Document:

<PAGE>

                                                                     EXHIBIT 4.4

                                    FORM OF

                              GUARANTEE AGREEMENT

                                    Between

                                 SEMPRA ENERGY
                                 (as Guarantor)

                                      and

                              THE BANK OF NEW YORK
                                  (as Trustee)

                                  dated as of

                               February 21, 2000
<PAGE>

                             CROSS-REFERENCE TABLE*

-------------------------------          -------------------------------
  Section of Trust Indenture                        Section of
   Act of 1939, as amended                      Guarantee Agreement
-------------------------------          -------------------------------

          310(a)......................................4.1(a)
          310(b)......................................4.1(c), 2.8
          310(c)......................................Inapplicable
          311(a)......................................2.2(b)
          311(b)......................................2.2(b)
          311(c)......................................Inapplicable
          312(a)......................................2.2(a)
          312(b)......................................2.2(b)
          313.........................................2.3
          314(a)......................................2.4
          314(b)......................................Inapplicable
          314(c)......................................2.5
          314(d)......................................Inapplicable
          314(e)......................................1.1, 2.5, 3.2
          314(f)......................................2.1, 3.2
          315(a)......................................3.1 (d)
          315(b)......................................2.7
          315(c)......................................3.1
          315(d)......................................3.1(d)
          316(a)......................................1.1, 2.6, 5.4
          316(b)......................................5.3
          316(c)......................................8.2
          317(a)......................................Inapplicable
          317(b)......................................Inapplicable
          318(a)......................................2.1(b)
          318(b)......................................2.1
          318(c)......................................2.1(a)

--------------------------------------------------------------------------------
 *  This Cross-Reference Table does not constitute part of the Guarantee
    Agreement and shall not affect the interpretation of any of its terms or
    provisions.

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                               TABLE OF CONTENTS

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ARTICLE I. DEFINITIONS........................................................................................................... 1
            Section 1.1  Definitions............................................................................................. 1
                         -----------
ARTICLE II. TRUST INDENTURE ACT.................................................................................................. 4
            Section 2.1  Trust Indenture Act; Application........................................................................ 4
                         --------------------------------
        (a) This Guarantee Agreement is subject to the provisions of the Trust Indenture Act that are
              required to be part of this Guarantee Agreement and shall, to the extent applicable, be
              governed by such provisions........................................................................................ 4
        (b) If and to the extent that any provision of this Guarantee Agreement limits, qualifies or
              conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture
              Act, such imposed duties shall control............................................................................. 4
            Section 2.2  List of Holders; Preferential Claims.................................................................... 4
                         ------------------------------------
        (a) The Guarantor shall furnish or cause to be furnished to the Guarantee Trustee (a) not later
              than 15 days after each of ________, ________, _______ and ________ (each such date a "Regular Record Date")
              of each year, a list, in such form as the Guarantee Trustee may reasonably require, containing all the
              information in the possession or control of the Guarantor, as to of the names and addresses of the Holders
              ("List of Holders") as of the preceding respective Regular Record Date, and (b) at such other times as the
              Guarantee Trustee may request in writing, within 30 days after the receipt by the Guarantor of any such
              request, a list of similar form and content as of a date not more than 15 days prior to the time such list
              is furnished.  The Guarantee Trustee shall preserve, in as current a form as is reasonably practicable,
              all information contained in Lists of Holders given to it, provided that the Guarantee Trustee may destroy
              any List of Holders previously given to it on receipt of a new List of Holders..................................... 4
        (b) The Guarantee Trustee shall comply with its obligations under Section 311(a), Section 31l(b)
              and Section 312(b) of the Trust Indenture Act...................................................................... 4
            Section 2.3  Reports by the Guarantee Trustee........................................................................ 4
                         --------------------------------
            Section 2.4  Periodic Reports to the Guarantee Trustee............................................................... 4
                         -----------------------------------------
            Section 2.5  Evidence of Compliance with Conditions Precedent........................................................ 5
                         ------------------------------------------------
            Section 2.6  Events of Default; Waiver............................................................................... 5
                         -------------------------
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        (a) Event of Default; Notice.  The Guarantee Trustee shall, within 90 days after the occurrence of
            ------------------------
              an Event of Default actually known to a Responsible Officer of the Guarantee Trustee, transmit
              by mail, first class postage prepaid, to the Holders, notices of all such defaults unless such
              defaults have been cured before the giving of such notice (the term "defaults" for the purposes
              of this Section 2.6(a) being hereby defined to be an Event of Default as, not including any
              periods of grace provided for therein and irrespective of the giving of any notice provided
              therein); provided, that, except in the case of a default in the payment of a Guarantee
              Payment, the Guarantee Trustee shall be protected in withholding such notice if and so long as
              the board of directors, the executive committee, or a trust committee of directors and/or
              Responsible Officers, of the Guarantee Trustee in good faith determines that the withholding of
              such notice is in the interests of the Holders....................................................................  5
            Section 2.7   Conflicting Interests.................................................................................  5
                          ---------------------

ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE.................................................................  5
            Section 3.1   Powers and Duties of the Guarantee Trustee............................................................  5
                          ------------------------------------------
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        (a) This Guarantee Agreement shall be held by the Guarantee Trustee for the benefit of the Holders,
              and the Guarantee Trustee shall not transfer this Guarantee Agreement to any Person except a
              Holder exercising his or her rights pursuant to Section 5.4(iv) or to a Successor Guarantee
              Trustee on acceptance by such Successor Guarantee Trustee of its appointment to act as
              Successor Guarantee Trustee.  The right, title and interest of the Guarantee Trustee shall
              automatically vest in any Successor Guarantee Trustee, upon acceptance by such Successor
              Guarantee Trustee of its appointment hereunder, and such vesting and cessation of title shall
              be effective whether or not conveying documents have been executed and delivered pursuant to
              the appointment of such Successor Guarantee Trustee...............................................................  6
        (b) If an Event of Default has occurred and is continuing, the Guarantee Trustee shall enforce this
              Guarantee Agreement for the benefit of the Holders................................................................  6
        (c) The Guarantee Trustee, before the occurrence of any Event of Default and after the curing or
              waiving of all Events of Default that may have occurred, shall undertake to perform only such
              duties as are specifically set forth in this Guarantee Agreement, and no implied covenants
              shall be read into this Guarantee Agreement against the Guarantee Trustee.  In case an Event of
              Default has occurred (that has not been cured or waived pursuant to Section 2.6), the Guarantee
              Trustee shall exercise such of the rights and powers vested in it by this Guarantee Agreement,
              and use the same degree of care and skill in its exercise thereof, as a prudent person would
              exercise or use under the circumstances in the conduct of his or her own affairs..................................  6
        (d) No provision of this Guarantee Agreement shall be construed to relieve the Guarantee Trustee
              from liability for its own negligent action, its own negligent failure to act or its own
              willful misconduct, except that:..................................................................................  6
            Section 3.2 Certain Rights of Guarantee Trustee.....................................................................  7
                        -----------------------------------
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        (a) Subject to the provisions of Section 3.1:...........................................................................  7
        (b) No provision of this Guarantee Agreement shall be deemed to impose any duty or obligation on
              the Guarantee Trustee to perform any act or acts or exercise any right, power, duty or
              obligation conferred or imposed on it in any jurisdiction in which it shall be illegal, or in
              which the Guarantee Trustee shall be unqualified or incompetent in accordance with applicable
              law, to perform any such act or acts or to exercise any such right, power, duty or obligation
              No permissive power or authority available to the Guarantee Trustee shall be construed to be a
              duty to act in accordance with such power and authority...........................................................  8
            Section 3.3  Indemnity..............................................................................................  8
                         ---------
            Section 3.4  Fees and Expenses......................................................................................  8
                         -----------------
ARTICLE IV. GUARANTEE TRUSTEE...................................................................................................  9
            Section 4.1  Guarantee Trustee; Eligibility.........................................................................  9
                         ------------------------------
        (a) There shall at all times be a Guarantee Trustee which shall:........................................................  9
        (b) If at any time the Guarantee Trustee shall cease to be eligible to so act under Section 4.1(a),
              the Guarantee Trustee shall immediately resign in the manner and with the effect set out in
              Section 4.2(c)....................................................................................................  9
        (c) If the Guarantee Trustee has or shall acquire any "conflicting interest" within the meaning of
              Section 310(b) of the Trust Indenture Act, the Guarantee Trustee and Guarantor shall in all
              respects comply with the provisions of Section 310(b) of the Trust Indenture Act..................................  9
            Section 4.2  Appointment, Removal and Resignation of the Guarantee Trustee.......................................... 10
                         -------------------------------------------------------------
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        (a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or removed without cause at
              any time by the Guarantor........................................................................................   9
        (b) The Guarantee Trustee shall not be removed until a Successor Guarantee Trustee has been
              appointed and has accepted such appointment by written instrument executed by such Successor
              Guarantee Trustee and delivered to the Guarantor.................................................................   9
        (c) The Guarantee Trustee appointed hereunder shall hold office until a Successor Guarantee Trustee
              shall have been appointed or until its removal or resignation.  The Guarantee Trustee may
              resign from office (without need for prior or subsequent accounting) by an instrument in
              writing executed by the Guarantee Trustee and delivered to the Guarantor, which resignation
              shall not take effect until a Successor Guarantee Trustee has been appointed and has accepted
              such appointment by instrument in writing executed by such Successor Guarantee Trustee and
              delivered to the Guarantor and the resigning Guarantee Trustee...................................................   9
        (d) If no Successor Guarantee Trustee shall have been appointed and accepted appointment as
              provided in this Section 4.2 within 60 days after delivery to the Guarantor of an instrument of
              resignation, the resigning Guarantee Trustee may petition, at the expense of the Guarantor, any
              court of competent jurisdiction for appointment of a Successor Guarantee Trustee.  Such court
              may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a
              Successor Guarantee Trustee......................................................................................  10

ARTICLE V. GUARANTEE...........................................................................................................  10

