Document:

EXHIBIT 10.1

***** Confidential  Treatment has been requested for portions of this agreement.
The copy file herein omits information subject to the  confidentiality  request.
Omissions are  designated as [*****].  A complete  version of this agreement has
been filed separately with the Securities and Exchange Commission.

                          SECURITIES PURCHASE AGREEMENT

         SECURITIES PURCHASE AGREEMENT (this  "Agreement"),  dated as of January
26, 2000, by and among eGlobe, Inc., a Delaware  corporation,  with headquarters
located at 1250 24th Street, NW, Suite 725, Washington, DC 20037 ("Company") and
each of the purchasers set forth on the signature pages hereto (the "Buyers").

         WHEREAS:

         A. The  Company  and the  Buyers  are  executing  and  delivering  this
Agreement in reliance upon the exemption from securities  registration  afforded
by Rule 506 under  Regulation D  ("Regulation  D") as  promulgated by the United
States  Securities and Exchange  Commission (the "SEC") under the Securities Act
of 1933, as amended (the "1933 Act");

         B.  The  Company  has  authorized  a new  series  of  preferred  stock,
designated  as Series P  Convertible  Preferred  Stock (the  "Series P Preferred
Stock"),  having  the  rights,  preferences  and  privileges  set  forth  in the
Certificate of Designations,  Rights and Preferences  attached hereto as Exhibit
"A" (the  "Certificate of  Designation")  and has authorized the issuance to the
Buyers of an aggregate of Fifteen Thousand (15,000) shares of Series P Preferred
Stock  (together  with  any  shares  of  Series  P  Preferred  Stock  issued  in
replacement  thereof or as a dividend  thereon or otherwise with respect thereto
in accordance with the terms thereof, the "Preferred Shares");

         C. The Series P Preferred  Stock is  convertible  into shares of common
stock, $.001 par value per share, of the Company (the "Common Stock"),  upon the
terms and subject to the limitations and conditions set forth in the Certificate
of Designation;

         D. The Company has  authorized  the issuance to the Buyers of warrants,
in the form  attached  hereto as Exhibit  "B", to purchase an aggregate of Three
Hundred Seventy-Five Thousand (375,000) shares of Common Stock (the "Warrants");

         E. The Buyers  desire to purchase and the Company  desires to issue and
sell,  upon  the  terms  and  conditions  set  forth in this  Agreement,  (i) an
aggregate of Fifteen Thousand  (15,000)  Preferred Shares and (ii) the Warrants,
for an aggregate purchase price of Fifteen Million Dollars ($15,000,000);

         F. Each Buyer wishes to purchase,  upon the terms and conditions stated
in this Agreement,  the number of Preferred  Shares and Warrants as is set forth
immediately below its name on the signature pages hereto; and

<PAGE>

         G.  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  "C"  (the   "Registration   Rights
Agreement"),  pursuant  to which  the  Company  has  agreed to  provide  certain
registration rights under the 1933 Act and the rules and regulations promulgated
thereunder, and applicable state securities laws.

         NOW,  THEREFORE,  the Company and each of the Buyers severally (and not
jointly) hereby agree as follows:

                  1.       PURCHASE AND SALE OF PREFERRED SHARES AND WARRANTS.

                           a. Purchase of Preferred Shares and Warrants.  On the
Closing Date (as defined below),  the Company shall issue and sell to each Buyer
and each Buyer  severally  agrees to purchase  from the  Company  such number of
Preferred  Shares and  Warrants as is set forth  immediately  below such Buyer's
name on the signature pages hereto.

                           b. Form of Payment.  On the Closing  Date (as defined
below), (i) each Buyer shall pay the Purchase Price for the Preferred Shares and
Warrants  to be issued and sold to it at the  Closing  (as  defined  below) (the
"Purchase  Price")  by wire  transfer  of  immediately  available  funds  to the
Company, in accordance with the Company's written wiring  instructions,  against
delivery of duly  executed  certificates  representing  such number of Preferred
Shares and Warrants  which such Buyer is  purchasing  and (ii) the Company shall
deliver such certificates duly executed on behalf of the Company, to such Buyer,
against delivery of such Purchase Price.

                           c.  Closing  Date.  Subject to the  satisfaction  (or
waiver) of the  conditions  thereto  set forth in Section 6 and Section 7 below,
the date and time of the issuance and sale of the Preferred  Shares and Warrants
pursuant to this  Agreement  (the  "Closing  Date")  shall be 12:00 noon Eastern
Standard Time on January 26, 2000 or such other  mutually  agreed upon time. The
closing of the transactions contemplated by this Agreement (the "Closing") shall
occur on the Closing Date at the offices of Ballard  Spahr  Andrews & Ingersoll,
LLP, 1735 Market  Street,  Philadelphia,  Pennsylvania  19103,  or at such other
location as may be agreed to by the parties.

                  2.       BUYERS'  REPRESENTATIONS  AND WARRANTIES.  Each Buyer
severally (and not jointly)  represents and warrants to the Company solely as to
such Buyer that:

<PAGE>

                           a.  Investment  Purpose.  As of the date hereof,  the
Buyer is purchasing  the Preferred  Shares,  the shares of Common Stock issuable
upon  conversion of or otherwise  pursuant to the Preferred  Shares  (including,
without limitation,  such additional shares of Common Stock as are issuable as a
result of the events described in Articles V, VI.D(b) or VI.E of the Certificate
of  Designation  and Section 2(c) of the  Registration  Rights  Agreement  (such
shares of Common Stock being collectively  referred to herein as the "Conversion
Shares")), the Warrants and the shares of Common Stock issuable upon exercise of
or otherwise  pursuant to the Warrants (the "Warrant  Shares" and,  collectively
with  the  Preferred  Shares,  the  Conversion  Shares  and  the  Warrants,  the
"Securities") for its own account and not with a present view towards the public
sale or distribution thereof within the meaning of the 1933 Act, except pursuant
to sales registered or exempted from registration  under the 1933 Act; provided,
however, that by making the representations  herein, the Buyer does not agree to
hold any of the  Securities  for any minimum or other specific term and reserves
the  right  to  dispose  of the  Securities  at any time in  accordance  with or
pursuant to a effective  registration statement or an applicable exemption under
the 1933 Act.

                           b.  Accredited  Investor  Status.  The  Buyer  is  an
"accredited  investor"  as that term is defined in Rule 501(a) of  Regulation  D
promulgated under the 1933 Act (an "Accredited Investor").

                           c. Reliance on Exemptions. The Buyer understands that
the  Securities  are being  offered  and sold to it in  reliance  upon  specific
exemptions from the registration requirements of United States federal and state
securities  laws and that the Company is relying upon the truth and accuracy of,
and the Buyer's compliance with, the  representations,  warranties,  agreements,
acknowledgments  and  understandings  of the Buyer set forth  herein in order to
determine the  availability  of such exemptions and the eligibility of the Buyer
to acquire the Securities.

                           d. Information.  The Buyer and its advisors,  if any,
have been  furnished with all materials  relating to the business,  finances and
operations  of the Company and  materials  relating to the offer and sale of the
Securities which have been requested by the Buyer or its advisors. The Buyer and
its advisors, if any, have been afforded the opportunity to ask questions of the
Company.  Neither  such  inquiries  nor any  other due  diligence  investigation
conducted by Buyer or any of its advisors or representatives shall modify, amend
or affect Buyer's right to rely on the Company's  representations and warranties
contained in Section 3 below.  The Buyer  understands that its investment in the
Securities involves a significant degree of risk.

                           e. Governmental Review. The Buyer understands that no
United States  federal or state agency or any other  government or  governmental
agency  has  passed  upon or  made  any  recommendation  or  endorsement  of the
Securities.

<PAGE>

                           f. Transfer or Re-sale.  The Buyer  understands  that
(i) except as provided in the Registration Rights Agreement, the sale or re-sale
of the Securities has not been and is not being registered under the 1933 Act or
any applicable  state securities laws, and the Securities may not be transferred
unless  (a) the  Securities  are  sold  pursuant  to an  effective  registration
statement  under the 1933 Act, (b) the Buyer shall have delivered to the Company
an opinion of  counsel  (which  opinion  shall be in form,  substance  and scope
customary for opinions of counsel in comparable transactions) to the effect that
the Securities to be sold or transferred may be sold or transferred  pursuant to
an exemption from such registration,  (c) the Securities are sold or transferred
to an "affiliate" (as defined in Rule 144  promulgated  under the 1933 Act (or a
successor  rule)  ("Rule  144")) of the Buyer  who  agrees to sell or  otherwise
transfer the Securities  only in accordance with this Section 2(f) and who is an
Accredited  Investor or (d) the  Securities  are sold pursuant to Rule 144; (ii)
any sale of such  Securities  made in  reliance  on Rule 144 may be made only in
accordance  with  the  terms  of said  Rule  and  further,  if said  Rule is not
applicable,  any re-sale of such  Securities  under  circumstances  in which the
seller  (or the  person  through  whom the sale is made)  may be deemed to be an
underwriter  (as that term is  defined in the 1933 Act) may  require  compliance
with some other exemption under the 1933 Act or the rules and regulations of the
SEC thereunder;  and (iii) neither the Company nor any other person is under any
obligation  to  register  such  Securities  under  the  1933  Act or  any  state
securities  laws or to comply  with the terms and  conditions  of any  exemption
thereunder  (in each  case,  other  than  pursuant  to the  Registration  Rights
Agreement).  Notwithstanding  the foregoing or anything else contained herein to
the contrary,  the Securities may be pledged as collateral in connection  with a
bona fide margin account or other lending arrangement.

                           g. Legends.  The Buyer understands that the Preferred
Shares and Warrants and,  until such time as the  Conversion  Shares and Warrant
Shares  have  been  registered  under  the  1933  Act  as  contemplated  by  the
Registration  Rights  Agreement  or otherwise  may be sold  pursuant to Rule 144
without any  restriction as to the number of securities as of a particular  date
that can then be immediately sold, the Conversion Shares and Warrant Shares, may
bear  a  restrictive   legend  in  substantially   the  following  form  (and  a
stop-transfer  order may be placed with the  Company's  transfer  agent  against
transfer of the certificates for such Securities):

                  "The securities  represented by this certificate have not been
                  registered  under the Securities Act of 1933, as amended.  The
                  securities  may not be sold,  transferred  or  assigned in the
                  absence  of  an  effective   registration  statement  for  the
                  securities under said Act, or an opinion of counsel,  in form,
                  substance  and scope  customary  for  opinions  of  counsel in
                  comparable  transactions,  that  registration  is not required
                  under said Act or unless sold  pursuant to Rule 144 under said
                  Act."

                  The legend set forth  above  shall be removed  and the Company
shall  issue or caused to be issued a  certificate  without  such  legend to the
holder of any Security upon which it is stamped,  if, unless otherwise  required
by applicable  state  securities  laws, (a) such Security is registered for sale
under an effective  registration statement filed under the 1933 Act or otherwise
may be sold  pursuant to Rule 144 without  any  restriction  as to the number of
securities  as of a particular  date that can then be  immediately  sold, or (b)
such holder provides the Company with an opinion of counsel, in form,  substance
and scope customary for opinions of counsel in comparable  transactions,  to the
effect  that a public  sale or transfer  of such  Security  may be made  without
registration  under the 1933 Act and such sale or transfer is  effected,  or (c)
such holder provides the Company with  reasonable  assurances that such Security
can be sold  pursuant  to Rule  144.  The Buyer  agrees to sell all  Securities,
including those  represented by a certificate(s)  from which the legend has been
removed,  in compliance with applicable  securities laws and prospectus delivery
requirements, if any.

<PAGE>

                           h. Authorization;  Enforcement. (i) The Buyer has all
requisite power, capacity and authority to enter into and perform this Agreement
and  the  Registration  Rights  Agreement  and to  consummate  the  transactions
contemplated  hereby  and  thereby,  (ii) the  execution  and  delivery  of this
Agreement and the  Registration  Rights  Agreement,  and the consummation of the
transactions  contemplated  hereby  and  thereby  have  been  duly  and  validly
authorized  by the Buyer,  and (iii) this  Agreement  has been duly executed and
delivered  on behalf of the  Buyer,  and this  Agreement  constitutes,  and upon
execution and delivery by the Buyer of the Registration  Rights Agreement,  such
agreement will constitute, valid and binding agreements of the Buyer enforceable
in accordance with their terms.

                           i.  Residency.   The  Buyer  is  a  resident  of  the
jurisdiction  set forth  immediately  below such Buyer's  name on the  signature
pages hereto.

                           j.  No  Conflicts.   The   execution,   delivery  and
performance of this Agreement and the Registration Rights Agreement by the Buyer
and the  consummation by the Buyer of the transactions  contemplated  hereby and
thereby  will not (i) if the Buyer is an  entity,  conflict  with or result in a
violation of any provision of the certificate of incorporation,  bylaws or other
organizational  documents of the Buyer, (ii) violate or conflict with, or result
in a breach of any provision of, or constitute a default (or an event which with
notice or lapse of time or both could become a default)  under any  agreement to
which the Buyer is a party,  or (iii) result in the violation of any law,  rule,
regulation,  order,  judgment or decree  applicable  to the Buyer.  There are no
agreements, laws or other restrictions of any kind to which the Buyer is a party
or is subject  that  would  prevent  or  restrict  the  execution,  delivery  or
performance of this Agreement by the Buyer.

