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                                                                   Exhibit 10.11

                        STRATEGIC RELATIONSHIP AGREEMENT


                  This STRATEGIC RELATIONSHIP AGREEMENT is made and entered into
as of February 28, 2000 (the "Agreement"), between El Sitio Uruguay S.A. ("ES"),
an Uruguayan corporation and wholly-owned subsidiary of El Sitio, Inc., a
British Virgin Islands corporation ("El Sitio"), and Sarandi Comunicaciones
S.A., an Uruguayan corporation ("GS").

                                    RECITALS

                  WHEREAS, El Sitio operates an Internet network providing
country-specific and regional content for Spanish- and Portuguese- speaking
audiences in Latin America and the United States, and ES operates a web site for
Uruguayan audiences;

                  WHEREAS, GS owns and operates several radio stations in
Uruguay, produces extensive proprietary news, commentary and entertainment, and
has extensive relationships with advertisers in Uruguay;

                  WHEREAS, ES and GS desire to maximize their mutual
opportunities and advantages by drawing upon their respective capabilities,
including, without limitation, El Sitio's Internet business growth potential,
ES's expertise in the development of web sites and GS's quality radio
programming, relationship with advertisers and established listener base; and

                  WHEREAS, to effect the foregoing, ES and GS desire to develop
a strategic relationship to lead in the convergence of Internet and traditional
media in Uruguay.

                  NOW THEREFORE, in consideration of the mutual promises and
agreements contained herein, ES and GS, intending to be legally bound, hereby
agree as follows:

                  1. Definitions. For purposes of this Agreement, the following
terms shall have the specified meanings:

                  "Agreement" shall have the meaning set forth in the preamble.

                  "Arbitration Request" shall have the meaning set forth in
Section 14(b).

                  "Bankruptcy Event" shall mean, as to any Person, (a) (i) the
         failure generally to pay its debts as they become due, (ii) the
         admission in writing of its inability to pay its debts generally as
         they become due, (iii) the commencement of a voluntary bankruptcy or
         insolvency case or proceeding, (iv) the consent to, or acquiescence in,
         the institution of a bankruptcy or an insolvency proceeding against it
         or the entry of a judgment, decree or order for relief against it in an
         involuntary case or proceeding, (v) the application for, consent to, or
         acquiescence in, the appointment or taking possession by a custodian or
         its business or of any part of its property, (vi) the making of a
         general assignment for the benefit of its creditors or (vii) taking any
         corporate action in furtherance of or to facilitate,

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         conditionally or otherwise, any of the foregoing; or (b) any judgment,
         decree or order of court or competent jurisdiction which (i) is for
         relief against such Person in an involuntary bankruptcy or insolvency
         case, (ii) appoints a custodian of such Person's business for any part
         of its property or (iii) orders the winding-up or liquidation of such
         Person's affairs; and such judgment, decree or order shall remain
         unstayed and in effect for a period of sixty (60) consecutive days; or
         any bankruptcy or insolvency petition or application shall be filed
         against such Person, or any bankruptcy case or insolvency proceeding
         shall be commenced against it and such petition, application, case or
         proceeding is not dismissed within ninety (90) days.

                  "Content" shall mean headlines, summaries, features, stories,
         materials, products, services, opinions, advice, advertisements,
         promotions, links, pointers, sounds, including live speeches and
         programming, and other information whether in digital, electronic,
         audio or print form.

                  "Damages" shall have the meaning set forth in Section 13(a).

                  "Design Standards" shall have the meaning set forth in Section
4(a).

                  "Disclosing Party" shall have the meaning set forth in Section
12(b).

                  "El Sitio" shall have the meaning set forth in the preamble.

                  "ES" shall have the meaning set forth in the preamble.

                  "ES Banner" shall mean a graphical element designed by ES that
         displays an ES Trademark and that, when clicked on by a user,
         automatically transfers the user to an ES Site.

                  "ES Programming Slot" shall have the meaning set forth in
Section 7(a).

                  "ES Program" shall have the meaning set forth in Section 7(a).

                  "ES Server" shall mean any Internet server owned or controlled
         by ES or its affiliates.

                  "ES Site" shall mean all Internet sites owned or controlled by
         ES or its affiliates, or to which ES or its affiliates license Content,
         including without limitation the ES Uruguay Site.

                  "ES Trademarks" shall mean the trademarks, service marks,
         trade names, domain names, logos, chimes and other indicators of origin
         pertaining to ES or its affiliates.