            Section 5.1         Guarantee......................................................................................  10
                                ---------
            Section 5.2         Waiver of Notice and Demand....................................................................  10
                                ---------------------------
            Section 5.3         Obligations Not Affected.......................................................................  10
                                ------------------------
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          (a) the release or waiver, by operation of law or otherwise, of the performance or observance by
                the Issuer of any express or implied agreement, covenant, term or condition relating to the
                Preferred Securities to be performed or observed by the Issuer;................................................  11
          (b) the extension of time for the payment by the Issuer of all or any portion of the Distributions
                (other than an extension of time for payment of Distributions that results from the extension
                of any interest payment period on the Notes as provided in the Indenture), Redemption Price,
                Liquidation Distribution or any other sums payable under the terms of the Preferred Securities
                or the extension of time for the performance of any other obligation under, arising out of, or
                in connection with, the Preferred Securities;..................................................................  11
          (c) any failure, omission, delay or lack of diligence on the part of the Holders or the Guarantee
                Trustee to enforce, assert or exercise any right, privilege, power or remedy conferred on the
                Holders pursuant to the terms of the Preferred Securities, or any action on the part of the
                Issuer granting indulgence or extension of any kind;...........................................................  11
          (d) the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership,
                insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement,
                composition or readjustment of debt of, or other similar proceedings affecting, the Issuer or
                any of the assets of the Issuer;...............................................................................  11
          (e) any invalidity of, or defect or deficiency in, the Preferred Securities;.........................................  11
          (f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred; or..........................  11
          (g) any other circumstance whatsoever that might otherwise constitute a legal or equitable
                discharge or defense of a guarantor, it being the intent of this Section 5.3 that the
                obligations of the Guarantor hereunder shall be absolute and unconditional under any and all
                circumstances..................................................................................................  11
              Section 5.4   Rights of Holders..................................................................................  11
                            -----------------
              Section 5.5   Guarantee of Payment...............................................................................  12
                            --------------------
              Section 5.6   Subordination......................................................................................  12
                            -------------
              Section 5.7   Independent Obligations............................................................................  12
                            -----------------------

ARTICLE VI. COVENANTS AND SUBORDINATION........................................................................................  12

              Section 6.1   Subordination......................................................................................  12
                            -------------
              Section 6.2   Pari Passu Guarantees..............................................................................  12
                            ---------------------

ARTICLE VII. TERMINATION.......................................................................................................  13

              Section 7.1   Termination........................................................................................  13
                            -----------
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ARTICLE VIII. MISCELLANEOUS...............................................................................................  13

            Section 8.1  Successors and Assigns...........................................................................  13
                         ----------------------
            Section 8.2  Amendments.......................................................................................  13
                         ----------
            Section 8.3  Notices..........................................................................................  13
                         -------
        (a) if given to the Guarantor, to the address set forth below or such other address, facsimile
              number or to the attention of such other Person as the Guarantor may give notice to the Holders:............  13
        (b) if given to the Issuer, in care of the Guarantee Trustee, at the Issuer's (and the Guarantee
              Trustee's) respective addresses set forth below or such other address as the Guarantee Trustee
              on behalf of the Issuer may give notice to the Holders:.....................................................  14
        (c) if given to the Guarantee Trustee, at the Guarantee Trustee's address set forth below or such
              other address as the Guarantee Trustee may give notice to the Holders:......................................  14
        (d) if given to any Holder, at the address set forth on the books and records of the Issuer.......................  14
            Section 8.4   Benefit.........................................................................................  14
                          -------
            Section 8.5   Interpretation..................................................................................  15
                          --------------
        (a) capitalized terms used in this Guarantee Agreement but not defined in the preamble hereto have
              the respective meanings assigned to them in Section 1.1;....................................................  15
        (b) a term defined anywhere in this Guarantee Agreement has the same meaning throughout;..........................  15
        (c) all references to "the Guarantee Agreement" or "this Guarantee Agreement" are to this Guarantee
              Agreement as modified, supplemented or amended from time to time;...........................................  15
        (d) all references in this Guarantee Agreement to Articles and Sections are to Articles and
              Sections of this Guarantee Agreement unless otherwise specified;............................................  15
        (e) a term defined in the Trust Indenture Act has the same meaning when used in this Guarantee
              Agreement unless otherwise defined in this Guarantee Agreement or unless the context otherwise
              requires;...................................................................................................  15
        (f) a reference to the singular includes the plural and vice versa; and...........................................  15
        (g) the masculine, feminine or neuter genders used herein shall include the masculine, feminine and
              neuter genders..............................................................................................  15
            Section 8.6   Governing Law...................................................................................  15
                          -------------
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<PAGE>

                              GUARANTEE AGREEMENT

     GUARANTEE AGREEMENT, dated as of February 23, 2000 (this "Guarantee
Agreement"), entered into between SEMPRA ENERGY, a California corporation having
its principal office at 101 Ash Street, San Diego, California 92101 (the
"Guarantor"), and THE BANK OF NEW YORK, a New York banking corporation, as
trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as defined herein) of
SEMPRA ENERGY CAPITAL TRUST I, a Delaware statutory business trust (the
"Issuer").

     WHEREAS, pursuant to an Amended and Restated Declaration of Trust, dated as
of February 23, 2000 (the "Declaration"), among Sempra Energy, a California
corporation (the "Company"), as Sponsor, the Property Trustee named therein, the
Delaware Trustee named therein, the Regular Trustees named therein and the
several Holders as defined therein, the Issuer is issuing up to $____________
aggregate Liquidation Amount (as defined in the Declaration) of its _____%
Cumulative Quarterly Income Preferred Securities, Series A (Liquidation Amount
$25 per Preferred Security) (the "Preferred Securities"), representing undivided
beneficial interests in the assets of the Issuer and having the terms set forth
in the Declaration;

     WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Common
Securities (as defined in the Declaration), will be used to purchase the Notes
(as defined in the Declaration) of the Company which will be deposited with The
Bank of New York, as Property Trustee under the Declaration, as trust assets;
and

     WHEREAS, as incentive for the Holders to purchase Preferred Securities the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the Preferred Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein;

     NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for
the benefit of the Holders from time to time of the Preferred Securities.

                                  ARTICLE I.
                                  DEFINITIONS

     Section 1.1 Definitions.  As used in this Guarantee Agreement, the terms
                 -----------
set forth below shall, unless the context otherwise requires, have the following
meanings. Capitalized or otherwise defined terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Declaration as in
effect on the date hereof.

     "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified
<PAGE>

Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.

     "Event of Default" means (i) a default by the Guarantor on any of its
payment obligations under this Guarantee Agreement and (ii) a default by the
Guarantor on any other obligation hereunder that remains uncured after 30 days
from the occurrence thereof.

     "Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Preferred Securities, to the extent not paid or
made by or on behalf of the Issuer:  (i) any accumulated and unpaid
Distributions (as defined in the Declaration) required to be paid on the
Preferred Securities, to the extent the Issuer shall have funds on hand
available therefor at such time, (ii) the redemption price, including all
accumulated and unpaid Distributions to the date of redemption (the "Redemption
Price"), with respect to any Preferred Securities called for redemption by the
Issuer, to the extent the Issuer shall have funds on hand available therefor at
such time, and (iii) upon a voluntary or involuntary termination, winding-up or
liquidation of the Issuer, unless Notes are distributed to the Holders, the
lesser of (a) the aggregate of the Liquidation Amount of $25 per Preferred
Security plus accumulated and unpaid Distributions on the Preferred Securities
to the date of payment, to the extent the Issuer shall have funds on hand
available therefor at such time and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer (in
either case, the "Liquidation Distribution").

     "Guarantee Trustee" has the meaning set forth in the preamble to this
Guarantee Agreement.

     "Holder" means any holder, as registered on the books and records of the
Issuer, of any Preferred Securities; provided, however, that in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor
or the Guarantee Trustee.

     "Indenture" means the Indenture dated as of February 23, 2000 among the
Company and The Bank of New York, as trustee thereunder, as supplemented by an
Officers' Certificate (as defined in the Indenture) dated as of February 23,
2000 pursuant to Section 301 of the Indenture.

     "List of Holders" has the meaning specified in Section 2.2(a).

     "Majority in Liquidation Amount of the Securities" means, except as
provided in the terms of the Preferred Securities and by the Trust Indenture
Act, Holder(s) of Preferred Securities or Common Securities voting together as a
single class or, as the context may require, Holder(s) of Preferred Securities
or Common Securities voting separately as a class, who vote Securities of a
relevant class and the aggregate liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accrued and
unpaid Distributions to the date upon which the voting percentages are
determined) of the Securities voted by such

                                      -2-
<PAGE>

Securityholders represents more than 50% of the above stated aggregate
liquidation amount of all Securities of such class.

     "Officer's Certificate" means a certificate signed by any one of the
Chairman of the Board, Chief Executive Officer, President, a Vice President, the
Treasurer, an Associate Treasurer, an Assistant Treasurer, the Controller, the
Secretary or an Assistant Secretary, of the Company, and delivered to the
Guarantee Trustee.  Any Officer's Certificate delivered with respect to
compliance with a condition or covenant provided for in this Guarantee Agreement
shall include:

          (a) a statement that the officer signing the Officer's Certificate has
     read the covenant or condition and the definitions relating thereto;

          (b) a brief statement of the nature and scope of the examination or
     investigation undertaken by such officer in rendering the Officer's
     Certificate;

          (c) a statement that such officer has made such examination or
     investigation as, in such officer's opinion, is necessary to enable such
     officer to express an informed opinion as to whether or not such covenant
     or condition has been complied with; and

          (d) a statement as to whether, in the opinion of such officer, such
     condition or covenant has been complied with.

     "Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.

     "Responsible Officer" means, with respect to the Guarantee Trustee, any
Vice-President, any Assistant Vice-President, any Assistant Secretary, any
Assistant Treasurer, any Trust Officer or Assistant Trust Officer or any other
officer of the Guarantee Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.

     "Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.

     "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.

                                      -3-
<PAGE>

                                  ARTICLE II.
                              TRUST INDENTURE ACT

     Section 2.1  Trust Indenture Act; Application.
                  --------------------------------

          (a)  This Guarantee Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.

          (b)  If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.

     Section 2.2  List of Holders; Preferential Claims.
                  ------------------------------------

          (a)  The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) not later than 15 days after each of ________, ________,
_______ and ________ (each such date a "Regular Record Date") of each year, a
list, in such form as the Guarantee Trustee may reasonably require, containing
all the information in the possession or control of the Guarantor, as to of the
names and addresses of the Holders ("List of Holders") as of the preceding
respective Regular Record Date, and (b) at such other times as the Guarantee
Trustee may request in writing, within 30 days after the receipt by the
Guarantor of any such request, a list of similar form and content as of a date
not more than 15 days prior to the time such list is furnished. The Guarantee
Trustee shall preserve, in as current a form as is reasonably practicable, all
information contained in Lists of Holders given to it, provided that the
Guarantee Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.

          (b)  The Guarantee Trustee shall comply with its obligations under
Section 311(a), Section 31l(b) and Section 312(b) of the Trust Indenture Act.