         3.                REPRESENTATIONS  AND  WARRANTIES  OF THE COMPANY. The
Company represents and warrants to each Buyer that:

                           a.  Organization and  Qualification.  The Company and
each of its  Subsidiaries  (as defined  below),  if any, is a  corporation  duly
organized,  validly  existing  and  in  good  standing  under  the  laws  of the
jurisdiction  in  which  it is  incorporated,  with  full  power  and  authority
(corporate and other) to own, lease, use and operate its properties and to carry
on its business as and where now owned,  leased,  used,  operated and conducted.
Schedule  3(a) sets forth a list of all of the  Subsidiaries  of the Company and
the  jurisdiction  in which each is  incorporated.  The  Company and each of its
Subsidiaries is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction in which its ownership or use of property or
the nature of the business  conducted by it makes such  qualification  necessary
except where the failure to be so qualified or in good standing would not have a
Material  Adverse Effect.  "Material  Adverse Effect" means any material adverse
effect on (i) the Securities, (ii) the business,  operations,  assets, financial
condition or prospects of the Company and its  Subsidiaries,  if any, taken as a
whole, or (iii) on the transactions  contemplated hereby or by the agreements or
instruments to be entered into in connection herewith.  "Subsidiaries" means any
corporation or other organization,  whether  incorporated or unincorporated,  in
which the Company owns,  directly or indirectly,  any equity or other  ownership
interest.

<PAGE>

                           b.  Authorization;  Enforcement.  (i) The Company has
all requisite  corporate power and authority to file and perform its obligations
under  the  Certificate  of  Designation  and to  enter  into and  perform  this
Agreement,  the Registration Rights Agreement and the Warrants and to consummate
the transactions contemplated hereby and thereby and to issue the Securities, in
accordance with the terms hereof and thereof, (ii) the execution and delivery of
this  Agreement,  the  Registration  Rights  Agreement  and the  Warrants by the
Company and the consummation by it of the transactions  contemplated  hereby and
thereby (including without limitation,  the issuance of the Preferred Shares and
the Warrants and the issuance  and  reservation  for issuance of the  Conversion
Shares and the  Warrant  Shares  issuable  upon  conversion  or  exercise  of or
otherwise  pursuant to the  Preferred  Shares and the  Warrants)  have been duly
authorized  by the  Company's  Board of  Directors  and no  further  consent  or
authorization  of the Company,  its Board of Directors,  or its  stockholders is
required,  (iii) this  Agreement  has been duly  executed  and  delivered by the
Company, and (iv) this Agreement constitutes and, upon execution and delivery by
the Company of the  Registration  Rights  Agreement  and the  Warrants  and upon
execution and filing of the Certificate of Designation,  each of such agreements
and instruments will constitute,  a legal,  valid and binding  obligation of the
Company enforceable against the Company in accordance with its terms.

                           a.  Capitalization.  The authorized  capital stock of
the Company consists of: (a) one hundred million  (100,000,000) shares of Common
Stock of which  thirty-five  million eight  hundred  three  thousand two hundred
eighteen (35,803,218) shares were issued and outstanding as of January 26, 2000;
and (b) ten million  (10,000,000) shares of preferred stock, par value $.001 per
share,  of which,  as of January 26,  2000:  (i) one hundred  twenty-five  (125)
shares of 8% Series D Cumulative  Convertible  Preferred  Stock are  authorized,
none of which are outstanding;  (ii) one hundred  twenty-five (125) shares of 8%
Series E Cumulative  Convertible  Redeemable Preferred Stock are authorized,  of
which fifty (50)  shares are issued and  outstanding;  (iii) two million  twenty
thousand  (2,020,000)  shares  of  Series  F  Convertible  Preferred  Stock  are
authorized, none of which are outstanding;  (iv) five hundred thousand (500,000)
shares of  Series H  Convertible  Preferred  Stock are  authorized,  issued  and
outstanding;  (v) four hundred thousand (400,000) shares of Series I Convertible
Preferred Stock are authorized,  issued and outstanding;  (vi) forty (40) shares
of 5% Series J Cumulative Convertible Preferred Stock are authorized, issued and
outstanding;  (vii)  thirty  (30) shares of 5% Series K  Cumulative  Convertible
Preferred Stock are authorized, issued and outstanding;  (viii) one (1) share of
20% Series M Cumulative  Convertible  Preferred Stock is authorized,  issued and
outstanding;  (ix) twenty  thousand  (20,000)  shares of 8% Series N  Cumulative
Convertible Preferred Stock are authorized,  none of which are outstanding;  and
(x) sixteen  thousand  one hundred  (16,100)  shares of 10% Series O  Cumulative
Convertible Preferred Stock are authorized, issued and outstanding. In addition,
(i)  3,250,000  shares are  reserved  for  issuance  pursuant  to Company  stock
options, (ii) 32,317,113 shares are reserved for issuance pursuant to securities
(other  than  the  Preferred  Shares  and  the  Warrants)  exercisable  for,  or
convertible  into or  exchangeable  for  shares of Common  Stock  (which  amount
includes 21,346,646 shares issuable upon conversion of shares of preferred stock
(excluding the Preferred  Shares),  7,553,800  shares  issuable upon exercise of
non-contingent   warrants  and  3,416,667   shares  issuable  upon  exercise  of
contingent  warrants) and (iii) 6,000,000  shares are reserved for issuance upon
conversion  of the  Preferred  Shares and exercise of the  Warrants  (subject to
adjustment  pursuant to the Company's covenant set forth in Section 4(h) below).
All of such  outstanding  shares of capital stock are, or upon issuance will be,
duly  authorized,  validly issued,  fully paid and  nonassessable.  No shares of
capital  stock of the  Company  are  subject to  preemptive  rights or any other
similar rights of the  stockholders  of the Company or any liens or encumbrances
imposed  through  the  actions  or  failure  to act of the  Company.  Except  as
disclosed in Schedule  3(c), as of the  effective  date of this  Agreement,  (i)
there are no  outstanding  options,  warrants,  scrip,  rights to subscribe for,
puts,  calls,  rights of first refusal,  agreements,  understandings,  claims or
other  commitments  or  rights  of any  character  whatsoever  relating  to,  or
securities or rights  convertible into or exchangeable for any shares of capital
stock of the Company or any of its  Subsidiaries,  or  arrangements by which the
Company or any of its  Subsidiaries  is or may become bound to issue  additional
shares of capital  stock of the Company or any of its  Subsidiaries,  (ii) there
are  no  agreements  or  arrangements  under  which  the  Company  or any of its
Subsidiaries is obligated to register the sale of any of its or their securities
under the 1933 Act (except the  Registration  Rights  Agreement) and (iii) there
are no anti-dilution or price  adjustment  provisions  contained in any security
issued by the Company (or in any agreement providing rights to security holders)
that will be triggered by the issuance of the Preferred  Shares,  the Conversion
Shares,  the Warrants or the Warrant  Shares.  The Company has  furnished to the
Buyer true and correct  copies of the  Company's  Certificate  of  Incorporation
(including  all   certificates  of  designation  of  the  rights,   preferences,
privileges and restrictions of the various existing series of preferred stock of
the   Company)  as  in  effect  on  the  date  hereof   (the   "Certificate   of
Incorporation"),  the  Company's  By-laws,  as in effect on the date hereof (the
"By-laws"),  and the terms of all securities convertible into or exercisable for
Common  Stock of the Company and the material  rights of the holders  thereof in
respect  thereto.  The Company shall provide the Buyer with a written  update of
this  representation  signed by the Company's Chief Executive or Chief Financial
Officer on behalf of the Company as of the Closing Date.

                           b. Issuance of Shares.  The Preferred  Shares and the
Warrants are duly  authorized and, upon issuance in accordance with the terms of
this Agreement, will be validly issued, fully paid and non-assessable,  and free
from all taxes, liens, claims and encumbrances with respect to the issue thereof
and  shall not be  subject  to  preemptive  rights  or other  similar  rights of
stockholders  of the Company  and will not impose  personal  liability  upon the
holder thereof. The Conversion Shares and the Warrant Shares are duly authorized
and reserved for issuance  and,  upon  conversion  of the  Preferred  Shares and
exercise of the Warrants in accordance  with the terms thereof,  will be validly
issued,  fully paid and  non-assessable,  and free from all taxes, liens, claims
and encumbrances with respect to the issuance thereof and will not be subject to
preemptive  rights or other similar  rights of  stockholders  of the Company and
will not impose personal liability upon the holder thereof.

<PAGE>

                           c.   Acknowledgment   of   Dilution.    The   Company
understands and acknowledges the potentially dilutive effect to the Common Stock
upon the  issuance of the  Conversion  Shares upon  conversion  of or  otherwise
pursuant to the Preferred  Shares and upon  issuance of the Warrant  Shares upon
exercise of or otherwise pursuant to the Warrants.  The Company's  directors and
executive  officers  have  studied  and  fully  understand  the  nature  of  the
Securities  being sold  hereunder.  The Company  further  acknowledges  that its
obligation to issue Conversion  Shares upon conversion of or otherwise  pursuant
to the  Preferred  Shares and  Warrant  Shares  upon  exercise  of or  otherwise
pursuant to the Warrants in accordance with this  Agreement,  the Certificate of
Designation  and the Warrants is absolute and  unconditional  regardless  of the
dilutive effect that such issuance may have on the ownership  interests of other
stockholders  of the Company.  Taking the foregoing into account,  the Company's
Board of Directors has determined, in its good faith business judgment, that the
issuance of the Preferred Shares,  the Conversion  Shares,  the Warrants and the
Warrant  Shares  hereunder  and under the  Certificate  of  Designation  and the
consummation of the transactions contemplated hereby and thereby are in the best
interest of the Company and its stockholders.

                           d.   Series   of   Preferred    Stock.   The   terms,
designations,  powers,  preferences and relative,  participating and optional or
special rights,  and the  qualifications,  limitations and  restrictions of each
series of preferred  stock of the Company (other than the Preferred  Shares) are
as stated in the  Certificate  of  Incorporation,  filed on or prior to the date
hereof,  and the  Bylaws.  The  terms,  designations,  powers,  preferences  and
relative,  participating and optional or special rights, and the qualifications,
limitations  and  restrictions  of the  Preferred  Shares  are as  stated in the
Certificate of Designation.

                           e.  No  Conflicts.   The   execution,   delivery  and
performance  of  this  Agreement,  the  Registration  Rights  Agreement  and the
Warrants by the Company and the  consummation by the Company of the transactions
contemplated  hereby and thereby (including,  without limitation,  the filing of
the Certificate of Designation and the issuance and reservation for issuance, as
applicable,  of the Preferred Shares,  Conversion  Shares,  Warrants and Warrant
Shares) will not (i) conflict  with or result in a violation of any provision of
the Certificate of Incorporation or By-laws or (ii) violate or conflict with, or
result in a breach of any  provision  of, or  constitute  a default (or an event
which with  notice or lapse of time or both could  become a default)  under,  or
give  to  others  any  rights  of   termination,   amendment,   acceleration  or
cancellation of, any agreement,  indenture, patent, patent license or instrument
to which the Company or any of its Subsidiaries is a party, or (iii) result in a
violation of any law, rule,  regulation,  order,  judgment or decree  (including
federal  and  state  securities  laws and  regulations  and  regulations  of any
self-regulatory  organizations  to  which  the  Company  or its  securities  are
subject)  applicable to the Company or any of its  Subsidiaries  or by which any
property or asset of the Company or any of its Subsidiaries is bound or affected
(except for such conflicts, defaults, terminations,  amendments,  accelerations,
cancellations  and  violations as would not,  individually  or in the aggregate,
have a Material Adverse Effect). Neither the Company nor any of its Subsidiaries
is  in  violation  of  its  Certificate  of  Incorporation,   By-laws  or  other
organizational  documents and neither the Company nor any of its Subsidiaries is
in default (and no event has occurred which with notice or lapse of time or both
could put the Company or any of its  Subsidiaries in default) under, and neither
the Company nor any of its  Subsidiaries  has taken any action or failed to take
any action  that would  give to others  any  rights of  termination,  amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company or any of its  Subsidiaries  is a party or by which any  property or
assets of the Company or any of its  Subsidiaries  is bound or affected,  except
for possible  defaults as would not,  individually  or in the aggregate,  have a
Material Adverse Effect. The businesses of the Company and its Subsidiaries,  if
any, are not being conducted, and shall not be conducted so long as a Buyer owns
any of the Securities,  in violation of any law,  ordinance or regulation of any
governmental entity, except where such conduct would not, individually or in the
aggregate,  have a Material Adverse Effect. Except as specifically  contemplated
by this Agreement and as required  under the 1933 Act and any  applicable  state
securities   laws,   the  Company  is  not   required  to  obtain  any  consent,
authorization  or order of, or make any filing or registration  with, any court,
governmental  agency,  regulatory agency, self regulatory  organization or stock
market or any third party in order for it to execute,  deliver or perform any of
its obligations under this Agreement,  the Registration  Rights Agreement or the
Warrants in accordance with the terms hereof or thereof or to issue and sell the
Preferred  Shares and the  Warrants in  accordance  with the terms hereof and to
issue the  Conversion  Shares upon  conversion  of or otherwise  pursuant to the
Preferred  Shares and the Warrant Shares upon exercise of or otherwise  pursuant
to  the  Warrants.   Except  as  disclosed  in  Schedule   3(g),  all  consents,
authorizations,  orders, filings and registrations which the Company is required
to obtain  pursuant to the preceding  sentence have been obtained or effected on
or prior to the date  hereof.  The  Company is not in  violation  of the listing
requirements of the Nasdaq  National  Market  ("Nasdaq") and does not reasonably
anticipate  that  the  Common  Stock  will  be  delisted  by the  Nasdaq  in the
foreseeable future. The Company and its Subsidiaries are unaware of any facts or
circumstances which might give rise to any of the foregoing.

