AMENDMENT TO
                       PREFERRED STOCK PURCHASE AGREEMENT


         This Amendment to the Preferred Stock Purchase  Agreement dated May 12,
2000  (the  "Purchase  Agreement"),  by  and  between  TeraComm  Research,  Inc.
("TeraComm") and Atlantic Technology Ventures,  Inc. ("Atlantic") is dated as of
July 18, 2000 (the "Amendment").

         WHEREAS,  Atlantic  has since the date of the Purchase  Agreement  made
Subsequent Payments to TeraComm in the amount of $750,000; and

         WHEREAS,  the parties wish to modify their rights and obligations  with
respect to Subsequent Payments under the Purchase Agreement.

         NOW, THEREFORE, the parties agree as follows:

         1. Schedule 1.2 of the Purchase  Agreement is hereby amended to provide
that the remaining $4 million of Subsequent  Payments  (including the $1 million
payments  due on  August  12,  2000 and  November  12,  2000) are not be due and
payable until the Technology  Milestone attached hereto as Attachment A has been
achieved. Within ten (10) days of TeraComm's achieving the Technology Milestone,
Atlantic shall make the $1 million  Subsequent  Payment  currently due on August
12,  2000  (the  "Second  Subsequent  Payment")  and shall  thereafter  make the
remaining  three  $1  million  Subsequent   Payments  on  the  next  three-month
anniversary dates of the date of such first $1 million Subsequent  Payment.  The
other provisions of Section 1.2 shall remain in effect,  including  subparagraph
(b) with respect to failure to make timely Subsequent Payments.

         2. TeraComm shall keep the  representatives of Atlantic on the TeraComm
Board of  Directors  informed as to progress  toward  achieving  the  Technology
Milestone.  If TeraComm  believes it has achieved the Technology  Milestone,  it
will notify Atlantic in writing thereof. If Atlantic disagrees that TeraComm has
achieved the Technology Milestone,  it shall so state in writing within five (5)
business  days of the notice  from  TeraComm.  If the matter  cannot be resolved
within the following ten (10) business days by discussions  between the parties,
the matter shall be deemed submitted to arbitration administered by the American
Arbitration Association in accordance with its commercial arbitration rules. The
place of  arbitration  shall  be  Boston,  Massachusetts.  With  respect  to the
arbitration,  the parties will attempt to agree on an arbitrator with sufficient
background in fiberoptic communications development to determine the dispute. If
the parties cannot agree on such person within thirty (30) days of submission of
the matter to  arbitration,  each party shall pick an  arbitrator  with relevant
experience  and those two parties shall pick a third  arbitrator,  and all three
will hear the arbitration.

         3.  Failure  of  Atlantic  to make the  Second  Subsequent  Payment  by
midnight at the end of December  30, 2000  (whether or not  TeraComm has reached
the  Technology  Milestone),  will at the  election  of  TeraComm  be  deemed to
constitute  failure  by  Atlantic  to timely  make a  Subsequent  Payment.  That
election  must be  voted on by the  Board of  Directors  of  TeraComm,  with all
members  entitled to  participate  in the  decision  (regardless  of conflict of
interest).



         4. All terms used as defined  terms  herein and not  otherwise  defined
herein shall have the meaning given them in the Purchase Agreement.

         5. This Amendment amends the Purchase Agreement only to the extent
stated herein. All other provisions of the Purchase Agreement shall remain in
full force and effect.

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

                                         TERACOMM RESEARCH, INC.


                                         By: ________________________________
                                         Its:  ________________________________


                                         ATLANTIC TECHNOLOGY VENTURES,
                                         INC.


                                         By: ________________________________
                                         Its: ________________________________


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