     Section 2.3  Reports by the Guarantee Trustee.
                  --------------------------------

          (a)  Not later than 60 days following February 15 of each year,
commencing February 15, 2001, the Guarantee Trustee shall provide to the Holders
such reports as are required by Section 313 of the Trust Indenture Act, if any,
in the form and in the manner provided by Section 313 of the Trust Indenture
Act. The Guarantee Trustee shall also comply with the requirements of Section
313(d) of the Trust Indenture Act.

          (b)  In addition, the Guarantee Trustee shall transmit to all Holders
and to the Company, a brief report dated as of such May 15 with respect to its
eligibility under Section 4.1 or, in lieu thereof, if to the best of its
knowledge it has continued to be eligible under said Section, a written
statement to such effect.

     Section 2.4  Periodic Reports to the Guarantee Trustee.  The Guarantor
                  -----------------------------------------
shall provide to the Guarantee Trustee such documents, reports and information,
if any, as required by Section

                                      -4-
<PAGE>

314 of the Trust Indenture Act and the compliance certificate required by
Section 314 of the Trust Indenture Act, in the form, in the manner and at the
times required by Section 314(a)(4) of the Trust Indenture Act.

     Section 2.5  Evidence of Compliance with Conditions Precedent.  The
                  ------------------------------------------------
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with such conditions precedent, if any, provided for in this Guarantee Agreement
that relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to such Section 314(c)(1) may be given in the form of an Officer's
Certificate.

       Section 2.6  Events of Default; Waiver.  The Holders of a Majority in
             -------------------------
Liquidation Amount of the Securities may, by vote, on behalf of the Holders,
waive any past Event of Default and its consequences. Upon such waiver, any such
Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent therefrom.

          (a)  Event of Default; Notice.  The Guarantee Trustee shall, within
               ------------------------
90 days after the occurrence of an Event of Default actually known to a
Responsible Officer of the Guarantee Trustee, transmit by mail, first class
postage prepaid, to the Holders, notices of all such defaults unless such
defaults have been cured before the giving of such notice (the term "defaults"
for the purposes of this Section 2.6(a) being hereby defined to be an Event of
Default as, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein); provided, that,
except in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee, or a trust committee of
directors and/or Responsible Officers, of the Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.

     Section 2.7  Conflicting Interests.  The Declaration and the Indenture
                  ---------------------
Indenture shall be deemed to be specifically described in this Guarantee
Agreement for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.

                                 ARTICLE III.
              POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

     Section 3.1  Powers and Duties of the Guarantee Trustee.
                  ------------------------------------------

          (a)  This Guarantee Agreement shall be held by the Guarantee Trustee
for the benefit of the Holders, and the Guarantee Trustee shall not transfer
this Guarantee Agreement to any Person except a Holder exercising his or her
rights pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee Trustee, upon
acceptance by such Successor Guarantee Trustee of its appointment hereunder, and
such vesting and cessation of title

                                      -5-
<PAGE>

shall be effective whether or not conveying documents have been executed and
delivered pursuant to the appointment of such Successor Guarantee Trustee.

     (b)  If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders.

     (c)  The Guarantee Trustee, before the occurrence of any Event of Default
and after the curing or waiving of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.

     (d)  No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:

          (i)   prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:

                (A)  the duties and obligations of the Guarantee Trustee shall
be determined solely by the express provisions of this Guarantee Agreement, and
the Guarantee Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Guarantee
Agreement; and

                (B)  in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Guarantee Trustee and conforming to
the requirements of this Guarantee Agreement; but in the case of any such
certificates or opinions that by any provision hereof or of the Trust Indenture
Act are specifically required to be furnished to the Guarantee Trustee, the
Guarantee Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Guarantee Agreement;

          (ii)  the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee Trustee,
unless it shall be proved that the Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;

          (iii) the Guarantee Trustee shall not be liable with respect to any
action or omitted to be taken by it in good faith in accordance with the of the
Holders of not less than a Majority in Liquidation Amount of the Securities
relating to the time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee, or

                                      -6-
<PAGE>

exercising any trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement; and

                  (iv)  no provision of this Guarantee Agreement shall require
the Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Guarantee Trustee shall have
reasonable grounds for believing that the repayment of such funds or liability
is not reasonably assured to it under the terms of this Guarantee Agreement or
adequate indemnity satisfactory to it against such risk or liability is not
reasonably assured to it.

     Section 3.2  Certain Rights of Guarantee Trustee.
                  -----------------------------------

          (a)  Subject to the provisions of Section 3.1:

               (i)    The Guarantee Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document reasonably believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties.

               (ii)   Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officer's Certificate
unless otherwise prescribed herein.

               (iii)  Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter be proved
or established before taking, suffering or omitting to take any action
hereunder, the Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officer's Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered by the
Guarantor.

              (iv)    The Guarantee Trustee may consult with legal counsel of
its selection, and the written advice or written opinion of such legal counsel
with respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or opinion. Such
legal counsel may be legal counsel to the Guarantor or any of its Affiliates and
may be one of its employees. The Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Guarantee
Agreement from any court of competent jurisdiction.

              (v)     The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee Agreement at
the request or direction of any Holder, unless such Holder shall have provided
to the Guarantee Trustee such adequate security and indemnity reasonably
satisfactory to it, against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be requested by
the Guarantee Trustee;

                                      -7-
<PAGE>

provided that, nothing contained in this Section 3.2(a)(v) shall be taken to
relieve the Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this Guarantee
Agreement.

               (vi)   The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document.

               (vii)  The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through its agents or attorneys, and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent or
attorney appointed with due care by it hereunder.

               (viii) Whenever in the administration of this Guarantee Agreement
the Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action hereunder,
the Guarantee Trustee (A) may request instructions from the Holders, (B) may
refrain from enforcing such remedy or right or taking such other action until
such instructions are received, and (C) shall be protected in acting in
accordance with such instructions.

          (b)  No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.

     Section 3.3  Indemnity.  The Guarantor agrees to indemnify the Guarantee
                  ---------
Trustee and its officers, directors, employees, representatives and agents for,
and to hold it and such persons harmless against, any loss, liability or expense
of whatever kind or nature regardless of their merit, demanded, asserted or
claimed against the Guarantee Trustee and incurred without negligence or bad
faith on the part of the Guarantee Trustee, arising out of or in connection with
the acceptance or administration of this Guarantee Agreement, including without
limitation the costs and expenses of defending itself (including reasonable
attorneys' and consultants' fees and expenses) against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The Guarantee Trustee will not claim or exact any lien or charge on
any Guarantee Payments as a result of any amount due to it under this Guarantee
Agreement. The indemnification provided hereunder shall survive the termination
of this Guarantee Agreement and the resignation or removal of the Guarantee
Trustee.

     Section 3.4  Fees and Expenses.  The Guarantor agrees:
                  -----------------

(1)  to pay the Guarantee Trustee from time to time such compensation as the
Guarantor and the Guarantee Trustee shall from time to time agree in writing for
all services rendered by it

                                      -8-
<PAGE>

hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);

(2)  except as otherwise expressly provided herein, to reimburse the Guarantee
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Guarantee Trustee in accordance with any provision of
this Indenture (including the compensation and the expenses and disbursements of
its agents and counsel), except any such expense, disbursement or advance as may
be attributable to its negligence or bad faith.

                                  ARTICLE IV.
                               GUARANTEE TRUSTEE

     Section 4.1  Guarantee Trustee; Eligibility.
                  ------------------------------

          (a)     There shall at all times be a Guarantee Trustee which shall:

                  (i)  not be an Affiliate of the Guarantor; and

                  (ii) be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements of Section
310(a) of the Trust Indenture Act. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
supervising or examining authority, then, for the purposes of this Section and
to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.

          (b)     If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.2(c).

          (c)  If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.

     Section 4.2  Appointment, Removal and Resignation of the Guarantee Trustee.
                  -------------------------------------------------------------

          (a)  Subject to Section 4.2(b), the Guarantee Trustee may be appointed
or removed without cause at any time by the Guarantor.

          (b)  The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and delivered to
the Guarantor.

          (c)  The Guarantee Trustee appointed hereunder shall hold office until
a Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The

                                      -9-
<PAGE>

Guarantee Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the Guarantee Trustee and
delivered to the Guarantor, which resignation shall not take effect until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
by instrument in writing executed by such Successor Guarantee Trustee and
delivered to the Guarantor and the resigning Guarantee Trustee.

      (d)  If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.

                                   ARTICLE V.
                                   GUARANTEE

     Section 5.1  Guarantee.  The Guarantor irrevocably and unconditionally
                  ---------
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by or on behalf of the Issuer), as and when due,
regardless of any defense, right of set-off or counterclaim which the Issuer may
have or assert. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Issuer to pay such amounts to the Holders.

     Section 5.2  Waiver of Notice and Demand.  The Guarantor hereby waives
                  ---------------------------
notice of acceptance of this Guarantee Agreement and of any liability to which
it applies or may apply, presentment, demand for payment, any right to require a
proceeding first against the Guarantee Trustee, Issuer or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.

     Section 5.3  Obligations Not Affected.  The obligations, covenants,
                  ------------------------
agreements and duties of the Guarantor under this Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:

          (a)  the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;

          (b)  the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment of
Distributions that results from the extension of any interest payment period on
the Notes as provided in the Indenture), Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred Securities;

          (c)  any failure, omission, delay or lack of diligence on the part of
the Holders or the Guarantee Trustee to enforce, assert or exercise any right,
privilege, power or remedy

                                      -10-
<PAGE>

conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;

          (d)  the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;

          (e)  any invalidity of, or defect or deficiency in, the Preferred
Securities;

          (f)  the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or

          (g)  any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.

     There shall be no obligation of the Holders to give notice to, or obtain
the consent of, the Guarantor with respect to the happening of any of the
foregoing.

          Section 5.4  Rights of Holders.  The Guarantor expressly acknowledges
                       -----------------
that: (i) this Guarantee Agreement will be deposited with the Guarantee Trustee
to be held for the benefit of the Holders; (ii) the Guarantee Trustee has the
right to enforce this Guarantee Agreement on behalf of the Holders; (iii) the
Holders of a Majority in Liquidation Amount of the Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee in respect of this Guarantee Agreement or
exercising any trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement; and (iv) any Holder may institute a legal proceeding
directly against the Guarantor to enforce its rights under this Guarantee
Agreement, without first instituting a legal proceeding against the Guarantee
Trustee, the Issuer or any other Person.

          Section 5.5  Guarantee of Payment.  This Guarantee Agreement creates
                       --------------------
a guarantee of payment and not of performance or collection. This Guarantee
Agreement will not be discharged except by payment of the Guarantee Payments in
full (without duplication of amounts theretofore paid by the Issuer) or upon
distribution of Notes to Holders as provided in the Declaration.