<PAGE>

                           f. SEC Documents; Financial Statements. Except as set
forth on Schedule  3(h),  since  December 31, 1997, the Company has timely filed
all reports,  schedules,  forms,  statements and other documents  required to be
filed  by it  with  the  SEC  pursuant  to  the  reporting  requirements  of the
Securities  Exchange  Act of 1934,  as  amended  (the  "1934  Act")  (all of the
foregoing filed prior to the date hereof and all exhibits  included  therein and
financial statements and schedules thereto and documents (other than exhibits to
such documents) incorporated by reference therein, being hereinafter referred to
herein as the "SEC  Documents").  The Company has made  available  to each Buyer
true and  complete  copies of the SEC  Documents,  except for such  exhibits and
incorporated documents. As of their respective dates, the SEC Documents complied
as to form in all material respects with the applicable requirements of the 1934
Act and the rules and regulations of the SEC promulgated  thereunder  applicable
to the SEC Documents, and none of the SEC Documents, at the time they were filed
with the SEC,  contained  any untrue  statement of a material fact or omitted to
state a material  fact  required to be stated  therein or  necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.  None of the statements made in any such SEC Documents is,
or has been,  required to be amended or updated under applicable law (except for
such  statements as have been amended or updated in subsequent  filings prior to
the date hereof). As of their respective dates, the financial  statements of the
Company  included  in the SEC  Documents  complied  as to  form in all  material
respects with  applicable  accounting  requirements  and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared  in  accordance  with  United  States  generally  accepted   accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise  indicated in such financial  statements or the notes  thereto,  or
(ii) in the case of  unaudited  interim  statements,  to the extent they may not
include footnotes or may be condensed or summary  statements) and fairly present
in all material respects the consolidated  financial position of the Company and
its  consolidated  Subsidiaries  as of the dates  thereof  and the  consolidated
results of their  operations and cash flows for the periods then ended (subject,
in the case of unaudited  statements,  to normal  year-end  audit  adjustments).
Except as set  forth in  Schedule  3(h) or in the  financial  statements  of the
Company  included  in  the  SEC  Documents,  the  Company  has  no  liabilities,
contingent or  otherwise,  other than (i)  liabilities  incurred in the ordinary
course of business  subsequent to December 31, 1998 and (ii)  obligations  under
contracts and  commitments  incurred in the ordinary  course of business and not
required under generally accepted accounting  principles to be reflected in such
financial statements,  which, individually or in the aggregate, are not material
to the financial condition or operating results of the Company.

                           g.  Absence of Certain  Changes.  Since  December 31,
1998 and except as set forth in the SEC Documents  filed after such date,  there
has been no material adverse change and no material  adverse  development in the
assets, liabilities,  business,  properties,  operations,  prospects,  financial
condition or results of operations of the Company or any of its Subsidiaries.

                           h. Absence of Litigation.  Except as disclosed in the
SEC documents or set forth on Schedule 3(j),  there is no action,  suit,  claim,
proceeding,  inquiry  or  investigation  before or by any court,  public  board,
government  agency,  self-regulatory  organization  or body  pending  or, to the
knowledge  of the  Company  or any of its  Subsidiaries,  threatened  against or
affecting the Company or any of its Subsidiaries, or their officers or directors
in their capacity as such, that could have a Material  Adverse Effect.  Schedule
3(j)  contains  a  complete  list and  summary  description  of any  pending  or
threatened   proceeding   against  or  affecting  the  Company  or  any  of  its
Subsidiaries, without regard to whether it would have a Material Adverse Effect.
The Company and its Subsidiaries are unaware of any facts or circumstances which
might give rise to any of the foregoing.

                           i. Patents, Copyrights, etc.; Year 2000 Compliance.

                            (i) The Company and each of its Subsidiaries owns or
possesses  the  requisite  licenses  or  rights  to  use  all  patents,   patent
applications,  patent rights, inventions,  know-how, trade secrets,  trademarks,
trademark applications, service marks, service names, trade names and copyrights
("Intellectual  Property") necessary to enable it to conduct its business as now
operated (and,  except as set forth in Schedule 3(k) hereof,  to the best of the
Company's  knowledge,  as presently  contemplated to be operated in the future);
there is no claim or action by any person pertaining to, or proceeding  pending,
or to the Company's  knowledge  threatened,  which  challenges  the right of the
Company or of a Subsidiary with respect to any Intellectual  Property  necessary
to enable it to conduct its business as now operated  (and,  except as set forth
in Schedule 3(k) hereof,  to the best of the Company's  knowledge,  as presently
contemplated  to be  operated  in the  future);  to the  best  of the  Company's
knowledge,  the Company's or its  Subsidiaries'  current and intended  products,
services and  processes do not  infringe on any  Intellectual  Property or other
rights  held  by any  person;  and  the  Company  is  unaware  of any  facts  or
circumstances  which  might give rise to any of the  foregoing.  The Company and
each of its Subsidiaries have taken reasonable  security measures to protect the
secrecy, confidentiality and value of their Intellectual Property.

                             (ii) All  of the  Company's  computer software  and
computer hardware, and other similar or related items of automated, computerized
or software  systems that are used or relied on by the Company in the conduct of
its  business  or that were,  or  currently  are being,  sold or licensed by the
Company to customers  (collectively,  "Information  Technology"),  are Year 2000
Compliant,  except for any such failure to be Year 2000 Compliant that would not
have a Material Adverse Effect.  For purposes of this Agreement,  the term "Year
2000 Compliant"  means,  with respect to the Company's  Information  Technology,
that the  Information  Technology  is designed  to be used prior to,  during and
after the calendar Year 2000 A.D., and the  Information  Technology  used during
each such time period will accurately receive, provide and process date and time
data  (including,  but not limited to,  calculating,  comparing and  sequencing)
from, into and between the 20th and 21st centuries, including the years 1999 and
2000, and leap-year calculations,  and will not malfunction,  cease to function,
or provide invalid or incorrect results as a result of the date or time data, to
the extent  that other  information  technology,  used in  combination  with the
Information  Technology,  properly  exchanges  date and time data  with it.  The
Company  has  delivered  to the Buyer true and correct  copies of all  analyses,
reports,  studies  and  similar  written  information,  whether  prepared by the
Company or another party, relating to whether the Information Technology is Year
2000 Compliant.

                           j. No Materially Adverse Contracts,  Etc. Neither the
Company nor any of its  Subsidiaries  is subject to any  charter,  corporate  or
other legal  restriction,  or any judgment,  decree,  order,  rule or regulation
which in the judgment of the Company's officers has or is expected in the future
to  have  a  Material  Adverse  Effect.  Neither  the  Company  nor  any  of its
Subsidiaries  is a party to any contract or  agreement  which in the judgment of
the Company's officers has or is expected to have a Material Adverse Effect.

                           k. Tax Status.  Except as set forth on Schedule 3(m),
the Company and each of its  Subsidiaries  has made or filed all federal,  state
and foreign income and all other tax returns,  reports and declarations required
by any  jurisdiction  to which it is subject (unless and only to the extent that
the Company and each of its  Subsidiaries  has set aside on its books provisions
reasonably  adequate for the payment of all unpaid and unreported taxes) and has
paid all taxes and other governmental  assessments and charges that are material
in  amount,  shown  or  determined  to be  due  on  such  returns,  reports  and
declarations,  except those being contested in good faith,  and has set aside on
its  books  provisions  reasonably  adequate  for the  payment  of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply.  Except as set forth on Schedule  3(m),  there are no unpaid taxes in any
material amount claimed to be due by the taxing  authority of any  jurisdiction,
and the officers of the Company know of no basis for any such claim. The Company
has not executed a waiver with respect to the statute of limitations relating to
the assessment or collection of any foreign, federal, state or local tax. Except
as set forth on Schedule  3(m),  none of the  Company's tax returns is presently
being audited by any taxing authority.

                           l.  Certain  Transactions.  Except  as set  forth  on
Schedule  3(n) and except for arm's  length  transactions  pursuant to which the
Company or any of its  Subsidiaries  makes  payments in the  ordinary  course of
business  upon  terms  no  less  favorable  than  the  Company  or  any  of  its
Subsidiaries  could obtain from third  parties and other than the grant of stock
options  disclosed  on  Schedule  3(c),  none  of the  officers,  directors,  or
employees  of the  Company  is  presently  a party to any  transaction  with the
Company  or any of its  Subsidiaries  (other  than for  services  as  employees,
officers and directors),  including any contract, agreement or other arrangement
providing for the furnishing of services to or by,  providing for rental of real
or personal property to or from, or otherwise  requiring payments to or from any
officer,  director or such  employee or, to the  knowledge  of the Company,  any
corporation,  partnership, trust or other entity in which any officer, director,
or any such  employee  has a  substantial  interest or is an officer,  director,
trustee or partner.

<PAGE>

                           m.  Disclosure.   All  information   relating  to  or
concerning  the Company or any of its  Subsidiaries  set forth in this Agreement
and  provided to the Buyers  pursuant to Section  2(d) hereof and  otherwise  in
connection with the transactions  contemplated hereby is true and correct in all
material  respects  and the Company has not omitted to state any  material  fact
necessary in order to make the  statements  made herein or therein,  in light of
the  circumstances  under  which they were  made,  not  misleading.  No event or
circumstance  has  occurred or exists with  respect to the Company or any of its
Subsidiaries  or its or their  business,  properties,  prospects,  operations or
financial  conditions,  which has not been publicly  announced or disclosed but,
under  applicable  law,  rule  or  regulation,  requires  public  disclosure  or
announcement  by the  Company  (assuming  for this  purpose  that the  Company's
reports  filed  under  the 1934 Act are  being  incorporated  into an  effective
registration statement filed by the Company under the 1933 Act).

                           n.  Acknowledgment   Regarding  Buyers'  Purchase  of
Securities.  The  Company  acknowledges  and  agrees  that the Buyers are acting
solely in the capacity of arm's length purchasers with respect to this Agreement
and the transactions  contemplated hereby. The Company further acknowledges that
no Buyer is acting as a financial advisor or fiduciary of the Company (or in any
similar   capacity)  with  respect  to  this  Agreement  and  the   transactions
contemplated  hereby  and that any  statement  made by any Buyer or any of their
respective  representatives  or agents in connection with this Agreement and the
transactions contemplated hereby is not advice or a recommendation and is merely
incidental to the Buyers'  purchase of the Securities  and,  except for any such
statement included in this Agreement or the Registration  Rights Agreement,  has
not been relied upon by the Company,  its officers or its  directors in any way.
The Company  further  represents  to each Buyer that the  Company's  decision to
enter into this Agreement has been based solely on the independent evaluation of
the Company and its representatives.

                           o. 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 require  registration
under the 1933 Act of the issuance of the Securities to the Buyers. The issuance
of the  Securities to the Buyers will not be integrated  with any other issuance
of the  Company's  securities  (past,  current or future)  for  purposes  of any
stockholder approval provisions applicable to the Company or its securities.

                           p. No Brokers.  The Company has taken no action which
would give rise to any claim by any person (except for Gerard Klauer  Mattison &
Co., Inc.) for brokerage commissions, finder's fees or similar payments relating
to this Agreement or the transactions  contemplated hereby. Prior to the date of
this  Agreement,  the Company has furnished to the Buyers a complete and correct
copy of the  agreement  dated  December  1, 1999  between the Company and Gerard
Klauer  Mattison & Co.,  Inc.  pursuant  to which such firm will be  entitled to
payment relating to the transactions contemplated by this Agreement.

<PAGE>

                           q. Permits;  Compliance.  The Company and each of its
Subsidiaries  is  in  possession  of  all  franchises,  grants,  authorizations,
licenses, permits, easements,  variances,  exemptions,  consents,  certificates,
approvals and orders  necessary to own,  lease and operate its properties and to
carry on its business as it is now being conducted  (collectively,  the "Company
Permits"), except where the failure to possess any such Company Permit would not
have a  Material  Adverse  Effect,  and  there is no action  pending  or, to the
knowledge of the Company, threatened regarding suspension or cancellation of any
of the  Company  Permits,  except  for any such  action  that  would  not have a
Material  Adverse Effect.  Neither the Company nor any of its Subsidiaries is in
conflict with, or in default or violation of, any of the Company Permits, except
for any such  conflicts,  defaults or violations  which,  individually or in the
aggregate,  would not reasonably be expected to have a Material  Adverse Effect.
Since  December 31, 1998,  neither the Company nor any of its  Subsidiaries  has
received  any  notification  with  respect to  possible  conflicts,  defaults or
violations  of  applicable  laws,   except  for  notices  relating  to  possible
conflicts, defaults or violations, which conflicts, defaults or violations would
not have a Material Adverse Effect.

                           r. Environmental Matters.

                             (i) Except as set forth in Schedule 3(t),there are,
to  the  Company's  knowledge,  with  respect  to  the  Company  or  any  of its
Subsidiaries or any predecessor of the Company, no past or present violations of
Environmental  Laws  (as  defined  below),  releases  of any  material  into the
environment, actions, activities, circumstances,  conditions, events, incidents,
or contractual  obligations  which may give rise to any common law environmental
liability  or any  liability  under the  Comprehensive  Environmental  Response,
Compensation  and  Liability  Act of 1980 or similar  federal,  state,  local or
foreign  laws and neither the Company nor any of its  Subsidiaries  has received
any notice with respect to any of the  foregoing,  nor is any action pending or,
to the Company's knowledge,  threatened in connection with any of the foregoing.
The term  "Environmental  Laws" means all federal,  state, local or foreign laws
relating  to  pollution  or  protection  of  human  health  or  the  environment
(including,  without limitation,  ambient air, surface water, groundwater,  land
surface or subsurface strata),  including,  without limitation, laws relating to
emissions,  discharges, releases or threatened releases of chemicals, pollutants
contaminants,   or  toxic  or  hazardous  substances  or  wastes  (collectively,
"Hazardous  Materials")  into the  environment,  or  otherwise  relating  to the
manufacture,   processing,  distribution,  use,  treatment,  storage,  disposal,
transport or handling of  Hazardous  Materials,  as well as all  authorizations,
codes, decrees,  demands or demand letters,  injunctions,  judgments,  licenses,
notices  or  notice  letters,  orders,  permits,  plans or  regulations  issued,
entered, promulgated or approved thereunder.

