenforceable, the application of such
provision or portion of such provision to Persons or circumstances other than
those as to which it is held invalid or unenforceable shall not be affected
thereby.


                                       63
<PAGE>   65

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

                                          BRACKNELL CORPORATION


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

                                          ABLE TELCOM HOLDING CORP.


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

                                          BRACKNELL ACQUISITION CORPORATION


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


                                       64
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.1.2
<SEQUENCE>5
<FILENAME>g63952aex3-1_2.txt
<DESCRIPTION>ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION
<TEXT>

<PAGE>   1
                                                                  EXHIBIT 3.1.2

                             ARTICLES OF AMENDMENT
                        TO THE ARTICLES OF INCORPORATION
                                       OF
                           ABLE TELCOM HOLDING CORP.

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

                      (PURSUANT TO SECTION 607.0602 OF THE
                       FLORIDA BUSINESS CORPORATION ACT)

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



         Pursuant to Section 607.0602 of the Florida Business Corporation Act
(the "FBCA"), Able Telcom Holding Corp. (the "COMPANY") hereby adopts the
following Amendment to its Articles of Incorporation, as amended (the
"AMENDMENT"):

         1.       The name of the Company is Able Telcom Holding Corp.

         2.       The Amendment set forth below was duly adopted on August 23,
2000 by the Board of Directors at a meeting duly held after appropriate notice
in accordance with Section 607.0822 of the FBCA.

         3.       This Amendment to the Company's Articles of Incorporation
shall be effected by adding the following Part D to Article III as follows:

                  D.       SERIES D CONVERTIBLE PREFERRED STOCK

                  (1) Designation and Amount. The shares of such series shall
be designated "Series D Convertible Preferred Stock" (herein referred to as
"SERIES D PREFERRED STOCK"), having a par value per share equal to $0.10, and
the number of shares constituting such series shall be 1,000.

                  (2) Dividend Provisions.

                           (a)      Subject to the rights of the Company's
Series C Convertible Preferred Stock to receive dividends on the Series C
Convertible Preferred Stock prior to the payment of dividends on the Series D
Preferred Stock, the holders of shares of Series D Preferred Stock shall be
entitled to receive, if and when declared by the Board of Directors, dividends
out of any assets legally available therefor, prior and in preference to any
declaration or payment of any dividend on the $0.001 par value Common Stock of
the Company ("COMMON STOCK") (payable other than in Common Stock or other
securities and rights convertible into or entitling the holder thereof to
receive, directly or indirectly, additional shares of Common Stock of the
Company) per share on the Series D Preferred Stock ("SERIES D DIVIDEND"), at
the rate of $2,220 per


<PAGE>   2

annum (as adjusted for any stock splits, stock dividends, recapitalizations or
the like) based on an initial debt conversion value of $37,000 per share. Such
dividend shall not be cumulative but shall be deemed payable as if declared
upon a Liquidation Event as defined in 3(b) below. No cash dividends may be
paid on the Common Stock unless a dividend at the rate stated above is
simultaneously declared and paid on the Series D Preferred Stock; any non-cash
dividends paid on the Common Stock shall be simultaneously declared and paid on
the Series D Preferred Stock.

                  (3) Liquidation Preference.

                           (a)      In the event of any liquidation,
dissolution or winding up of the Company, either voluntary or involuntary,
subject only to the rights of the Series C Convertible Preferred Stock, the
holders of Series D Preferred Stock shall be entitled to receive, prior and in
preference to any distribution of any of the assets of the Company to the
holders of Common Stock or any subsequent issuance of preferred stock or series
of common stock by reason of their ownership thereof, an amount per share equal
to $37,000 for each outstanding share of Series D Preferred Stock (the "Series
D Liquidation Price") (subject to proportional adjustment of such fixed dollar
amounts for any stock splits, stock dividends, combinations, recapitalizations
or the like).

                           (b)      For purposes of this Section 3, a
liquidation, dissolution or winding up of the Company shall be deemed to be
occasioned by, or to include (A) the acquisition of the Company by another
entity by means of any transaction or series of related transactions
(including, without limitation, any reorganization, merger or consolidation)
that results in the transfer of fifty percent (50%) or more of the outstanding
voting power of the Company; or (B) a sale of all or substantially all of the
assets of the Company (each a "Liquidation Event").

                           (c)      Upon a Liquidation Event, if the
consideration received by the Company is other than cash, its value will be
deemed its fair market value.

                           (d)      The Company shall give each holder of
record of Common Stock and Series D Preferred Stock written notice of any
Liquidation Event not later than twenty (20) days prior to the stockholders'
meeting called to approve the Liquidation Event, or twenty (20) days prior to
the closing of the Liquidation Event, whichever is earlier, and shall also
notify such holders in writing of the final approval of the Liquidation Event.
The first of such notices shall describe the material terms and conditions of
the impending Liquidation Event and the provisions of this Section 3, and the
Company shall thereafter give such holders prompt notice of any material
changes. The Liquidation Event shall in no event take place sooner than twenty
(20) days after the Company has given the first notice provided herein or
sooner than ten (10) days after the Company has given notice of any material
changes provided for herein; provided, however, that such periods may be
shortened upon the written consent of the holders of Common Stock and Series D
Preferred Stock that are entitled to such notice rights or


                                       2
<PAGE>   3

similar notice rights and that represent at least a majority of the voting
power of all then outstanding shares of such Common Stock and Series D
Preferred Stock.

                  (4)      Redemption. The Company and holders of Series D
Preferred Stock shall have redemption rights as follows:

                           (a)      Company Redemption. The Company may, at its
option, on or after August 23, 2004 ("MATURITY DATE"), require all holders to
redeem all of their Series D Preferred Stock (a "COMPANY REDEMPTION") at the
Series D Redemption Price pursuant to a Company Redemption Notice.

                           (b)      Redemption Price. The Series D Redemption
Price is the sum of (A) the Series D Liquidation Price plus (B) the accrued
Series D Dividend, whether or not actually declared. The Series D Redemption
Price is payable in cash.

                           (c)      Redemption Notice. If the Company elects to
make a Company Redemption, the Company shall give a Company Redemption Notice
to the holders of Series D Preferred Stock stating that it will redeem all or a
portion of the Series D Preferred Stock pursuant to this Section 4 on a date
certain. Any Company Redemption Notice must be given by facsimile or by
overnight courier to the holders of Series D Preferred Stock. The Company
Redemption Notice shall be addressed to each such holder of Series D Preferred
Stock at the facsimile number or address of such holder appearing on the books
of the Company or given by such holder to the Company for the purpose of
notice. The Company Redemption Notice shall state the number of shares of
Series D Preferred Stock of each holder required to be redeemed and, within not
more than five business days after the effective date of the Company Redemption
stated in the Company Redemption Notice, such holder shall surrender to the
Company at the place designated in the Company Redemption Notice, or to the
agent designated by the Company, such holder's certificate(s) representing the
shares so redeemed against payment in cash of the applicable Company Redemption
Price.

                           (d)      [RESERVED]

                           (e)      Effect of Redemption. Thirty (30) days
following the giving of the Company Redemption Notice, if the holder of the
Series D Preferred Stock has not elected to convert the Series D Preferred
Stock into Common Stock, all shares of the Series D Preferred Stock designated
in the Company Redemption Notice shall be deemed to have been redeemed, and a
holder of Series D Preferred Stock shall have only the right to receive the
Series D Redemption Price, without interest thereon, upon surrender of the
certificate(s) evidencing such holders' Series D Preferred Stock.

                  (5)      Conversion. The holders of the Series D Preferred
Stock shall have conversion rights as follows (the "Conversion Rights").


                                       3
<PAGE>   4

                           (a)      Right to Convert. Each share of Series D
Preferred Stock shall be convertible, at the option of the holder thereof for
so long as such share is outstanding at any time after the earlier to occur of
(i) the effective date of the Agreement and Plan of Merger between the Company
and Bracknell Corporation executed on or about August 23, 2000 (the "Merger
Agreement"), OR (ii) the termination date of the Merger Agreement, at the
office of the Company or any transfer agent for such stock, into such number of
fully paid and nonassessable shares of Common Stock as is determined by
dividing the Series D Liquidation Price by the Conversion Price applicable to
such share, determined as hereafter provided, in effect on the date the
certificate is surrendered for conversion. The initial Conversion Price per
share for shares of Series D Preferred Stock shall be US $10.01.

                           (b)      Mechanics of Conversion. Before any holder
of Series D Preferred Stock shall be entitled to convert the same into shares
of Common Stock, he or she shall surrender the certificate or certificates
therefor, duly endorsed, at the office of the Company or of any transfer agent
for the Series D Preferred Stock, and shall give written notice to the Company
at its principal corporate office of the election to convert the same and shall
state therein the names or names in which the certificate or certificates for
shares of Common Stock are to be issued. The Company shall, as soon as
practicable thereafter, issue and deliver at such office to such holder of
Series D Preferred Stock, or to the nominee or nominees of such holder, a
certificate or certificates for the number of shares of Common Stock to which
such holder shall be entitled as aforesaid. Such conversion shall be deemed to
have been made immediately prior to the close of business on the date of such
surrender of the shares of Series D Preferred Stock to be converted, and the
person or persons entitled to receive the shares of Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock as of such date.

                           (c)      Conversion Price Adjustments of Preferred
Stock for Certain Dilution Issuances, Splits and Combinations. The Conversion
Price of the Series D Preferred Stock shall be subject to adjustment from time
to time as follows:

                                    (i)      If the Company should, at any time
or from time to time after the holders acquire the Series D Preferred Stock,
fix a record date for (A) the effectuation of a split or subdivision of the
outstanding shares of Common Stock or (B) the determination of holders of
Common Stock entitled to receive a dividend or other distribution payable in
additional shares of Common Stock or other securities or rights convertible
into, or entitling the holder thereof to receive directly or indirectly
additional shares of Common Stock (hereinafter referred to as "Common Stock
Equivalents") without payment of any consideration by such holder for the
additional shares of Common Stock or the Common Stock Equivalents (including
the additional shares of Common Stock issuable upon conversion or exercise
thereof), then, as of such record date (or the date of such dividend
distribution, split or subdivision if no record date is fixed), the Conversion
Price of the Series D Preferred Stock shall be appropriately


                                       4
<PAGE>   5

decreased so that the number of shares of Common Stock issuable on conversion
of each share of such Series shall be increased in proportion to such increase
of the aggregate of shares of Common Stock outstanding and those issuable with
respect to such Common Stock Equivalents.