                  "ES Uruguay Site" shall mean the Internet site, currently
         located at URL:http://www.elsitio.com.uy, which is owned and maintained
         by ES for users in Uruguay and border areas.

                  "GS" shall have the meaning set forth in the preamble.

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                  "GS Sites" shall have the meaning set forth in Section 4.

                  "GS Stations" shall have the meaning set forth in Section 4.

                  "GS Trademarks" shall mean the trademarks, service marks,
         trade names, domain names, logos, chimes and other indicators of origin
         pertaining to GS.

                  "Guaranteed Minimums" shall have the meaning set forth in
Section 5(b).

                  "ICC Rules" shall have the meaning set forth in Section 14(b).

                  "Indemnified Party" shall have the meaning set forth in
Section 13(a).

                  "Indemnifying Party" shall have the meaning set forth in
Section 13(a).

                  "Intellectual Property" shall have the meaning set forth in
Section 10(a).

                  "Notice" shall have the meaning set forth in Section 13(b).

                  "Petitioner" shall have the meaning set forth in Section
14(b).

                  "Pledge Agreement" shall have the meaning set forth in Section
3(b).

                  "Pricing Schedule" shall have the meaning set forth in Section
6(b).

                  "Property Owner" shall have the meaning set forth in Section
10(a).

                  "Release Date" shall have the meaning set forth in Section
3(b).

                  "Respondent" shall have the meaning set forth in Section
14(b).

                  "Shares" shall have the meaning set forth in Section 3(a).

                  "Transfer" shall have the meaning set forth in Section 3(a).

                  2. Entry Into Strategic Relationship. ES and GS hereby enter
into a strategic relationship in accordance with the terms and conditions of
this Agreement for such purposes as are set forth or contemplated in this
Agreement, which purposes shall include the following:

                  (a) for ES, (i) to obtain access to quality Uruguayan news,
         sports and music programming for use and publication on its web sites
         in accordance with Section 8, (ii) to secure guaranteed advertising
         revenue sourced in Uruguay in accordance with Section 5, (iii) to
         obtain access to advertising and programming time on GS's radio
         stations in accordance with Sections 6 and 7, and (iv) to obtain an
         option to purchase a radio station of GS and other related rights in
         accordance with Section 9; and

                  (b) for GS, (i) to invest in Internet growth in Latin America
         through equity participation in El Sitio in accordance with Section 3,
         and (ii) to benefit from ES's

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         expertise in the development of its own web sites complimentary to its
         radio programming in accordance with Section 4.

                  3.       Share Purchase and Pledge.

                  (a) Share Transfer. ES hereby agrees to sell, transfer, assign
and deliver, or to cause El Sitio to issue, sell, allot and deliver,
("Transfer") on the date hereof or promptly thereafter, to GS, and GS agrees to
purchase and accept, sixty-two thousand and five hundred (62,500) common shares,
US$0.01 par value, of El Sitio (the "Shares"), promptly upon the execution of
this Agreement, in exchange for the obligations herein undertaken by GS, the
adequacy of which consideration is hereby acknowledged. ES shall carry out the
Transfer of the Shares by causing the delivery to the GS of 10 share
certificates each representing 6,250 Shares and made out in the name of "Sarandi
Comunicaciones S.A.".

                  (b) Share Pledge. GS hereby agrees to pledge all of the
acquired Shares as collateral security for the prompt and complete payment and
performance when due of its obligations under this Agreement and to enter into
the Pledge Agreement attached as Exhibit A hereto (the "Pledge Agreement")
promptly upon the execution of this Agreement. The execution and delivery of the
Pledge Agreement by GS in favor of ES shall be a condition to the Transfer of
the Shares. In accordance with the Pledge Agreement, GS shall, simultaneously
upon receipt of the Shares pursuant to Section 3(a), deliver to ES all
certificates evidencing all of the Shares acquired by it together with an
undated stock power covering each certificate, duly executed by GS with, if so
requested by ES, signature guaranteed. It is understood that, in accordance with
the Pledge Agreement, unless a breach of this Agreement shall have occurred and
be continuing, on March 31, June 30, September 30 and December 31 (or, if not on
a business day, the next succeeding business day) of each year until and
including June 30, 2002 (or, if not on a business day, the next succeeding
business day), one share certificate and the Shares represented thereby shall be
released from the pledge and delivered to GS (such date of release, the "Release
Date"). After June 30, 2002, unless a breach of this Agreement shall have
occurred and be continuing, no Shares shall be subject to the pledge or in any
way subject to forfeiture pursuant to the Pledge Agreement.