                             (ii) Other than those that are or were stored, used
or disposed of in compliance  with  applicable  law, no Hazardous  Materials are
contained on or about any real property  currently  owned, or to the best of the
Company's  knowledge leased or used, by the Company or any of its  Subsidiaries,
and  no  Hazardous  Materials  were  released  on or  about  any  real  property
previously  owned, or to the Company's  knowledge leased or used, by the Company
or any of its Subsidiaries  during the period the property was owned,  leased or
used by the Company or any of its  Subsidiaries,  except in the normal course of
the Company's or any of its Subsidiaries' business.

                             (iii) Except as set forth in Schedule  3(t),  there
are no underground  storage tanks on or under any real property owned, or to the
Company's  knowledge  leased or used, by the Company or any of its  Subsidiaries
that are not in compliance with applicable law.

<PAGE>

                           s.   Title  to   Property.   The   Company   and  its
Subsidiaries  have good and marketable  title in fee simple to all real property
and good and  marketable  title to all personal  property owned by them which is
material to the business of the Company and its Subsidiaries,  in each case free
and clear of all liens, encumbrances and defects except such as are described in
Schedule  3(u) or such as would not have a  Material  Adverse  Effect.  Any real
property and facilities held under lease by the Company and its Subsidiaries are
held by them under valid, subsisting and enforceable leases with such exceptions
as would not have a Material Adverse Effect.

                           t.   Insurance.   The   Company   and   each  of  its
Subsidiaries  are  insured by insurers of  recognized  financial  responsibility
against such losses and risks and in such amounts as  management  of the Company
believes to be prudent and customary in the  businesses in which the Company and
its  Subsidiaries  are engaged.  Neither the Company nor any such Subsidiary has
any reason to believe that it will not be able to renew its  existing  insurance
coverage as and when such coverage  expires or to obtain  similar  coverage from
similar  insurers as may be  necessary  to continue  its business at a cost that
would not have a Material Adverse Effect.

                           u. Internal Accounting Controls. The Company and each
of  its  Subsidiaries   maintain  a  system  of  internal   accounting  controls
sufficient,  in the judgment of the  Company's  board of  directors,  to provide
reasonable  assurance  that (i)  transactions  are executed in  accordance  with
management's general or specific authorizations,  (ii) transactions are recorded
as necessary to permit  preparation of financial  statements in conformity  with
generally accepted accounting  principles and to maintain asset  accountability,
(iii) access to assets is permitted only in accordance with management's general
or specific  authorization  and (iv) the recorded  accountability  for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.

                           v. Foreign  Corrupt  Practices.  Neither the Company,
nor any of its Subsidiaries, nor any director, officer, agent, employee or other
person acting on behalf of the Company or any  Subsidiary  has, in the course of
his actions for, or on behalf of, the Company,  used any corporate funds for any
unlawful contribution,  gift,  entertainment or other unlawful expenses relating
to  political  activity;  made any direct or  indirect  unlawful  payment to any
foreign or  domestic  government  official  or employee  from  corporate  funds;
violated  or is in  violation  of any  provision  of the  U.S.  Foreign  Corrupt
Practices Act of 1977 as amended; or made any bribe, rebate,  payoff,  influence
payment,  kickback  or  other  unlawful  payment  to  any  foreign  or  domestic
government official or employee.

<PAGE>

                           w.  Solvency.  The  Company  (both  before  and after
giving effect to the  transactions  contemplated  by this  Agreement) is solvent
(i.e.,  its assets have a fair market value in excess of the amount  required to
pay its probable  liabilities on its existing debts as they become  absolute and
matured)  and  currently  the Company has no  information  that would lead it to
reasonably  conclude that the Company would not have the ability to, nor does it
intend to take any action  that would  impair its ability to, pay its debts from
time to time incurred in connection  therewith as such debts mature. The Company
did not receive a qualified  opinion from its auditors  with respect to its most
recent  fiscal year end and does not  anticipate or know of any basis upon which
its auditors  might issue a qualified  opinion in respect of its current  fiscal
year.

                           x. No  Investment  Company.  The Company is not,  and
upon the issuance and sale of the Securities as  contemplated  by this Agreement
and the Certificate of Designation will not be an "investment  company" required
to be  registered  under  the  Investment  Company  Act of 1940 (an  "Investment
Company"). The Company is not controlled by an Investment Company.

                           y. Form S-1  Eligibility.  The  Company is  currently
eligible to register the resale of its Common Stock on a registration  statement
on Form S-1 under the 1933 Act. There exist no facts or circumstances that would
prohibit or delay the preparation and filing of a registration statement on Form
S-1 with respect to the Registrable  Securities (as defined in the  Registration
Right Agreement) within the time periods referred to therein.

                  4.       COVENANTS.

                           a. Best  Efforts.  The  parties  shall use their best
efforts to satisfy timely each of the conditions described in Section 6 and 7 of
this Agreement.

                           b. Form D; Blue Sky Laws.  The Company agrees to file
a Form D with respect to the  Securities as required  under  Regulation D and to
provide a copy thereof to each Buyer  promptly  after such  filing.  The Company
shall,  on or before the Closing  Date,  take such  action as the Company  shall
reasonably  determine  is necessary  to qualify the  Securities  for sale to the
Buyers at the Closing pursuant to this Agreement under applicable  securities or
"blue sky" laws of the states of the  United  States (or to obtain an  exemption
from such qualification), and shall provide evidence of any such action so taken
to each Buyer on or prior to the Closing Date.

                           c. Eligibility to Use Form S-1; Reporting Status. The
Company  represents and warrants that it meets the  requirements  for the use of
Form S-1 for registration of the sale by the Buyer of the Registrable Securities
(as  defined  in the  Registration  Rights  Agreement).  So  long  as the  Buyer
beneficially  owns any of the  Securities,  the  Company  shall  timely file all
reports  required  to be filed with the SEC  pursuant  to the 1934 Act,  and the
Company  shall not  terminate  its status as an issuer  required to file reports
under the 1934 Act even if the 1934 Act or the rules and regulations  thereunder
would permit such  termination.  The Company  further agrees to file all reports
required  to be filed by the  Company  with the SEC in a timely  manner so as to
become eligible, and thereafter to maintain its eligibility, for the use of Form
S-3.

                           d.  Use  of  Proceeds.  The  Company  shall  use  the
proceeds  from the sale of the  Preferred  Shares  in the  manner  set  forth in
Schedule 4(d) attached hereto and made a part hereof and, except as set forth in
Schedule 4(d), shall not, directly or indirectly, use such proceeds for any loan
to or  investment  in any other  corporation,  partnership,  enterprise or other
person  (except in  connection  with its currently  existing  direct or indirect
Subsidiaries).

<PAGE>

*****  Certain  information  on this page has been omitted and filed  separately
with the Securities  and Exchange  Commission.  Confidential  Treatment has been
requested with respect to the omitted portions

                           e. Additional  Equity Capital;  Right of First Offer.
Subject to the exceptions  described  below,  the Company will not,  without the
prior  written  consent of a  majority-in-interest  of the Buyers,  negotiate or
contract  with any  party  to  obtain  additional  equity  or  equity-equivalent
financing  (including debt financing with an equity component) during the period
(the  "Lock-up  Period")  beginning  on the Closing  Date and ending on the date
which is one hundred twenty (120) days from the date the Registration  Statement
(as defined in the Registration  Rights  Agreement) is declared  effective (plus
any days in which sales cannot be made thereunder).  In addition, subject to the
exceptions   described  below,  if  the  Company  wishes  to  obtain  equity  or
equity-equivalent  financing (including debt financing with an equity component)
("Future Financings") during the period beginning on the Closing Date and ending
twelve (12) months  following  the date the  Registration  Statement is declared
effective  (plus any days in which sales  cannot be made  thereunder),  it shall
first  deliver to each  Buyer,  at least  fifteen  (15)  business  days prior to
offering  such Future  Financing to any other Person (as defined in Article IV.B
of the  Certificate  of  Designation),  written  notice  describing the proposed
Future  Financing,  including the terms and conditions  thereof,  and the Buyers
shall have the exclusive right to negotiate,  and the Company shall negotiate in
good faith with the Buyers, during the ten (10) day period following delivery of
such  notice,  to provide  such  Future  Financing  on terms  acceptable  to the
Company;  provided,  however,  that if the  Company and the Buyers are unable to
agree on such terms  during such  period,  the  Company  shall have the right to
negotiate  and contract  with any other Person to obtain such Future  Financing,
provided that the terms of such Future  Financing  are no less  favorable to the
Company  than those terms  proposed  in such  written  notice  (the  limitations
referred  to in  this  sentence  and the  preceding  sentence  are  collectively
referred to as the "Capital  Raising  Limitations").  In the event the terms and
conditions of a proposed Future Financing are amended in any material respect on
terms which are less  favorable to the Company  after  delivery of the notice to
the Buyers concerning the proposed Future Financing, the Company shall deliver a
new notice to each Buyer  describing  the amended  terms and  conditions  of the
proposed  Future  Financing and each Buyer  thereafter  shall have the exclusive
right  during the ten (10) day period  following  delivery of such new notice to
provide such Future Financing on the same terms as contemplated by such proposed
Future Financing,  as amended.  The foregoing sentence shall apply to successive
amendments to the terms and  conditions of any proposed  Future  Financing.  The
Capital Raising  Limitations shall not apply to any transaction  involving:  (i)
issuances  of  securities  in a firm  commitment  underwritten  public  offering
(excluding a continuous  offering pursuant to Rule 415 under the 1933 Act); (ii)
issuances of securities as consideration for a merger, consolidation or purchase
of assets, or in connection with any strategic partnership or joint venture (the
primary purpose of which is not to raise equity capital),  or in connection with
the disposition or acquisition of a business,  product,  asset or license by the
Company;  or (iii) the sale by the  Company  of up to  Fifteen  Million  Dollars
($15,000,000)  of Common  Stock to entities  controlled  by or  affiliated  with
[*****]  (collectively,   the  "[*****]  Entities"),  provided  that  such  sale
referenced in this clause (iii) is  consummated in a private  placement  closing
simultaneous  with or within  thirty  (30) days after the Closing at a price per
share of not less than eighty  percent  (80%) of the market  price of the Common
Stock on the date of issuance,  provided, further, that the Company shall not be
permitted to file a  registration  statement  with respect to the resale of such
Common Stock by the  purchaser  referenced  in this clause (iii)  thereof for at
least one  hundred  eighty  (180) days after the date on which the  Registration
Statement required to be filed pursuant to the Registration Rights Agreement has
been  declared   effective  (plus  any  days  in  which  sales  cannot  be  made
thereunder).  The  Capital  Raising  Limitations  also  shall  not  apply to the
issuance of securities  upon  exercise or  conversion of the Company's  options,
warrants or other convertible securities outstanding as of the date hereof or to
the grant of  additional  options or  warrants,  or the  issuance of  additional
securities,  under any Company stock option,  restricted stock or other employee
benefit  plan  approved  by the  stockholders  of the  Company.  Notwithstanding
anything to the contrary in the Section 4(e),  the [*****]  Entities  shall have
the right to participate in the Future Financing, on a pro rata basis based upon
the amount of securities  purchased by the [*****]  Entities in the  transaction
referenced  in clause (iii) above,  provided  that,  in the event that the [***]
Entities  choose  not to  exercise  their  right to  participate  in the  Future
Financing, then the Buyers shall have the right to provide the remaining portion
of the Future Financing not provided by the [*****] Entities.

<PAGE>

                           f. Expenses.  The Company shall  reimburse  Rose Glen
Capital  Management,  L.P. ("Rose Glen") for all reasonable expenses incurred by
it in connection  with the  negotiation,  preparation,  execution,  delivery and
performance  of this  Agreement  and the  other  agreements  to be  executed  in
connection herewith, including, without limitation,  attorneys' and consultants'
fees and expenses and travel  expenses.  The  Company's  obligation to reimburse
Rose Glen's  expenses  under this Section  4(f) shall be limited to  Twenty-Five
Thousand Dollars ($25,000),  of which Two Thousand Five Hundred Dollars ($2,500)
was advanced previously.

                           g. Financial Information.  The Company agrees to send
the  following  reports to each Buyer until such Buyer  transfers,  assigns,  or
sells all of the Securities:  (i) within ten (10) business days after the filing
with the SEC, a copy of its Annual Report on Form 10-K, its Quarterly Reports on
Form 10-Q and any Current  Reports on Form 8-K; (ii) within one (1) business day
after release,  copies of all press releases issued by the Company or any of its
Subsidiaries; and (iii) contemporaneously with the making available or giving to
the stockholders of the Company,  copies of any notices or other information the
Company makes available or gives to such stockholders.