                                    (ii)    If the number of shares of Common
Stock outstanding at any time after the holders acquire the Series D Preferred
Stock is decreased by a combination of the outstanding shares of Common Stock,
then, following the record date of such combination, the Conversion Price for
the Series D Preferred Stock shall be appropriately increased so that the
number of shares of Common Stock issuable on conversion of each share of such
Series shall be decreased in proportion to such decrease in outstanding shares.

                                    (iii)   (A) Notwithstanding anything else
herein to the contrary, if at any time the Company issues or sells any Common
Stock at a price less than the Conversion Price, then the Conversion Price
shall be reduced effective concurrently with such issue or sale (or thereafter
as applicable) to provide the holder of the Series D Preferred Stock such lower
Conversion Price (except pursuant to presently outstanding convertible
securities and the Company's 1995 Stock Option Plan, as amended, or other
options to employees of the Company or its subsidiaries).

                                            (B) For the purposes of the
foregoing adjustment, in the case of the issuance of any convertible or
exchangeable securities, warrants, options or other rights to subscribe or
exchange for or to purchase shares of Common Stock ("Exchangeable Securities"),
the maximum number of shares of Common Stock issuable upon exercise, conversion
or exchange of such Exchangeable Securities shall be deemed to be outstanding,
provided that no further adjustment shall be made upon the actual issuance of
Common Stock upon exercise, exchange or conversion of such Exchangeable
Securities. Further, the conversion price of such exchangeable securities shall
be deemed to be the "Purchase Price" of the Common Stock deemed issued in this
paragraph.

                                            (C) In the event of any issuance for
consideration that provides a discount to the market price of the Common Stock
or that has a ceiling price less than the Conversion Price then in effect, then
the Conversion Price will be reduced to the lower price computed as aforesaid.

                           (d)      Conversion Price Adjustment Upon
Liquidation Event. If the Company enters into an agreement which would create a
Liquidation Event, then, as of the date of the Liquidation Event, the
Conversion Price of the Series D Preferred Stock shall automatically be reset
to the price per share to be received by holders of the Common Stock in the
Liquidation Event if such price is lower than the Conversion Price.


                                       5
<PAGE>   6

                           (e)      Recapitalizations. If at any time or from
time to time there shall be a recapitalization of the Common Stock (other than
a subdivision, combination or merger or sale of assets transaction provided for
elsewhere in this Section 5 or Section 3), provision shall be made so that the
holders of the Series D Preferred Stock shall thereafter be entitled to receive
upon conversion of the Series D Preferred Stock the number of shares of stock,
or other securities or property of the Company or otherwise, to which a holder
of Common Stock deliverable upon conversion would have been entitled on such
recapitalization. In any such case, appropriate adjustment shall be made in the
application of the provisions of this Section 5 with respect to the rights of
the holders of the Series D Preferred Stock after the recapitalization to the
end that the provisions of this Section 5 (including adjustment of the
Conversion Price then in effect and the number of shares purchasable upon
conversion of the Series D Preferred Stock) shall be applicable after that
event as nearly equivalent as may be practicable.

                           (f)      No Impairment. The Company will not, by
amendment of its Certificate of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith use its best
efforts to assist in the carrying out of all the provisions of this Section 5
and to take all such action as may be necessary or appropriate in order to
protect the Conversion Rights of the holders of the Series D Preferred Stock
against impairment.

                           (g)      No Fractional Shares and Certificate as to
Adjustments. No fractional shares shall be issued upon the conversion of any
share or shares of the Series D Preferred Stock, and the number of shares of
Common Stock to be issued shall be rounded to the nearest whole share. Whether
or not fractional shares are issuable upon such conversion shall be determined
on the basis of the total number of shares of Series D Preferred Stock the
holder is at the time converting into Common Stock and the number of shares of
Common Stock issuable upon such aggregate conversion.

                           (h)      Reservation of Stock Issuable Upon
Conversion. The Company shall at all times reserve and keep available out of
its authorized but unissued shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of the Series D Preferred Stock, such
number of its shares of Common Stock as shall from time to time be sufficient
to effect the conversion of all outstanding shares of the Series D Preferred
Stock, and if at any time the number of authorized but unissued shares of
Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of the Series D Preferred Stock, in addition to such other
remedies as shall be available to the holder of such Series D Preferred Stock,
the Company shall take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purposes,
including, without limitation, engaging in best efforts to


                                       6
<PAGE>   7

obtain the requisite shareholder approval of any necessary amendment to these
Articles of Incorporation.

                           (i)      Notices. Any notice required by the
provisions of this Amendment to be given to the holders of shares of Series D
Preferred Stock shall be deemed given if deposited in the United States mail,
postage prepaid, and addressed to each holder of record at his address
appearing on the books of this Corporation.

                  (6)      Voting Rights. At the election of a holder, the
holder of each share of Series D Preferred Stock shall be entitled to one vote
for each share of Common Stock into which the Series D Preferred Stock could
then be converted on all matters on which the Common Stock is entitled to vote,
voting as a class with the Common Stock.

                  (7)      No Preference Greater than Series D Convertible
Preferred.

                           Without the prior express written consent of the
holders of not less than two thirds (2/3) of the then-outstanding Series D
Preferred Stock, the Company shall not hereafter authorize or issue additional
or other capital stock that is of senior rank or pari pasu rank to the Series D
Preferred Stock 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 two thirds (2/3)
of the then-outstanding Series D Preferred Stock, the Company shall not
hereafter authorize or make any amendment to the Company's Articles of
Incorporation or bylaws, or file any resolution of the board of directors of
the Company with the Secretary of State of the State of Florida containing any
provisions, which would adversely affect or otherwise impair the rights or
relative priority of the holders of the Series D Preferred Stock relative to
the holders of the Common Stock or the holders of any other class of capital
stock (Convertible Preferred Stock or otherwise). In the event of the merger or
consolidation of the Company with or into another corporation, the Series D
Preferred Stock shall maintain their relative powers, designations and
preferences provided for herein and no merger shall result inconsistent
therewith.

                  (8)      Restriction On Redemption and Cash Dividends with
Respect to Common Stock. Until all of the Series D Preferred Stock have been
converted or redeemed as provided herein, the Company shall not, directly or
indirectly, redeem, or declare or pay any cash dividend or distribution on, its
Common Stock without the prior express written consent of the holders of not
less than two-thirds (2/3) of the then outstanding Series D Preferred Stock.

                  (9)      Vote to Change the Terms of Series D Preferred
Stock. 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 two-thirds
(2/3) of the then outstanding Series D Preferred Stock, shall be required for
any change to these Articles of Amendment or the


                                       7
<PAGE>   8

Company's Articles of Incorporation which would amend, alter, change or repeal
any of the powers, designations, preferences and rights of the Series D
Preferred Stock.

                  (10)     Remedies, Characterizations, Other Obligations,
Breaches and Injunctive Relief. The remedies provided in these Articles of
Amendment shall be cumulative and in addition to all other remedies available
under these Articles of Amendment, at law or in equity (including a decree of
specific performance and/or other injunctive relief), no remedy contained
herein shall be deemed a waiver of compliance with the provisions giving rise
to such remedy, and nothing herein shall limit a holder's right to pursue
actual damages for any failure by the Company to comply with the terms of these
Articles of Amendment. The Company covenants to each holder of Series D
Preferred Stock that there shall be no characterization concerning this
instrument other than as expressly provided herein. Amounts set forth or
provided for herein with respect to payments, conversion and the like (and the
computation thereof) shall be the amounts to be received by the holder thereof
and shall not, except as expressly provided herein, be subject to any other
obligation of the Company (or the performance thereof). The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the holders of the Series D Preferred Stock and that the
remedy at law for any such breach may be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the holders
of the Series D Preferred Stock shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach, with the necessity
of showing economic loss and without any bond or other security being required.

                  (11)     Failure or Indulgence Not Waiver. No failure or
delay on the part of a holder of Series D Preferred Stock in the exercise of
any power, right or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, power or
privilege.


         IN WITNESS WHEREOF, the Company has caused the foregoing Article of
Amendment to the Article of Incorporation to be signed on August 23, 2000.

                                    ABLE TELCOM HOLDING CORP.



                                    By: /s/ James E. Brands
                                       -----------------------------------
                                    Name:  James E. Brands
                                          --------------------------------
                                    Title: Senior Executive Vice President
                                          --------------------------------


                                       8
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.46
<SEQUENCE>6
<FILENAME>g63952aex10-46.txt
<DESCRIPTION>EMPLOYMENT AGREEMENT, BILLY V. RAY, JUNE 15, 2000
<TEXT>

<PAGE>   1
                                                               EXHIBIT 10.46

                              EMPLOYMENT AGREEMENT

         This Employment Agreement ("Agreement") is made as of [June 15, 2000]
by and between Able Telcom Holding Corp., a Florida corporation (the "Company"),
and Billy V. Ray, Jr. (hereinafter, the "Executive").

                                 R E C I T A L S

                  A.       The Board of Directors of the Company (the "Board")
recognizes the Executive's potential contribution to the growth and success of
the Company, and desires to assure the Company of the Executive's employment in
an executive capacity and to compensate him therefor, and has approved the
provisions of this Agreement and has authorized the officers of the Company to
execute the Agreement on behalf of the Company.

                  B.       The Executive is willing to make his services
available to the Company and on the terms and conditions hereinafter set forth.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, the parties agree as follows:

         1.       Employment.

                  1.1.     Employment and Term. The Company hereby agrees to
employ the Executive and the Executive hereby agrees to serve the Company on the
terms and conditions set forth herein.

                  1.2.     Duties of Executive. During the Term of Employment
under this Agreement, the Executive shall serve as the Chairman and Chief
Executive Officer of the Company. The Executive shall be accountable only to the
Board, and, subject to the authority of the Board, shall have supervision and
control over, and responsibility for, the strategic planning, implementation of
the Strategic Plan, and oversight of the policy and procedures of the Company.
He also shall have such other powers and duties as may from time to time be
prescribed by the Board, provided that such duties are consistent with the
Executive's position as Chairman and Chief Executive Officer of a company the
size and type of the Company. The Executive shall devote his full time and
attention to the business and affairs of the Company, render such services to
the best of his ability, and use his reasonable best efforts to promote the
interests of the Company. Notwithstanding the foregoing or any other provision
of this Agreement, it shall not be a breach or violation of this Agreement for
the Executive to (i) serve on corporate (subject to approval of the Board),
civic or charitable boards or committees, (ii) deliver lectures, fulfill
speaking engagements or teach at educational institutions, or (iii) manage
personal investments, so long as such activities do not significantly interfere
with or significantly detract from the performance of the Executive's
responsibilities to the Company in accordance


<PAGE>   2

with this Agreement. The Executive may continue to serve out the remaining term
as a board member on any corporate board on which he serves as of the
Commencement Date.