                  (c) Lock-up Agreement. GS agrees that it will not, until 365
days after the Release Date for any particular share certificate, directly or
indirectly, (a) offer for sale, sell or contract to sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition or purchase by any person at any
time in the future of) any Shares or other equity securities of ES or any
securities convertible into or exchangeable for any Shares or other equity
securities, or sell or grant options, rights or warrants with respect to any
Shares or other equity securities, or (b) enter into any swap or other derivates
transaction that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership whether any such transaction described in clause
(a) or (b) above is to be settled by delivery of any Shares or other securities,
in cash or otherwise, in each case without the prior written consent of ES.

                  4. Web Site Development and Hosting. ES hereby agrees to
design and develop a web site (the "GS Sites") for each of the following radio
stations owned by GS: Sarandi AM 690; Sarandi Sport AM 890; and FM 91.9 Sarandi
Satelital (collectively, the "GS Stations"). The services to be rendered by ES
and the related obligations of GS under this Section 4 are the following:

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                  (a) Design of Web Sites. ES shall design each GS Site in such
a manner that each GS Site (i) retains the "look and feel" of the existing web
sites of the GS Stations (or of a particular GS Station), and (ii) meets the
standards and practices of ES for web sites of similar characteristics as set
forth in the Design Standards to be agreed upon by the parties within 15 days of
the date hereof (the "Design Standards"). Each GS Site shall be accessible to
users of the Internet both directly or through one or more Universal Resource
Locators designated by GS or through the ES portals. In no event shall ES be
required by GS to create custom features for the GS Sites other than those set
forth in the Design Standards; provided, however, that GS shall have the right
to request additional features, such as audio streaming, for additional payments
to ES that shall be no higher than the lowest price for which such features are
offered by ES to other customers in Uruguay for web design and hosting at that
time. Notwithstanding the foregoing, ES hereby agrees to provide free of charge
audio streaming from two of the GS Stations to the GS Sites with a maximum
capacity at any one time of 50 users per each such GS Station. GS hereby agrees
that all web site development or hosting related services or features required
by GS Sites shall be purchased exclusively from ES. During the term of this
Agreement, ES shall have the right to modify to Design Standards in accordance
with modifications in its standards and practices for web sites of similar
characteristics.

                  (b) Hosting, Housing and Maintenance. The GS Sites shall be
hosted on ES Servers, and ES shall use commercially reasonable efforts to
provide the level of server capacity necessary for their effective operation. ES
shall use commercially reasonable efforts to assure that access to the GS Sites
shall be available twenty-four (24) hours a day, seven (7) days a week. At its
sole discretion and from time to time, ES shall have the right to carry out
maintenance, make changes or alterations to the technology used in the GS Sites
or in the ES Servers, including such maintenance, changes or alterations that
may result in temporary lack of Internet access to the GS Sites. All visitors to
the GS Sites shall be deemed and shall be counted as users of and visitors to ES
Sites in addition to the GS Sites.

                  (c) Development of Content. GS shall be responsible for
developing all Content (except for any ES Banners and any third-party banners or
other advertising procured by ES in accordance with Section 4(e)) displayed on
the GS Sites, which Content shall be in good taste and in accordance with all
applicable laws, rules and regulations. GS shall deliver all Content to ES on a
daily basis in digital format in a manner to be mutually agreed by the parties;
provided, however, that GS shall bear all costs for the delivery of such
Content, including any costs associated with the real-time or delayed delivery
of such Content to ES via telephone, cable, microwave, satellite, Internet or
other such means of transmission. All Content shall be delivered to ES at the
location or locations specified by ES in its sole discretion. The Content
delivered to ES, in or by any means whatsoever under this Section 4(c) and
Section 8(a), shall not contain any viruses, worms, Trojan horses or other
disabling devices or internal controls, and GS shall use the then current
version of a reputable antivirus software to test for compliance with this
warranty prior to the use or provision of any third-party hardware, software or
other technology in the digital preparation of the Content.