          Section 5.6  Subordination.  The Guarantor shall be subrogated to all
                       -------------
(if any) rights of the Holders against the Issuer, in respect of any amounts
paid to the Holders by the Guarantor under this Guarantee Agreement, and shall
have the right to waive payment by the Issuer pursuant to Section 5.1; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any rights which
it may acquire against the Issuer by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Guarantee Agreement, if, at the time of any such payment, any amounts are due
and unpaid under this Guarantee Agreement. If any

                                      -11-
<PAGE>

amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.

     Section 5.7  Independent Obligations.  The Guarantor acknowledges that its
                  -----------------------
obligations hereunder are independent of the obligations of the Issuer with
respect to the Preferred Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.3 hereof.

                                  ARTICLE VI.
                          COVENANTS AND SUBORDINATION

     Section 6.1  Subordination.  The obligations of the Gurantor under this
                  -------------
Guarantee Agreement will constitute unsecured obligations of the Guarantor and
will rank subordinate and junior in right of payment to all other liabilities of
the Guarantor except those made pari passu or subordinate to such obligations
expressly by their terms.

     Section 6.2  Pari Passu Guarantees.  The obligations of the Guarantor under
                  ---------------------
this Guarantee Agreement shall rank pari passu with the obligations of the
Guarantor under any similar Guarantee Agreements issued by the Guarantor on
behalf of the holders of preferred securities issued by any other trusts
established by Guarantor or its Affiliates.

                                  ARTICLE VII.
                                  TERMINATION

     Section 7.1  Termination.  This Guarantee Agreement shall terminate and no
                  -----------
be of no further force and effect upon (i) full payment of the Redemption Price
of all Preferred Securities, (ii) the distribution of Notes to the Holders in
exchange for all of the Preferred Securities or (iii) full payment of the
amounts payable in accordance with the Declaration upon liquidation of the
Issuer. Notwithstanding the foregoing, this Guarantee Agreement will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder must restore payment of any sums paid with respect to Preferred
Securities or this Guarantee Agreement.

                                 ARTICLE VIII.
                                 MISCELLANEOUS

     Section 8.1  Successors and Assigns.  All guarantees and agreements
                  ----------------------
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Preferred Securities from time to time
outstanding. Except in connection with a consolidation, merger or sale involving
the Guarantor that is permitted under Article VIII of the Indenture and pursuant
to which the successor or assignee agrees in writing to perform the Guarantor's
obligations hereunder, the Guarantor shall not assign its obligations hereunder.

                                      -12-
<PAGE>

     Section 8.2  Amendments.  Except with respect to any changes which do not
                  ----------
which do not adversely affect the rights of the Holders in any material respect
(in which case no consent of the Holders will be required), this Guarantee
Agreement may only be amended with the prior written approval of the Holders of
a Majority in Liquidation Amount of Securities. The provisions of Article VI of
the Declaration concerning meetings of the Holders shall apply to the giving of
such approval.

     Section 8.3  Notices.  Any notice, request or other communication required
                  -------
or permitted to be given hereunder shall be in writing, duly signed by the party
giving such notice, and delivered, telecopied or mailed by first class mail as
follows:

          (a)  if given to the Guarantor, to the address set forth below or such
other address, facsimile number or to the attention of such other Person as the
Guarantor may give notice to the Holders:

                  Sempra Energy
                  101 Ash Street
                  San Diego, California 92101
                  Facsimile No.:  619-696-4670
                  Attention:  Chief Corporate Counsel

          (b)  if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) respective addresses set forth below or
such other address as the Guarantee Trustee on behalf of the Issuer may give
notice to the Holders:

                  Sempra Energy Capital Trust I
                  101 Ash Street
                  San Diego, California 92101
                  Facsimile No.:  [619-696-4670]
                  Attention:  [Chief Corporate Counsel]

                  with a copy to:

                  The Bank of New York
                  101 Barclay Street, 21-W
                  New York, New York 10286
                  Facsimile No.:  212-815-5915
                  Attention:  Corporate Trust Administration

          (c)  if given to the Guarantee Trustee, at the Guarantee Trustee's
address set forth below or such other address as the Guarantee Trustee may give
notice to the Holders:

                  The Bank of New York
                  101 Barclay Street, 21-W
                  New York, New York 10286
                  Facsimile No.:  212-815-5915
                  Attention:  Corporate Trust Administration

                                      -13-
<PAGE>

          (d)  if given to any Holder, at the address set forth on the books and
records of the Issuer.

     All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.

     Section 8.4  Benefit.  This Guarantee Agreement is solely for the benefit
                  -------
of the Holders and is not separately transferable from the Preferred Securities.

     Section 8.5  Interpretation.  In this Guarantee Agreement, unless the
                  --------------
context otherwise requires:

          (a)  capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to them in
Section 1.1;

          (b)  a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;

          (c)  all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;

          (d)  all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;

          (e)  a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;

          (f)  a reference to the singular includes the plural and vice versa;
and

          (g)  the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.

     Section 8.6  Governing Law.  THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY
                  -------------
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.

     This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

                              (Signatures follow)

                                      -14-
<PAGE>

     THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.

                                 SEMPRA ENERGY

                                 By: _____________________________________
                                     Name:  Charles A. McMonagle
                                     Title:  Vice President and Treasurer

                                 THE BANK OF NEW YORK,

                                 as Guarantee Trustee

                                 By: _____________________________________
                                     Name:
                                     Title:Exhibit 10.1

                               PURCHASE AGREEMENT

          THIS PURCHASE AGREEMENT ("Agreement") is made as of the 10th day of
February, 2000 by and between Ursus Telecom Corporation, a Florida corporation
(the "Company"), and the Investors set forth on the signature page affixed
hereto (each an "Investor" and collectively the "Investors").

                                    RECITALS

          A. The Company and the Investors are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("Regulation D"), as promulgated by the U.S.
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended;

          B. The Investors wish to purchase, and the Company wishes to sell and
issue to the Investors, upon the terms and conditions stated in this Agreement,
that number of shares of the common stock of the Company, $0.01 par value per
share (the "Common Stock") and that number of warrants to purchase Common Stock
in the form attached hereto as EXHIBIT A (the "Warrants"), as are set forth on
the signature page attached hereto and executed by each such Investor; and

          C. Contemporaneous with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration Rights Agreement,
in the form attached hereto as EXHIBIT B (the "Registration Rights Agreement"),
pursuant to which the Company has agreed to provide certain registration rights
under the Securities Act of 1933, as amended and the rules and regulations
promulgated thereunder, and applicable state securities laws;

          In consideration of the mutual promises made herein and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

          1. DEFINITIONS. In addition to those terms defined above and elsewhere
in this Agreement, for the purposes of this Agreement, the following terms shall
have the meanings here set forth:

                    1.1 "AFFILIATE" means, with respect to any Person, any other
Person which directly or indirectly controls, is controlled by, or is under
common control with, such Person.

                    1.2 "AGREEMENTS" means this Agreement, the Registration
Rights Agreement, and the Warrants.

                    1.3 "CLOSING" means the consummation of the transactions
contemplated by this Agreement, and "CLOSING DATE" means the date of such
Closing.

                    1.4 "CONTROL" means the possession , direct or indirect, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.

                    1.5 "MARKET PRICE" means the average of the five lowest
closing bid prices of the Common Stock in the twenty-five (25) trading days
immediately preceding the date hereof.

                    1.6 "MATERIAL ADVERSE EFFECT" means a material adverse
effect on the condition (financial or otherwise), business, assets, or results
of operations of the Company as a whole.

                    1.7 "PERSON" means an individual, corporation, partnership,
trust, business trust, association, joint stock company, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization, governmental
authority or any other form of entity not specifically listed herein.

                    1.8 "SEC FILINGS" has the meaning set forth in Section 4.6.

                    1.9 "SECURITIES" means the Shares, the Warrants and the
Warrant Shares (defined below).

                    1.10 "SHARES" means the shares of Common Stock being
purchased by the Investors hereunder.

                    1.11 "WARRANT SHARES" means the shares of Common Stock
issuable upon exercise of or otherwise pursuant to the Warrants.

                    1.12 "1933 ACT" means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.

                    1.13 "1934 ACT" means the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.

          2. PURCHASE AND SALE OF THE SHARES AND WARRANTS. Subject to the terms
and conditions of this Agreement, each of the Investors hereby severally, and
not jointly, agrees to purchase, and the Company hereby agrees to sell and issue
to the Investors, the number of Shares and Warrants to purchase the number of
shares of Common Stock set forth on such Investor's signature page attached
hereto. The number of Shares to be purchased by each Investor shall be
determined by dividing such Investor's aggregate purchase price (as such
aggregate purchase price is set forth on such Investor's signature page attached
hereto), by an amount equal to 85% of the Market Price on the date of this
Agreement (the "Purchase Price"). The number of shares of Common Stock
purchasable by the Investors upon exercise of the Warrants shall be as set forth
on such Investor's signature page attached hereto and the exercise price of the
Warrants shall be 115% of the Market Price on the date of this Agreement;
provided, in no event shall the exercise price of the Warrants be less than the
closing bid price of the Common Stock on the day preceding the date of this
Agreement.

          3. CLOSING. The Company shall promptly deliver to Investors' counsel,
in trust, a certificate or certificates, registered in such name or names as the
Investors may designate, representing all of the Shares and all of the Warrants,
with instructions that such certificates are to be held for release to the
Investors only upon payment of the Purchase Price to the Company. Upon receipt
by counsel to the Investors of the certificates, each Investor shall promptly
cause a wire transfer in same day funds to be sent to the account of the Company
as instructed in writing by the Company, in an amount representing such
Investor's Purchase Price. On the date the Company receives such funds, the
certificates evidencing the Shares and the Warrants shall be released to the
Investors (and such date shall be deemed the "Closing Date").

          4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Investors that:

                    4.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. Each of
the Company and its subsidiaries is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to carry on
its business as now conducted and own its properties. Each of the Company and
its subsidiaries is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property makes such qualification or licensing
necessary unless the failure to so qualify would not have a Material Adverse
Effect. The Company's subsidiaries are reflected on SCHEDULE 4.1 hereto.

                    4.2 AUTHORIZATION. The Company has full power and authority
and has taken all requisite action on the part of the Company, its officers,
directors and stockholders necessary for (i) the authorization, execution and
delivery of the Agreements, (ii) authorization of the performance of all
obligations of the Company hereunder or thereunder, and (iii) the authorization,
issuance (or reservation for issuance) and delivery of the Securities. The
Agreements constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability, relating to or affecting creditors'
rights generally.