         2.       Term.

                  2.1.     Term. The term of employment under this Agreement
(the "Term of Employment") shall commence as of May 1, 2000 (the "Commencement
Date") and shall continue for a period ending three (3) years from any date as
of which the Term of Employment is being determined, subject to earlier
termination pursuant to Section 5 hereof. This contract will automatically renew
for an additional three (3) year term after the initial term of three (3) years.
At the end of the three year period, the Executive may sign a consulting
agreement. The terms of either an extension to this agreement or of a consulting
agreement will be negotiated not later than the 30th month of this agreement.
The date on which the Term of Employment shall expire is sometimes referred to
in this Agreement as the "Expiration Date".

         3.       Compensation.

                  3.1.     Base Salary. The Executive shall receive a base
salary at the annual rate of $350,000 (the "Base Salary") during the Term of
Employment, with such Base Salary payable in installments consistent with the
Company's normal payroll schedule, subject to applicable withholding and other
taxes. The Base Salary shall be reviewed, at least annually, for merit increases
and may, by action and in the discretion of the Board, be increased at any time
or from time to time. The Executive's Base Salary at any point in time shall not
be decreased for any reason.

                  3.2.     Bonuses.

                           a.       Formula  Bonus:  For each Bonus Period that
begins on or after November 1, 2000 during the Term of Employment, the Executive
shall be paid an annual formula bonus (the "Formula Bonus") during the Term of
Employment equal to the greater of (i) the Minimum Annual Bonus, or (ii) the
bonus determined pursuant to a formula (the "Formula") established by the Board
at the beginning of each Bonus Period that commences during the Term of
Employment. The Minimum Annual Bonus shall be $150,000 and, subject to the
Board's approval, may be payable on each July 31, October 31, January 31, and
April 30. To establish the Formula, within the first three (3) months of each
Bonus Period for which a Formula Bonus may be payable pursuant to this Section
3.2a, the Board shall (x) assign the Executive a percentage of his Base Salary
that may be earned as a bonus (the "Target Award Percentage"), which shall not
be less than 100%, and (y) assign reasonable financial performance targets for
the Company by which to measure the Executive's performance. At the end of each
such Bonus Period, the Board will determine a percentage that reflects the
Company's actual financial performance in relation to the financial performance
targets set for the Company ("Percent of Target Award Earned"). The Executive's
bonus pursuant to the Formula will be determined as follows:

  (TARGET AWARD PERCENTAGE) X (BASE SALARY) X (PERCENT OF TARGET AWARD EARNED).


                                      -2-
<PAGE>   3

         The amount of the bonus payable to the Executive shall be determined as
promptly as practicable after the determination of the Company's financial
performance for the Bonus Period. If and to the extent that the amount of the
bonus for the Bonus Period determined pursuant to the Formula exceeds the
Minimum Annual Bonus, the Company shall pay the excess to the Executive within 2
1/2 months after the end of the Bonus Period for which it is payable.

                           b.       Termination Year Bonus. For the Bonus Period
in which the Executive's employment with the Company terminates for any reason,
the Company shall pay the Executive a pro rata portion (based upon the period
ending on the date on which the Executive's employment with the Company
terminates) of the bonus otherwise payable under Section 3.2a for the Bonus
Period in which such termination of employment occurs; provided, however, that
(i) the Bonus Period shall be deemed to end on the last day of the fiscal
quarter of the Company in which the Executive's employment so terminates, and
(ii) the business criteria used to determine the bonus for this short Bonus
Period shall be annualized and shall be determined based upon unaudited
financial information prepared in accordance with generally accepted accounting
principles, applied consistently with prior periods, and reviewed and approved
by the Compensation Committee of the Board. The Incentive Compensation for this
Bonus Period is sometimes hereinafter referred to as the "Termination Year
Bonus."

                           c.       Additional Bonuses.

                                    (i)      The Executive shall receive such
additional bonuses, if any, as the Board may in its sole and absolute discretion
determine, but in no case shall this bonus be less than the amount needed to
repay any loans advanced under Section 3.2a under the terms of repayment.

                                    (ii)     The Company shall pay to the
Executive additional bonuses (the "Special Bonuses"), payable as and when
payments on the Loans (as described in Section 4.6), if any, are due and payable
by the Executive to the Company, in amounts such that after payment by the
Executive of all federal, state and/or local taxes imposed upon the Special
Bonus, the Executive retains an amount sufficient to repay that portion (both
principal and interest) of the Loans advanced by the Company to the Executive
pursuant to Subsection 3(a) hereof that is then due and payable by the
Executive. The Company may offset and apply the amount of the Special Bonus
against the amounts (both principal and interest) then due and payable on the
Loans.

                                    (iii)    In the event that the Executive's
employment with the Company is terminated for any reason other than by the
Executive without Good Reason pursuant to Section 5.5(b) hereof, the Company
shall pay to the Executive an additional bonus (the "Additional Special Bonus"),
payable within thirty (30) days of the date of the termination of the
Executive's employment, in an amount such that after payment by the Executive of
all federal, state and/or local taxes imposed upon the Additional Special Bonus,
the Executive retains an amount sufficient to repay that portion (both principal
and interest) of the Loans advanced by the Company to the Executive pursuant to
Subsection 3(a) hereof that is due and payable by the Executive at that time.
The Company can offset and apply the amount of the


                                      -3-
<PAGE>   4

Additional Special Bonus against the amounts (both principal and interest) then
due and payable on the Loans.

                                    (iv)     The Executive shall receive such
additional bonuses, if any, as the Board may in its sole and absolute discretion
determine.

                           d.       Definitions. Any bonuses, other than the
Special Bonuses and the Additional Special Bonus, payable pursuant to this
Section 3.2 are sometimes hereinafter referred to as "Incentive Compensation."
Each period for which Incentive Compensation is payable under this Section 3.2
is sometimes hereinafter referred to as a Bonus Period. Except as otherwise
provided in Section 3.2c, and unless otherwise agreed to by the Board and the
Executive, the Bonus Period shall be the fiscal year of the Company.

                           e.       Time of Payment. Except as otherwise
provided herein, any Incentive Compensation payable pursuant to this Section 3.2
shall be paid by the Company to the Executive within 2 1/2 months after the end
of the Bonus Period for which it is payable.

                           f.       Other. Under no circumstances shall the Base
Salary of the Executive be less than 110% of the President and Chief Financial
Officer's Base Salary nor shall the Cumulative Formula Bonus and Additional
Discretionary Bonus of the Executive be less than 110% of said bonus of the
President and Chief Financial Officer.

         4.       Expense Reimbursement and Other Benefits.

                  4.1.     Reimbursement of Expenses. Upon the submission of
proper substantiation by the Executive, and subject to such rules and guidelines
as the Company may from time to time adopt with respect to the reimbursement of
expenses of executive personnel, the Company shall reimburse the Executive for
all reasonable expenses actually paid or incurred by the Executive during the
Term of Employment in the course of and pursuant to the business of the Company.
The Executive shall account to the Company in writing for all expenses for which
reimbursement is sought and shall supply to the Company copies of all relevant
invoices, receipts or other evidence reasonably requested by the Company.

                  4.2.     Compensation/Benefit Programs/Life Insurance. During
the Term of Employment, the Executive shall be entitled to participate in all
medical, dental, hospitalization, accidental death and dismemberment,
disability, travel and life insurance plans and all other plans as are presently
and hereinafter offered by the Company to its executive personnel, including
savings, pension, profit-sharing and deferred compensation plans, subject to the
general eligibility and participation provisions set forth in such plans. In
addition, the Company shall obtain, pay for and keep in force at all times while
the Executive is employed by the Company (and thereafter when required by this
Agreement) a term life insurance policy on the life of the Executive with a
death benefit not less than $1,000,000; provided that if the Executive is not
insurable at the insurer's lowest rates for healthy, non-smoking males of the
Executive's age (the "Non-Rated Premiums"), then the Company shall obtain and
pay for an insurance policy on the life of the Executive in the face amount
obtainable for such Non-Rated Premiums. The


                                      -4-
<PAGE>   5

Executive shall have the exclusive right to own and designate the beneficiaries
of any life insurance policy provided by the Company hereunder and to change the
beneficiaries from time to time. Such policy and the proceeds and cash value
thereof, if any, shall be the sole property of the Executive and the Company
shall not retain and beneficial interest therein.

                  4.3.     Working Facilities. During the Term of Employment,
the Company shall furnish the Executive with an office, secretarial help and
such other facilities and services suitable to his position and adequate for the
performance of his duties hereunder.

                  4.4.     Automobile. During the Term of Employment, the
Company shall, at the Executive's election, either (i) pay to the Executive a
non-accountable automobile allowance of $1,500 per month or (ii) provide the
Executive with a premium automobile (which initially shall be new and shall be
replaced not less frequently than every three (3) years), and reimburse the
Executive for the costs of gasoline, oil, repairs, maintenance, insurance and
other expenses incurred by Executive by reason of the use of the automobile.

                  4.5.     Stock Options.

                           a.       Initial Grant. As of the Commencement Date,
the Company shall grant to the Executive, an option to purchase one hundred and
fifty thousand (150,000) shares of common stock of the Company (the "Initial
Options") at the closing price on the Commencement Date. This option shall be
immediately exercisable in full and shall remain exercisable for a period of ten
(10) years, whether or not the Executive continues to be employed by the Company
during that period. The parties intend that the Initial Options be granted
pursuant to the Company's stock option plan (the "Stock Option Plan") and shall
be incentive stock options to the extent allowable under the Stock Option Plan
and applicable laws; provided, however, in the event that the Initial Options
may not be granted under the Stock Option Plan due to the failure of the Company
to obtain shareholder approval of an increase in the number of shares available
for grant thereunder, the Initial Options shall be granted to the Executive
outside of the Stock Option Plan.

