Document:

<PAGE>

                                                                   EXHIBIT 10.60
                              AMENDED AND RESTATED
                          FIRST SUPPLEMENTAL INDENTURE

         THIS AMENDED AND RESTATED FIRST SUPPLEMENTAL INDENTURE, dated as of
February 28, 1999 (the "Amended and Restated First Supplemental Indenture") by
and among Startec Global Communications Corporation, a Delaware corporation
("Startec"), and First Union National Bank, as Trustee under the Indenture (as
defined below) (the "Trustee").

         WHEREAS, Startec and the Trustee are parties to an Indenture dated as
of May 21, 1998, as amended by the First Supplemental Indenture dated February
28, 1999 and the Second Supplemental Indenture dated August 20, 1999 (the
"Indenture"), pursuant to which Startec issued its 12% Senior Notes due 2008 and
12% Series A Senior Notes due 2008 (collectively the "Notes"); and

         WHEREAS, pursuant to that First Supplemental Indenture, Startec, as the
successor by merger to Startec Global Communications Corporation, a Maryland
corporation ("Startec Maryland") pursuant to the Reorganization (as defined in
the Indenture), expressly agreed to assume all of the obligations of Startec
Maryland with respect to all the Notes and under the Indenture under the
provisions of Sections 801 and 903 of the Indenture; and

         WHEREAS, in connection with completing the Reorganization, Startec
completed the transfer of substantially all of its operating assets to
lower-tiered subsidiaries; and

         WHEREAS, Section 901 of the Indenture provides, generally, that,
without the consent of the Holders (as defined in the Indenture), Startec, when
authorized by a Board Resolution (as defined in the Indenture), and the Trustee
may enter into one or more indenture supplements to cure any ambiguity, to
correct or supplement any provision in the Indenture which may be inconsistent
with any other provision in the Indenture, or to make any other provisions with
respect to matters or questions arising under the Indenture; provided that such
action shall not adversely affect the interests of the Holders in any material
respect; and

         WHEREAS, certain matters or questions have arisen under Article Eight
of the Indenture regarding the Reorganization; and

         WHEREAS, Startec's Board of Directors has adopted a Board Resolution
authorizing an indenture supplement to amend and restate the First Supplemental
Indenture in order to resolve the matters or questions that have arisen under
Article Eight of the Indenture regarding the Reorganization and ratify and
confirm Startec's assumption of the obligations of Startec Maryland with respect
to all the Notes and under the Indenture; and

         WHEREAS, this Amended and Restated First Supplemental Indenture is
intended by the parties to amend and restate the First Supplemental Indenture in
its entirety and is intended to be effective as of February 28, 1999.

<PAGE>

         NOW, THEREFORE, THIS AMENDED AND RESTATED FIRST SUPPLEMENTAL
 INDENTURE WITNESSETH:

         The parties hereto mutually agree as follows:

         Section 1. ASSUMPTION OF OBLIGATIONS. Upon the effective date of the
Merger, Startec hereby expressly agrees to assume all of the obligations of
Startec Maryland with respect to all the Notes and under the Indenture.

         Section 2. RATIFICATION OF INDENTURE. The Indenture, as supplemented
hereby, is in all respects ratified and confirmed and the Indenture as so
supplemented shall be read, taken and construed as one instrument. This
supplement is intended by the parties to, and does hereby, amend and restate the
First Supplemental Indenture in its entirety, effective as of February 28, 1999.

         Section 3. COUNTERPARTS. This Amended and Restated First Supplemental
Indenture may be executed in several counterparts, each of which shall be
regarded as an original and all of which together shall constitute one
instrument.

         Section 4. OTHER PROVISIONS. The Indenture is hereby amended as follows
(a) the last clause of Article Eight, Section 801 is amended to read: "PROVIDED
FURTHER that clauses (1), (3), (4) and (5) above shall not apply to the
Reorganization (except that Subsidiary Holdings shall be required to expressly
assume, by an indenture supplemental hereto, all of the obligations of the
Company with respect to all the Notes and under this Indenture)," and (b)
Article Eight, Section 802 is amended to add the following clause at the end of
the section: "PROVIDED, HOWEVER, that this Section shall not apply to the
Reorganization (except that Subsidiary Holdings shall be required to expressly
assume, by an indenture supplemental hereto, all of the obligations of the
Company with respect to all the Notes and under this Indenture)."

         IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated First Supplemental Indenture to be duly executed as of the 26th day of
June, 2000.

STARTEC:                                            TRUSTEE:

Startec Global Communications Corporation           First Union National Bank

By:   /s/ RAM MUKUNDA                               By:  /s/ PATRICIA A. WELLING
   -------------------------                           -------------------------
Name:  Ram Mukunda                                  Name:  Patricia A. Welling
Title:  President and Chief Executive Officer       Title:  Vice President
Date:  June 26, 2000                                Date:  June 26, 2000<PAGE>

                                 CONFORMED COPY

THIS AGREEMENT is made 22nd June 1998

BETWEEN

(1)      THE PERSONS whose names and addresses are set out in Column (1) of the
         Schedule hereto ("the Subscribers")

(2)      POLYDOC PLC incorporated under the Companies Acts (registered in
         England number 3217859) and having its registered office at 26
         Farringdon Street London EC4A 4AQ ("the Company"); and

WHEREAS

On the terms and conditions of this Agreement the Subscribers have agreed to
subscribe for a total of up to L1,570,920 of 5% Convertible Loan Stock 1999 to
be issued by the Company and the Company has agreed to issue such stock and to
issue share warrants entitling the Subscribers to subscribe for ordinary shares
in the capital of the Company

NOW IT IS HEREBY AGREED as follows:-

1        INTERPRETATION

1.1      In this Agreement (including the Schedule hereto) the following
         expressions have the meanings stated, unless the context otherwise
         requires

         "Completion Date" means the date on which the completion of this
         Agreement takes place pursuant to Clause 4;

         "Instrument" means the instrument constituting the Loan Stock in the
         form set out in Appendix A hereto

         "Loan Stock" means the L1,570,920 5% Convertible Loan Stock 1999 to be
         issued by the Company pursuant to the Instrument

         "Share Warrants" mean warrants entitling the holder to subscribe for
         ordinary shares in the capital of the Company in the form set out in
         Appendix B hereto