                  (d) Timing and Coordination. ES shall use commercially
reasonable efforts to have the GS Sites operational by March 31, 2000. Each GS
Site shall be pre-approved by GS prior to such GS Site's launching date (which
approval shall not be unreasonably withheld). ES shall respond to GS's requests
for services, upgrades and modifications to the GS Sites in a manner consistent
with its standard operating practices for customers for web design and hosting.
GS shall be required to pay for any services, upgrades or modifications in
addition to such

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services, upgrades or modifications as are contemplated in the Design Standards.
In order to coordinate the development and maintenance of the GS Sites, each of
ES and GS shall designate a program manager, who shall serve as the points of
contact for all matters relating to the development and hosting of the GS Sites.

                  (e) Advertising on GS Sites. GS shall own all rights, title
and interest in and to the GS Sites and the Content thereon (except for any ES
Banners, any ES proprietary design features or programming and any third-party
banners or other advertising procured by ES in accordance with this Section
4(e)). As partial consideration for the design, hosting and maintenance of the
GS Sites, GS hereby grants ES the non-exclusive right to use or sell, and
receive all revenues or other benefits from the sale of, banners or other
advertising to be displayed on the GS Sites. Notwithstanding the foregoing, all
advertising on the GS Sites shall be subject to GS's prior approval, which
approval shall not be unreasonably withheld or delayed.

                  (f) ES Advertising on GS Sites. Each GS Site shall contain ES
Banners, with hyper-links to the ES Sites, displayed continuously and
prominently above the fold on each main screen and subscreen. In no case shall
any GS Site include any advertising of any nature for any entity reasonably
construed to be in competition with ES or its affiliates.

                  (g) Limitation on ES Obligations. Unless specifically set
forth in this Section 4, ES shall have no obligations to GS regarding the design
and hosting of the GS Sites. GS shall be responsible for obtaining all licenses,
if any, and satisfying all other legal requirements (including costs associated
therewith) necessary to operate the GS Sites.

                  5.       Guaranteed Advertising Revenues.

                  (a) Appointment as Non-Exclusive Sales Agent. Subject to
compliance with its obligations under this Section 5 and Section 10, during the
term of this Agreement, GS shall act as a non-exclusive sales agent in the
Republic of Uruguay for advertising on the ES Uruguay Site. ES shall advise GS,
on a periodic basis, of its then-current rate cards setting forth the number,
characteristics, pricing and other conditions of advertising spots available for
sale on the ES Uruguay Site; provided, however, that the rates to be charged by
ES for advertising procured by GS shall be substantially similar to the rates
charged in the preceding month to similarly-situated cash-paying clients for
advertising spots of similar characteristics. All such sales shall be subject to
the standard terms and conditions for advertising on the ES Sites. GS shall be
entitled to offer discounts on the pricing terms offered in the rate cards to
the extent offered by ES to a similarly situated advertiser for a similar sized
purchase of advertising. GS shall not contract with advertisers that are
reasonably objectionable to ES, including, without limitation, advertisements
for cigarettes, guns or pornography. ES shall have, in its sole discretion, the
right to reject advertising sold by GS if the advertiser or the substance of the
advertisement is inconsistent with ES's corporate image. Advertising spots shall
be available for sale on a first come first serve basis.

                  (b) Guaranteed Advertising Revenue. Notwithstanding any other
provision of this Agreement, GS hereby unconditionally and irrevocably
guarantees Uruguayan-sourced revenues (including sales tax), net of any
commissions and collection costs, from advertising on the ES Uruguay Site
procured solely by GS for the benefit of ES in the amount of (i) Three Hundred
Thousand U.S. Dollars (U.S.$300,000) in the year 2000, (ii) Three Hundred
Thousand U.S. Dollars (U.S.$300,000) in the year 2001 and (iii) One Hundred and
Fifty Thousand U.S.

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Dollars (U.S.$150,000) in the first six months of the year 2002 (the "Guaranteed
Minimum"). GS agrees that it shall pay the Guaranteed Minimum advertising
revenues promptly upon receipt but no later than on a quarterly basis, such that
(i) in the year 2000, no less than one-third of the Guaranteed Minimum for such
year shall be payable during each three-month period ended June 30, September 30
and December 31 of such year, (ii) in the year 2001, no less than one-fourth of
the Guaranteed Minimum for such year shall be payable during each three-month
period ended March 31, June 30, September 30 and December 31 of such year, and
(iii) in the six-month period during the year 2002, no less than one-half of the
Guaranteed Minimum for such six-month period shall be payable during each three
month period ended March 31 and June 30 of such six-month period; provided, that
if in the preceding quarter the amount of Uruguayan-sourced advertising revenues
generated by GS on behalf of the ES Uruguay Site exceeded the Guaranteed Minimum
for such calendar quarter, GS may, at its option, elect to designate such excess
above the Guaranteed Minimum as amounts paid toward the Guaranteed Minimum for
subsequent periods, in which event, the amount payable in such subsequent period
as may be designated shall be reduced by the amount of such excess.