                           b.       Future Grants. In addition, during the Term
of Employment, the Executive shall be eligible to be granted options (the "Stock
Options") to purchase common stock (the "Common Stock") of the Company under
(and therefore subject to all terms and conditions of) the Company's Stock
Option Plan, and any successor plan thereto; provided, however, that the Stock
Options shall become immediately exercisable in full upon termination of the
Executive's employment with the Company for any reason other than termination by
the Company for Cause under Section 5.1 hereof or termination by the Executive
without Good Reason under Section 5.5b hereof. The number of Stock Options and
terms and conditions of the Stock Options shall be determined by the committee
of the Board appointed pursuant to the Stock Option Plan, or by the Board of
Directors of the Company, in its discretion and pursuant to the Stock Option
Plan. In no case shall the Executive be granted less than 100% of any options
granted to the President and Chief Financial Officer.


                                      -5-
<PAGE>   6

                  4.6.     Loans. Immediately upon execution of this Agreement,
in consideration of benefits and opportunities the Executive must relinquish in
connection with his current employment, and for other good and valuable
consideration, the Executive shall receive a loan from the Company of $300,000,
repayable in equal yearly installments over the term of this agreement plus
extensions from the proceeds of yearly bonus amounts at the Executive's option.
The Company must fund any loan request within 72 hours of receiving written
notification from the Executive. The loans described in this Section 4.6 shall
collectively be referred to in this Agreement as the "Loans." The Loans shall
bear interest at a fixed rate equal to the prime rate as published by the Bank
of Wachovia for the business day immediately preceding the date on which the
loan is made. During the period in which the Executive is employed by the
Company, payments on the Loans shall be made solely from the proceeds of the
Additional Bonuses payable by the Company to the Executive pursuant to Section
3.2(c)(ii) hereof. Upon termination of the Executive's employment with the
Company for any reason other than by the Executive without Good Reason pursuant
to Section 5.5(b) hereof, payments on the Loans shall be made solely from the
proceeds of the Special Additional Bonus payable by the Company to the Executive
pursuant to Section 3.2(c)(iii) hereof. Upon termination of the Executive's
employment with the Company by the Executive without Good Reason, the Loans
shall become immediately due and payable within thirty (30) days of the date of
such termination of employment.

                  4.7.     Other Benefits. The Executive shall be entitled to
four (5) weeks of paid vacation each calendar year during the Term of
Employment, to be taken at such times as the Executive and the Company shall
mutually determine and provided that no vacation time shall significantly
interfere with the duties required to be rendered by the Executive hereunder.
Any vacation time not taken by Executive during any calendar year may be carried
forward into any succeeding calendar year. The Executive shall receive such
additional benefits, if any, as the Board of the Company shall from time to time
determine.

                  4.8.     Housing Allowance. The Executive shall receive a
monthly non-accountable housing allowance of eighteen hundred dollars ($1,800)
per month.

         5.       Termination.

                  5.1.     Termination for Cause. The Company shall at all times
have the right, upon written notice to the Executive, to terminate the Term of
Employment, for Cause as defined below. For purposes of this Agreement, the term
"Cause" shall mean (i) an action or omission of the Executive which constitutes
a willful and material breach of, or a willful and material failure or refusal
(other than by reason of his disability or incapacity) to perform his duties
under, this Agreement which is not cured within fifteen (15) days (or if the
Executive is acting diligently to effect a cure, such longer time as shall be
reasonably necessary to effect the cure) after receipt by the Executive of
written notice of same, (ii) fraud, embezzlement, material misappropriation of
funds or breach of trust in connection with his services hereunder, or (iii) a
conviction of any felony which involves dishonesty or a breach of trust. Any
termination for Cause shall be made in writing by notice to the Executive, which
notice shall set forth in reasonable detail all acts or


                                      -6-
<PAGE>   7

omissions upon which the Company is relying for such termination. The Executive
(and his legal representative) shall have the right to address the Board
regarding the acts set forth in the notice of termination. Upon any termination
pursuant to this Section 5.1, the Company shall (i) pay to the Executive any
unpaid Base Salary through the date of termination and (ii) pay to the Executive
his accrued but unpaid Incentive Compensation, if any, for any Bonus Period
ending on or before the date of the termination of Executive's employment with
the Company. Upon any termination effected and compensated pursuant to this
Section 5.1, the Company shall have no further liability hereunder (other than
for (x) reimbursement for reasonable business expenses incurred prior to the
date of termination, subject, however, to the provisions of Section 4.1, and (y)
payment of compensation for unused vacation days that have accumulated during
the calendar year in which such termination occurs).

                  5.2.     Disability. The Company shall at all times have the
right, upon written notice to the Executive, to terminate the Term of
Employment, if the Executive shall as the result of mental or physical
incapacity, illness or disability, become unable to perform his obligations
hereunder for a period of 180 days in any 12-month period. The determination of
whether the Executive is or continues to be disabled shall be made in writing by
a physician selected by the Board and reasonably acceptable to the Executive.
Upon any termination pursuant to this Section 5.2, the Company shall (i) pay to
the Executive any unpaid Base Salary through the effective date of termination
specified in such notice, (ii) pay to the Executive his accrued but unpaid
Incentive Compensation, if any, for any Bonus Period ending on or before the
date of termination of the Executive's employment with the Company, (iii) pay to
the Executive his Termination Year Bonus, if any, at the time provided in
Section 3.2f hereof, and (iv) pay to the Executive any then unpaid Special
Bonuses at the time provided in Section 3.2(c)(ii) and any Additional Special
Bonus at the time provided in Section 3.2(c)(iii). Upon any termination effected
and compensated pursuant to this Section 5.2, the Company shall have no further
liability hereunder (other than for (x) reimbursement for reasonable business
expenses incurred prior to the date of termination, subject, however to the
provisions of Section 4.1, and (y) payment of compensation for unused vacation
days that have accumulated during the calendar year in which such termination
occurs).

                  5.3.     Death. Upon the death of the Executive during the
Term of Employment, the Company shall (i) pay to the estate of the deceased
Executive any unpaid Base Salary through the Executive's date of death, (ii) pay
to the estate of the deceased Executive his accrued but unpaid Incentive
Compensation, if any, for any Bonus Period ending on or before the Executive's
date of death, (iii) pay to the estate of the deceased Executive, the
Executive's Termination Year Bonus, if any, at the time provided in Section 3.2f
hereof, and (iv) pay to the Executive's estate any then unpaid Special Bonuses
at the time provided in Section 3.2(c)(ii) and any Additional Special Bonus at
the time provided in Section 3.2(c)(iii). Upon any termination effected and
compensated pursuant to this Section 5.3, the Company shall have no further
liability hereunder (other than for (x) reimbursement for reasonable business
expenses incurred prior to the date of the Executive's death, subject, however
to the provisions of Section 4.1, and (y) payment of compensation for unused
vacation days that have accumulated during the calendar year in which such
termination occurs).


                                      -7-
<PAGE>   8

                  5.4.     Termination Without Cause. At any time the Company
shall have the right to terminate the Term of Employment by written notice not
less than thirty (30) days prior to the termination date, to the Executive. Upon
any termination pursuant to this Section 5.4 (that is not a termination under
any of Sections 5.1, 5.2, 5.3 or 5.5, the Company shall (i) pay to the Executive
on the termination date any unpaid Base Salary through the date of termination
specified in such notice, (ii) pay to the Executive the accrued but unpaid
Incentive Compensation, if any, for any Bonus Period ending on or before the
date of the termination of the Executive's employment with the Company, at the
time provided in Section 3.2f, (iii) pay to the Executive on the termination
date a lump sum payment equal to three (3) times the sum of (x) his Base Salary
as of the date of his termination and (y) the Formula Bonus for the year in
which such termination occurs, assuming a Target Award Percentage of 100%, (iv)
continue to provide the Executive with the benefits he was receiving under
Sections 4.2 and 4.4 hereof (the "Benefits") for a period of three (3) years
immediately following the date of his termination in the manner and at such
times as the Benefits otherwise would have been provided to the Executive, (v)
pay to the Executive his Termination Year Bonus, if any, at the time provided in
Section 3.2f; (vi) pay to the Executive as a single lump sum payment, within 30
days of the date of termination, a lump sum benefit equal to the value of the
portion of his benefits under any savings, pension, profit sharing or deferred
compensation plans that are forfeited under such plans but that would not have
been forfeited if the Executive's employment had contained for an additional
three (3) years; and (vii) pay to the Executive any then unpaid Special Bonuses
at the time provided in Section 3.2(c)(iii) and any Additional Special Bonus at
the time provided in Section 3.2(c)(iii). In the event that the Company is
unable to provide the Executive with any Benefits required hereunder by reason
of the termination of the Executive's employment pursuant to this Section 5.4,
then the Company shall promptly reimburse the Executive for amounts paid by the
Executive to acquire comparable coverage. Upon any termination effected and
compensated pursuant to this Section 5.4, the Company shall have no further
liability hereunder (other than for (x) reimbursement for reasonable business
expenses incurred prior to the date of termination, subject, however, to the
provisions of Section 4.1, and (y) payment of compensation for unused vacation
days that have accumulated during the calendar year in which such termination
occurs).

                  5.5.     Termination by Executive.

                           a.       The Executive shall at all times have the
right, by written notice not less than (30) days prior to the termination date,
to terminate the Term of Employment.

                           b.       Upon termination of the Term of Employment
pursuant to this Section 5.5 by the Executive without Good Reason (as defined
below), the Company shall (i) pay to the Executive upon the termination date any
unpaid Base Salary through the effective date of termination specified in such
notice or otherwise mutually agreed and (ii) pay to the Executive his accrued
but unpaid Incentive Compensation, if any, for any Bonus Period ending on or
before the termination of Executive's employment with the Company, at the time
provided in Section 3.2f. Upon any termination effected and compensated pursuant
to this Section 5.5(b), the Company shall have no further liability hereunder
(other than for (x) reimbursement for


                                      -8-
<PAGE>   9

reasonable business expenses incurred prior to the date of termination, subject,
however, to the provisions of Section 4.1, and (y) payment of compensation for
unused vacation days that have accumulated during the calendar year in which
such termination occurs). In addition, the Loans (as described in Section 4.6
hereof), to the extent then outstanding, shall become immediately due and
payable as of the date of such termination of employment pursuant to this
Subsection 5.5(b).