                    4.3 CAPITALIZATION. Set forth on SCHEDULE 4.3 hereto is (a)
the authorized capital stock of the Company on the date hereof; (b) the number
of shares of capital stock issued and outstanding; (c) the number of shares of
capital stock issuable pursuant to the Company's stock plans; and (d) the number
of shares of capital stock issuable and reserved for issuance pursuant to
securities (other than the Shares and the Warrants) exercisable for, or
convertible into or exchangeable for any shares of capital stock. All of the
issued and outstanding shares of the Company's capital stock have been duly
authorized and validly issued and are fully paid, nonassessable and free of
preemptive rights. Except as set forth on SCHEDULE 4.3, no Person is entitled to
preemptive or similar statutory or contractual rights with respect to any
securities of the Company. Except as set forth on SCHEDULE 4.3, there are no
outstanding warrants, options, convertible securities or other rights,
agreements or arrangements of any character under which the Company or any of
its subsidiaries is or may be obligated to issue any equity securities of any
kind and except as contemplated by this Agreement, neither the Company nor any
of its subsidiaries is currently in negotiations for the issuance of any equity
securities of any kind. Except as set forth on SCHEDULE 4.3, the Company has no
knowledge of any voting agreements, buy-sell agreements, option or right of
first purchase agreements or other agreements of any kind among any of the
securityholders of the Company relating to the securities of the Company held by
them. Except as set forth on SCHEDULE 4.3, the Company has not granted any
Person the right to require the Company to register any securities of the
Company under the 1933 Act, whether on a demand basis or in connection with the
registration of securities of the Company for its own account or for the account
of any other Person.

                    4.4 VALID ISSUANCE. The Company has reserved a sufficient
number of shares of Common Stock for the issuance of the Shares pursuant to this
Agreement and upon exercise of the Warrants. The Company will take such steps as
may be necessary to reserve sufficient shares for issuance pursuant to Section 7
below when such issuance is determinable. The Shares and Warrants are duly
authorized, and such Securities, along with the Warrant Shares when issued in
accordance herewith and with the terms of the Warrants, will be duly authorized,
validly issued, fully paid, non-assessable and free and clear of all
encumbrances and restrictions, except for restrictions on transfer imposed by
applicable securities laws.

                    4.5 CONSENTS. The execution, delivery and performance by the
Company of the Agreements and the offer, issuance and sale of the Securities
require no consent of, action by or in respect of, or filing with, any Person,
governmental body, agency, or official other than filings that have been made
pursuant to applicable state securities laws and post-sale filings pursuant to
applicable state and federal securities laws and the requirements of the Nasdaq
Stock Market, which the Company undertakes to file within the applicable time
periods.

                    4.6 DELIVERY OF SEC FILINGS; BUSINESS. The Company has
provided the Investors with copies of the Company's most recent Annual Report on
Form 10-K for the fiscal year ended March 31, 1999, and all other reports filed
by the Company pursuant to the 1934 Act since the filing of the Annual Report on
Form 10-K and prior to the date hereof (collectively, the "SEC Filings"); which
the Company hereby represents and warrants are all filings required of the
Company pursuant to the 1934 Act for such period. The Company is engaged only in
the business described in the SEC Filings and the SEC Filings contain a complete
and accurate description of the business of the Company.

                    4.7 USE OF PROCEEDS. The proceeds of the sale of the Common
Stock and the Warrants hereunder shall be used by the Company for working
capital and general corporate purposes.

                    4.8 NO MATERIAL ADVERSE CHANGE. Since the filing of the
Company's most recent Annual Report on Form 10-K or as otherwise identified and
described in subsequent reports filed by the Company pursuant to the 1934 Act or
as set forth on SCHEDULE 4.8 hereto, there has not been:

                         (i) any change in the consolidated assets, liabilities,
financial condition or operating results of the Company from that reflected in
the financial statements included in the Company's most recent Quarterly Report
on Form 10-Q, except changes in the ordinary course of business which have not
had, in the aggregate, a Material Adverse Effect;

                         (ii) any declaration or payment of any dividend, or any
authorization or payment of any distribution, on any of the capital stock of the
Company, or any redemption or repurchase of any securities of the Company;

                         (iii) any material damage, destruction or loss, whether
or not covered by insurance to any assets or properties of the Company;

                         (iv) any waiver by the Company of a valuable right or
of a material debt owed to it not in the ordinary course of business;

                         (v) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Company, except in the ordinary
course of business and which is not material to the assets, properties,
financial condition, operating results or business of the Company taken as a
whole (as such business is presently conducted and as it is proposed to be
conducted);

                         (vi) any material change or amendment to a material
contract or arrangement by which the Company or any of its assets or properties
is bound or subject;

                         (vii) any material labor difficulties or labor union
organizing activities with respect to employees of the Company;

                         (viii) any transaction entered into by the Company
other than in the ordinary course of business; or

                         (ix) any other event or condition of any character that
might have a Material Adverse Effect.

                    4.9 SEC FILINGS; MATERIAL CONTRACTS.

                         (a) The SEC Filings complied as to form in all material
respects with the requirements of the 1934 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.

                         (b) During the preceding two years, each registration
statement and any amendment thereto filed by the Company pursuant to the 1933
Act and the rules and regulations thereunder, as of the date such statement or
amendment became effective, complied as to form in all material respects with
the 1933 Act 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 in order
to make the statements made therein, in light of the circumstances under which
they were made, not misleading; and each prospectus filed pursuant to Rule
424(b) under the 1933 Act, as of its issue date and as of the closing of any
sale of securities pursuant thereto did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.

                         (c) Except as set forth on SCHEDULE 4.3 hereto, there
are no agreements or instruments currently in force and effect that constitute a
warrant, option, convertible security or other right, agreement or arrangement
of any character under which the Company is or may be obligated to issue any
material amounts of any equity security of any kind, or to transfer any material
amounts of any equity security of any kind.

                    4.10 FORM S-3 ELIGIBILITY. The Company is currently eligible
to register the resale of its Common Stock on a registration statement on Form
S-3 under the 1933 Act.

                    4.11 NO CONFLICT, BREACH, VIOLATION OR DEFAULT. The
execution, delivery and performance of the Agreements by the Company and the
issuance and sale of the Securities will not conflict with or result in a breach
or violation of any of the terms and provisions of, or constitute a default
under (i) the Company's Certificate of Incorporation or the Company's Bylaws,
both as in effect on the date hereof (copies of which have been provided to the
Investors before the date hereof), or (ii) except where it would not have a
Material Adverse Effect, (a) any statute, rule, regulation or order of any
governmental agency or body or any court, domestic or foreign, having
jurisdiction over the Company or any of its properties, or (b) except as set
forth on SCHEDULE 4.11, any agreement or instrument to which the Company is a
party or by which the Company is bound or to which any of the properties of the
Company is subject.

                    4.12 TAX MATTERS. The Company has timely prepared and filed
all tax returns required to have been filed by the Company with all appropriate
governmental agencies and timely paid all taxes owed by it. The charges,
accruals and reserves on the books of the Company in respect of taxes for all
fiscal periods are adequate in all material respects, and there are no material
unpaid assessments against the Company nor, to the knowledge of the Company, any
basis for the assessment of any additional taxes, penalties or interest for any
fiscal period or audits by any federal, state or local taxing authority except
such as which are not material. All material taxes and other assessments and
levies that the Company is required to withhold or to collect for payment have
been duly withheld and collected and paid to the proper governmental entity or
third party when due. There are no tax liens or claims pending or threatened
against the Company or any of its respective assets or property. There are no
outstanding tax sharing agreements or other such arrangements between the
Company and any other corporation or entity.

                    4.13 TITLE TO PROPERTIES. Except as disclosed in the SEC
Filings or SCHEDULE 4.13, the Company has good and marketable title to all real
properties and all other properties and assets owned by it, in each case free
from liens, encumbrances and defects that would materially affect the value
thereof or materially interfere with the use made or currently planned to be
made thereof by them; and except as disclosed in the SEC Filings, the Company
holds any leased real or personal property under valid and enforceable leases
with no exceptions that would materially interfere with the use made or
currently planned to be made thereof by them.

                    4.14 CERTIFICATES, AUTHORITIES AND PERMITS. The Company
possesses adequate certificates, authorities or permits issued by appropriate
governmental agencies or bodies necessary to conduct the business now operated
by it and has not received any notice of proceedings relating to the revocation
or modification of any such certificate, authority or permit that, if determined
adversely to the Company, would individually or in the aggregate have a Material
Adverse Effect.

                    4.15 NO LABOR DISPUTES. No material labor dispute with the
employees of the Company exists or, to the knowledge of the Company, is
imminent.

                    4.16 INTELLECTUAL PROPERTY. The Company has sufficient title
or adequate rights or licenses to the inventions, know-how, patents, copyrights,
trademarks, trade names, confidential information and other intellectual
property (collectively, "Intellectual Property Rights"), free and clear of any
material liens, security interests, charges, encumbrances, equities and other
adverse claims, necessary to conduct the business now operated by it, or
presently employed by it, and presently contemplated to be operated by it, and
the Company has not received any notice of infringement of or conflict with
asserted rights of others with respect to any Intellectual Property Rights. To
the knowledge of the Company, the Company's patents and other Intellectual
Property Rights and the present activities of the Company do not infringe any
patent, copyright, trademark, trade name or other proprietary rights of any
third party.

                    4.17 ENVIRONMENTAL MATTERS. The Company is not in violation
of any statute, rule, regulation, decision or order of any governmental agency
or body or any court, domestic or foreign, relating to the use, disposal or
release of hazardous or toxic substances or relating to the protection or
restoration of the environment or human exposure to hazardous or toxic
substances (collectively, "Environmental Laws"), does not own or operate any
real property contaminated with any substance that is subject to any
Environmental Laws, is not liable for any off-site disposal or contamination
pursuant to any Environmental Laws, and is not subject to any claim relating to
any Environmental Laws, which violation, contamination, liability or claim would
individually or in the aggregate have a Material Adverse Effect; and the Company
is not aware of any pending investigation that might lead to such a claim.

                    4.18 LITIGATION. Except as disclosed in the SEC Filings or
on SCHEDULE 4.18 hereto, there are no pending actions, suits or proceedings
against or affecting the Company, its subsidiaries or any of its or their
properties that, if determined adversely to the Company or such subsidiary,
would individually or in the aggregate have a Material Adverse Effect or would
materially and adversely affect the ability of the Company to perform its
obligations under this Agreement, or which are otherwise material in the context
of the sale of the Securities; and to the Company's knowledge, no such actions,
suits or proceedings are threatened or contemplated.