                  (c) Financial Guarantee. GS hereby unconditionally and
irrevocably guarantees to ES the due prompt and complete payment in full when
due of any amount by which the Uruguayan-sourced advertising revenues generated
by GS on behalf of the ES Uruguay Site is less than the Guaranteed Minimum
advertising revenues for any calendar quarter procured from third parties by GS
and actually paid to the ES Uruguay Site in such calendar quarter or otherwise
attributed to such calendar quarter. ES shall not bear the risk as to the
collectibility of advertising sold on its behalf by GS. This guarantee of
payment, performance and compliance is in no way conditioned or contingent upon
any attempt by ES to collect from or enforce performance or compliance by ES
with any other condition whatsoever. If any accounts receivable are not paid
during a calendar quarter in which they were scheduled for payment, ES may
demand payment from GS pursuant to this paragraph. Upon receipt of payment from
GS regarding an overdue account receivable, ES shall assign to GS such account
receivable up to the amount of the payment received. No amounts of advertising
revenues shall be deemed procured by GS unless and until payment of such
revenues is actually received by ES.

                  (d) Sales Commission. As consideration for acting as sales
agent in accordance with Section 5(a), GS shall be entitled to receive 35% of
all revenues from advertising, net of any commissions and collection costs,
procured by GS and paid to ES relating to the ES Uruguay Site in any calendar
quarter in excess of the Guaranteed Minimum unless, such revenues are otherwise
allocated toward the Guaranteed Minimum in subsequent calendar quarters (in
which event no sales commission shall be payable).

                  (e) Billing Procedures. GS shall advise ES promptly upon
entering into an agreement to sell advertising on the ES Uruguay Site together
with the billing information and the proposed billing dates. ES shall itself
issue invoices for all such advertising and deliver to GS on a monthly basis a
copy of all invoices and other agreements related to advertising on the ES
Uruguay Site procured by GS. All payments for advertising on the ES Uruguay Site
shall be payable directly to ES. ES shall notify GS of any invoices on
advertising procured by GS the payment of which is delayed for more than one
month.

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                  6.       Advertising Time on GS Radio Stations.

                  (a) Advertising Time. For no additional cost and as partial
consideration for the Shares and the obligations undertaken by ES under this
Agreement, GS shall guarantee to ES a total of Four Hundred and Fifty Thousand
U.S. Dollars (U.S.$450,000) of advertising time on its radio stations as
follows: (i) in the year 2000, Fifty Thousand U.S. Dollars (U.S.$50,000) in each
three-month period ended June 30, September 30 and December 31 of such year;
(ii) in the year 2001, Thirty-Seven Thousand and Five Hundred U.S. Dollars
(U.S.$37,500) in each quarter ended March 31, June 30, September 30 and December
31 of such year; and (iii) in the year 2002, Seventy-Five Thousand U.S. Dollars
(U.S.$75,000) in each three-month period ended March 31 and June 30 of such
year. All such advertising time shall be subject to the standard terms and
conditions for advertising on GS Radio Stations; provided, that (i) ES shall
have access to ratings, audience delivery, demographic and other information in
control of GS and (ii) no advertiser shall have more favorable terms, control
and direction over the frequency and other timing or the placement adjacent to
or in conjunction with programming of its advertising, or more favorable choice
of time spots, than ES.

                  (b) Pricing of Advertising Time. Advertising time provided by
GS to ES in accordance with Section 6(a) shall be regulated by the Pricing
Schedule to be agreed upon by the parties within 15 days of the date hereof and
revised as required by market conditions; provided, however, that in no event
shall the cost of advertising of ES be greater than the lowest rates charged as
of the date hereof to similarly-situated cash-paying clients of GS for
advertising time of similar characteristics.