                           c.       Upon termination of the Term of Employment
pursuant to this Section 5.5 by the Executive for Good Reason, the Company shall
pay to the Executive the same amounts, and shall continue or compensate for
Benefits in the same amounts, that would have been payable or provided by the
Company to the Executive under Section 5.4 of this Agreement if the Term of
Employment had been terminated by the Company without Cause. In addition, if the
termination of the Term of Employment occurs after a Change in Control, and as a
result of the Change in Control, the Executive would be entitled to a reduction
in the option price for any options granted to the Executive, or any cash
payments from the Company (other than those provided under this Agreement), in
addition to those specified in Section 5.4, under any plan or program maintained
by the Company (the "Additional Benefits"), then the Company shall provide the
Executive with those Additional Benefits, if any only to the extent that such
Additional Benefits, when added to the amounts payable and the Benefits provided
by the Company to the Executive hereunder, will not constitute excess parachute
payments with the meaning of Section 280G of the Code. Upon any termination
effected and compensated pursuant to this Section 5.5(c), the Company shall have
no further liability hereunder (other than for (x) reimbursement for reasonable
business expenses incurred prior to the date of termination, subject, however,
to the provisions of Section 4.1, and (y) payment of compensation for unused
vacation days that have accumulated during the calendar year in which such
termination occurs.)

                           d.       For purposes of this Agreement, "Good
Reason" shall mean (i) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 1.2 of this Agreement, or any other
action by the Company which results in a diminution in such position, authority,
duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive; (ii) any failure by the Company to comply with any of the provisions
of Article 3 of this Agreement, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive; (iii)
any purported termination by the Company of the Executive's employment other
than for Cause pursuant to Section 5.1 or because of the Executive's disability
pursuant to Section 5.2 of this Agreement; or (iv) the occurrence of a Change in
Control. (v) failure to fund written loan request described in Section 4.6. For
purposes of this Section 5.5(d), the Executive acknowledges that the Company's
holding company functions are headquartered and centralized in Atlanta, Georgia.
For purposes of this Section 5.5(d), any good faith determination of "Good
Reason" made by the Executive shall be conclusive; provided that the Executive
shall not exercise his right to terminate his employment for Good Reason without
first giving sixty (60)


                                      -9-
<PAGE>   10

days written notice to the Board of the factual basis constituting Good Reason.
The Company shall have the right to cure the problem(s) noted by the Executive,
before the Executive may terminate his employment for Good Reason.

                           e.       For purposes of this Agreement, the term
"Change in Control" shall mean:

                                    (i)      Approval by the shareholders of the
Company of (x) a reorganization, merger, consolidation or other form of
corporate transaction or series of transactions, in each case, with respect to
which persons who were the shareholders of the Company immediately prior to such
reorganization, merger or consolidation or other transaction do not, immediately
thereafter, own more than 50% of the combined voting power entitled to vote
generally in the election of directors of the reorganized, merged or
consolidated company's then outstanding voting securities, in substantially the
same proportions as their ownership immediately prior to such reorganization,
merger, consolidation or other transaction, or (y) a liquidation or dissolution
of the Company or (z) the sale of all or substantially all of the assets of the
Company (unless such reorganization, merger, consolidation or other corporate
transaction, liquidation, dissolution or sale is subsequently abandoned);

                                    (ii)     A new Board member is elected
without the approval of at least two of the Individuals who, as of the
Commencement Date of this Agreement, constitute the Board (the "Incumbent
Board"); or

                                    (iii)    the acquisition (other than from
the Company) by any person, entity or "group", within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act, of beneficial ownership
within the meaning of Rule 13-d promulgated under the Securities Exchange Act of
more than 50% of either the then outstanding shares of the Company's Common
Stock or the combined voting power of the Company's then outstanding voting
securities entitled to vote generally in the election of directors (hereinafter
referred to as the ownership of a "Controlling Interest") excluding, for this
purpose, any acquisitions by (1) the Company or its Subsidiaries, (2) any
person, entity or "group" that as of the Commencement Date of this Agreement
owns beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Securities Exchange Act) of a Controlling Interest or (3) any employee
benefit plan of the Company or its Subsidiaries;

                                    (iv)     provided that, with respect to this
Section 5.5(e), a Change in Control shall not be deemed to have occurred should
any of the contingencies referred to in this Section involve any of those
companies, persons or other legal entities with whom the Company is negotiating
on or before the Commencement Date and which are communicated, in writing, by
the Company to the Executive upon execution of this Agreement.

                  5.6.     Certain Additional Payments by the Company. Anything
in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment, distribution or other action by the Company to or
for the benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise,


                                      -10-
<PAGE>   11

including any additional payments required under this Section 5.6) (a "Payment")
would be subject to an excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code"), or any interest or penalties are
incurred by the Executive with respect to any such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), the Company shall make a payment to the
Executive (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any Excise Tax) imposed upon the Gross-Up
Payment, the Executive retains (or has had paid to the Internal Revenue Service
on his behalf) an amount of the Gross-Up Payment equal to the sum of (x) the
Excise Tax imposed upon the Payments and (y) the product of any deductions
disallowed because of the inclusion of the Gross-Up Payment in the Executive's
adjusted gross income and the highest applicable marginal rate of federal income
taxation for the calendar year in which the Gross-Up Payment is to be made. For
purposes of determining the amount of the Gross-Up Payment, the Executive shall
be deemed to (i) pay federal income taxes at the highest marginal rates of
federal income taxation for the calendar year in which the Gross-Up Payment is
to be made, and (ii) pay applicable state and local income taxes at the highest
marginal rate of taxation for the calendar year in which the Gross-Up Payment is
to be made, net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes.

                  5.7.     Resignation. Upon any termination of employment
pursuant to this Article 5, the Executive shall be deemed to have resigned as an
officer, and if he or she was then serving as a director of the Company, as a
director, and if required by the Board, the Executive hereby agrees to
immediately execute a resignation letter to the Board.

                  5.8.     Survival. The provisions of this Article 5 shall
survive the termination of this Agreement, as applicable.

         6.       Restrictive Covenants.

                  6.1.     Non-competition. In order to fully protect the
Company's Proprietary Information, at all times during the Restricted Period,
the Executive shall not, directly or indirectly, perform or provide managerial
or executive services on behalf of any person, entity or enterprise which is
engaged in, or plans to engage in, any business in the United States that
directly or indirectly competes with the Company's Business (for this purpose,
the "Company's Business" is the business of telephone and telecommunication
installation and service and the manufacture, sale and installation of highway
signs and traffic control products.) During the Executive's employment with the
Company, the Executive shall not, directly or indirectly have any interest in
any business (other than the Company) that competes with the Company's Business,
provided that this provision shall not apply to the Executive's ownership or
acquisition, solely as an investment, of securities of any issuer that is
registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934,
as amended, and that are listed or admitted for trading on any United States
national securities exchange or that are quoted on the National Association of
Securities Dealers Automated Quotations System, or any similar system or
automated dissemination of quotations of securities prices in common use, so
long as the


                                      -11-
<PAGE>   12

Executive does not control, acquire a controlling interest in or become a member
of a group which exercises direct or indirect control of, more than five percent
of any class of capital stock of such corporation. For purposes of this
Agreement the "Restricted Period" shall be the period during which the Executive
is employed by the Company and, if the Executive's employment with the Company
is either terminated by the Company without Cause pursuant to Section 5.4, or by
the Executive for Good Reason pursuant to Section 5.5c, and the Company has paid
to the Executive all of amounts then payable to the Executive pursuant to
Sections 5.4 or 5.5c, as applicable, the three (3) year period immediately
following the termination of the Executive's employment with the Company.

                  6.2.     Confidential Information. The Executive recognizes
and acknowledges that the Trade Secrets (as defined below) and Confidential
Information (as defined below), of the Company and all physical embodiments
thereof, as they may exist from time-to-time, collectively, the "Proprietary
Information" are valuable, special and unique assets of the Company's business.
In order to obtain and/or maintain access to such Proprietary Information, which
employee acknowledges is essential to the performance of his duties under this
Agreement, the Executive agrees that, except with respect to those duties
assigned to him by the Company, the Executive shall hold in confidence all
Proprietary Information and the Executive will not reproduce, use, distribute,
disclose, or otherwise misappropriate any Proprietary Information, in whole or
in part, and will take no action causing, or fail to take any action necessary
to prevent causing, any Proprietary Information to lose its character as
Proprietary Information, nor will the Executive make use of any such Information
for the Executive's own purposes or for the benefit of any person, business or
legal entity (except the Company) under any circumstances, except that the
Executive may disclose such Proprietary Information to the extent required by
law, provided that, prior to any such disclosure, the Company be provided an
opportunity to contest such disclosure.

                  For purposes of this Agreement, the term "Trade Secrets" means
information belonging to or licensed to the Company, regardless of form,
including, but not limited to, any technical or non-technical data, formula,
pattern, compilation, program, device, method, technique, drawing, financial,
marketing or other business plan, lists of actual or potential customers or
suppliers, or any other information similar to any of the foregoing, which
derives economic value, actual or potential, from not being generally known to,
and not being readily ascertainable by proper means by, other persons who can
derive economic value from its disclosure or use. The term "Confidential
Information" means any information belonging to or licensed to the Company,
regardless of form, other than Trade Secrets, which is valuable to the Company
and not generally known to competitors of the Company.

                  The provisions of this Section 6.2 will apply to Trade Secrets
for as long as such information remains a Trade Secret and to Confidential
Information during the Executive's employment with the Company and for a period
of two (2) years following the termination of the Executive's employment with
the Company for whatever reason.


                                      -12-
<PAGE>   13

                  6.3.     Nonsolicitation of Employees and Customers. At all
times during the Restricted Period, as defined in Section 6.1 hereof, the
Executive shall not, directly or indirectly, for himself or for any other
person, firm, corporation, partnership, association or other entity (a) employ,
solicit, recruit or attempt to employ, solicit, or recruit any employee of the
Company to leave the Company's employment, or (b) solicit or attempt to solicit
any of the actual or targeted prospective customers or clients of the Company
with whom the Executive had material contact or about whom the Executive learned
Confidential Information on behalf of any person or entity in connection with
any business that competes with the Company's Business.