         "Special Resolution" means the special resolution to be passed by the
         Company in General Meeting in the form set out in Part 1 of Appendix C
         hereto

         "Ordinary Resolution" means the ordinary resolution to be passed by the
         Company in General Meeting in the form set out in Part 2 of Appendix C
         hereto

                                       1
<PAGE>

2        CONDITIONS

2.1      Completion of this Agreement with the Subscribers other than Mr Mence
         is conditional upon each of the following:

         2.1.1    the passing by the Company in General Meeting of the Special
                  Resolution; and

         2.1.2    the execution by the Company of this Instrument

2.2      Completion of this Agreement with Mr Mence is conditional upon each of
         the following:-

         2.2.1        the agreement of the Panel on Takeovers and Mergers to the
                      waiver of the obligation of Mr Barry Mence to make a
                      general offer under Rule 9 of the City Code on Takeovers
                      and Mergers following exercise by him of the conversion
                      rights attaching to the Loan Stock to be issued to him
                      hereunder and/or the subscription rights under the Share
                      Warrants to be issued to him hereunder; and

         2.2.2    the passing by the Company in general meeting of the Special
                  Resolution and the Ordinary Resolution; and

         2.2.3        the execution by the Company of the Instrument

2.3      The Subscribers and the Company shall use their respective reasonable
         endeavours to procure the fulfilment of the conditions set out in
         clauses 2.1 and 2.2 by 31 July 1998 or such later date as the
         Subscribers may agree in writing

2.4      If any of the conditions in clause 2.1 have not been fulfilled on or
         before the date referred to in clause 2.3 this Agreement and everything
         contained in it shall cease and determine provided that until such date
         each of the parties hereto shall comply with the obligations on its
         part contained in this Agreement

2.5      If the conditions in clause 2.1 have been fulfilled on or before the
         date referred to in clause 2.3 but the conditions in clause 2.2 have
         not been fulfilled by that date then the obligations in this Agreement
         relating to the subscription by Mr Mence for Loan Stock and the issue
         by the Company of Share Warrants to Mr Mence shall cease and determine

3        SUBSCRIPTION FOR LOAN STOCK AND ISSUE OF SHARE WARRANTS

         On the terms and subject to the conditions referred to in this
         Agreement:-

                                       2
<PAGE>

3.1      each of the Subscribers in respect of whom this Agreement has become
         unconditional will subscribe in cash at par for the amount of Loan
         Stock set out opposite such Subscriber's name in Column (2) of the
         Schedule hereto and the Company shall issue such Loan Stock to such
         Subscribers; and

3.2      the Company shall issue to each of the Subscribers who so subscribe for
         Loan Stock Share Warrants entitling each of such Subscribers to
         subscribe for the number of ordinary shares of 20p each in the capital
         of the Company set out opposite such Subscriber's name in Column (3) of
         the Schedule hereto

4        COMPLETION

         Forthwith upon satisfaction of the conditions set out in clauses 2.1
         and 2.2 or, if the conditions set out in clause 2.1 have been satisfied
         but not the conditions set out in clause 2.2 then on the date referred
         to in clause 2.3, completion of this Agreement shall take place when
         all but not part only of the following shall be done:

4.1      The Subscribers in respect of whom this Agreement has become
         unconditional shall pay to the Company the subscription price for the
         Loan Stock subscribed by them

4.2      The Company shall issue the Loan Stock to such Subscribers

4.3      The Company shall issue the Share Warrants to such Subscribers

5        ANNOUNCEMENTS

         No announcement of the terms of this Agreement shall be made by any
         party prior to the Completion Date without the written consent of the
         others save for any announcement required to be made by the Company in
         accordance with the rules and regulations of the Stock Exchange or the
         Amsterdam Stock Exchange

6        COSTS

         The parties will pay their own costs of and incidental to the
         negotiation preparation and completion of this Agreement

                                       3
<PAGE>

7        GENERAL

7.1      This Agreement shall be governed by and construed in accordance with
         English law

7.2      The Agreement may be executed as two or more documents in the same form
         and execution by all the parties of at least one of such documents will
         constitute due execution of this Agreement

7.3      This Agreement shall be binding upon and enure for the benefit of the
         successors of the parties hereto but shall not be assignable

IN WITNESS WHEREOF this Agreement has been duly executed by the parties the day
and year first above written

                                  THE SCHEDULE

                                 THE SUBSCRIBERS

<TABLE>
<CAPTION>
         NAME AND ADDRESS    NOMINAL VALUE OF LOAN STOCK      NUMBER OF SHARES IN RESPECT OF
                (1)                 SUBSCRIBED L             WHICH WARRANTS ARE TO BE ISSUED
                                         (2)                               (3)

<S>                          <C>                             <C>
Barry Mence                            523,640                           300,000
Colne Priory
Earls Colne
Colchester
Essex CO6 2PG

Nederlandse Participatie               523,640                           300,000
Maatschappij NV
Breitnerstraat 1
Postbus 7224
1007 JB Amsterdam
The Netherlands

Brandon Limited                        523,640                           300,000
Parade House                           -------                           -------
The Parade
Castletown
Isle of Man
                                      1,570,920                          900,000
</TABLE>

                                       4
<PAGE>

SIGNED by BARRY MENCE      )
in the presence of:-       )                     BARRY MENCE

M.L. Stimson
Secretary
35 Walker Drive
Leigh-on-Sea
Essex  SS9 3QT

SIGNED by M.W. DEKKER                            )
for and on behalf of NEDERLANDSE                 )
PARTICIPATIE MAATSCHAPPIJ NV                     )    M.W. DEKKER
in the presence of:                              )

C. KOERTS

SIGNED by R.L.D. TUCKER                          )
for and on behalf of BRANDON                     )    R.L.D. TUCKER
LIMITED in the presence of:-                     )    DIRECTOR

S.E.C. ST MAUR
15 Ballastrooan
Colby
Isle of Man
(Secretary)

SIGNED by E.R.E.I. WIEBENGA                      )
for and on behalf of POLYDOC                     )    E.R.E.I. WIEBENGA
PLC in the presence of:-                         )

P.A. HOEBOER

                                       5
<PAGE>

                                                                      Appendix A

            DATED                                                1998
            ---------------------------------------------------------

                                   POLYDOC PLC

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

                                   INSTRUMENT
                       CONSTITUTING L1,570,920 5 per cent
                           CONVERTIBLE LOAN STOCK 1999