                  (c) Scheduling of Advertising Time. ES shall have the right to
reserve advertising spots on a first-come, first-served basis. GS shall have the
right to preempt or substitute the broadcast of any ES advertisement for
programs of public importance (and in no event solely for another advertiser);
provided, that in such event, GS shall provide ES with alternative advertising
times of at least equivalent value and desirability. Advertising time to be
provided by GS to ES shall be reduced in accordance with the advertising time
actually used by ES. In the event that ES does not use all the advertising times
to which it is entitled in a given year under this Section 6(c), GS shall
provide ES with additional advertising times of an equivalent value (measured by
the same rates) in the following year, which time shall be subject to the
approval of ES. Any co-branding or reselling of advertising times by ES (unless
with or to one of its affiliates) shall be subject to the prior approval of GS,
which approval shall not be unreasonably withheld or delayed.

                  7.       Programming Time on GS Radio Stations.

                  (a) Programming Services. GS hereby grants to ES the right to
one hour per day (including weekends and holidays) of continuous prime-time
over-the-air programming time (the "ES Programming Slot") for a five-year
period, commencing on the date three months from the date hereof and ending on
the fifth anniversary thereof, on one of the GS Stations as selected by ES. The
ES Programming Slot may be filled, at ES's sole option and entire discretion, by
original programming produced in accordance with Section 7(b) or with other
programming contracted by ES (the "ES Program"). The ES Programming Slot shall
be carried by the GS Station of ES's choice, at its sole option and entire
discretion. ES shall, from time to time, have the right to modify its (i) chosen
time slot or (ii) the GS station carrying the ES Programming Slot by written
notice to GS delivered no later than 30 days in advance of broadcasting. For the

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purposes of this Section 7(a), "prime-time" shall be understood as programming
between the hours of 9:00 p.m. and midnight.

                  (b) Provision of Content for Programming. Except when ES
chooses in accordance with Section 7(a) to fill the ES Programming Slot with
programming contracted by ES, GS shall produce the content of the ES Programs in
accordance with the instructions and material provided by ES. ES hereby agrees
to reimburse GS, within 30 days of receipt of an invoice from GS, for 50% of all
reasonable pre-approved production costs actually incurred by GS in connection
with its production of the content of ES Programs in accordance with this
Section 7(b) and satisfactorily evidenced in such invoice; provided, however,
that in no case shall ES be liable for any overhead costs related to the
maintenance of any GS Station or equipment pertaining to GS. Notwithstanding the
foregoing, the ES Programs shall be subject to ES's prior approval and editorial
direction. GS shall use reasonable care to ensure that all ES Programs are in
good taste and in accordance with all applicable laws, rules and regulations. GS
shall have no right to edit or alter the content of the ES Programs without the
prior approval of ES.

                  (c) Right to Revenues. Each party shall have the right to sell
advertising during the ES Programming Slot and each party shall have the right
to receive 50% of revenues from any sale (whether by ES, GS or otherwise) of
advertising during the ES Programming Slot, net of customary sales commissions.
Each party hereby agrees to use its commercially reasonable best efforts to sell
advertising during the ES Programming Slot. Each party hereby agrees to provide
the other party immediate notice of any sale of advertising time during the ES
Programming Slot and a copy of the invoice in connection with such sale within
15 days of such sale but in any event at least prior to broadcasting.
Notwithstanding the foregoing, all advertising during the ES Programming Slot
shall be subject to ES's prior approval, and GS shall use reasonable care to
ensure that all advertising during the ES Programming Slot is in good taste and
in accordance with all applicable laws, rules and regulations. Each party hereby
agrees not to sell, without the prior consent of the other party, advertising
time during the ES Programming Slot at a rate lower than the average rate
charged by GS for advertising time of similar characteristics. ES shall have the
sole right to sell, and receive all revenues from the sale of, its rights
hereunder to the ES Programming Slot, subject to the prior approval of GS, which
approval shall not to be unreasonably withheld or delayed.

                  (d) Limitation of Obligations. GS shall retain full authority
and power over each GS Station and their operation, and shall be responsible for
all costs associated therewith. GS shall assume all costs related to producing
and broadcasting the ES Programs in the same manner as GS produces and
broadcasts its own programming of similar characteristics. The parties expressly
understand and agree that no provision in this Agreement will be considered to
reduce or interfere with GS's absolute responsibility under applicable laws,
rules and regulations to supervise and control the GS Stations. GS shall have
the right to preempt or substitute the broadcast of any ES Program for programs
of public importance, provided, that in such event, GS shall provide ES with
over-the-air programming time of equivalent characteristics, which time shall be
subject to the approval of ES.