                  6.4.     Ownership of Developments. All copyrights, patents,
trade secrets, or other intellectual property rights associated with any ideas,
concepts, techniques, inventions, processes, or works of authorship developed or
created by Executive during the course of performing work for the Company or its
clients (collectively, the "Work Product") shall belong exclusively to the
Company and shall, to the extent possible, be considered a work made by the
Executive for hire for the Company within the meaning of Title 17 of the United
States Code. To the extent the Work Product may not be considered work made by
the Executive for hire for the Company, the Executive agrees to assign, and
automatically assign at the time of creation of the Work Product, without any
requirement of further consideration, any right, title, or interest the
Executive may have in such Work Product. Upon the request of the Company, the
Executive shall take such further actions, including execution and delivery of
instruments of conveyance, as may be appropriate to give full and proper effect
to such assignment.

                  6.5.     Books and Records. All books, records, and accounts
relating in any manner to the customers or clients of the Company, whether
prepared by the Executive or otherwise coming into the Executive's possession,
shall be the exclusive property of the Company and shall be returned immediately
to the Company on termination of the Executive's employment hereunder or on the
Company's request at any time.

                  6.6.     Definition of Company. Solely for purposes of this
Article 6, the term "Company" also shall include any existing or future
subsidiaries of the Company that are operating during the time periods described
herein and any other entities that directly or indirectly, through one or more
intermediaries, control, are controlled by or are under common control with the
Company during the periods described herein.

                  6.7.     Acknowledgment by Executive. The Executive
acknowledges and confirms that (a) the restrictive covenants contained in this
Article 6 are reasonably necessary to protect the legitimate business interests
of the Company, and (b) the restrictions contained in this Article 6 (including
without limitation the length of the term of the provisions of this Article 6)
are not overbroad, overlong, or unfair and are not the result of overreaching,
duress or coercion of any kind. The Executive further acknowledges and confirms
that his full, uninhibited and faithful observance of each of the covenants
contained in this Article 6 will not cause him any undue hardship, financial or
otherwise, and that enforcement of each of the covenants contained herein will
not impair his ability to obtain employment commensurate with his abilities and
on terms fully acceptable to him or otherwise to obtain income required for the
comfortable support


                                      -13-
<PAGE>   14

of him and his family and the satisfaction of the needs of his creditors. The
Executive acknowledges and confirms that his special knowledge of the business
of the Company is such as would cause the Company serious injury or loss if he
were to use such ability and knowledge to the benefit of a competitor or were to
compete with the Company in violation of the terms of this Article 6. The
Executive further acknowledges that the restrictions contained in this Article 6
are intended to be, and shall be, for the benefit of and shall be enforceable
by, the Company's successors and assigns.

                  6.8.     Reformation by Court. In the event that a court of
competent jurisdiction shall determine that any provision of this Article 6 is
invalid or more restrictive than permitted under the governing law of such
jurisdiction, then only as to enforcement of this Article 6 within the
jurisdiction of such court, such provision shall be interpreted and enforced as
if it provided for the maximum restriction permitted under such governing law.

                  6.9.     Extension of Time. If the Executive shall be in
violation of any provision of this Article 6, then each time limitation set
forth in this Article 6 shall be extended for a period of time equal to the
period of time during which such violation or violations occur. If the Company
seeks injunctive relief from such violation in any court, then the covenants set
forth in this Article 6 shall be extended for a period of time equal to the
pendency of such proceeding including all appeals by the Executive.

                  6.10.    Survival. The provisions of this Article 6 shall
survive the termination of this Agreement, as applicable.

         7.       Injunction. It is recognized and hereby acknowledged by the
parties hereto that a breach by the Executive of any of the covenants contained
in Article 6 of this Agreement will cause irreparable harm and damage to the
Company, the monetary amount of which may be virtually impossible to ascertain.
As a result, the Executive recognizes and hereby acknowledges that the Company
shall be entitled to an injunction from any court of competent jurisdiction
enjoining and restraining any violation of any or all of the covenants contained
in Article 6 of this Agreement by the Executive or any of his affiliates,
associates, partners or agents, either directly or indirectly, and that such
right to injunction shall be cumulative and in addition to whatever other
remedies the Company may possess.

         8.       Attorney's Fees. Nothing contained herein shall be construed
to prevent the Company or the Executive from seeking and recovering from the
other damages sustained by either or both of them as a result of its or his
breach of any term or provision of this Agreement. In the event that either
party hereto brings suit for the collection of any damages resulting from, or
the injunction of any action constituting, a breach of any of the terms or
provisions of this Agreement, then the party found to be at fault shall pay all
reasonable court costs and attorneys' fees of the other.

         9.       Assignment. Neither party shall have the right to assign or
delegate his rights or obligations hereunder, or any portion thereof, to any
other person.


                                      -14-
<PAGE>   15

         10.      Governing Law and Venue This Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
Georgia. The venue for any action to enforce this Agreement shall be the state
or federal courts located within Fulton County, Georgia.

         11.      Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and, upon its effectiveness, shall supersede all prior agreements,
understandings and arrangements, both oral and written, between the Executive
and the Company (or any of its affiliates) with respect to such subject matter.
This Agreement may not be modified in any way unless by a written instrument
signed by both the Company and the Executive.

         12.      Notices: All notices required or permitted to be given
hereunder shall be in writing and shall be personally delivered by courier, sent
by registered or certified mail, return receipt requested or sent by confirmed
facsimile transmission addressed as set forth herein. Notices personally
delivered, sent by facsimile or sent by overnight courier shall be deemed given
on the date of delivery and notices mailed in accordance with the foregoing
shall be deemed given upon the earlier of receipt by the addressee, as evidenced
by the return receipt thereof, or three (3) days after deposit in the U.S. mail.
Notice shall be sent (i) if to the Company, addressed to 1000 Holcomb Woods
Parkway, Suite 440, Roswell, Georgia 30076, Attention: Chairman of the Board,
and (ii) if to the Executive, to his address as reflected on the payroll records
of the Company, or to such other in accordance with this provision.

         13.      Benefits; Binding Effect. This Agreement shall be for the
benefit of and binding upon the parties hereto and their respective heirs,
personal representatives, legal representatives, successors and, where permitted
and applicable, assigns, including, without limitation, any successor to the
Company, whether by merger, consolidation, sale of stock, sale of assets or
otherwise.

         14.      Severability. The invalidity of any one or more of the words,
phrases, sentences, clauses, provisions, sections or articles contained in this
Agreement shall not affect the enforceability of the remaining portions of this
Agreement or any part thereof, all of which are inserted conditionally on their
being valid in law, and, in the event that any one or more of the words,
phrases, sentences, clauses, provisions, sections or articles contained in this
Agreement shall be declared invalid, this Agreement shall be construed as if
such invalid word or words, phrase or phrases, sentence or sentences, clause or
clauses, provisions or provisions, section or sections or article or articles
had not been inserted. If such invalidity is caused by length of time or size of
area, or both, the otherwise invalid provision will be considered to be reduced
to a period or area which would cure such invalidity.

         15.      Waivers. The waiver by either party hereto of a breach or
violation of any term or provision of this Agreement shall not operate nor be
construed as a waiver of any subsequent breach or violation.


                                      -15-
<PAGE>   16

         16.      Damages. Nothing contained herein shall be construed to
prevent the Company or the Executive from seeking and recovering from the other
damages sustained by either or both of them as a result of its or his breach of
any term or provision of this Agreement. In the event that either party hereto
brings suit for the collection of any damages resulting from, or the injunction
of any action constituting, a breach of any of the terms or provisions of this
Agreement, then the party found to be at fault shall pay all reasonable court
costs and attorneys' fees of the other.

         17.      Section Headings. The article, section and paragraph headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.

         18.      No Third Party Beneficiary. Nothing expressed or implied in
this Agreement is intended, or shall be construed, to confer upon or give any
person other than the Company, the parties hereto and their respective heirs,
personal representatives, legal representatives, successors and permitted
assigns, any rights or remedies under or by reason of this Agreement.

         19.      Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument and agreement.

         20.      Indemnification.

                           a.       Subject to limitations imposed by law, the
Company shall indemnify and hold harmless the Executive to the fullest extent
permitted by law from and against any and all claims, damages, expenses
(including attorneys' fees), judgments, penalties, fines, settlements, and all
other liabilities incurred or paid by him in connection with the investigation,
defense, prosecution, settlement or appeal of any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative and to which the Executive was or is a party or is threatened to
be made a party by reason of the fact that the Executive is or was an officer,
employee or agent of the Company, or by reason of anything done or not done by
the Executive in any such capacity or capacities, provided that the Executive
acted in good faith, in a manner that was not grossly negligent or constituted
willful misconduct and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The Company also shall pay any and all expenses (including attorney's
fees) incurred by the Executive as a result of the Executive being called as a
witness in connection with any matter involving the Company and/or any of its
officers or directors.

                           b.       The Company shall pay any expenses
(including attorneys' fees), judgments, penalties, fines, settlements, and other
liabilities incurred by the Executive in investigating, defending, settling or
appealing any action, suit or proceeding described in this Section 20 in advance
of the final disposition of such action, suit or proceeding. The Company shall
promptly pay the amount of such expenses to the Executive, but in no event later
than 10 days following the Executive's delivery to the Company of a written
request for an advance


                                      -16-
<PAGE>   17

pursuant to this Section 20, together with a reasonable accounting of such
expenses.

                           c.       The Executive hereby undertakes and agrees
to repay to the Company any advances made pursuant to this Section 20 if and to
the extent that it shall ultimately be found that the Executive is not entitled
to be indemnified by the Company for such amounts.

                           d.       The Company shall make the advances
contemplated by this Section 20 regardless of the Executive's financial ability
to make repayment, and regardless whether indemnification of the Indemnitee by
the Company will ultimately be required. Any advances and undertakings to repay
pursuant to this Section 20 shall be unsecured and interest-free.

                           e.       A retainer of one hundred thousand dollars
($100,000) shall be advanced to Executive's counsel upon written demand by
Executive after commencement of any proceedings which are against or include the
Executive as co-defendant.

                           f.       The provisions of this Section 20 shall
survive the termination of this Agreement.

         [The remainder of this page has been intentionally left blank]


                                      -17-
<PAGE>   18

         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.

                                    COMPANY:

                                    ABLE TELCOM HOLDING CORP.