                           h.  Reservation of Shares.  The Company shall use its
best  efforts at all times to maintain  the number of shares of Common  Stock so
reserved for issuance at no less than  6,000,000  shares,  provided that, in the
event that the  Company  delivers  the Share  Limit  Waiver  (as  defined in the
Certificate of Designation), the Company will promptly take all action necessary
to reserve  additional shares of Common Stock in accordance with its obligations
hereunder,  and the Company shall at all times thereafter have  authorized,  and
reserved  for the purpose of issuance,  a sufficient  number of shares of Common
Stock to provide for the full conversion of the outstanding Preferred Shares and
the issuance of the  Conversion  Shares in  connection  therewith  (based on the
lesser of the  Variable  Conversion  Price (as  defined  in the  Certificate  of
Designation)  in effect  from time to time and the  Fixed  Conversion  Price (as
defined in the  Certificate of  Designation) in effect from time to time) and as
otherwise  required by the  Certificate of Designation  and the full exercise of
the Warrants and the issuance of the Warrant Shares (based on the exercise price
of the Warrants in effect from time to time).  The Company  shall not reduce the
number of shares of Common Stock  reserved for issuance  upon  conversion  of or
otherwise  pursuant to the  Preferred  Shares and the  exercise of or  otherwise
pursuant to the Warrants without the consent of each Buyer. Subject to the first
sentence  of this  Section  4(h),  if at any time the number of shares of Common
Stock  authorized  and reserved  for issuance is below the number of  Conversion
Shares  issued and issuable  upon  conversion  of or  otherwise  pursuant to the
Preferred Shares (based on the lesser of the Variable Conversion Price in effect
from time to time and the  Fixed  Conversion  Price in effect  from time to time
(each as defined in the Certificate of  Designation))  and Warrant Shares issued
and issuable  upon exercise of or otherwise  pursuant to Warrants  (based on the
exercise  price of the  Warrants in effect from time to time),  the Company will
promptly  take all  corporate  action  necessary  to  authorize  and  reserve  a
sufficient number of shares,  including,  without limitation,  calling a special
meeting of  stockholders  to authorize  additional  shares to meet the Company's
obligations  under this Section 4(h), in the case of an  insufficient  number of
authorized shares, and using its best efforts to obtain stockholder  approval of
an increase in such authorized number of shares.

                           i.  Listing.  The Company shall  promptly  secure the
listing of the  Conversion  Shares and the  Warrant  Shares  upon each  national
securities  exchange or automated quotation system, if any, upon which shares of
Common Stock are then listed  (subject to official  notice of issuance)  and, so
long as any Buyer  owns any of the  Securities  shall  maintain,  so long as any
other shares of Common Stock shall be so listed,  such listing of all Conversion
Shares from time to time  issuable upon  conversion of or otherwise  pursuant to
the Preferred Shares and Warrant Shares from time to time issuable upon exercise
of or otherwise  pursuant to the Warrants.  The Company will obtain and, so long
as any Buyer owns any of the Securities, maintain the listing and trading of its
Common Stock on Nasdaq, the Nasdaq SmallCap Market ("Nasdaq SmallCap"),  the New
York Stock Exchange  ("NYSE"),  or the American Stock Exchange ("AMEX") and will
comply in all material respects with the Company's  reporting,  filing and other
obligations under the bylaws or rules of the National  Association of Securities
Dealers ("NASD") and such exchanges,  as applicable.  The Company shall promptly
provide to each Buyer  copies of any  notices it  receives  from  Nasdaq and any
other  exchanges or  quotation  systems on which the Common Stock is then listed
regarding  the  continued  eligibility  of the Common  Stock for listing on such
exchanges and quotation systems.

<PAGE>

                           j.   Corporate   Existence.   So   long  as  a  Buyer
beneficially owns any Preferred Shares, the Company shall maintain its corporate
existence and shall not merge,  consolidate or sell all or substantially  all of
the Company's  assets,  except in the event of a merger or consolidation or sale
of all or substantially all of the Company's assets,  where (i) the surviving or
successor  entity (and, if an entity  different  from the surviving or successor
entity, the entity whose securities into which the Preferred Shares shall become
convertible  pursuant to Article  VI.C(b) of the  Certificate of Designation) in
such  transaction  assumes the  Company's  obligations  hereunder  and under the
agreements  and  instruments  entered  into in  connection  herewith  (provided,
however,  that in the case of a merger or  consolidation in which the Company is
not the surviving  entity and in which all of the outstanding  shares of capital
stock of the  Company  are being  acquired  for or  converted  into the right to
receive  consideration  consisting  entirely  of  cash,  then the  successor  or
surviving  entity  (if not the  Company)  shall not be  obligated  to assume the
obligations of the Company under the Certificate of Designation,  except for the
obligations  under Article IV.B thereof),  and (ii) any entity whose  securities
into which the  Preferred  Shares shall become  convertible  pursuant to Article
VI.C(b) of the Certificate of Designation is a publicly traded corporation whose
Common Stock is listed for trading on Nasdaq, Nasdaq SmallCap, NYSE or AMEX.

                           k. No  Integration.  The  Company  shall not make any
offers or sales of any security (other than the Securities) under  circumstances
that  would  require  registration  of the  Securities  being  offered  or  sold
hereunder  under  the  1933  Act or  cause  the  offering  of  Securities  to be
integrated  with any other offering of securities by the Company for the purpose
of  any  stockholder  approval  provision  applicable  to  the  Company  or  its
securities.

                           l.  Trading  Guidelines.  So long  as a  Buyer  holds
Preferred Shares, such Buyer covenants and agrees that it will conduct its sales
of Common  Stock in  compliance  with  applicable  securities  laws and will not
create any daily low trading price in the Common Stock.

                           m.  Certificates  of  Elimination.  The Company shall
promptly file  Certificates  of  Elimination  with the Secretary of State of the
State of Delaware with respect to each series of its outstanding preferred stock
which is fully  converted by the holders thereof or redeemed by the Company upon
such conversion or redemption.

                  5.  TRANSFER  AGENT  INSTRUCTIONS.   The  Company  shall issue
irrevocable instructions to its transfer agent to issue certificates, registered
in the name of each  Buyer or its  nominee,  for the  Conversion  Shares and the
Warrant  Shares in such amounts as specified  from time to time by each Buyer to
the Company upon conversion of the Preferred  Shares or exercise of the Warrants
in  accordance  with  the  terms  thereof  (the   "Irrevocable   Transfer  Agent
Instructions").  Prior to registration of the Conversion  Shares and the Warrant
Shares  under the 1933 Act or the date on which the  Conversion  Shares  and the
Warrant  Shares may be sold pursuant to Rule 144 without any  restriction  as to
the number of  securities as of a particular  date that can then be  immediately
sold,  all such  certificates  shall bear the  restrictive  legend  specified in
Section 2(g) of this Agreement.  The Company warrants that no instruction  other
than the Irrevocable Transfer Agent Instructions  referred to in this Section 5,
and stop  transfer  instructions  to give effect to Section  2(f) hereof (in the
case of the Conversion  Shares and the Warrant Shares,  prior to registration of
the  Conversion  Shares and the Warrant Shares under the 1933 Act or the date on
which the Conversion  Shares and the Warrant Shares may be sold pursuant to Rule
144 without any  restriction  as to the number of  securities as of a particular
date that can then be  immediately  sold),  will be given by the  Company to its
transfer agent and that the Securities shall otherwise be freely transferable on
the books and  records  of the  Company as and to the  extent  provided  in this
Agreement and the Registration  Rights Agreement.  Nothing in this Section shall
affect in any way the Buyer's  obligations  and  agreement  set forth in Section
2(g)  hereof  to  comply  with all  applicable  securities  laws and  prospectus
delivery  requirements,  if any,  upon  re-sale  of the  Securities.  If a Buyer
provides  the Company  with (i) an opinion of counsel,  in form,  substance  and
scope  customary for opinions in comparable  transactions,  to the effect that a
public sale or  transfer of such  Securities  may be made  without  registration
under  the 1933 Act and such  sale or  transfer  is  effected  or (ii) the Buyer
provides reasonable  assurances that the Securities can be sold pursuant to Rule
144, the Company shall permit the transfer,  and, in the case of the  Conversion
Shares and the Warrant Shares, promptly instruct its transfer agent to issue one
or more certificates, free from any restrictive legend, in such name and in such
denominations as specified by such Buyer.

                  6. CONDITIONS  TO  THE  COMPANY'S   OBLIGATION  TO  SELL.  The
obligation of the Company  hereunder to issue and sell the Preferred  Shares and
Warrants to a Buyer at the Closing is subject to the satisfaction,  at or before
the Closing  Date, of each of the following  conditions  thereto,  provided that
these  conditions  are for the  Company's  sole benefit and may be waived by the
Company at any time in its sole discretion:

                           a. The  applicable  Buyer  shall have  executed  this
Agreement and the  Registration  Rights  Agreement and delivered the same to the
Company.

                           b. The  applicable  Buyer  shall have  delivered  the
applicable Purchase Price in accordance with Section 1(b) above.

                           c. The  Certificate  of  Designation  shall have been
accepted for filing with the Secretary of State of the State of Delaware.

                           d.  The   representations   and   warranties  of  the
applicable  Buyer shall be true and correct in all  material  respects as of the
date when made and as of the Closing  Date as though  made at that time  (except
for  representations  and  warranties  that speak as of a specific  date,  which
representations  and warranties  shall be true and correct as of such date), and
the  applicable  Buyer  shall have  performed,  satisfied  and  complied  in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the applicable Buyer at
or prior to the Closing Date.

                           e.  No   litigation,   statute,   rule,   regulation,
executive order, decree, ruling or injunction shall have been enacted,  entered,
promulgated  or  endorsed  by or in  any  court  or  governmental  authority  of
competent jurisdiction or any self-regulatory organization having authority over
the matters  contemplated  hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.

                  7. CONDITIONS TO EACH  BUYER'S  OBLIGATION  TO  PURCHASE.  The
obligation  of each Buyer  hereunder  to purchase the  Preferred  Shares and the
Warrants at the Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following  conditions,  provided that these  conditions are
for such Buyer's sole benefit and may be waived by such Buyer at any time in its
sole discretion:

                           a. The Company shall have executed this Agreement and
the Registration Rights Agreement and delivered the same to the Buyer.

                           b. The  Company  shall have  delivered  to such Buyer
duly executed  certificates  (in such  denominations as the Buyer shall request)
representing  the Preferred Shares and duly executed  Warrants  purchased at the
Closing in accordance with Section 1(b) above.

                           c. The  Certificate  of  Designation  shall have been
accepted for filing with the Secretary of State of the State of Delaware,  and a
copy thereof  certified by such  Secretary of State shall have been delivered to
such Buyer.

                           d. The Irrevocable  Transfer Agent  Instructions,  in
form and substance satisfactory to a  majority-in-interest  of the Buyers, shall
have been  delivered to and  acknowledged  in writing by the Company's  Transfer
Agent.

                           e. The  representations and warranties of the Company
shall be true and correct in all material  respects as of the date when made and
as of the Closing Date as though made at such time  (except for  representations
and  warranties  that speak as of a specific  date,  which  representations  and
warranties shall be true and correct as of such date) and the Company shall have
performed,  satisfied and complied in all material  respects with the covenants,
agreements and conditions required by this Agreement to be performed,  satisfied
or complied with by the Company at or prior to the Closing Date. The Buyer shall
have received a certificate  or  certificates,  executed by the chief  executive
officer or chief financial officer of the Company, dated as of the Closing Date,
to the  foregoing  effect  and as to such  other  matters  as may be  reasonably
requested by such Buyer including,  but not limited to certificates with respect
to the Company's  Certificate of Incorporation,  By-laws and Board of Directors'
resolutions relating to the transactions contemplated hereby.

                           f.  No   litigation,   statute,   rule,   regulation,
executive order, decree, ruling or injunction shall have been enacted,  entered,
promulgated  or  endorsed  by or in  any  court  or  governmental  authority  of
competent jurisdiction or any self-regulatory organization having authority over
the matters  contemplated  hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.

                           g. The Conversion Shares and the Warrant Shares shall
have been  authorized  for  listing on Nasdaq  (subject  to  official  notice of
issuance)  and  trading  in the  Common  Stock on  Nasdaq  shall  not have  been
suspended by the SEC or Nasdaq.

                           h. The Buyer  shall have  received  an opinion of the
Company's  counsel,  dated as of the Closing Date, in form,  scope and substance
reasonably  satisfactory  to the  Buyer  and in  substantially  the same form as
Exhibit "D" attached hereto.

                           i.  The  Buyer  shall  have   received  an  officer's
certificate described in Section 3(c) above, dated as of the Closing Date.

                           j. No material  adverse  change or development in the
business, operations,  properties,  prospects, financial condition or operations
of the Company  shall have  occurred  since the date  hereof;  provided  that no
decrease  in the  trading  price of the Common  Stock on Nasdaq  shall in and to
itself be considered to be such a material adverse change or development.

<PAGE>

                           k.  The  Company's  Series  A,  B,  C,  D, F, G and N
preferred  stock shall have been  converted or eliminated and the only remaining
series of preferred stock authorized and/or outstanding shall be Series E, F, H,
I, J, K, L, M and O preferred stock.

                           l. The proposed  merger between the Company and Trans
Global Communications, Inc. shall not have been abandoned, canceled, terminated,
or the terms thereof  materially  altered (in a manner materially adverse to the
Company) from those previously publicly announced, nor shall there have been any
public announcement that such merger may not be consummated.

                  8.       GOVERNING LAW; MISCELLANEOUS.

                           a. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware applicable to
agreements made and to be performed in the State of Delaware  (without regard to
principles  of  conflict  of  laws).  The  parties  irrevocably  consent  to the
jurisdiction of the United States federal courts and the state courts located in
Delaware with respect to any suit or  proceeding  based on or arising under this
Agreement,   the  agreements   entered  into  in  connection   herewith  or  the
transactions  contemplated  hereby or  thereby  and  irrevocably  agree that all
claims in respect of such suit or  proceeding  may be determined in such courts.
The  parties  irrevocably  waive the  defense  of an  inconvenient  forum to the
maintenance of such suit or proceeding.  The parties  further agree that service
of  process  upon a party  mailed by first  class  mail shall be deemed in every
respect  effective  service  of  process  upon the  party  in any  such  suit or
proceeding. Nothing herein shall affect either party's right to serve process in
any other manner permitted by law. The parties agree that a final non-appealable
judgment in any such suit or proceeding  shall be conclusive and may be enforced
in other jurisdictions by suit on such judgment or in any other lawful manner.