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

                                  STONES PORTER
                              26 FARRINGDON STREET
                                 LONDON EC4A 4AQ

                               TEL : 0171 248 9991

                                    REF: HTE

                                       6
<PAGE>

THIS INSTRUMENT is made the                                                1998
by POLYDOC PLC (Registered No. 3217859) whose registered office is at 26
Farringdon Street London EC4A ("the Company")

THIS INSTRUMENT WITNESSES and the Company hereby declares as follows:-

1.         In this Instrument unless the context otherwise requires:-

           Conditions"                      means the Conditions set out in
                                            Schedule 2 as from time to time
                                            modified in the manner set out
                                            therein

           "Stock"                          means the principal moneys
                                            represented by the 5 per cent
                                            Convertible Loan Stock 1999 hereby
                                            constituted or as the case may
                                            require a specific proportion
                                            thereof;

           "Stockholder"                    means any original holder of the
                                            stock or its successor in title

2.         The Company has determined to create and hereby constitutes
           L1,570,920 loan stock to be designated as 5 per cent Convertible Loan
           Stock 1999

3.         The Stock shall be issued in amounts or multiples of L1 at par for
           cash and shall be issued and held at all times subject to the
           provisions contained in this Instrument including the Conditions.
           Payment for the Stock may be made in a currency other than sterling
           acceptable to the Company at the rate of exchange for that currency
           into sterling applicable on the date the Stock is issued

4.         Every Stockholder shall be entitled to a certificate for the stock
           held by it. Every certificate shall be in the form or substantially
           in the form set out in Schedule 1 hereto and shall have the
           Conditions annexed thereto

5.         The Company shall in accordance with the Conditions pay to the
           Stockholders interest on the Stock in issue for the time being

6.         The Company shall in accordance with the Conditions redeem or convert
           the Stock in issue from time to time

IN WITNESS whereof this Instrument has been entered in to day and year first
above written

                                       7
<PAGE>

                                   SCHEDULE 1

                                   POLYDOC PLC

               INCORPORATED UNDER THE COMPANIES ACTS 1985 AND 1989

                     REGISTERED NO. 3217859 ("THE COMPANY")

5 PER CENT CONVERTIBLE LOAN STOCK 1999 constituted by an Instrument
dated [                 ] 1998 ("the Instrument") and created pursuant to the
memorandum and articles of association of the Company by a resolution of the
board of directors passed on [                ] with the benefit of and subject
to the provisions contained in the Instrument including the Conditions annexed
hereto

THIS IS TO CERTIFY THAT
of
is the registered holder of L[     ] of the above mentioned Stock subject to the
provisions contained in the Instrument including the Conditions annexed hereto

DATED the [                            ]

EXECUTED and DELIVERED as a         )
DEED BY POLYDOC PLC acting          )
by a director and its secretary     )
or two directors                    )                ...........................
                                                     DIRECTOR

                                                     ...........................
                                                     DIRECTOR/SECRETARY

                                       8
<PAGE>

NOTICE OF CONVERSION

TO:               POLYDOC PLC ("the Company")

I/We being the registered holder of L             of the 5 per cent Convertible
Loan Stock 1999 of the Company ("the Stock") represented by this Certificate
hereby give notice of my/our desire to convert into fully paid Ordinary Shares
of the Company *all/L               of such Stock in accordance with the
Conditions attached to the Certificate.

I/We desire *all/        of such Ordinary Shares of the Company to be registered
in my/our name(s) and agree to accept such Ordinary Shares to be issued to me/us
pursuant hereto subject to the Memorandum and Articles of Association of the
Company and hereby authorise(s) the entry of my/our name(s) in the Register of
Members in respect thereof and the despatch of a Certificate therefor by
ordinary post at my/our risk to

                                       at

Dated this                      day of                                  199

Signature(s) of Stockholder ..............................................

*Delete or complete as appropriate. If this space is left blank the notice will
be deemed to relate to the whole of the Stock represented by the Certificate or
all the Ordinary Shares into which such Stock may be converted (as the case may
be).

                                       9
<PAGE>

                                   SCHEDULE 2

                                 THE CONDITIONS

1.       DEFINITIONS

1.1      In these Conditions unless the context otherwise requires:

"Certificate"                       means the certificate for the Stock held by
                                    the Stockholder issued pursuant to the
                                    Instrument;

"Conversion Date"                   means in relation to the conversion of the
                                    Stock 31 July 1999

"Conversion Rate"                   means (subject to adjustment pursuant
                                    to Clause 5.2) one Ordinary Share for each
                                    L[to be inserted - being 80% of the average
                                    of the mid-market PRICE FOR TRANSACTIONS IN
                                    THE COMPANY'S SHARES ON THE ALTERNATIVE
                                    INVESTMENT MARKET OF THE LONDON STOCK
                                    EXCHANGE OVER THE FIVE WORKING DAYS
                                    PRECEDING THE DATE OF THE AGREEMENT TO WHICH
                                    THIS DOCUMENT IS APPENDIX A] in nominal
                                    amount of the Stock unless at any time after
                                    the date of issue of the Stock and before
                                    the Conversion Date the Company shall have
                                    offered to its shareholders generally (but
                                    not necessarily offered to shareholders not
                                    resident in the United Kingdom or the
                                    Netherlands) the opportunity to participate
                                    in a rights issue or placing and open offer
                                    or other similar issue at a price per
                                    Ordinary Share fully paid of less than L[to
                                    be inserted - being 80% of the average of
                                    the mid-market price for TRANSACTIONS IN THE
                                    COMPANY'S SHARES ON THE ALTERNATIVE
                                    INVESTMENT MARKET OF THE LONDON STOCK
                                    EXCHANGE OVER THE FIVE WORKING DAYS
                                    PRECEDING THE DATE OF THE AGREEMENT TO WHICH
                                    THIS DOCUMENT IS APPENDIX A] in which event
                                    the Conversion Rate shall be one Ordinary
                                    Share for

                                       10
<PAGE>

                                    each nominal amount of the Stock equal to
                                    such price per fully paid share

"Conversion Rights"                 means the rights mentioned in Condition 5.1;

"Conditions"                        means the conditions herein set out as the
                                    same may from time to time be modified in
                                    accordance with these Conditions;