                                    By:
                                       ----------------------------------------
                                    Name: H. Alec McLarty
                                    Title: Director

                                    EXECUTIVE:


                                    -------------------------------------------
                                    Billy V. Ray, Jr.


                                      -18-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.47
<SEQUENCE>7
<FILENAME>g63952aex10-47.txt
<DESCRIPTION>PROMISSORY NOTE, BILLY V. RAY, AUGUST 18,2000
<TEXT>

<PAGE>   1
                                                                   EXHIBIT 10.47


                                 PROMISSORY NOTE

                                                                 August 18, 2000
$2,000,000                                                      Roswell, Georgia

         FOR VALUE RECEIVED, the undersigned, Billy V. Ray, Jr., an individual
resident of the State of Georgia (the "Borrower"), promises to pay on or before
June 30, 2001 (the "Maturity Date") to the order of Able Telcom Holding Corp., a
Florida corporation (along with each subsequent holder of this Note, herein
referred to as the "Holder"), the principal sum of TWO MILLION DOLLARS
($2,000,000), with interest on the outstanding principal balance of this Note
from the date hereof until fully paid at a simple interest rate of nine and one
half percent (9 1/2%) per annum.

         Interest shall be calculated on the basis of three hundred and sixty
(360) days per year for the actual number of days elapsed.

         Interest, to the extent accrued, shall be paid by the Borrower on the
Maturity Date. The entire principal amount hereof, together with all accrued and
unpaid interest hereon, shall be due and payable on the Maturity Date.

         The principal hereof and interest hereon shall be payable in lawful
money of the United States of America, at such place as the Holder hereof may
designate. This Note may be prepaid in whole or in part without premium or
penalty.

         Time is of the essence of this Note.

         This Note shall be construed and enforced in accordance with the laws
of the State of Georgia.

         IN WITNESS WHEREOF, the undersigned Borrower has executed this
instrument under seal as of the day and year first above written.


                                            ------------------------------(SEAL)
                                            Billy V. Ray, Jr.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.48
<SEQUENCE>8
<FILENAME>g63952aex10-48.txt
<DESCRIPTION>FORM OF INDEMNIFICATION AGREEMENT
<TEXT>

<PAGE>   1
                                                                   EXHIBIT 10.48

                                    FORM OF
                            INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made as of this ___ day of
May, 2000 between Able Telcom Holding Corp., a Florida corporation (the
"Company"), and _________________________(the "Indemnitee").

WHEREAS, it is essential and in the best interests of the Company to retain and
attract the most capable persons available as directors and officers of the
Company or any entity on which the officers or directors indemnified herein
serve at the request of the Company;

WHEREAS, Indemnitee is serving as an officer or director of the Company, or as
an officer or director of any entity at the request of the Company;

WHEREAS, the Company and Indemnitee recognize the increased risk of litigation
and other claims being asserted against directors and officers of companies; and

WHEREAS, in recognition of Indemnitee's need for substantial protection against
personal liability; in order to enhance Indemnitee's continued service to the
Company or other corporation in an effective manner; to provide Indemnitee with
specific contractual assurance that indemnification protection will be provided;
and in order to induce Indemnitee to continue to provide services to the Company
or any entity at the request of the Company as an officer or director thereof
the Company wishes to provide in this Agreement for the indemnification and
advancing of expenses to Indemnitee to the fullest extent permitted by law and
as set forth in this Agreement.

NOW THEREFORE, in consideration of the foregoing premises and of the Indemnitee
continuing to serve the Company or any entity at the request of the Company, and
intending to be legally bound hereby, the parties hereto agree as follows:

         1.       Definitions.

                  (a)      "Claim" means any threatened, pending or completed
action, suit, proceeding or alternative dispute resolution mechanism, or any
inquiry, hearing or investigation, whether conducted by the Company or any other
party, that Indemnitee in good faith believes might lead to the institution of
an action, suit, proceeding or alternative dispute resolution mechanism, whether
civil, criminal, administrative, investigative or otherwise; provided, however,
that the term "Claim" shall not include any threatened, pending or completed
action, suit, proceeding, alternate dispute, resolution mechanism,
investigation, inquiry or administrative proceeding to the extent such
proceeding involves an event or occurrence that is not indemnifiable by the
Company under applicable law.

                  (b)      "Expenses" include attorneys' fees (through all
appeals) and all other costs, travel expenses, fees of experts, transcript
costs, filing fees, witness fees, telephone charges, postage, delivery service
fees, expenses and obligations of any nature whatsoever reasonably and actually
incurred in connection with investigating, defending, being a witness or
participating in as a party (including on appeal), or preparing to defend, any
Claim relating to any Indemnifiable Event.

<PAGE>   2

                  (c)      "Indemnifiable Event" means any event, occurrence or
omission related to the fact that Indemnitee is or was a director or senior
officer of the Company, or is or was serving at the request of the Company as a
director, officer, employee, trustee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise;
provided, however, that an Indemnifiable Event shall not include any event or
occurrence that is not indemnifiable by the Company under applicable law.

                  (d)      "Reviewing party" means (i) a majority of a quorum of
members of the Company's Board of Directors, consisting of members who are not
parties to the particular Claim for which Indemnitee is seeking indemnification,
or if such quorum is not obtainable, or even if obtainable, by a majority of a
committee duly designated by the Board of Directors (in which designation
directors who are parties may participate) consisting solely of two or more
directors who, at the time, are not parties to the particular Claim for which
Indemnitee is seeking indemnification; (ii) Independent Legal Counsel, if
appointed by a quorum of disinterested directors, the committee referred to in
Section 1 (d)(i) above or a majority of the full Board of Directors (in which
directors who are parties may participate); or (iii) a majority of a quorum of
shareholders who were not a party to the particular Claim for which the
Indemnitee seeks indemnification, or if no such quorum is available, by a
majority of shareholders who were not a party to such Claim.

                  (e)      "Independent Legal Counsel" means an attorney,
selected by the Board of Directors of the Company. Independent Legal Counsel
shall not be any person who, under the applicable standards of professional
conduct then prevailing, would have a conflict of interest in representing the
Company or Indemnitee in an action to determine Indemnitee's rights under this
Agreement, nor shall Independent Legal Counsel be any person who has been
sanctioned or censured for ethical violations of applicable standards of
professional conduct.

         2.       Basic Indemnification Arrangement

                  (a)      In the event Indemnitee was, is or becomes a party to
or witness or other participant in, or is threatened to be made a party to or
witness or other participant in, a Claim by reason of (or arising in part out
of) an Indemnifiable Event, the Company shall indemnify Indemnitee to the
fullest extent permitted by law as soon as practicable, but in any event no
later than thirty (30) days after written demand is presented to the Company by
Indemnitee, against any and all Expenses, judgments, fines, penalties, or other
amounts adjudicated against Indemnitee, and amounts actually and reasonably
incurred in settlement (including all interest, assessments and other charges
paid or payable in connection with or in respect of such Expenses, judgments,
fines, penalties or amounts paid in settlement) of such Claim and any federal,
state, local or foreign taxes imposed on the Indemnitee as a result of the
actual or deemed receipt of any payments under this Agreement.

                  (b)      Notwithstanding the foregoing, the obligations of the
Company under Section 2(a) shall be subject to the condition that the Reviewing
party shall not have determined (in a written opinion, in any case in which the
Independent Legal Counsel is involved) that Indemnitee would not be permitted to
be indemnified under this Agreement or applicable law.


                                       2
<PAGE>   3

                  (c)      To the extent that Indemnitee has been successful on
the merits or otherwise in defense of any or all Claims relating in whole or in
part to an Indemnifiable Event or in defense of any issue or matter therein,
including dismissal without prejudice, Indemnitee shall be indemnified against
all Expenses incurred in connection therewith. In connection with any
determination by the Reviewing Party or otherwise as to whether Indemnitee is
entitled to be indemnified hereunder, the burden of proof shall be on the
Company to establish that Indemnitee is not so entitled.

                  (d)      Notwithstanding the foregoing, no indemnification or
Expense Advance (under Section 4 (c)) shall be provided hereunder if (i)
Indemnitee institutes or initiates an action, proceeding or claim against the
Company (except for an action to enforce or interpret this Agreement, which is
provided for in Section 4(d) below); (ii) a court determines that, with respect
to an action or claim instituted by the Indemnitee to enforce or interpret this
Agreement, the action or claim was not in good faith or was frivolous; (iii) the
Claim is for an amount paid in a settlement without the Company's consent; (iv)
such payment would be prohibited by applicable law; or (v) a judgment or other
final adjudication establishes that Indemnitee's actions or omissions to act
were material to the cause of action so adjudicated and constitute (A) a
violation of the criminal law, unless the Indemnitee had reasonable cause to
believe his conduct was lawful and had no reasonable cause to believe his
conduct was unlawful; (B) a transaction from which the Indemnitee derived an
improper personal benefit; (C) in the case of a director, a circumstance under
which the liability provisions of Section 607.0834 of the Florida Business
Corporation Act is applicable; or (D) fraudulent, dishonest or willful
misconduct or a conscious disregard for the best interests of the Company in a
proceeding by or in the right of the Company to procure a judgment in its favor
or in a proceeding by or in the right of a shareholder.

         3.       Partial Indemnity

If Indemnitee is entitled under any provision of this Agreement, or is
determined by a court of competent jurisdiction to be entitled to
indemnification by the Company for some or a portion of the Expenses, judgments,
fines, penalties and amounts paid in settlement or appeal of a Claim but not,
however, for the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion thereof to which Indemnitee is entitled.

         4.       Indemnification Procedures

                  (a)      In the event any Claim should be asserted against the
Indemnitee the Indemnitee shall notify the Company to that effect within five
(5) days of the date Indemnitee receives formal notice of such Claim. At such
time, the Company shall have the right, but not the obligation, to assume
control of the defense of such Claim through its own attorney(s) at its own
expense or pursuant to directors and officers liability insurance which may be
in effect, and in connection therewith, Indemnitee shall cooperate fully to make
available to the Company all pertinent information under the control of the
Indemnitee which relates to such Claim; provided, however, that the attorney(s)
appointed by the Company is reasonably acceptable to Indemnitee. After approval
of such counsel by Indemnitee and the retention of such counsel by the Company,
the Company will not be liable to Indemnitee under this Agreement for any
attorneys' fees subsequently incurred by Indemnitee with respect to the same
proceeding; provided, however, that if Indemnitee shall have reasonably
concluded that there is a conflict of interest between the


                                       3
<PAGE>   4

Company and Indemnitee in the conduct of any such defense, the Company, at its
expense will provide Indemnitee with counsel reasonably acceptable to Indemnitee
to defend the Claim.