                           b.  Counterparts;   Signatures  by  Facsimile.   This
Agreement  may be  executed in one or more  counterparts,  all of which shall be
considered  one  and  the  same  agreement  and  shall  become   effective  when
counterparts  have been signed by each party and  delivered  to the other party.
This Agreement,  once executed by a party, may be delivered to the other parties
hereto  by  facsimile  transmission  of a copy of  this  Agreement  bearing  the
signature of the party so delivering this Agreement.

                           c.  Headings.  The headings of this Agreement are for
convenience   of   reference   and  shall  not  form  part  of,  or  affect  the
interpretation of, this Agreement.

                           d.  Severability.  If any provision of this Agreement
shall be  invalid or  unenforceable  in any  jurisdiction,  such  invalidity  or
unenforceability  shall  not  affect  the  validity  or  enforceability  of  the
remainder of this Agreement or the validity or  enforceability of this Agreement
in any other jurisdiction.

<PAGE>

                           e. Entire Agreement;  Amendments.  This Agreement and
the  instruments  referenced  herein  contain  the entire  understanding  of the
parties with respect to the matters  covered  herein and therein and,  except as
specifically  set forth  herein or  therein,  neither  the Company nor the Buyer
makes any representation, warranty, covenant or undertaking with respect to such
matters.  No provision of this  Agreement may be waived or amended other than by
an instrument in writing signed by the party to be charged with enforcement.

                           f. Notices.  Any notices  required or permitted to be
given under the terms of this Agreement shall be sent by certified or registered
mail (return receipt requested) or delivered personally or by courier (including
a recognized  overnight delivery service) or by facsimile and shall be effective
five days after being  placed in the mail,  if mailed by regular  United  States
mail,  or upon  receipt,  if  delivered  personally  or by courier  (including a
recognized  overnight delivery service) or by facsimile,  in each case addressed
to a party. The addresses for such communications shall be:

           If to the Company:

           eGlobe, Inc.
           1250 24th Street, NW
           Suite 725
           Washington, DC 20037
           Attention: Chairman of the Board and Chief Executive Officer
           Facsimile: (202) 822-8984

           With copy to:

           Hogan & Hartson L.L.P
           Columbia Square
           555 13th Street, NW
           Washington, DC 20004-1109
           Attention: Steven M. Kaufman, Esq.
           Facsimile: (202) 637-5910

                  If to a Buyer: To the address set forth immediately below such
Buyer's name on the signature pages hereto.

           With copy to:

           Ballard Spahr Andrews & Ingersoll, LLP
           1735 Market Street, 51st Floor
           Philadelphia, Pennsylvania 19103
           Attention: Gerald J. Guarcini, Esq.
           Facsimile: (215) 864-8999

                  Each  party  shall  provide  notice to the other  party of any
change in address.

<PAGE>

                           g.  Successors and Assigns.  This Agreement  shall be
binding  upon and inure to the benefit of the parties and their  successors  and
assigns.  Neither the Company nor any Buyer shall  assign this  Agreement or any
rights or obligations  hereunder without the prior written consent of the other.
Notwithstanding the foregoing, subject to Section 2(f), any Buyer may assign its
rights  hereunder to (i) any of its  "affiliates," as that term is defined under
the 1934 Act and  (ii)  after  the  Maximum  Share  Amount  (as  defined  in the
Certificate  of  Designation)  has  been  issued,   any  person  that  purchases
Securities  in a private  transaction  from a Buyer,  without the consent of the
Company.

                           h.  Third  Party  Beneficiaries.  This  Agreement  is
intended for the benefit of the parties  hereto and their  respective  permitted
successors  and  assigns,  and is not for the benefit of, nor may any  provision
hereof be enforced by, any other person.

                           i. Survival.  The  representations  and warranties of
the  Company  and the  Buyers  and the  agreements  and  covenants  set forth in
Sections 2, 3, 4, 5 and 8 shall  survive the closing  hereunder  notwithstanding
any due diligence  investigation conducted by or on behalf of the Company or the
Buyers. The Company agrees to indemnify and hold harmless each of the Buyers and
all their officers,  directors,  employees and agents for loss or damage arising
as a result of or related to any breach or alleged  breach by the Company of any
of its  representations,  warranties and covenants set forth in Sections 3 and 4
hereof or any of its  covenants  and  obligations  under this  Agreement  or the
Registration  Rights  Agreement,  including  advancement of expenses as they are
incurred.  Each Buyer agrees,  severally and not jointly,  to indemnify and hold
harmless the Company and its officers, directors,  employees and agents for loss
or damage  arising as a result of or related to any breach or alleged  breach by
such Buyer of any of its representations,  warranties and covenants set forth in
Sections  2 and 4 hereof or any of its  covenants  and  obligations  under  this
Agreement, including advancement of expenses as they are incurred.

                           j.  Publicity.  The  Company  and each of the  Buyers
shall have the right to review a  reasonable  period of time before  issuance of
any press  releases,  filings  with the SEC,  the NASD or any stock  exchange or
interdealer quotation system, or any other public statements with respect to the
transactions  contemplated hereby; provided,  however, that the Company shall be
entitled,  without the prior  approval of each of the Buyers,  to make any press
release or public  filings with respect to such  transactions  as is required by
applicable law and  regulations  (although each of the Buyers shall be consulted
by the Company in  connection  with any such press  release prior to its release
and shall be provided with a copy thereof and be given an opportunity to comment
thereon).

                           k.  Further  Assurances.  Each  party  shall  do  and
perform,  or cause to be done and  performed,  all such further acts and things,
and  shall  execute  and  deliver  all  such  other  agreements,   certificates,
instruments and documents, as the other party may reasonably request in order to
carry out the intent and  accomplish  the  purposes  of this  Agreement  and the
consummation of the transactions contemplated hereby.

                           l. No Strict Construction.  The language used in this
Agreement  will be deemed to be the  language  chosen by the  parties to express
their mutual intent, and no rules of strict construction will be applied against
any party.

<PAGE>

                           m. Remedies.  The Company  acknowledges that a breach
by it of its obligations  hereunder will cause irreparable harm to each Buyer by
vitiating  the  intent  and  purpose of the  transactions  contemplated  hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations  under this Agreement will be inadequate and agrees, in the event of
a  breach  or  threatened  breach  by the  Company  of the  provisions  of  this
Agreement, that each Buyer shall be entitled, in addition to all other available
remedies in law or in equity, to an injunction or injunctions to prevent or cure
any breaches of the provisions of this Agreement and to enforce specifically the
terms and  provisions  of this  Agreement,  without  the  necessity  of  showing
economic loss and without any bond or other security being required.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

         IN WITNESS WHEREOF,  the undersigned Buyers and the Company have caused
this Agreement to be duly executed as of the date first above written.

EGLOBE, INC.

By:
   -------------------------------------------------------
         Christopher J. Vizas
         Chairman of the Board and Chief Executive Officer

RGC INTERNATIONAL INVESTORS, LDC
By:      Rose Glen Capital Management, L.P.,
         Investment Manager
         By:      RGC General Partner Corp.,
                  as General Partner

By:
     -------------------------------------------------------
         Wayne D. Bloch
         Managing Director

RESIDENCE:  Cayman Islands

ADDRESS:

         c/o Rose Glen Capital Management, L.P.
         3 Bala Plaza East, Suite 200
         251 St. Asaphs Road
         Bala Cynwyd, PA  19004
         Facsimile:        (610) 617-0570
         Telephone:        (610) 617-5900

AGGREGATE SUBSCRIPTION AMOUNT:

         Number of Preferred Shares:                                      15,000
         Number of Warrants:                                             375,000
         Aggregate Purchase Price:                                   $15,000,000FISCAL AND PAYING AGENCY AGREEMENT

            THIS AGREEMENT ("Agreement"), dated as of November 22, 1999, among
Polo Ralph Lauren Corporation, a corporation incorporated under the laws of the
State of Delaware (the "Issuer"), each of the subsidiaries of the Issuer
identified on Schedule I hereto and each additional subsidiary that is required
from time to time to become a party hereto pursuant to Section 16 hereof (each a
"Guarantor" and collectively, the "Guarantors"), The Bank of New York, acting
through its office at One Canada Square, London E14 5AL, as fiscal and principal
paying agent ("BONY" or any successor or additional fiscal and principal paying
agent appointed hereunder being called the "Agent"). BONY, and/or any successor
or additional paying agent appointed hereunder, is sometimes referred to herein
individually as a "Paying Agent" and collectively as the "Paying Agents").

                              W I T N E S S E T H:

            Section 1. Notes; Guarantees; Appointment of Agent. (a) The Issuer
has authorized the creation and issue of euro 275,000,000 6.125 per cent
unsecured, unsubordinated notes (the "Notes") due 2006.

            (b) The Guarantors hereby agree, jointly and severally, to guarantee
fully the Issuer's obligations under the Notes on an equal and ratable basis
(collectively, the "Guarantees"), on the terms and subject to the conditions
described herein, in the Guarantees and in the Notes.

            (c) The Issuer and the Guarantors hereby (i) appoint the Agent to
act, on the terms and conditions specified herein and in the Notes, as fiscal
and principal paying agent for the Notes and any other Paying Agent to act on
the terms and conditions specified herein and in the Notes, as paying agent for
the Notes, and (ii) agree to all of the terms and conditions of the Notes (the
"Terms and Conditions"), to which the rights of the Noteholders (as defined in
Section 4(b) below) hereunder shall be subject.

            Section 2. Amount; Execution. (a) The authorized aggregate principal
amount of Notes which may be issued hereunder is euro 275,000,000.

            (b) Each of the Temporary Global Note, the Permanent Global Note and
the Definitive Notes, if any (each as defined in Section 4 below), shall be
executed by or on behalf

<PAGE>

of the Issuer by the manual or facsimile signature of an Authorized
Representative (as defined in Section 3 hereof) of the Issuer and authenticated
manually by or on behalf of the Agent.

            (c) To evidence its guarantee of the payment of principal and
interest and any Additional Amounts in respect of the Notes, each Guarantor
shall execute a Guarantee, which shall be in substantially the form of Exhibit D
hereto and shall be endorsed on each Note. Each Guarantor's execution of the
Guarantee may be evidenced by a manual or facsimile signature of a duly
authorized officer and may be imprinted or otherwise reproduced on the
Guarantee, and for that purpose the Guarantor may adopt and use the facsimile
signature of any such officer. Each Guarantee (including the payment of
principal of, premium, if any, and interest and any Additional Amounts on the
Notes) shall rank pari passu in right of payment with all other present and
future unsecured and unsubordinated indebtedness of such Guarantor and shall
rank senior in right of payment to all subordinated indebtedness of such
Guarantor. In the event that any Guarantor is required, by the terms of its
Guarantee, to make or cause to be made any payment in respect of the Notes,
references to the Issuer in this Agreement (other than in Section 1(a)) shall be
deemed to mean and include the Guarantor except where the context otherwise
requires.

            Section 3. Authorized Representatives. From time to time the Issuer
and each Guarantor will furnish the Agent with a certificate of the Issuer or
such Guarantor, as the case may be, certifying the incumbency and specimen
signatures of officers authorized to execute Notes or Guarantees on behalf of
the Issuer or such Guarantor, as the case may be (each an "Authorized
Representative"). Until the Agent receives a subsequent incumbency certificate
of the Issuer or such Guarantor, the Agent shall be entitled to rely on the last
such certificate delivered to it for purposes of determining the Authorized
Representatives. The Agent shall have no responsibility to the Issuer or the
Guarantors to determine by whom or by what means a facsimile signature may have
been affixed on the Notes, the interest coupons appertaining thereto (the
"Coupons"), if any, or the Guarantees endorsed on such Notes or to determine
whether any facsimile or manual signature is genuine, or if such facsimile or
manual signature resembles the specimen signatures filed with the Agent by a
duly authorized officer of the Issuer or such Guarantor. Any Note or Coupon or
the Guarantee endorsed on such Note bearing the manual or facsimile signature of
a person who is an Authorized Representative on the date such signature is
affixed shall bind the Issuer or such Guarantor, as the case may be, after the
authentication and delivery thereof by the Agent, notwithstanding that such
person

                                       2
<PAGE>

shall have ceased to hold office on the date such Note, with attached Coupons,
if applicable, is authenticated and delivered by the Agent.

            Section 4. Form of the Notes and Exchange of Notes. With regard to
the issuance of Notes:

            (a) The Temporary Global Note and Permanent Global Note: The Notes
will initially be represented by a temporary global note (the "Temporary Global
Note") substantially in the form of Exhibit A hereto. The Temporary Global Note
will be exchangeable for interests in a permanent global note (the "Permanent
Global Note") substantially in the form of Exhibit B hereto as set out in the
terms of the Temporary Global Note. Immediately before issue, the Issuer shall
deliver to the Agent, and the Agent (or its agent on its behalf) shall
authenticate, the duly executed Temporary Global Note. The Agent shall then
deliver the Temporary Global Note upon written instruction of the Issuer to a
common depositary for Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear System ("Euroclear"), and Cedelbank.