"Extraordinary Resolution"          has the meaning set out in Condition 12.10;

"Instrument"                        means the Instrument (including the
                                    Schedules thereto) dated [ ] 1998
                                    constituting the Stock as such Instrument
                                    may from time to time be modified in
                                    accordance with these Conditions and shall
                                    include any further instrument expressed to
                                    be supplemental thereto;

"Subsidiaries"                      means any subsidiary of the Company (within
                                    the meaning of Section 736(2) Companies Act
                                    1985) ;

"Ordinary share capital"
 and "Ordinary Shares"              mean the Ordinary share capital of the
                                    Company as presently constituted comprising
                                    Ordinary Shares of 20p each;

"Register"                          means the register relating to the Stock
                                    maintained by the Company in accordance with
                                    these Conditions;

"Stock"                             means the L1,570,920 5 per cent Convertible
                                    Loan Stock 1999 constituted by and to be
                                    issued in accordance with the Instrument and
                                    for the time being outstanding or as the
                                    case may require a specific portion thereof
                                    or the principal monies represented by the
                                    same;

"Stockholders"                      means the several persons for the time being
                                    entered in the Register as the holders of
                                    the Stock

1.2      References in these Conditions to a Condition are to a paragraph of
         these Conditions

1.3      The headings to the Conditions shall not affect the interpretation of
         these Conditions

                                       11
<PAGE>

1.4      References in these Conditions to statutory provisions shall be
         construed as references to such statutory provisions as respectively
         replaced, amended or re-enacted (whether before or after the date
         hereof) from time to time and shall include any provisions of which any
         subsequent statutory provisions are re-enactments (whether with or
         without modification) and any subordinate legislation or regulations
         made under any of the foregoing

1.5      In these Conditions where the context permits, words importing the
         singular include the plural and vice versa, references to persons
         include bodies corporate, unincorporated associations and partnerships
         and words importing any gender include the other genders

2.       STOCK

2.1      The Stock shall at all times be held subject to the provisions of the
         Instrument (including these Conditions)

2.2      The Stock in issue from time to time shall rank pari passu inter se as
         an obligation of the Company

3.       CERTIFICATES

3.1      Every Stockholder shall be entitled to a certificate stating the amount
         of the Stock held by him

3.2      Each certificate shall be sent at his own risk to the respective
         Stockholder at his address shown in the Register

3.3      Joint holders of Stock shall only be entitled to one certificate in
         respect of the Stock held by them jointly which certificate shall be
         sent to the joint holder first named in the Register at his registered
         address

4.       INTEREST

4.1      Interest shall be paid half-yearly in arrears on the principal amount
         of the Stock for the time being outstanding at the rate of 5 per cent
         per annum and such interest shall be paid, less income or other tax
         thereon which the Company is obliged by law to withhold, by payments on
         every 30 June and 31 December but so that the first payment of such
         interest calculated from the date of issue of any of the principal
         amount of the Stock to 31 December 1998 (both dates inclusive) shall be
         made on 31 December 1998. The interest on the Stock shall be calculated
         on the basis of a 365 day year and shall accrue on a day to day basis
         from the date of issue to the date of redemption or to the date of
         cancellation

                                       12
<PAGE>

         pursuant to Condition 11, or, in respect of any Stock converted, to the
         Conversion Date

4.2      Interest on the Stock may be paid in a currency other than sterling
         acceptable to the relevant Stockholder at the rate of exchange for
         sterling into that currency applicable on the date such interest is
         payable

5.       CONVERSION TERMS

5.1      Subject to Condition 5.2 each Stockholder shall on and subject to the
         terms and conditions hereinafter mentioned have the right to require
         the Company to allot on the Conversion Date fully paid Ordinary Shares
         in accordance with Condition 5.3 in exchange for and in satisfaction of
         such nominal amount of the Stock held by such Stockholder as such
         Stockholder shall specify in the Conversion Notice endorsed on the
         Certificate

5.2      Stock will be convertible at the Conversion Rate save that if a
         variation in the issued share capital of the Company occurs (whether by
         way of a capitalisation issue or any reduction, subdivision or
         consolidation or whether by way of any modification to the rights
         attached to the Ordinary Shares or the creation of any new class of
         share capital or otherwise) which adversely affects the Conversion Rate
         to the detriment of the Stockholders, then the Conversion Rate shall be
         adjusted in such manner as the Company may propose and the Stockholders
         may approve by way of Extraordinary Resolution as being fair and
         reasonable at a Meeting or Meetings of the Stockholders convened by the
         Company or any one or more of the Stockholders pursuant to the
         provisions of Condition 13. In the event that such adjustment to the
         Conversion Rate is not so approved in the manner aforesaid within 30
         days of the date of the first of such Meetings, then the matter shall
         be referred to an independent Chartered Accountant to be selected (at
         the instance of any Stockholder or the Company) by the President (or
         the next most senior available officer) for the time being of the
         Institute of Chartered Accountants in England and Wales. Such
         independent Chartered Accountant shall be a person with relevant
         experience of the matter in dispute and he shall consult with such
         persons with similar experience as he shall from time to time deem
         appropriate and the Company, shall furnish him with such documents and
         other information as he may reasonably request. Any such independent

                                       13
<PAGE>

         Chartered Accountant (whose costs shall be payable as he shall direct)
         shall act as an expert and his decision shall be final and binding on
         the Stockholders and the Company

5.3      Subject as hereinafter provided, for the purpose of conversion the
         following provisions shall apply:-

         (a)      each Stockholder who wishes to exercise Conversion Rights must
         complete the Conversion Notice endorsed on his Certificate in respect
         of the nominal amount (being not less than L100,000 or such smaller
         amount as may constitute his entire holding of Stock) of the Stock in
         respect of which he wishes to exercise the Conversion Right and must
         lodge the Certificate at the registered office of the Company not less
         than 14 days prior to the Conversion Date; a Conversion Notice may not
         be withdrawn without the consent of the Directors of the Company;

         (b)      if any Certificate with the Conversion Notice completed has
         been so lodged with the Company the Company shall, on the Conversion
         Date, allot to the Stockholder the number of ordinary shares of the
         Company credited as fully paid to which the Stockholder is entitled
         under Condition 5.2 and such allotment shall be in exchange for and in
         satisfaction of the principal moneys outstanding on the Stock so
         converted;