                    4.19 FINANCIAL STATEMENTS. The financial statements included
in each SEC Filing present fairly and accurately in all material respects the
consolidated financial position of the Company as of the dates shown and its
consolidated results of operations and cash flows for the periods shown, and
such financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis. Except as set
forth in the financial statements of the Company included in the SEC Filings
filed prior to the date hereof, to the best of the Company's knowledge, the
Company has no liabilities, contingent or otherwise, except those which
individually or in the aggregate would not have a Material Adverse Effect.

                    4.20 INSURANCE COVERAGE. The Company maintains in full force
and effect insurance coverage that is customary for comparably situated
companies for the business being conducted and properties owned or leased by the
Company, and the Company reasonably believes such insurance coverage to be
adequate against all liabilities, claims and risks against which it is customary
for comparably situated companies to insure.

                    4.21 COMPLIANCE WITH NASDAQ CONTINUED LISTING REQUIREMENTS.
The Company is in compliance with all applicable Nasdaq National Market
continued listing requirements. There are no proceedings pending or to the
Company's knowledge threatened against the Company relating to the continued
listing of the Company's Common Stock on the Nasdaq National Market and the
Company has not received any notice of, nor to the knowledge of the Company is
there any basis for, the delisting of the Common Stock from the Nasdaq National
Market.

                    4.22 ACKNOWLEDGEMENT OF DILUTION. The number of shares of
Common Stock issuable pursuant to this Agreement may increase substantially. The
Company's executive officers and directors have studied and fully understand the
nature of the transactions being contemplated hereunder and recognize that they
have a potential dilutive effect.

                    4.23 BROKERS AND FINDERS. The Investors shall have no
liability or responsibility for the payment of any commission or finder's fee to
any third party in connection with or resulting from this agreement or the
transactions contemplated by this Agreement by reason of any agreement of or
action taken by the Company. The Investors acknowledge that the Company is
obligated to pay a finder's fee to Swartz LLC equal to 4.5% of the gross
proceeds of this offering plus warrants to acquire 25,000 shares of Common
Stock.

                    4.24 NO DIRECTED SELLING EFFORTS OR GENERAL SOLICITATION.
Neither the Company nor any Person acting on its behalf has conducted any
general solicitation or general advertising (as those terms are used in
Regulation D) in connection with the offer or sale of any of the Securities.

                    4.25 NO INTEGRATED OFFERING. Neither the Company nor any of
its Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would adversely affect reliance by
the Company on Section 4(2) for the exemption from registration for the
transactions contemplated hereby or would require registration of the Securities
under the 1933 Act.

                    4.26 DISCLOSURES. No representation or warranty made under
any Section hereof contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained herein, in
light of the circumstances under which the statements were made, not misleading.

          5. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. Each of the
Investors hereby severally, and not jointly, represents and warrants to the
Company that:

                    5.1 ORGANIZATION AND EXISTENCE. The Investor is a validly
existing corporation or limited liability company and has all requisite
corporate or limited liability company power and authority to invest in the
Securities pursuant to this Agreement.

                    5.2 AUTHORIZATION. The execution, delivery and performance
by the Investor of the Agreements have been duly authorized and the Agreements
will each constitute the valid and legally binding obligation of the Investor,
enforceable against the Investor in accordance with their terms.

                    5.3 PURCHASE ENTIRELY FOR OWN ACCOUNT. The Securities to be
received by the Investor hereunder will be acquired for the Investor's own
account, not as nominee or agent, and not with a view to the resale or
distribution of any part thereof, and the Investor has no present intention of
selling, granting any participation in, or otherwise distributing the same. The
Investor is not a registered broker dealer or an entity engaged in the business
of being a broker dealer.

                    5.4 INVESTMENT EXPERIENCE. The Investor acknowledges that it
can bear the economic risk and complete loss of its investment in the Securities
and has such knowledge and experience in financial or business matters that it
is capable of evaluating the merits and risks of the investment contemplated
hereby.

                    5.5 DISCLOSURE OF INFORMATION. The Investor has had an
opportunity to receive documents related to the Company and to ask questions of
and receive answers from the Company regarding the Company, its business and the
terms and conditions of the offering of the Securities. The Investor
acknowledges receipt of the SEC Filings and any other filings which it requested
be made by the Company with the SEC. Neither such inquiries nor any other due
diligence investigation conducted by the Investor shall modify, amend or affect
the Investor's right to rely on the Company's representations and warranties
contained in this Agreement.

                    5.6 RESTRICTED SECURITIES. The Investor understands that the
Securities are characterized as "restricted securities" under the U.S. federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the 1933 Act only in certain limited circumstances.

                    5.7 LEGENDS. It is understood that, until registration for
resale pursuant to the Registration Rights Agreement, certificates evidencing
the Securities may bear one or all of the following legends:

                         (a) "The shares represented by this certificate may not
be transferred without (i) the opinion of counsel satisfactory to the
corporation that such transfer may lawfully be made without registration under
the Securities Act of 1933 or qualification under applicable state securities
laws; or (ii) such registration or qualification."

                         (b) If required by the authorities of any state in
connection with the issuance of sale of the Securities, the legend required by
such state authority.

                    Upon registration for resale pursuant to the Registration
Rights Agreement or upon Rule 144(k) becoming available, the Company shall
promptly cause certificates evidencing the Shares previously issued hereunder
(including Shares issued pursuant to Section 7.1 below) to be replaced with
certificates which do not bear such restrictive legends, and all Warrant Shares
subsequently issued shall not bear such restrictive legends. When the Company is
required to cause unlegended certificates to replace previously issued legended
certificates, if unlegended certificates are not delivered to an Investor within
ten (10) business days of submission by that Investor of legended stock
certificate(s) to the Company's transfer agent, the Company shall be liable to
the Investor for a penalty equal to 2% of the aggregate Purchase Price of the
Shares evidenced by such certificate(s) for each thirty day period (or portion
thereof) beyond such ten days that the unlegended certificates have not been so
delivered.

                    5.8 ACCREDITED INVESTOR. The Investor is an accredited
investor as defined in Rule 501(a) of Regulation D, as amended, under the 1933
Act.

                    5.9 NO GENERAL SOLICITATION. The Investor did not learn of
the investment in the Securities as a result of any public advertising or
general solicitation.

          6. REGISTRATION RIGHTS AGREEMENT. The parties acknowledge and agree
that part of the inducement for the Investor to enter into this Agreement is the
Company's execution and delivery of the Registration Rights Agreement. The
parties acknowledge and agree that simultaneously with the execution hereof, the
Registration Rights Agreement is being duly executed and delivered by the
parties thereto.

          7. COVENANTS AND AGREEMENTS OF THE COMPANY.

                    7.1 PURCHASE PRICE ADJUSTMENTS.

                         (a) REQUIRED ADJUSTMENTS. Subject to the exclusions
contained in Section 7.1(f) below, if during the period the MFN Period (defined
below) the Company issues or sells any shares of its Common Stock at a Per Share
Selling Price (as defined below) lower than the Purchase Price per share set
forth in Section 2 hereof, the Purchase Price per share of the Shares sold to
the Investors hereunder shall be adjusted downward to equal such lower Per Share
Selling Price and Investors shall be entitled to receive the additional shares
as provided by Section 7.1(c); provided, however, that in the event an Investor
then owns less than 51% of the Shares acquired by it hereunder, such Investor
shall be entitled to additional shares only with respect to the number of Shares
then owned by such Investor as provided in Section 7.1(c). The Company shall
give to the Investors written notice of any such sale within 24 hours of the
closing of any such issuance or sale. For so long as an Investor owns 51% or
more of the Shares originally acquired by such Investor hereunder, such Investor
shall be entitled to the full benefit of the Purchase Price adjustment required
by this Section 7.1. The term "Shares" as used in this Agreement shall include
shares issued to the Investors pursuant to this Section 7.1.

                         (b) DEFINITIONS.

                              (i) For the purposes of this Section 7.1, the term
"Per Share Selling Price" as used in this Section 7.1 shall include the amount
actually paid by third parties for each share of Common Stock. In the event a
fee in excess of 5.5% is paid by the Company in connection with such
transaction, any such excess amount shall be deducted from the selling price pro
rata to all shares sold in the transaction to arrive at the Per Share Selling
Price. A sale in a capital raising transaction of shares of Common Stock shall
include the sale or issuance of rights, options, warrants or convertible
securities under which the Company is or may become obligated to issue shares of
Common Stock, and in such circumstances the Per Share Selling Price of the
Common Stock covered thereby shall also include the exercise or conversion price
thereof (in addition to the consideration received by the Company upon such sale
or issuance less the excess fee amount as provided above). In case of any such
security issued within the MFN Period in a "Variable Rate Transaction" or an
"MFN Transaction" (each as defined below), the Per Share Selling Price shall be
deemed to be the lowest conversion or exercise price at which such securities
are converted or exercised or might have been converted or exercised in the case
of a Variable Rate Transaction, or the lowest adjustment price in the case of an
MFN Transaction, over the life of such securities. If shares are issued for a
consideration other than cash, the Per Share Selling Price shall be the fair
value of such consideration as determined in good faith by independent certified
public accountants mutually acceptable to the Company and the Investors.

                              (ii) The term "Variable Rate Transaction" shall
mean a transaction in which the Company issues or sells (a) any debt or equity
securities that are convertible into, exchangeable or exercisable for, or
include the right to receive additional shares of Common Stock either (x) at a
conversion, exercise or exchange rate or other price that is based upon and/or
varies with the trading prices of or quotations for the Common Stock at any time
after the initial issuance of such debt or equity securities, or (y) with a
fixed conversion, exercise or exchange price that is subject to being reset at
some future date after the initial issuance of such debt or equity security or
upon the occurrence of specified or contingent events directly or indirectly
related to the business of the Company or the market for the Common Stock (but
excluding standard stock split anti-dilution provisions), or (b) any securities
of the Company pursuant to an "equity line" structure which provides for the
sale, from time to time, of securities of the Company which are registered for
resale pursuant to the 1933 Act.

                              (iii) The term "MFN Transaction" shall mean a
transaction in which the Company issues or sells any securities in a capital
raising transaction or series of related transactions (the "New Offering") which
grants to the investor (the "New Investor") the right to receive additional
securities based upon future capital raising transactions of the Company on
terms more favorable than those granted to the New Investor in the New Offering.