                  (e) Delivery and Care of Programs. ES shall use its
commercially reasonable best efforts to make available transmission tapes of the
ES Programs in sufficient time for their broadcasting as scheduled. Unless
otherwise agreed, any such transmission tapes and other materials supplied by ES
to GS for broadcasting shall be and shall remain at all times the exclusive
property of ES and, while in the possession or responsibility of GS, any loss or
damage

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shall be the sole risk of GS. GS shall undertake all necessary actions to ensure
the security of such tapes and materials.

                  8.       Content and Staff.

                  (a) License to Use of Content. GS hereby grants to ES an
exclusive world-wide, royalty free license (GS shall be responsible for all
royalty payments required, if any) to distribute, perform, display, reproduce,
transmit, retransmit or otherwise disseminate on the Internet any and all
proprietary Content broadcasted on the GS Stations or created or otherwise
developed by GS; provided, however, that GS shall have the right to use such
proprietary Content on the GS Sites. Subject to ES's compliance with its
obligations set forth in Section 10, GS shall grant ES the exclusive license to
distribute, perform, display, reproduce, transmit, retransmit or otherwise
disseminate the GS Trademark on the ES Uruguay Site in association with the
transmission and display of such Content (and Content developed by ES in
accordance with Section 8(b)), provided that such transmission and display shall
be in good taste and in accordance with applicable laws, rules and regulations.
GS shall transmit the Content to ES on a daily basis in accordance with Section
4(c) and this Section 8(a). ES shall have the right to alter or modify the
Content upon its receipt to adapt it to its intended use. ES may elect, at its
sole option, to credit, or not to credit, to GS the use of Content sourced from
GS.

                  (b) Right to Access to Staff. GS shall grant ES free access
during business hours to all GS staff involved in the production of Content for
the GS Radio Stations solely in order for ES to develop, produce and display its
own Content on the ES Uruguay Site. In addition, GS shall grant to ES free
access to such individual radio personalities and journalists as ES may identify
to assist in the preparation of specific Content for ES or to participate in
chats with users of ES Sites, including the ES Uruguay Site. Such access shall
be limited to an aggregate of twelve hours per week from the date hereof to the
first anniversary thereof, and shall increase by four hours per week each
subsequent year. GS shall use its best efforts to cause such GS staff to use its
best efforts to provide the services requested by ES in accordance with this
Section 8(b).

                  9.       Options to Rename and Purchase Radio Station.

                  (a) Option to Rename. GS hereby irrevocably grants to ES a
five year option to change, on any date specified by ES by at least one month
prior written notice to GS, the station name and identification of FM 91.9 from
"Sarandi Satelital" to a station name and identification related to the ES
Trademarks selected by ES such as "El Sitio FM". Once such option is exercised,
the use of the station name selected by ES is irrevocable and indefinite and is
not tied to the term of this Agreement. From the time of termination of this
Agreement pursuant to Section 15 hereof, in consideration for the use of an ES
Trademark, GS shall pay monthly to ES 3% of all revenues from such radio
station, net of any commissions and collection costs.

                  (b) Protection of Trademark. If ES should exercise its option
to rename Sarandi Satelital, GS's programming on such radio station shall be
subject to the ongoing satisfaction of ES that the Content of the programming is
consistent with the quality associated with the ES Trademarks; provided, that
programming substantially similar to the programming broadcasted on such radio
station in the three months preceding the date hereof shall be deemed to conform
to the quality associated with the ES Trademarks. If ES reasonably believes that
any of the programming broadcasted on such radio station does not meet the high
quality associated with

                                       10
<PAGE>   11
the ES Trademarks, ES shall so inform GS and GS shall be afforded a reasonable
opportunity to make adequate changes to do so. In the event that after such
opportunity, ES is still not satisfied with the programming broadcasted on such
radio station, upon written notice by ES, GS shall, and shall cause all GS staff
to, promptly stop using any station name and identification related to an ES
Trademark in association with such radio station and shall within 30 days pay ES
the amount of U.S.$250,000 as liquidated damages.