         (c)      subject to Condition 5.6 Ordinary Shares of the Company
         allotted on conversion shall rank pari passu and form one class with
         the ordinary share capital of the Company in issue on the Conversion
         Date;

         (d)      interest on principal moneys outstanding on Stock converted
         shall be payable in respect thereof up to and including the Conversion
         Date but shall cease to accrue thereafter;

         (e)      as soon as practicable after the allotment pursuant to
         Condition 5.3(b) and in any event no later than 21 days thereafter the
         Company will issue and send free of charge to each Stockholder a
         certificate in respect of the Ordinary share capital allotted on
         conversion and (in the case of an exercise of the Conversion Rights in
         respect of part only of the Stock) a balance Certificate for the Stock
         in respect of which the Conversion Rights have not been exercised on
         that occasion and which has not been redeemed pursuant to Condition 6.1

5.4      The Company shall use all reasonable endeavours to ensure that (if
         appropriate) all the Ordinary share capital allotted on conversion will
         upon

                                       14
<PAGE>

         allotment be admitted to trading on the Alternative Investment Market
         of the Stock Exchange and the NMAX of the Amsterdam Stock Exchange and
         any other stock exchange on which the Ordinary share capital of the
         Company shall for the time being be listed, quoted or traded

5.5      The Company shall keep available for issue sufficient authorised but
         unissued share capital to satisfy in full without the need for the
         passing of any resolution by shareholders all Conversion Rights

5.6      Ordinary Shares issued on conversion shall be credited as fully paid
         but shall not carry the right to receive any dividends or distributions
         declared, paid or made on the Ordinary Shares by reference to a record
         date which falls on or before the Conversion Date

6.       REDEMPTION AND PURCHASE

6.1      The Company shall redeem at par on the Conversion Date all Stock not
         previously converted or cancelled

6.2      Upon redemption of any Stock the company shall also pay the amount of
         any interest accrued (but remaining unpaid) on such Stock up to and
         including the date of redemption

6.3      The Company shall be at liberty at any time and from time to time to
         purchase Stock by tender (available to all Stockholders alike) at any
         price or to purchase Stock by private treaty

6.4      All Stock redeemed or purchased by the Company shall be cancelled and
         the Company shall not be at liberty to reissue the same

6.5      On the date upon which the Stock (or any part thereof) is to be
         redeemed or purchased pursuant to these Conditions each relevant
         Stockholder shall be bound to deliver to the Company the Certificate
         for his Stock and upon such delivery the Company shall pay to such
         Stockholder the amount payable to him in respect of such redemption or
         purchase. The Company shall issue free of charge to such Stockholder a
         fresh certificate for any balance of his Stock not so redeemed or
         purchased

6.6      The Stock, to the extent that it has not already been converted
         pursuant to Condition 5 or redeemed or purchased pursuant to this
         condition 6 or cancelled pursuant to Condition 11 shall (unless
         otherwise agreed by the Stockholders) be repayable on the date upon
         which any of the following events occurs:

                                       15
<PAGE>

         (a)      if the Company fails to pay any amount of interest due to the
         Stockholders within 28 days after its due date, the Company having been
         given written notice by the Stockholders of such failure within 10
         business days after such due date; or

         (b)      if a distress or other execution is levied or sued out upon or
         against any part of the property or assets of the Company or any of its
         Subsidiaries and is not discharged within seven business days of having
         been levied or sued out; or

         (c)      if the Company or any of its Subsidiaries becomes insolvent,
         makes a general assignment for the benefit of its creditors or is
         unable to pay its debts as they fall due for the purposes of Section
         123 of the Insolvency Act 1986 or admits in writing its inability to
         pay its debts as they mature or anything analogous to any of such
         events occurs under the law of any applicable jurisdiction; or

         (d)      if an encumbrancer takes possession or an administrator,
         receiver, liquidator, trustee or similar officer is appointed of all or
         any part of the undertaking, property or assets of the Company or any
         of its Subsidiaries; or

         (e)      if an order is made, or an effective resolution is passed for
         the winding up of, or the making of an administration order in relation
         to the Company or any of its Subsidiaries; or

         (f)      if the Company ceases to carry on business

6.7      The amount payable on redemption, purchase or repayment pursuant to
         this Condition 6 may be paid in a currency other than sterling
         acceptable to the relevant Stockholder at the rate of exchange for
         sterling into that currency applicable on the date of such redemption,
         purchase or repayment

7.       PAYMENTS

7.1      Payment of interest and principal for the time being owing on the Stock
         or any part thereof shall be made by bank transfer where the registered
         holder thereof has so instructed the Company and given the necessary
         details but otherwise may be made by cheque or warrant drawn on the
         Company's bankers and made payable to the registered holder thereof or
         in the case of joint registered holders to all such holders or to such
         other person or persons as the registered holder or all the joint
         registered

                                       16
<PAGE>

         holders may in writing direct. All such payments shall be sent to the
         registered address of the registered holder or, in the case of joint
         registered holders, the registered address of the joint holder first
         named in the Register or such other address as the registered holder or
         all the joint registered holders may in writing direct.

7.2      If several persons are entered in the Register as joint holders of any
         Stock then (without prejudice to Condition 7.1) the receipt of any one
         of such persons for any monies payable on or in respect of such Stock
         shall be as effective a discharge to the Company as if the person
         signing such receipt were the sole registered holder of such Stock

7.3      If the Company is so required by law, the Company shall make any
         deduction on account of tax or otherwise from any amount payable by it
         hereunder in respect of the Stock and shall deliver to the relevant
         Stockholder in respect of each amount so deducted a certificate as to
         the gross amount of such payment, the amount deducted, the nature of
         the deduction and the actual amount paid and certifying that the
         Company has paid, or will pay, the amount deducted to the Inland
         Revenue or other appropriate authority. If the Company is required to
         make any such deduction, the Company shall not be required to make any
         additional payment to the relevant Stockholder

8.       REGISTER

8.1      A register for the Stock in issue ("Register") shall be kept by the
         Company and there shall be entered in the Register:

         (a)      the names and addresses of the holders for the time being of
         the Stock;

         (b)      the amount of the Stock held by the registered holders;

         (c)      the date at which the name of each registered holder is
         entered in respect of the Stock standing in his name;

         (d)      the serial number of each certificate issued in respect of the
         Stock and the date of the issue thereof; and