                              (iv) The term "MFN Period" shall mean the period
ending thirty (30) months following the date of this agreement; provided,
however, that if during calendar year 2000 the Company completes a firm
commitment underwritten primary public offering (other than a "shelf"
registration of securities by the Company to which this proviso shall not apply)
of its Common Stock, the MFN period will terminate on the day after the public
sale of such Common Stock.

                         (c) ADJUSTMENT MECHANISM. If an adjustment of the
Purchase Price is required pursuant to Section 7.1(a), the Company shall deliver
to the Investors within twenty (20) calendar days of the closing of the
transaction giving rise to the adjustment ("Delivery Date") each Investor's
pro-rata share of such number of additional shares of Common Stock equal to (i)
the aggregate Purchase Price paid by the Investor divided by the adjusted per
share purchase price as required under Section 7.1(a), minus (ii) the total
number of shares of Common Stock previously delivered to that Investor
hereunder; provided however, that the Company shall effect such adjustment in
cash, in whole or in part, to the extent required by Section 7.1(d). In the
event the Company fails to deliver the additional shares (or cash, as the case
may be) by the Delivery Date, the Company shall be liable to the Investors for a
penalty equal to 2% of the aggregate Purchase Price adjustment per month (in
each instance to such Investor pro rata in accordance with its participation in
this offering), payable in Common Stock or cash, at each Investor's election.

                         (d) LIMITATION ON NUMBER OF SHARES.

                              (i) If by way of any adjustment required by this
Section 7.1, an Investor would receive a number of shares of Common Stock such
that the total number of such shares held by the Investor as of the date of such
adjustment would be greater than 9.90% but less than 13.0% of the total
outstanding Common Stock of the Company, then the Company shall not effect the
adjustment required by this Section to the extent necessary to avoid causing the
aforesaid limitation to be exceeded until 120 days following the date such
adjustment would have otherwise been made.

                              (ii) If by way of any adjustment required by this
Section 7.1, the Investor would receive a number of shares of Common Stock such
that the total number of such shares held by the Investor as of the date of such
adjustment would equal or exceed 13.0% of the total outstanding Common Stock of
the Company, then the Company shall not effect the adjustment required by this
Section to the extent necessary to avoid causing the aforesaid limitation to be
exceeded until 180 days following the date such adjustment would have otherwise
been made.

                              (iii) In the event that the Company would be
obligated to issue an amount of shares of Common Stock which, when aggregated
with all shares of Common Stock issued to an Investor, would constitute a breach
of the Company's obligations under the rules or regulations of Nasdaq as they
apply to the Company, or any other principal securities exchange or market upon
which the Common Stock is or becomes traded (the "Cap Regulations"), the Company
shall not be obligated to issue any such shares of Common Stock. Instead, the
Company shall immediately seek shareholder approval of this transaction (with
voting in accordance with the Cap Regulations and other applicable law) if such
approval would, under the Cap Regulations, permit the Company to issue the
shares of Common Stock without violation of the Cap Regulations. If such
shareholder approval will not afford a cure of the breach of the Cap
Regulations, or if such shareholder approval is not obtained within ninety (90)
days, then the Company shall promptly redeem the Investor at a redemption price
equal to 110% of the cash value of the adjustment. Only shares acquired pursuant
to this Agreement will be included in determining whether the limitations would
be exceeded for purposes of this Section 7.1(d)(iii).

                         (e) CAPITAL ADJUSTMENTS. In case of any stock split or
reverse stock split, stock dividend, reclassification of the common stock,
recapitalization, merger or consolidation, or like capital adjustment affecting
the Common Stock of the Company, the provisions of Section 7.1 shall be applied
in a fair, equitable and reasonable manner so as to give effect, as nearly as
may be, to the purposes hereof.

                         (f) EXCLUSIONS. Section 7.1(a) shall not apply to:

                              (i) issuances of options to acquire or shares of
Common Stock by the Company pursuant to the provisions of any existing
shareholder-approved option or similar employee benefit plan heretofore adopted
by the Company or issuances of up to 1,000,000 additional shares of Common Stock
to directors or employees of the Company pursuant to the provisions of any
subsequently adopted shareholder-approved option or similar employee benefit
plan; or

                              (ii) sales of shares of Common Stock by the
Company upon conversion or exercise of any convertible securities, options or
warrants outstanding prior to the date hereof; or

                              (iii) issuances by the Company of up to 2,000,000
shares of Common Stock in the aggregate so long as within the following
categories (issuances in excess of any of the thresholds in any of the
categories shall be subject to Section 7.1(a)): (A) the issuance by the Company
of up to 750,000 shares of Common Stock during each of the two fifteen (15)
month periods of the MFN Period as consideration for the acquisition by the
Company of one or more privately held entities; (B) the issuance by the Company
of up to 750,000 shares of Common Stock during each of the two fifteen (15)
month periods of the MFN Period as consideration for the acquisition by the
Company of one or more publicly traded companies; (C) the issuance by the
Company of up to 400,000 shares of Common Stock to corporate strategic partners
of the Company in connection with the formation of joint ventures or marketing
agreements; and (D) the issuance by the Company of up to 100,000 shares of
Common Stock to consultants of the Company in consideration for services to be
rendered to the Company.

                        7.2 LIMITATION ON TRANSACTIONS.

                              (a) Until the date of effectiveness of the
Registration Statement covering the Shares as contemplated by the Registration
Rights Agreement, without the prior written consent of the Investors (which
consent may be withheld in the Investors' discretion), the Company shall not
issue or sell or agree to issue or sell for cash any securities in a capital
raising transaction, and until the date that is at least 22 trading days (plus
that number of days, if any of an "Allowed Delay" or a "Blackout Period" under
the Registration Rights Agreement) after the Investors have received the
Company's written notice of the effectiveness of the Registration Statement
covering the Shares, a firm commitment underwritten primary public offering
(other than a "shelf" registration of securities by the Company) of the
Company's securities may not be declared effective.

                              (b) Until the expiration of the MFN Period,
without the prior written consent of the Investors (which consent may be
withheld in the Investors' discretion), the Company shall not (i) issue or sell
or agree to issue or sell for cash any securities in a MFN Transaction; or (ii)
issue or sell, or agree to issue or sell, for cash any securities in a Variable
Rate Transaction.

                              (c) Subject to any consent or approval rights of
the Investor hereunder, in the event the Company contemplates a private offering
of its equity or debt securities within six months of the date hereof, the
Company agrees that, upon the request of the Investors, the Company shall first
disclose the terms and conditions and other relevant facts of such proposed
transaction to Nasdaq and obtain from Nasdaq its assurance that such transaction
will not be integrated with the offering which is the subject of this Agreement
for purposes of the Nasdaq rules requiring shareholder approval of the issuance
of 20% or more of an issuer's outstanding common stock. In the event the Company
fails to seek or obtain such assurances, then, at the election of an Investor,
the Company shall redeem the Common Stock purchased by such Investor at 120% of
the original per share Purchase Price paid by the Investor for all Common Stock
then held by such Investor.

                    7.3 RIGHT OF THE INVESTORS TO PARTICIPATE IN FUTURE
TRANSACTIONS. Until the expiration of the MFN Period, the Investors will have a
right to participate in future capital raising transactions on the terms and
conditions set forth in this Section 7.3. During such period, the Company shall
give seven (7) business days advance written notice to the Investor prior to any
non-public offer or sale of any of the Company's equity securities or any
securities convertible into or exchangeable or exercisable for such securities
by providing to the Investors a comprehensive term sheet containing all
significant business terms of such a proposed transaction. The Investors shall
have the right (pro rata in accordance with the Investors' participation in this
offering) to purchase up to 50% of such securities which are the subject of such
a proposed transaction for the same consideration and on the same terms and
conditions as contemplated for such third-party sale. The Investor(s)' rights
hereunder must be exercised in writing by the Investor(s) within five (5)
business days following receipt of the notice from the Company. If, subsequent
to the Company giving notice to an Investor hereunder but prior to the Investor
exercising its right to participate (or the expiration of the five-day period
without response from the Investor), the terms and conditions of the proposed
third-party sale are changed from that disclosed in the comprehensive term sheet
provided to such Investor, the Company shall be required to provide a new notice
to the Investor hereunder and the Investors shall have the right, which must be
exercised within five (5) business days of such new notice, to exercise their
rights to purchase the securities on such changed terms and conditions as
provided hereunder. In the event the Investors do not exercise their rights
hereunder, or affirmatively decline to engage in the proposed transaction with
the Company, then the Company may proceed with such proposed transaction on the
same terms and conditions as noticed to the Investors (assuming the Investors
have consented to the transaction, if required, pursuant to Section 7.2 of this
Agreement). The rights and obligations of this Section 7.3 shall in no way
diminish the other rights of the Investor pursuant to this Section 7.

                    7.4 OPINION OF COUNSEL. On or prior to the Closing Date, the
Company will deliver to the Investors the opinion of legal counsel to the
Company, in form and substance reasonably acceptable to the Investors,
addressing those legal matters set forth in SCHEDULE 7.4 hereto.

                    7.5 RESERVATION OF COMMON STOCK PURSUANT TO SECTION 7.1 AND
EXERCISE OF WARRANTS. The Company hereby agrees at all times to reserve and keep
available out of its authorized but unissued shares of Common Stock, solely for
the purpose of providing for the exercise of the Warrants, such number of shares
of Common Stock as shall from time to time equal the number of shares sufficient
to permit the exercise of the Warrants in accordance with the terms of the
Warrants. In addition, as soon as such number is determinable, the Company
agrees to reserve such shares as may be necessary to permit the issuances to the
Investors required by Section 7.1.

                    In addition, as soon as such number is determinable, the
Company agrees to reserve such shares as may be necessary to permit the
issuances to the Investors required by Section 7.1.

                    7.6 REPORTS. For so long as the Investors beneficially own
any of the Securities, the Company will furnish to the Investors the following
reports, each of which shall be provided to the Investors by air mail (within
one week of filing with the SEC, in the case of SEC filings):

                              (a) QUARTERLY REPORTS. The Company's quarterly
report on Form 10-Q or, in the absence of such report, consolidated balance
sheets of the Company as at the end of such period and the related consolidated
statements of operations, stockholders' equity and cash flows for such period
and for the portion of the Company's fiscal year ended on the last day of such
quarter, all in reasonable detail and certified by a principal financial officer
of the Company to have been prepared in accordance with generally accepted
accounting principles, subject to year-end and audit adjustments.

                              (b) ANNUAL REPORTS. The Company's Form 10-K or, in
the absence of a Form 10-K, consolidated balance sheets of the Company as at the
end of such year and the related consolidated statements of earnings,
stockholders' equity and cash flows for such year, all in reasonable detail and
accompanied by the report on such consolidated financial statements of an
independent certified public accountant selected by the Company and reasonably
satisfactory to the Investor.