                  (b)      If, within ten (10) days of notice to the Company by
Indemnitee of the assertion of a Claim against Indemnitee, the Company does not
notify Indemnitee in writing that it shall assume control of the defense of the
Claim, Indemnitee shall have the right to appoint his or her own counsel, and
seek indemnification under this Agreement.

                  (c)      Expense Advance. Subject to the Company assuming
control of the defense of a claim and subject to sub-section (d) below, the cost
and Expenses reasonably incurred by Indemnitee or on Indemnitee's behalf in
investigating, defending or appealing any Claim, or in enforcing Indemnitee's
right under any provisions of this Agreement, covered by Section 2 above shall
be paid by the Company within ten (10) business days of Indemnitee's written
request therefor even if there has been no final disposition of such Claim,
provided that such costs and Expenses reasonably are expected to be incurred
within thirty days of Indemnitee's request. Indemnitee's written request shall
state the amount requested and shall be accompanied by copies of the invoices or
other relevant documentation.

                  (d)      Obligation to Repay Advances. The obligation of the
Company to make an Expense Advance pursuant to Section 4(c) shall be subject to
the condition that, if, when and to the extent that the Reviewing party
determines that Indemnitee would not be permitted to be so indemnified under
this Agreement or applicable law, Indemnitee agrees to reimburse the Company for
all such amounts and Expenses theretofore paid; provided, however, that if
Indemnitee has commenced legal proceedings in a court of competent jurisdiction
to secure a determination that Indemnitee should be indemnified under applicable
law, any determination made by the Reviewing party that Indemnitee would not be
permitted to be indemnified under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any Expense
Advance until a final judicial determination is made with respect thereto (as to
which all rights of appeal therefrom have been exhausted or lapsed).
Indemnitee's obligation to reimburse the Company for Expense Advances shall be
unsecured and no interest shall be charged thereon. If there has been no
determination by the Reviewing party within ten (10) days of being notified of a
Claim, or if the Reviewing party determines that Indemnitee substantively would
not be permitted to be indemnified in whole or in part under this Agreement or
applicable law, Indemnitee shall have the right, at Indemnitee's expense, to
commence litigation in any court referenced in paragraph 16 of this Agreement
seeking an initial determination by the court regarding indemnification or
challenging any such determination by the Reviewing party or any aspect thereof.
If successful in an enforcement action, the Indemnitee shall be entitled to be
paid the Expenses, including but not limited to, reasonable attorneys' fees, of
prosecuting such claim.

         5.       Settlements without Consent

The Company shall not be liable to indemnify Indemnitee under this Agreement for
any amounts paid in settlement of any proceeding effected without its written
consent. The Company shall not settle any proceeding for which the Company has
assumed the defense in any manner that would impose any penalty on Indemnitee
without Indemnitee's written consent. Neither the


                                       4
<PAGE>   5

Company nor Indemnitee will unreasonably withhold their respective consent to
any proposed settlement.

         6.       No Presumption

For purposes of this Agreement, the termination of any Claim, action, suit or
proceeding, by judgment, order, settlement (whether with or without court
approval) or upon a plea of nolo contendere, or its equivalent, shall not create
a presumption that Indemnitee did not meet any particular standard of conduct,
that Indemnitee had a particular belief or that a court has determined that
indemnification is not permitted by applicable law.

         7.       Non-Exclusivity

The rights of Indemnitee hereunder shall be in addition to any other rights
Indemnitee may have under the Articles of Incorporation or Bylaws of the Company
or a subsidiary of the Company or the Florida Business Corporation Act or
otherwise. To the extent that a change in the Florida Business Corporation Act
(whether by statute or judicial decision) permits greater indemnification by
agreement than would be afforded currently under the Articles of Incorporation
and Bylaws of the Company, a subsidiary of the Company and this Agreement, it is
the intent of the parties hereto that Indemnitee shall enjoy by this Agreement
the greater benefits so afforded by such change. The rights of Indemnitee
hereunder shall continue to exist if the provisions of the Bylaws of the Company
with respect to indemnification should be rescinded or restrictively modified.

         8.       No Construction as Employment Agreement

Nothing contained herein shall be construed as giving or limiting any right of
Indemnitee to be retained in the employ of the Company or any of its
subsidiaries.

         9.       Amendments

The provisions of this Agreement may not be amended, supplemented, waived or
changed orally, but only by a writing signed by the party as to whom enforcement
of any such amendment, supplement, waiver or modification is sought and making
specific reference to this Agreement.

         10.      Subrogation

In the event of payment under this Agreement, the Company shall be subrogated to
the extent of such payment to all of the rights of recovery of Indemnitee, who
shall execute all papers required and shall do everything that may be necessary
to secure such rights, including the execution of such documents necessary to
enable the Company effectively to bring suit to enforce such rights.

         11.      No Duplication of Payments

The Company shall not be liable under this Agreement to make any payment in
connection with any claim made against Indemnitee to the extent Indemnitee has
otherwise actually received payment (under any insurance policy, Articles of
Incorporation or Bylaws of the Company or otherwise) of the amounts otherwise
indemnifiable hereunder.


                                       5
<PAGE>   6

         12.      Binding Effect

All of the terms and provisions of this Agreement shall be binding upon, inure
to the benefit of, and be enforceable by the parties and their respective
administrators, executors, legal representatives, heirs, successors and
permitted assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of the Company. The Company shall require and cause any successor
(whether direct or indirect by purchase, merger, consolidation or otherwise) to
all, substantially all or a substantial part, of the business and/or assets of
the Company, by written agreement in form and substance satisfactory to
Indemnitee, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession had taken place. This Agreement shall continue in effect
regardless of whether Indemnitee continues to serve as a director or officer of
the Company or of any other company at the direction of the Company, and
regardless of the termination, for any or no reason, of any employment agreement
or employment relationship with the Company, so long as Indemnitee shall be
subject to any possible Claim by reason of the fact that Indemnitee was an
officer or director of the Company (or was serving in such other capacities at
the Company's request).

         13.      Severability

If any provision of this Agreement or any other agreement entered into pursuant
hereto is contrary to, prohibited by or deemed invalid under applicable law or
regulation, such provision shall be inapplicable and deemed omitted to the
extent so contrary, prohibited or invalid, but the remainder hereof shall not be
invalidated thereby and shall be given full force and effect so far as possible.
If any provision of this Agreement may be construed in two or more ways, one of
which would render the provision invalid or otherwise voidable or unenforceable
and another of which would render the provision valid and enforceable, such
provision shall have the meaning which renders it valid and enforceable.

         14.      Notice

All notices required to be given under the terms of this Agreement shall be in
writing, shall be effective upon receipt (except that if delivery of certified
mail is refused, delivery shall be deemed made five (5) days after the date of
mailing), and shall be delivered to the addressee in person or mailed by
certified mail, return receipt requested:

                  If to the Company, addressed to:
                  Able Telcom Holding Corp.
                  1000 Holcomb Woods Parkway, Suite 440
                  Roswell, GA 30076
                  Attn: President


                                       6
<PAGE>   7

                  If to Indemnitee addresses to:
                  Edward Z. Pollock
                  12468 Crystal Pointe Drive
                  Boynton Beach, FL 33437

or such other address as the party to receive the notice shall advise by due
notice hereunder.

         15.      Governing Law

This Agreement and all transactions contemplated by this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Florida.

         16.      Jurisdiction and Venue

The parties acknowledge that a substantial portion of the negotiations,
anticipated performance and execution of this Agreement occurred or shall occur
in Atlanta, Georgia. Any civil action or legal proceeding arising out of or
relating to this Agreement shall be brought in the courts of record of the State
of Georgia in Fulton County or the United States District Court, having
jurisdiction in Atlanta, Georgia. Each party consents to the jurisdiction of
such court in any such civil action or legal proceeding and waives any objection
to the laying of venue of any such civil action or legal proceeding in such
court. Service of any court paper may be effected on such party by mail, as
provided in this Agreement, or in such other manner as may be provided under
applicable laws, rules of procedure or local rules.

         17.      Third Parties

Unless expressly stated herein to the contrary, nothing in this Agreement,
whether express or implied, is intended to confer any rights or remedies under
or by reason of this Agreement on any persons other than the parties hereto and
their respective administrators, executors, other legal representatives, heirs,
successors and permitted assigns. Nothing in this Agreement is intended to
relieve or discharge the obligation or liability of any third persons to any
party to this Agreement, nor shall any provision give any third persons any
right of subrogation or action over or against any party to this Agreement.

         18.      Recitals

The recitals herein are true and correct and constitute a part hereof.

         19.      Entire Agreement

This Agreement represents the entire understanding and agreement between the
parties with respect to the subject matter hereof, and supersedes all other
negotiations, understandings and representations (if any) made by and between
such parties.


                                       7
<PAGE>   8

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



                                    ABLE TELCOM HOLDING CORP.





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







                                    INDEMNITEE







                                    -----------------------------
                                    Edward Z. Pollock


                                       8
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>9
<FILENAME>g63952aex23-1.txt
<DESCRIPTION>CONSENT OF ERNST & YOUNG LLP
<TEXT>

<PAGE>   1
                                                                    EXHIBIT 23.1


              CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


         We consent to the reference to our firm under the caption "Experts" and
to the use of our report dated January 19, 1998, with respect to the financial
statements of Able Telcom Holding Corp. included in Amendment No. 2 to the
Registration Statement (Form S-1 No. 333-65991) and related Prospectus of Able
Telcom Holding Corp. for the registration of 16,271,507 shares of its common
stock.


                                                 Ernst & Young LLP


West Palm Beach, Florida
August 31, 2000
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>10
<FILENAME>g63952aex23-2.txt
<DESCRIPTION>CONSENT OF ARTHUR ANDERSEN LLP
<TEXT>

<PAGE>   1
                                                                    EXHIBIT 23.2


                   CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS


As independent public accountants, we hereby consent to the use of our reports
(and to all references to our Firm) included in or made a part of this
registration statement.

                                                      ARTHUR ANDERSEN LLP


Omaha, Nebraska
August 31, 2000
</TEXT>
</DOCUMENT>
</SUBMISSION>