         (e)      particulars of all transfers of Stock

8.2      Any change of name or address on the part of any Stockholder shall
         forthwith be notified to the Company and thereupon the Register shall
         be altered accordingly

                                       17
<PAGE>

8.3      A Stockholder shall be entitled at all reasonable times during usual
         office hours (except when the Register shall be closed in conformity
         with the provisions hereof) to inspect the Register and take copies of
         and extracts from the same or any part thereof

8.4      The Register may be closed by the Company for such periods and at such
         times as it may think fit provided it shall not be closed for more than
         30 days in any year

9.       REGISTERED HOLDER

9.1      Except as required by law or as ordered by some court of competent
         jurisdiction, the Company will recognise the registered holder of any
         Stock as the absolute owner thereof and will not be bound to take
         notice or see to the execution of any trust whether express or implied
         to which any Stock may be subject. Without prejudice to Condition 6 the
         receipt of the registered holder (or, in the case of joint registered
         holders, of any one of such holders) for any monies payable in respect
         of the Stock shall be a good discharge to the Company notwithstanding
         any notice it may have (whether express or otherwise) of the right,
         title, interest or claim of any other person to or in such monies. No
         notice of any trust (whether express or otherwise) shall, except as
         provided by statute or as required by an order of a court of competent
         jurisdiction, be entered on the Register in respect of any Stock

9.2      The executors or administrators of a deceased holder of Stock (not
         being one or several joint registered holders) shall be the only person
         recognised by the Company as having any title to, or interest in, such
         Stock

9.3      In the case of death of any of the Joint registered holders of Stock,
         the survivors or survivor shall be the only persons or person
         recognised by the Company as having any title to, or interest in, such
         Stock

9.4      Any person becoming entitled to any Stock in consequence of the death
         or bankruptcy or liquidation of any holder may, upon producing such
         evidence that he sustains the character in respect of which he proposes
         to act under this Condition 9.4 or of his title as the Directors of the
         Company shall think sufficient, be registered himself as the holder in
         respect of such Stock or, subject to Condition 10, may transfer such
         Stock

                                       18
<PAGE>

9.5      The Company shall not be bound to register more than 4 persons as the
         joint holders of any of the Stock

10       TRANSFERS OF STOCK

10.1     Every Stockholder shall be entitled to transfer in whole or in part,
         any Stock held by him but, if in part, in a nominal amount of not less
         than L100,000 or such smaller amount as may constitute his entire
         holding of Stock

10.2     An instrument of transfer shall be in writing in the usual common form

10.3     Every instrument of transfer must be signed by or on behalf of the
         transferor or, where the transferor is a corporation, given under its
         common seal or in accordance with all necessary corporate action
         required to duly authorise the execution and delivery of such
         instrument of transfer and the transferor shall be deemed to remain the
         owner of the Stock until the name of the transferee is entered in the
         Register in respect thereof

10.4     Every instrument of transfer must be left for registration at the
         registered office of the Company, or at the place where the Register
         shall for the time being be kept, accompanied by the certificate or
         certificates for the Stock to be transferred and such other evidence as
         the Directors of the Company may reasonably require to prove the title
         of the transferor or his right to transfer such Stock and, if the
         instrument of transfer is executed by some other person on the
         transferor's behalf, the authority of that person so do to. All
         instruments of transfer which shall be registered shall be retained by
         the Company. No fee shall be charged for registration

11       REPLACEMENT CERTIFICATES

11.1     If any certificate for the Stock is worn out or defaced then, upon
         production thereof to the Directors of the Company they may cancel and
         retain the same and may issue a new certificate in lieu thereof

11.2     If any such certificate is lost or destroyed then, upon proof thereof
         to the satisfaction of the Directors of the Company and on such terms
         as to evidence and indemnity as the Directors of the Company may deem
         adequate being given and the payment of all out of pocket expenses of
         the Company in investigating such evidence and preparing the requisite
         indemnity, a new certificate in lieu thereof may be issued to the
         person entitled to such lost or destroyed certificate

                                       19
<PAGE>

11.3     An entry as to the issue of the new certificate and indemnity (if any)
         shall be made in the Register

12       MEETINGS OF THE STOCKHOLDERS

12.1     The Company, or any one or more of the Stockholders holding or together
         holding not less than one-tenth of the Stock for the time being
         outstanding, may at any time convene a Meeting of the Stockholders to
         be held at such place as the Company or such Stockholder or
         Stockholders (as the case may be) may determine by giving not less than
         14 days' notice thereof (exclusive of the day on which the notice is
         served and of the day on which the Meeting is to be held) to the
         Stockholders and (if convened by any one or more of the Stockholders)
         to the Company

12.2     The Notice convening any Meeting shall specify the place, day and hour
         of the Meeting and the general nature of the business to be transacted
         but it shall not be necessary (except in the case of an Extraordinary
         Resolution) to specify in the Notice the terms of the resolution(s) to
         be proposed

12.3     At any Meeting of Stockholders a person or persons holding or
         representing by proxy at least one-tenth in value of the Stock for the
         time being outstanding shall form a quorum for the transaction of
         business except for the purpose of passing an Extraordinary Resolution.
         The quorum for passing an Extraordinary Resolution shall be the holders
         present in person or by proxy of 50 per cent or more in nominal value
         of the Stock for the time being outstanding. No business shall be
         transacted at any Meeting unless the requisite quorum is present

12.4     The Chairman for the time being of the Board of Directors of the
         Company shall be entitled to take the chair at any Meeting of the
         Stockholders but, unless he is a Stockholder, he shall not be entitled
         to vote at any such Meeting. If at any Meeting the Chairman shall not
         be present within 5 minutes after the time appointed for holding the
         Meeting, the Stockholders present shall choose one of their number to
         be Chairman at that Meeting

12.5     If within 15 minutes from the time appointed for the Meeting a quorum
         is not present the Meeting, if convened on the requisition of
         Stockholders, shall be dissolved and in any other case it shall stand
         adjourned to such

                                       20
<PAGE>

         day (not being less than 14 or more than 28 days after the date of the
         Meeting from which such adjournment takes place) and time and place as
         the Chairman of the Meeting shall direct Provided that at least 7 days'
         notice shall be given of such adjourned Meeting and such notice shall
         state that the Stockholders present whatever their number or the
         nominal value of the Stock held or represented by them will constitute
         a quorum for all purposes