                              (c) SECURITIES FILINGS. Copies of (i) all notices,
proxy statements, financial statements, reports and documents as the Company
shall send or make available generally to its stockholders or to financial
analysts, promptly after providing same to the stockholders and (ii) all
periodic and special reports, documents and registration statements (other than
on Form S-8) which the Company furnishes or files, or any officer or director of
the Company (in such person's capacity as such) furnishes or files with the SEC.

                              (d) OTHER INFORMATION. Such other information
relating to the Company as from time to time may reasonably be requested by the
Investors provided the Company produces such information in its ordinary course
of business, and further provided that the Company, solely in its own
discretion, determines that such information is not confidential in nature and
disclosure to the Investor would not be harmful to the Company.

                    7.7 PRESS RELEASES. Any press release or other publicity
concerning this Agreement or the transactions contemplated by this Agreement
shall be submitted to the Investors for comment at least two (2) business days
prior to issuance, unless the release is required to be issued within a shorter
period of time by law or pursuant to the rules of a national securities
exchange.

                    7.8 NO CONFLICTING AGREEMENTS. The Company will not take any
action, enter into any agreement or make any commitment that would conflict or
interfere in any material respect with the obligations to the Investors under
the Agreements.

                    7.9 INSURANCE. So long as the Investors beneficially own any
Securities, the Company shall not materially reduce the insurance coverages set
forth in SCHEDULE 4.20.

                    7.10 COMPLIANCE WITH LAWS. So long as the Investors
beneficially own any Securities, the Company will use reasonable efforts to
comply with all applicable laws, rules, regulations, orders and decrees of all
governmental authorities, except to the extent non-compliance (in one instance
or in the aggregate) would not have a Material Adverse Effect.

                    7.11 LISTING OF UNDERLYING SHARES AND RELATED MATTERS. The
Company hereby agrees, promptly following the Closing of the transactions
contemplated by this Agreement, to take such action to cause the Shares and the
Warrant Shares to be listed on the Nasdaq National Market as promptly as
possible but no later than the effective date of the registration contemplated
by the Registration Rights Agreement. The Company further agrees that if the
Company applies to have its Common Stock or other securities traded on any other
principal stock exchange or market, it will include in such application the
Warrant Shares and will take such other action as is necessary to cause such
Common Stock to be so listed. For so long as the Investors beneficially own any
of the Securities, the Company will take all action necessary to continue the
listing and trading of its Common Stock on the Nasdaq National Market and will
comply in all respects with the Company's reporting, filing and other
obligations under the bylaws or rules of such exchange, as applicable, to ensure
the continued eligibility for trading of the Shares and the Warrant Shares
thereon.

                    7.12 CORPORATE EXISTENCE. So long as the Investors
beneficially own any of the Shares or Warrants, the Company shall maintain its
corporate existence, except in the event of a merger, consolidation or sale of
all or substantially all of the Company's assets, as long as the surviving or
successor entity in such transaction (a) assumes the Company's obligations
hereunder and under the agreements and instruments entered into in connection
herewith, regardless of whether or not the Company would have had a sufficient
number of shares of Common Stock authorized and available for issuance in order
to fulfill its obligations hereunder and effect the exercise in full of all
Warrants outstanding as of the date of such transaction; (b) has no legal,
contractual or other restrictions on its ability to perform the obligations of
the Company hereunder and under the agreements and instruments entered into in
connection herewith; and (c) is a publicly traded corporation whose common stock
and the shares of capital stock issuable upon exercise of the Warrants are (or
would be upon issuance thereof) listed for trading on the Nasdaq National
Market, the Nasdaq SmallCap Market, the New York Stock Exchange or the American
Stock Exchange.

          8. SURVIVAL. All representations, warranties, covenants and agreements
contained in this Agreement shall be deemed to be representations, warranties,
covenants and agreements as of the date hereof and shall survive the execution
and delivery of this Agreement for a period of three years from the date of this
Agreement; provided, however, that the provisions contained in Section 7 hereof
shall survive in accordance therewith.

          9. MISCELLANEOUS.

                    9.1 SUCCESSORS AND ASSIGNS. This Agreement may not be
assigned by a party hereto without the prior written consent of the other party
hereto, except that without the prior written consent of the Company, but after
notice duly given, an Investor may assign its rights and delegate its duties
hereunder in whole or in part to an Affiliate or to a third party acquiring some
portion or all of its Shares in a private transaction, and without the prior
written consent of the Investors, but after notice duly given and in compliance
with this Agreement, the Company may assign its rights and delegate its duties
hereunder to any successor-in-interest corporation in the event of a merger or
consolidation of the Company with or into another corporation, or any merger or
consolidation of another corporation with or into the Company that results
directly or indirectly in an aggregate change in the ownership or control of
more than 50% of the voting rights of the equity securities of the Company, or
the sale of all or substantially all of the Company's assets. The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective permitted successors and assigns of the parties. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.

                    9.2 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

                    9.3 TITLES AND SUBTITLES. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

                    9.4 NOTICES. Unless otherwise provided, any notice required
or permitted under this Agreement shall be given in writing and shall be deemed
effectively given only upon delivery to each party to be notified by (i)
personal delivery, (ii) telex or telecopier, upon receipt of confirmation of
complete transmittal, or (iii) an internationally recognized overnight air
courier, addressed to the party to be notified at the address as follows, or at
such other address as such party may designate by ten days' advance written
notice to the other party:

                           If to the Company:

                                   Ursus Telecom Corporation
                                   440 Sawgrass Corporate Parkway
                                   Sunrise, FL 33325
                                   Attn:    Johannes Seefried
                                            Chief Financial Officer
                                   Fax: (954) 846-7884

                           If to the Investors, to the addresses set forth on
                           the signature pages hereto.

                    9.5 EXPENSES. The parties hereto shall pay their own costs
and expenses in connection herewith, except that the Company shall pay to Tail
Wind, Inc. a sum equal to 1% of the Purchase Price paid by each Investor as and
for reimbursement for legal and due diligence expenses incurred in connection
herewith and such amount shall be paid at Closing from gross proceeds of the
offering.

                    9.6 AMENDMENTS AND WAIVERS. Any term of this Agreement may
be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Investors.
Any amendment or waiver effected in accordance with this paragraph shall be
binding upon each holder of any Securities purchased under this Agreement at the
time outstanding, each future holder of all such securities, and the Company.

                    9.7 SEVERABILITY. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such provision
shall be excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.

                    9.8 ENTIRE AGREEMENT. This Agreement, including the Exhibits
and Schedules hereto, and the Registration Rights Agreement constitute the
entire agreement among the parties hereof with respect to the subject matter
hereof and thereof and supersede all prior agreements and understandings, both
oral and written, between the parties with respect to the subject matter hereof
and thereof.

                    9.9 FURTHER ASSURANCES. The parties shall execute and
deliver all such further instruments and documents and take all such other
actions as may reasonably be required to carry out the transactions contemplated
hereby and to evidence the fulfillment of the agreements herein contained.

                    9.10 APPLICABLE LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York without
regard to principles of conflicts of laws.

[Remainder of Page Intentionally Blank.]

<PAGE>

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

The Company:                            URSUS TELECOM CORPORATION

                                        By: /s/ Luca M. Giussani
                                           ---------------------
                                           Name: Luca M. Giussani
                                           Title: Chief Exeuctive Officer

<PAGE>

The Investor:                              THE TAIL WIND FUND LTD.

                                           By: /s/ Jason McCarroll
                                              ------------------------
                                           Name: Jason McCarroll
                                           Title: Director

                                           By: /s/ Joan Thompson
                                              -------------------------
                                           Name: Joan Thompson
                                           Title: Director

Aggregate Purchase Price: $4,400,000
Number of Shares of Common Stock:  386,643
Number of Warrants:  248,798
   (56,545 per $1 million invested)
Effective per share Purchase Price of Shares:  $11.38
Exercise price of Warrants:  $15.3956
Address for Notice:

                                            The Tail Wind Fund Ltd.
                                            MeesPierson (Bahamas) Ltd.
                                            Attn:  Jason McCarroll
                                            Windemere House, 404 East Bay Street
                                            P.O. Box SS 5539, Nassau, Bahamas
                                            Tel:  242/393-8777 Fax: 242/393-9021

                                            with a copy to:

                                            David Crook, Esq.
                                            The Tail Wind Fund Ltd.
                                            c/o EASI
                                            4th Floor, No. 1 Regent Street
                                            London, SW1Y 4NS UK
                                            Telephone:  44-171-468-7660
                                            Facsimile:  44-171-468-7657

                                            and with a copy to:

                                            Bryan Cave LLP
                                            700 Thirteenth Street, NW
                                            Washington, DC  20005
                                            Attn:  LaDawn Naegle
                                            Telephone:  202/508-6046
                                            Facsimile:  202/508-6200
<PAGE>
The Investor:                              RESONANCE LIMITED

                                           By: /s/ M. Mandel
                                              ------------------------
                                           Name: M. Mandel
                                           Title: President

Aggregate Purchase Price: $2,000,000
Number of Shares of Common Stock:  175,747
Number of Warrants:  24,000
   (12,000 per $1 million invested)
Effective per share Purchase Price of Shares:  $11.38
Exercise price of Warrants:  $15.3956
Address for Notice:

                                            [---------------------]
                                            [---------------------]
                                            [---------------------]
                                            [---------------------]
                                            [---------------------]

                                            with a copy to:

                                            Bryan Cave LLP
                                            700 Thirtheenth Street, NW
                                            Washington, DC 20005
                                            Attn: LaDawn Naegle
                                            Telephone:  202/508/6046
                                            Facsimile:  202/508/6200
<PAGE>

The Investor:                              EMERGE CAPITAL

                                           By: /s/ Michael de Beaumont
                                              ------------------------
                                           Name: Michael de Beaumount
                                           Title: Director

Aggregate Purchase Price: $600,010.50
Number of Shares of Common Stock:   52,725
Number of Warrants:   7,200
   (12,000 per $1 million invested)
Effective per share Purchase Price of Shares:  $11.38
Exercise price of Warrants:  $15.3956
Address for Notice:

                                             Emerge Capital
                                             69, Route D'esch
                                             L-2953
                                             Luxembourg

                                            with a copy to:

                                            Bryan Cave LLP
                                            700 Thirtheenth Street, NW
                                            Washington, DC 20005
                                            Attn: LaDawn Naegle
                                            Telephone:  202/508/6046
                                            Facsimile:  202/508/6200

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