            (b) The Definitive Notes: At any time on or after the Exchange Date
(as defined in Section 4(c)), the Permanent Global Note will become exchangeable
in whole, but not in part (free of charge to the holder), for Notes in
definitive form (the "Definitive Notes") in the denominations of euro 1,000,
euro 10,000 and euro 100,000 (i) at any time upon request of any holder thereof
(a "Noteholder"), including any person who is from time to time shown in the
records of Euroclear or Cedelbank as the holder of a particular principal amount
of such Notes (an "Accountholder"), upon at least 60 days' prior written notice
to the Agent specifying a Definitive Exchange Date (as defined below) or (ii) if
the Issuer would suffer a material disadvantage as a result of a change in laws
or regulations (taxation or otherwise) or as a result of a change in the
practice of Euroclear and/or Cedelbank which would not be suffered were the
Notes in definitive form and a certificate to such effect signed by two duly
Authorized Representatives of the Issuer is given to the Agent. Thereupon (in
the case of (ii) above) the Issuer may give notice to the Agent and the
Noteholders of its intention to exchange the Permanent Global Note for
Definitive Notes on the Definitive Exchange Date.

            On any Definitive Exchange Date, the Permanent Global Note shall be
surrendered to or to the order of the Agent. In exchange for the Permanent
Global Note, the Issuer will deliver, or procure the delivery of, an equal
aggregate principal amount of Definitive

                                       3
<PAGE>

Notes (having attached to them all Coupons in respect of interest which has not
already been paid on the Permanent Global Note), security printed in accordance
with any applicable legal and stock exchange requirements and in or
substantially in the form set out in this Agreement. On exchange of the
Permanent Global Note, the Issuer will ensure that it is canceled. From and
after such time as Definitive Notes are issued in exchange for the Permanent
Global Note, any remaining interest in the Temporary Global Note will be
exchangeable only for Definitive Notes, but only upon presentation to the Agent
of a certificate or certificates in substantially the form set forth in Exhibit
E hereto of Euroclear or Cedelbank, with respect to the Temporary Global Note or
portions thereof being exchanged, to the effect that it has received in writing
or by tested telex a certification or certifications in substantially the form
set forth in Exhibit F hereto signed by the person appearing in its records as
the owner of the Temporary Global Note or portions thereof being exchanged. No
Definitive Notes delivered in exchange for the Permanent Global Note or
Temporary Global Note will be mailed or otherwise delivered to any location in
the United States or its possessions in connection with such exchange.

            If Definitive Notes have not been delivered by 5:00 p.m. (London
time) on the Definitive Exchange Date, then at 5:00 p.m. (London time) on the
Definitive Exchange Date, the holder(s) of the Permanent Global Note will cease
to have any rights thereunder, and Accountholders will acquire directly against
the Issuer all those rights that they would have had if they had been the
holders of Definitive Notes in an aggregate principal amount equal to the amount
of Notes they were shown as holding on the records of Euroclear and/or
Cedelbank.

            "Definitive Exchange Date" means a day specified in the notice
requiring exchange falling not less than 60 days after that date on which such
notice is given and on which date banks are open for business in London and in
the city in which the relevant clearing system is located.

            Each Definitive Note will be in substantially the form set out in
Exhibit C-1 hereto, will have attached to it Coupons in substantially the form
set out in Exhibit C-2 hereto, and will be security printed in accordance with
applicable legal and stock exchange requirements. The Notes will be endorsed
with the Terms and Conditions.

            (c) Exchange of Temporary Global Note for the Permanent Global Note:
At least 14 days before the Exchange Date (as defined below), the Issuer will
execute and deliver to the London office of the Agent the Permanent Global Note.
On and after the Exchange Date,

                                       4
<PAGE>

the Temporary Global Note may be surrendered to the Agent at such office to be
exchanged, as a whole or in part, for interests in the Permanent Global Note
without charge, and the Agent shall authenticate and deliver, in exchange for
such Temporary Global Note or the portions thereof to be exchanged, an equal
aggregate principal amount of the Permanent Global Note, but only upon
presentation to the Agent of a certificate or certificates in substantially the
form set forth in Exhibit E hereto of Euroclear and/or Cedelbank, with respect
to the Temporary Global Note or portions thereof being exchanged, to the effect
that it has received in writing or by tested telex a certification or
certifications in substantially the form set forth in Exhibit F hereto signed by
the person appearing in its records as the owner of the Temporary Global Note or
portions thereof being exchanged. "Exchange Date" means the date which is 40
days after the closing date for the sale of such Notes. On exchange in part of
the Temporary Global Note, the principal amount of the Temporary Global Note so
exchanged shall be endorsed by or on behalf of the Agent in accordance with the
terms of the Temporary Global Note. Until so exchanged in full the holders of
interests in the Temporary Global Note shall in all respects be entitled to the
same benefits under this Agreement as the holders of interests in the Permanent
Global Note and the holders of the Definitive Notes authenticated and delivered
hereunder, except that neither the holder nor the beneficial owners of the
Temporary Global Note shall be entitled to receive any payments of principal or
interest, including Additional Amounts (as defined in, and payable pursuant to,
Section 4 of the Terms and Conditions), if any, on the Temporary Global Note
except (i) as provided in Section 7(i), or (ii) if, upon due certification,
exchange of the Temporary Global Note is improperly refused or withheld.

            Section 5. Reliance on Instructions. No Paying Agent shall incur any
liability to the Issuer in acting hereunder pursuant to instructions which such
Paying Agent believed in good faith to have been given by an Authorized
Representative.

            Section 6. Issuer's and Guarantors' Representations and Warranties.
Each Paying Agent is entitled to assume that;

            (i) the issuance and delivery of the Notes by the Issuer have been
            duly and validly authorized by the Issuer;

            (ii) the execution and delivery of the Guarantees by the respective
            Guarantors have, in each case, been duly and validly authorized by
            each Guarantor;

                                       5
<PAGE>

            (iii) the Notes, when completed, authenticated, issued and delivered
            pursuant hereto, will constitute the legal, valid and binding
            obligations of the Issuer; and

            (iv) upon the due authorization, issuance and delivery of the Notes
            and the due endorsement of the Guarantees thereon, the Guarantees
            will constitute the legal valid and binding obligations of the
            Guarantors.

            Section 7. Payments; Interest Payment Dates; Record Dates.

            (a) Payment to Agent: The Issuer will, on each date on which any
payment in respect of the Notes becomes due, transfer to the Agent by 10:00 a.m.
London time such amount as may be required for the purposes of such payment. The
Issuer will procure the delivery to the Agent by 10:00 a.m. (London time) on the
second business day in London before the due date for any such payment a copy of
irrevocable instructions issued by it for such payment to be made to the Agent.
In this Clause, the date on which a payment in respect of the Notes becomes due
means the first date on which the holder of a Note or Coupon could claim the
relevant payment but disregarding the necessity for it to be a business day in
any particular place of presentation.

            (b) Notification of Non-payment: The Agent will forthwith notify by
telex or facsimile each other Paying Agent, if any, and the Issuer if it has not
by 10:00 a.m. London time on the due date for any payment due in respect of the
Notes received the full amount so payable on such date.

            (c) Payment by Paying Agents: Each Paying Agent will, subject to the
Agent's receipt of monies therefor from the Issuer and subject to and in
accordance with the Terms and Conditions, pay or cause to be paid on behalf of
the Issuer on and after each due date therefor the amounts due in respect of the
Notes and Coupons and, in the case of each Paying Agent other than the Agent,
will be entitled to claim any amounts so paid from the Agent. If any payment
provided for in sub-Clause (a) is made late but otherwise in accordance with
this Agreement, the Paying Agents may nevertheless make payments in respect of
the Notes and Coupons. However, unless and until the full amount of any such
payment has been made to the Agent, the Paying Agents will not be bound to make
such payments.

            (d) Reimbursement of Paying Agents: The Agent will, subject to
receipt of monies therefor from the Issuer, on demand promptly reimburse each
other Paying Agent, if

                                       6
<PAGE>

any, for payments in respect of the Notes and Coupons properly made by it in
accordance with the Notes and this Agreement.

            (e) Late Payment: If the Agent has not by the due date for any
payment in respect of the Notes received the full amount payable on such date
but receives it later, it will forthwith give notice to each other Paying Agent
and Noteholders that it has received such full amount.

            (f) Method of Payment to Agent: Unless otherwise provided in the
Notes, all sums payable to the Agent hereunder will be paid in euro and in
immediately available funds to such account with such bank as the Agent may from
time to time notify to the Issuer.

            (g) Moneys Held by Agent: The Agent may deal with moneys paid to it
under this Agreement in the same manner as other moneys paid to it as a banker
by its customers except that (1) it may not exercise any lien, right of set-off
or similar claim in respect of them and (2) it shall not be liable to anyone for
interest on any sums held by it under this Agreement. Any monies paid by the
Issuer to the Agent for payment of principal or interest which remain unclaimed
for two years after such monies have become due and payable will be repaid to
the Issuer upon its written request and the Noteholder may thereafter look only
to the Issuer for payment thereof.

            (h) Partial Payments: If on presentation of a Note or Coupon only
part of the amount payable in respect of it is paid (except as a result of
deduction of tax as permitted by the Terms and Conditions) the Paying Agent to
whom the Note or Coupon is presented shall procure that such Note or Coupons
shall have attached to it a memorandum of the amount paid and the date of
payment.

            (i) Payments on the Temporary Global Note: Prior to the Exchange
Date, payments in respect of the Notes shall be made only with respect to that
portion of the Temporary Global Note for which the Agent has received the
certificates referred to in Section 4(c). In the event that the due date for any
payment in respect of the Notes shall occur at a time when any portion of the
principal amount of the Temporary Global Note has not been exchanged for
interests in the Permanent Global Note, payments of principal of, and interest
(including Additional Amounts (if any)), on that portion of the principal amount
of the Temporary Global Note which has not been exchanged for interests in the
Permanent Global Note shall be transferred by the Issuer to the Agent in
accordance with Section 7(a) and shall be held by the

                                       7
<PAGE>

Agent for payment in respect of the Notes upon such exchange or, prior to the
Exchange Date, upon presentation to the Agent of the certificates referred to in
Section 4(c).

            (j) Amounts to be Deducted or Withheld: At least five business days
prior to the first payment date (and at least five business days prior to each
succeeding payment date if there has been any change with respect to the matters
set forth in any certificate required to be delivered hereunder) the Issuer will
furnish to the Agent and each Paying Agent a certificate of an Authorized
Representative of the Issuer specifying the amount required to be deducted or
withheld in the United States on the payments of principal and interest due on
such payment date for or on account of any taxes, assessments or other
governmental charges described in Section 4 of the Terms and Conditions and
certifying that such amount will be deducted or withheld and paid by the Issuer.
The Issuer will provide the Agent with such evidence as the Agent may require of
the Issuer's compliance with the foregoing requirement to pay. The Issuer will
indemnify each of the Agent and each Paying Agent for, and hold it harmless
against, any loss, liability or expense incurred without negligence, bad faith
or willful misconduct on its part, arising out of or in connection with actions
taken or omitted by it in reliance on any certificate furnished pursuant to this
paragraph or the failure to furnish such a certificate. The obligations of the
Issuer under this paragraph will survive the payment of the Notes and the
resignation or removal of the Agent or any Paying Agent and the termination of
this Agreement.

            Section 8. Duties of the Agent. In accordance with the Terms and
Conditions and this Agreement or if otherwise requested by the Issuer, the Agent
will:

            (a) receive requests to effect exchanges of the Permanent Global
Note to Definitive Notes;

            (b) maintain a record of the Temporary Global Note, the Permanent
Global Note and the certificate number or numbers of all Definitive Notes and
Coupons delivered hereunder;

            (c) carry out such other acts as may be necessary to give effect to
the Terms and Conditions with respect to payment, transfer, cancellation and
replacement (if any Note or Coupon is mutilated or defaced or is apparently
destroyed, lost or stolen, it may be replaced at the specified office of any
Paying Agent subject to all applicable laws and stock exchange requirements upon
payment by the claimant of the expenses incurred in connection therewith

                                       8
<PAGE>

and on such terms and with such indemnity as the Issuer and the Agent may
require; mutilated or defaced Notes or Coupons must be surrendered before
replacements will be issued); and

            (d) upon and in accordance with the written instructions of the
Issuer received at least 15 days before the proposed publication date, arrange
for the publication of any notice delivered to the Agent by the Issuer which is
to be given to the Noteholders and supply a copy thereof to each other Paying
Agent, Euroclear, Cedelbank and, so long as the Notes are listed thereon, the
London Stock Exchange.

            Section 9. Liability. None of the Agent, the other Paying Agents, if
any, or any of their respective officers or employees shall be liable for any
act or omission hereunder except in the case of its gross negligence or willful
misconduct. The duties and obligations of each of the Agent, the other Paying
Agents, if any, and each of their respective officers and employees shall be
determined by the express provisions of this Agreement and each shall not be
liable except for the performance of such duties and obligations as are
specifically set forth herein in respect of such person and no implied covenants
shall be read into this Agreement against any of them. Each of the Agent and the
Paying Agents may consult with counsel and shall be fully protected in any
action reasonably taken in good faith in accordance with the advice of counsel.
None of the Agent, the other Paying Agents, if any, nor any of their respective
officers or employees shall be required to ascertain whether any issuance or
sale of Notes (or any amendment or termination of this Agreement) have been duly
authorized or are in compliance with any other agreement to which the Issuer is
a party (whether or not the Paying Agents are also a party to such other
agreement).

            Section 10. Protection of Agent.

            (a) No provision of this Agreement shall require the Agent or any
Paying Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties, or in the exercise of its
rights and powers, hereunder.

            (b) In acting hereunder and in connection with the Notes each of the
Agent and each Paying Agent shall act solely as an agent of the Issuer and will
not thereby assume any obligations towards, or relationship of agency or trust
for, any of the Noteholders.

            (c) Each of the Agent and each Paying Agent may consult with legal
or other professional advisers satisfactory to it, and the opinion of such
advisers shall be full and

                                       9
<PAGE>

complete protection in respect of any action taken, omitted or suffered
hereunder in good faith and in accordance with the opinion of such advisers.