12.6     A resolution put to the vote of a Meeting shall be decided on a show of
         hands unless before or on the declaration of the result of the show of
         hands a poll is duly demanded by the Chairman of the Meeting or by
         Stockholders holding at least one-tenth in value of the Stock for the
         time being outstanding and a demand by a representative or proxy for a
         Stockholder shall be the same as a demand by that Stockholder

12.7     On a show of hands every Stockholder who (being an individual) is
         present in person or (being a corporation) is present by its authorised
         representative shall have 1 vote. On a poll every Stockholder present
         in person or by representative or by proxy shall have 1 vote for every
         L1 of Stock of which he is the holder. In the case of joint registered
         holders of Stock the vote of the senior who tenders a vote whether in
         person or by proxy shall be accepted to the exclusion of the votes of
         the other joint holders and for this purpose seniority shall be
         determined by the order in which the names stand in the Register in
         respect of the joint holding. A person appointed to act as proxy need
         not be a Stockholder

12.8     A Meeting of the Stockholders shall, in addition to any other powers
         have the following powers exercisable by Extraordinary Resolution:

         (a)      power to sanction any modification, compromise, abrogation or
         arrangement in respect of the Stockholders against the Company; and

         (b)      power to assent to any modification or abrogation of the
         provisions contained in these Conditions, or to which the Stock is
         subject proposed or agreed to by the Company

12.9     An Extraordinary Resolution passed at a Meeting of the Stockholders
         duly convened and held in accordance with those Conditions shall be
         binding upon all the Stockholders whether present or not at such
         Meeting and each of the Stockholders shall be bound to give effect
         thereto accordingly. A resolution in writing signed by all the
         Stockholders shall

                                       21
<PAGE>

         be as valid and effectual as if it had been passed as an Extraordinary
         Resolution at a Meeting of the Stockholders duly convened and held.
         Each of the Stockholders shall, if the Company so requests, surrender
         the certificate(s) for his Stock to the company so that a memorandum of
         any such Extraordinary Resolution or resolution in writing may be
         endorsed thereon or annexed thereto

12.10    The expression "Extraordinary Resolution" means a resolution passed at
         a Meeting of the Stockholders duly convened and held in accordance with
         the provisions contained in these Conditions relative to a Meeting for
         passing an Extraordinary Resolution by a majority consisting of not
         less than three-fourths of the persons voting thereat on a show of
         hands or, on a poll, by a majority consisting of not less than
         three-fourths of the votes given on such poll

13.      NOTICES

         Any notice to the Company or a Stockholder (as the case may be)
         required for any purpose may be served personally or by sending it
         through the post in a prepaid letter addressed to the Company or
         its/their respective registered offices for the time being or to such
         Stockholder at his registered address. In the case of joint registered
         holders, such service shall be effected on all the joint holders by
         service on the Stockholder first named in the Register at his
         registered address. Where a notice or other document is served by post,
         service shall be deemed to have been effected on the day after the date
         on which it is posted and in proving such service it shall be
         sufficient to prove that the letter was properly addressed, stamped and
         posted and, where a notice or other document is served personally shall
         be deemed to be effected immediately upon delivery

14.      CONTINUING EFFECT

         The Instrument (including these Conditions) shall enure for the benefit
         of, and shall be binding upon all persons for the time being registered
         as holders of any of the Stock, and any person claiming through or
         under any of them, each of whom may sue, or be sued, for the
         performance or observance of the provisions thereof so far as his
         holding is concerned

15.      SHAREHOLDERS' COMMUNICATIONS

                                       22
<PAGE>

         The Company shall send to the Stockholders a copy of all circulars
         reports and other written communications sent to all the holders of
         Ordinary Shares in the Company at the time the same are sent to such
         holders

16.      PROPER LAW

         The Instrument, these Conditions and the Stock shall be governed by and
         construed in accordance with English law and the courts of England
         shall have jurisdiction in respect thereof

EXECUTED and DELIVERED              )
as a Deed by POLYDOC PLC            )
acting by a director and its        )
secretary or two directors          )

                                       23
<PAGE>

                                                                      Appendix B

                                   POLYDOC PLC

      (INCORPORATED IN ENGLAND UNDER THE COMPANIES ACT 1985 - NO. 3217859)

                             ORDINARY SHARE WARRANT

THIS IS TO CERTIFY THAT

of

has been granted the right to subscribe on or before 31 December 2000 ("the
Exercise Date") for up to 300,000 ordinary shares of 20p each in PolyDoc Plc
("the Company") at [TO BE INSERTED - BEING 80% OF THE AVERAGE OF THE MID-MARKET
PRICE FOR TRANSACTIONS IN THE COMPANY'S SHARES ON THE ALTERNATIVE INVESTMENT
MARKET OF THE LONDON STOCK EXCHANGE OVER THE FIVE WORKING DAYS PRECEDING THE
DATE OF THE AGREEMENT TO WHICH THIS DOCUMENT IS APPENDIX A] per ordinary share
("the Subscription Price") subject to the conditions attached and subject to the
Memorandum and Articles of Association of the Company.

Executed and delivered as a Deed       )        Director........................
by POLYDOC PLC acting by a             )
director and its secretary or two      )        Director/
directors                                       Secretary.......................

                                                Dated                       1998

                                       24
<PAGE>

                                FORM OF EXERCISE

The Company Secretary,
PolyDoc Plc

I, the undersigned hereby exercise my right to subscribe for
         ** ordinary shares comprised in this Warrant and agree to accept the
shares to be allocated pursuant to this Form of Exercise subject to the
Memorandum and Articles of Association of the Company, and hereby request you to
place my name on the Register of Members in respect thereof.

I enclose a remittance for L      *** in favour of PolyDoc Plc being the amount
payable on subscription for the shares in respect of which this Warrant is now
exercised.

I hereby request you to despatch a certificate for the ordinary shares to be
registered in my name and, if applicable, a balance Warrant by ordinary post at
my risk to the address stated below.

Signature:   ......................          Address:   ........................

Name:   .....................                         ..........................

Dated:   .....................                        ..........................

**       Please indicate the number of shares you wish to subscribe for. If no
         number is inserted, you will be deemed to have exercised your rights in
         respect of that number of shares which may be subscribed for with the
         amount of remittance. If the Option is exercised in part, it must be in
         respect of multiples of 1,000 shares.