            (d) Each of the Agent and each Paying Agent shall be protected and
shall incur no liability for or in respect of any action taken, omitted or
suffered in reliance upon any instruction, request or order from the Issuer, or
any Note, form of transfer, resolution, direction, consent, certificate,
affidavit, statement, telex, facsimile transmission or other paper or document
believed by it in good faith to be genuine and to have been delivered, signed or
sent by the proper party or parties.

            (e) Each of the Agent and each Paying Agent shall not be under any
obligation to take any action hereunder which it expects will result in any
expense or liability of the Agent or the Paying Agent, as the case may be, the
payment of which within a reasonable time is not, in its good faith opinion,
assured to it.

            (f) Each of the Agent and each Paying Agent shall not be responsible
for any act done or omitted in connection herewith or therewith, except in the
case of its gross negligence or willful misconduct.

            (g) Each of the Agent and each Paying Agent may perform the services
required to be rendered by it hereunder either directly or through
attorneys-in-fact or agents not regularly in its employ and the Agent and each
Paying Agent, as the case may be, shall not be responsible or liable for any
misconduct or negligence on the part of any such attorney or agent appointed by
it with due care hereunder.

            (h) Each of the Agent and each Paying Agent shall not be liable for
any action taken, suffered or omitted by it in good faith and believed by it to
be authorized or within the discretion or rights or powers conferred upon it by
this Agreement; and

            (i) Each of the Agent and each Paying Agent shall not have any duty
or responsibility in the event of any default by the Issuer in the payment or
performance of any of the Issuer's obligations under this Agreement, the Notes
or any other agreement pertaining to any or all of the foregoing (including, but
not limited to, any duty or responsibility to accelerate all or any of the Notes
or to initiate or attempt to initiate any proceedings at law or otherwise or to
make any demand for the payment thereof upon the Issuer.

                                       10
<PAGE>

            Section 11. Indemnification by Issuer. The Issuer and the
Guarantors, jointly and severally, agree to indemnify and hold harmless, each of
the Agent, each Paying Agent and each of its respective directors, officers,
employees and agents from and against any and all liabilities (including
liability for penalties), losses, claims, damages, actions, suits, judgments,
demands, costs and expenses (including legal fees and expenses) relating to or
arising out of or in connection with its performance under this Agreement,
except to the extent caused by the gross negligence or willful misconduct of
such Agent or Paying Agent, as the case may be, or its directors, officers or
employees. The foregoing indemnity includes, but is not limited to, any action
taken or omitted in good faith within the scope of this Agreement upon
telephone, telecopier or other electronically transmitted instructions, if
authorized herein, received from or believed by the Agent or the Paying Agent,
as the case may be, in good faith to have been given by, an Authorized
Representative. This indemnity shall survive the resignation or removal of the
Agent or any Paying Agent and the satisfaction or termination of this Agreement
and the payment of the Notes and Coupons.

            Section 12. Compensation of the Paying Agents. The Issuer and the
Guarantors, jointly and severally, agree to pay the compensation of the Agent
and each Paying Agent at such rates as shall be agreed upon in writing from time
to time between such Agent or Paying Agent, as the case may be, and the Issuer,
and to reimburse the Agent and each Paying Agent for its out-of-pocket expenses
(including costs of preparation of the Notes and legal fees and expenses),
disbursements and advances incurred or made in accordance with any provisions of
this Agreement. The obligations of the Issuer and the Guarantors to the Agent
and each Paying Agent pursuant to this Section shall survive the resignation or
removal of the Agent or any Paying Agent and the satisfaction or termination of
this Agreement and the payment of the Notes and Coupons.

            Section 13. Meetings of the Noteholders. Attached hereto as Exhibit
G are the provisions for meetings of the Noteholders (each, a "Meeting"). A
Paying Agent shall, at the request of any Noteholder, issue Voting Certificates
and Block Voting Instructions in a form and manner which comply with the
provisions of Exhibit G (Provisions for Meetings of the Noteholders) (except
that it shall not be required to issue the same less than 48 hours before the
time fixed for any Meeting provided for therein). Such Paying Agent shall keep a
full record of Voting Certificates and Block Voting Instructions issued by it
and shall give to the Issuer, not

                                       11
<PAGE>

less than 24 hours before the time appointed for any Meeting, full particulars
of all Voting Certificates and Block Voting Instructions issued by it in respect
of such Meeting.

            Section 14. Notices. (a) All communications by or on behalf of the
Issuer or the Guarantors relating to the issuance, transfer, exchange or payment
of Notes or interest thereon shall be in writing and directed to the Agent at
its address set forth in subsection (b)(ii) hereof (or such other address as the
Agent shall specify in writing to the Issuer from time to time).

            (b) Notices and other communications hereunder shall (except to the
extent otherwise expressly provided) be in writing and shall be addressed as
follows, or to such other addresses as the parties hereto shall specify from
time to time:

            (i)    if to the Issuer or the Guarantors:
                   c/o Polo Ralph Lauren Corporation
                   650 Madison Avenue
                   New York, NY  10022
                   Attention: General Counsel
                   Fax no.:  (212) 318-7183

            (ii)   if to the Agent:
                   The Bank of New York
                   One Canada Square
                   London E14 5AL
                   Attention: Trevor Blewer
                   Telex no.: 011 44-171-883-265/6
                   Fax no.: 011 44-171-893-6399

            Section 15. Resignation or Removal of Agent or a Paying Agent. The
Agent may at any time resign as such agent or a Paying Agent may at any time
resign as such paying agent by giving written notice to the Issuer of such
intention on its part, specifying the date on which its desired resignation
shall become effective; provided, however, that such date shall be not less than
30 days after the giving of such notice by the Agent or a Paying Agent, as the
case may be, to the Issuer. The Agent or a Paying Agent may be removed at any
time by the filing with it of an instrument in writing signed by a duly
Authorized Representative of the Issuer and specifying such removal and the date
upon which it is intended to become effective. Such registration or removal
shall take effect on the date of the appointment by the Issuer of a successor
agent or paying agent and the acceptance of such appointment by such successor
Agent or Paying Agent. In the event of resignation by the Agent or a Paying
Agent, if a

                                       12
<PAGE>

successor agent or paying agent has not been appointed by the Issuer on or
before the effective date of such resignation, the Agent or such Paying Agent
may, at the expense of the Issuer, petition any court of competent jurisdiction
for appointment of a successor Agent or Paying Agent. The Issuer may appoint a
successor agent and additional or successor paying agents and shall forthwith
give notice of any such appointment to the Agent, if continuing, and each
continuing Paying Agent and the Noteholders, whereupon the Issuer, the
continuing Agent and each continuing Paying Agent and the additional or
successor agent or paying agent shall acquire and become subject to the same
rights and obligations between themselves as if they had entered into an
agreement in the form mutatis mutandis of this Agreement.

            Section 16. Benefit of Agreement; Additional Guarantors. This
Agreement is solely for the benefit of the parties hereto, their successors,
assigns and any additional or successor Agent or Paying Agent appointed in
accordance with Section 15 above and the holders from time to time of the Notes
and no other person shall acquire or have any right under or by virtue hereof.
The Issuer will cause each of its subsidiaries that is required from time to
time following the date hereof to be a guarantor in respect of the Credit
Facilities (as defined below) to (i) execute and deliver an instrument in form
and substance satisfactory to the Agent agreeing to become a party to this
Agreement as an additional Guarantor, (ii) execute and deliver a Guarantee
pursuant to which such Guarantor will guarantee the Issuer's obligations under
the Notes on the terms and conditions set forth herein, in the Notes and in such
Guarantee, and (iii) deliver an opinion of counsel to the effect that each of
this Agreement and such Guarantee has been duly authorized and executed by such
subsidiary and constitutes the legal, valid and binding obligation of such
subsidiary. The "Credit Facilities" means the 1997 Credit Facility and the 1999
Credit Facility, each by and among the Issuer, The Chase Manhattan Bank, as
agent, and other financial institutions, each as in effect of the date hereof,
and as each such agreement may be amended, renewed, extended, substituted,
refinanced, replaced, supplemented or otherwise modified from time to time. The
"1997 Credit Facility" means the Company's $225.0 million revolving line of
credit, and the "1999 Credit Facility" means the Company's $100.0 million senior
credit facility consisting of a $20.0 million revolving line of credit and an
$80.0 million term loan.

            Section 17. Notes Held by a Paying Agent. Each of the Agent and each
Paying Agent, in its individual or other capacity, may become the owner or
pledgee of the Notes with the same rights it would have if it were not acting as
Agent or Paying Agent hereunder and may

                                       13
<PAGE>

engage or be interested in any financial or other transaction with the Issuer
and may act on, or as a depositary, trustee or agent for, any committee or body
of holders of Notes or other obligations of the Issuer as freely as if it were
not appointed hereunder.

            Section 18. Consolidation, Merger or Transfer. The Issuer may (or
may cause a Guarantor to), without the consent of the Noteholders, merge or
consolidate with any other corporation or dispose of all or substantially all of
its assets to any other corporation, provided that the successor corporation
assumes all obligations of the Issuer under the Notes and this Agreement (or,
with respect to a Guarantor, all of the obligations under such Guarantee) and
certain other conditions set forth in the Terms and Conditions are met.

            Section 19. Counterparts. This Agreement may be executed by the
parties hereto in any number of counterparts, and by each of the parties hereto
in separate counterparts, each such counterpart, when so executed and delivered,
shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same instrument.

            Section 20. Governing Law. This Agreement is to be delivered and
performed in, and shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of the State of New York.

            Section 21. Submission to NY Jurisdiction. Each of the parties to
this Agreement hereby irrevocably submits to the non-exclusive jurisdiction of
any New York State or United States Federal court sitting in New York City, the
Borough of Manhattan over any suit, action or proceeding arising out of or
relating to this Agreement or the Notes. Each of the parties hereto irrevocably
waives, to the fullest extent permitted by law, any objection which it may have
to the laying of the venue of any such suit, action or proceeding brought in
such a court and any claim that any such suit, action or proceeding brought in
such a court has been brought in an inconvenient forum. As long as any of the
Notes or any of the Coupons appertaining thereto remain outstanding, the Issuer
and the Guarantors will at all times have either a registered office or an
authorized agent in New York City, at which or upon whom process may be served
in any suit, action or proceeding arising out of or relating to this Agreement
or any Note or any of the Coupons appertaining thereto. Service of process at
such office or upon such agent and written notice of such service mailed or
delivered to the Issuer and the Guarantors shall to the extent permitted by law
be deemed in every respect effective service of process upon the Issuer and the
Guarantors in any such suit, action or proceeding.

                                       14
<PAGE>

            Section 22. Modification of Fiscal Agency Agreement and Notes. This
Agreement, the Terms and Conditions or the Guarantees may be amended by the
Issuer and the Agent, without the consent of the holder of any Note or Coupon,
for the purposes of curing any ambiguity, or of curing, correcting or
supplementing any defective provisions contained herein or therein or in any
other manner which the Issuer may deem necessary or desirable and which will not
be inconsistent with the Notes or any Coupons and which will not adversely
affect the interests of the holders of Notes or any Coupons.

                                       15
<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on their behalf by their officers thereunto duly authorized, all as
of the day and year first above written.

                                 Issuer:

                                 Polo Ralph Lauren Corporation

                                 By: ___________________________________________

                                 Guarantors:

                                 The Ralph Lauren Womenswear Company, L.P.

                                 By:  Polo Ralph Lauren Womenswear, Inc., its
                                      General Partner

                                      By:  _____________________________________
                                           Name:
                                           Title:

                                 Polo Retail, LLC

                                 By:  Fashions Outlet of America, Inc., its sole
                                      Member

                                      By:  _____________________________________
                                           Name:
                                           Title:

                                 Fashions Outlet of America, Inc.

                                 By: ___________________________________________
                                     Name:
                                     Title:

                                       16
<PAGE>

                                 The Polo/Lauren Company, L.P.

                                 By:   PRL International, Inc., its
                                       General Partner

                                      By:  _____________________________________
                                           Name:
                                           Title:

                                 PRL International, Inc.

                                 By: ___________________________________________
                                     Name:
                                     Title:

                                 RL Fragrances, LLC

                                 By:   PRL International, Inc., its sole
                                       Member

                                      By:  _____________________________________
                                           Name:
                                           Title:

                                 PRL USA Holdings, Inc.

                                 By: ___________________________________________
                                     Name:
                                     Title:

                                 PRL Fashions, Inc.

                                 By: ___________________________________________
                                     Name:
                                     Title:

                                 PRL USA, Inc.

                                 By: ___________________________________________
                                     Name:
                                     Title:

                                       17
<PAGE>

                                 Ralph Lauren Home Collection, Inc.

                                 By: ___________________________________________
                                     Name:
                                     Title:

                                 PRL Financial Corporation

                                 By: ___________________________________________
                                     Name:
                                     Title:

                                 Agent:

                                 The Bank of New York,
                                   as Fiscal Agent

                                 By: ___________________________________________
                                     Name:
                                     Title:

                                       18
<PAGE>

                                                                      Schedule I

                                   Guarantors

The Ralph Lauren Womenswear Company, L.P., a Delaware limited partnership
Polo Retail, LLC, a Delaware limited liability company
Fashions Outlet of America, Inc., a Delaware corporation
The Polo/Lauren Company, L.P., a New York limited partnership
PRL International, Inc., a Delaware corporation
RL Fragrances, LLC, a Delaware limited liability company
PRL USA Holdings, Inc., a Delaware corporation
PRL Fashions, Inc., a Delaware corporation
PRL USA, Inc., a Delaware corporation
Ralph Lauren Home Collection, Inc., a Delaware corporation
PRL Financial Corporation, a Delaware corporation

                                       19

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}]]