***      The remittance should be for an amount equal to the Subscription Price
         per share multiplied by the number of shares applied for.

                                       25
<PAGE>

CONDITIONS:

1.         The right to subscribe pursuant to this Warrant may be exercised by
           the completion and delivery to the registered office of the Company
           of the Form of Exercise on the reverse and the payment to the Company
           of the aggregate Subscription Price therefor by the holder of the
           Warrant.

2.         The right to subscribe pursuant to this Warrant may be exercised in
           whole or in part on or before the Exercise Date and to the extent not
           so exercised then this Warrant shall be null and void and no
           subscription rights thereunder shall be exercisable thereafter.

3.         This Warrant shall not be transferable and any disposal or transfer
           voluntary or involuntary of this Warrant or any right hereunder shall
           (except as mentioned in Condition 4) be void and cause the right to
           subscribe pursuant to this Warrant to cease to be exercisable.

4.         If the holder of this Warrant dies before exercising any rights
           hereunder then such rights may be exercisable by his personal
           representatives.

5.         If a variation in the issued share capital of the Company occurs
           (whether by way of a capitalisation or rights issue or any reduction,
           subdivision or consolidation or whether by way of any modification to
           the rights attached to the ordinary shares in the Company or of the
           creation of any new class of share capital or otherwise) which
           adversely affects the right to subscribe pursuant to this Warrant,
           then the Subscription Price or the shares to be issued on
           subscription shall be adjusted in such manner as the Company and the
           holder of this Warrant may agree as being fair and reasonable

6.         Ordinary shares of the Company issued on the Exercise Date shall be
           credited as fully paid but shall not carry the right to receive any
           dividends or distributions declared, paid or made on the ordinary
           shares of the Company by reference to a record date which falls on or
           before the Exercise Date but otherwise shall rank pari passu and form
           one class

                                       26
<PAGE>

           with the ordinary share capital of the Company in issue on the
           Exercise Date.

7.         The Company shall use all reasonable endeavours to ensure that (if
           appropriate) all the ordinary shares of the Company allotted on
           exercise of this Warrant will upon allotment be admitted to trading
           on the Alternative Investment Market of the Stock Exchange and the
           NMAX of the Amsterdam Stock Exchange and any other stock exchange on
           which the Ordinary share capital of the Company shall for the time
           being be listed, quoted or traded

8.         The Company shall keep available for issue sufficient authorised but
           unissued share capital to satisfy in full without the need for the
           passing of any resolution by shareholders all rights to subscribe
           pursuant to this Warrant.

9.         This Warrant shall be governed by and construed in accordance with
           English law and the courts of England shall have jurisdiction in
           respect thereof.

                                       27
<PAGE>

                                                                      APPENDIX C

                                   POLYDOC PLC

                                   RESOLUTIONS

                                     PART 1

SPECIAL RESOLUTIONS

That:

(i)      the Directors be generally and unconditionally authorised pursuant to
and in accordance with Section 80 of the Companies Act 1985 to exercise all the
powers of the Company to allot relevant securities (within the meaning of that
Section) up to a maximum aggregate nominal amount of L2,256,923 but so that such
authority (unless previously renewed revoked or varied) is to expire at the
conclusion of the Annual General Meeting of the Company to be held in 1999 or on
31 July 1999, whichever is earlier, but so that the Company may, before such
expiry, make an offer or agreement which would or might require relevant
securities to be allotted after such expiry and the Directors may allot relevant
securities pursuant to any such offer or agreement as if such authority had not
expired

(ii)     the Directors be empowered pursuant to Section 95 of the Companies Act
1985 to allot equity securities (as defined in Section 94(2) of that Act) for
cash pursuant to the authority conferred by paragraph (i) above as if Section 89
(1) of that Act did not apply to any such allotment provided that such power is
limited to:

(a)      the issue for cash of up to L1,570,920 of 5 per cent Convertible Loan
         Stock 1999 and the allotment thereafter on conversion of such Loan
         Stock of equity securities and the issue to the subscribers of such
         Loan Stock of Warrants giving the right to subscribe in cash for a
         maximum aggregate nominal amount of L180,000 of additional equity
         securities

                                       28
<PAGE>

         and the allotment thereafter on exercise of such right of such equity
         securities; and

(b)      the allotment of equity securities in connection with an issue or
         offering by way of rights to ordinary shareholders where the equity
         securities respectively attributable to the interests of ordinary
         shareholders are proportionate (as nearly as may be practicable) to the
         respective numbers of ordinary shares held by or deemed to be held by
         them on the record date of such allotment, but subject to such
         exclusions or other arrangements as the Directors may deem necessary or
         expedient to deal with any fractional entitlements or any legal or
         practical problems under the laws of any overseas territory or the
         requirements of any regulatory authority or any stock exchange; and

(c)      the allotment (otherwise than pursuant to paragraph (ii) (a) or (b)
         above) of equity securities up to a maximum aggregate nominal amount of
         L170,000;

and is to expire at the conclusion of the Annual General Meeting of the Company
to be held in 1999 or on 31 July 1999, whichever is the earlier, save that the
Company may before such expiry make offers or agreements which would or might
require equity securities to be allotted after such expiry and the Directors may
allot equity securities pursuant to any such offer or agreement as if such power
had not expired.

                                     PART 2

ORDINARY RESOLUTION

That the issue by the Company to Mr Barry Mence of

(i)      L523,640 nominal of 5% Convertible Loan Stock 1999; and

(ii)     Share Warranties entitling him to subscribe for up to 300,000 ordinary
shares of 20p each in the Company for cash [TO BE INSERTED - BEING 80% OF THE

                                       29
<PAGE>

AVERAGE OF THE MID-MARKET PRICE FOR TRANSACTIONS IN THE COMPANY'S SHARES ON THE
ALTERNATIVE INVESTMENT MARKET OF THE LONDON STOCK EXCHANGE OVER THE FIVE WORKING
DAYS PRECEDING THE DATE OF THE AGREEMENT TO WHICH THIS DOCUMENT IS APPENDIX A]
per share at any time on or before 31 December 2000;

on the terms set out in the circular to shareholders in the Company sent with
the notice convening this meeting, be and are hereby approved.

                                       30

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