                  (c) Option to Purchase. GS hereby irrevocably grants directly
or indirectly to ES the option to purchase, exercisable during the twenty-four
months following the date hereof, on any date specified by ES upon at least 15
days prior written notice to GS (but no later than 14 months from the date
hereof), all of GS's right, title and interest in FM 91.9 Sarandi Satelital and
assets related thereto free and clear of any lien, mortgage, or other
encumbrance for an amount equal to One Million U.S. Dollars (U.S.$1,000,000),
which amount shall, at the sole option of ES, be payable in cash, ES common
shares (based on the market price on such date) or a combination thereof. Such
purchase may be made either by ES directly or by any third party designated by
ES at its sole discretion. Such purchase shall be free and clear of all debts,
adverse claims, liabilities and obligations, direct, indirect, absolute or
contingent of GS, whether accrued, vested or otherwise, whether known or unknown
and whether or not actually reflected, or required by U.S. generally accepted
accounting principles to be reflected, in GS's balance sheets or other books and
records.

                  10.      Intellectual Property.

                  (a) Extent of Intellectual Property Rights. Except as and to
the extent, if any, specifically set forth in this Agreement, neither ES nor GS
shall have the right to use such other party's Intellectual Property (as
hereinafter defined). Except as specifically set forth in this Agreement, each
of ES and GS acknowledges that (i) the other party or its affiliates (the
"Property Owner") is the owner or has the rights to use, such Property Owner's
patents, copyrights, trademarks, licences, service marks, initials, trade
secrets, proprietary knowledge, logos and corporate trade names or identity
(whether registered, applied for, or subsisting under the common law and/or the
laws of any jurisdiction) (collectively "Intellectual Property") and (ii) it is
not acquiring any right, title or interest in or to the Property Owner's
Intellectual Property as a result of this Agreement.

                  (b) Value of Intellectual Property. Each party acknowledges
the Intellectual Property of the other party has come to symbolize the goodwill
and reputation that such other party has built as a provider of high quality
goods and services. Each party agrees that, in its use of the other party's
Intellectual Property (which in any case shall be solely as specifically set
forth in this Agreement), it will maintain the goodwill symbolized by, and avoid
damage to, such other party's Intellectual Property.

                  11.      Representations and Warranties.

                  (a) Mutual Representations and Warranties. Each of ES and GS
hereby represents and warrants to each other party that:

                  (i) It has the full corporate right, power and authority to
         execute, deliver and perform this Agreement and to consummate the
         transactions contemplated hereby;


                                       11
<PAGE>   12
                  (ii) The execution, delivery and performance of this Agreement
         and the consummation of the transactions contemplated hereby have been
         duly authorized by all necessary corporate action;

                  (iii) This Agreement has been duly executed and delivered by
         an authorized officer, and is a legal, valid and binding obligation
         enforceable against it in accordance with its terms, except as
         enforceability may be limited by bankruptcy, insolvency,
         reorganization, moratorium and other similar laws relating to or
         affecting creditors' rights generally, general equitable principles
         (whether considered in a proceeding in equity or at law), and an
         implied covenant of good faith and fair dealing;

                  (iv) The execution, delivery and performance of this Agreement
         shall not constitute a breach or default under any contract or
         agreement to which it is a party or by which it is bound or otherwise
         violate the rights of any third party;

                  (v) Except pursuant to any exercise of the options set forth
         in Section 9, no consent, approval or authorization of or from any
         governmental entity or any other corporation, person or other entity
         not a party to this Agreement, whether prescribed by law, regulation,
         contract or agreement, is required for its execution, delivery and
         performance of this Agreement or consummation of the transactions
         contemplated hereby; and

                  (vi) No party will be required to make any kind of payment or
         deliver any other consideration to any third person for or in respect
         of another party's acquisition, exercise or exploitation of rights
         granted (or purported to be granted) hereunder to it.

                  (vii) It is the legal holder of all licenses and other
         authorizations necessary for the operation of each of its radio
         stations, Internet sites or Internet severs (if any) as presently
         conducted.

                  (b) Representations, Warranties and Covenants of GS. GS hereby
represents and warrants to ES that:

                  (i) GS is the owner of or otherwise has the right to
         reproduce, prepare derivative works of, distribute, perform, transmit,
         retransmit or display, as the case may be, the Content; and

                  (ii) the Content created or acquired by GS shall not infringe
         upon any third party copyright, trademark or other proprietary right.

                  12. Confidentiality. (a) Unless required by law, each of ES
and GS shall maintain in confidence, and not disclose, divulge or otherwise
communicate to any other person, any proprietary information or materials about,
or held by, the other party or its affiliates which are communicated to, learned
by, developed or otherwise acquired by the party during the term of this
Agreement, or use such information for any purpose except to carry out the terms
of this Agreement or in a manner consistent with the terms of this Agreement
without the prior written consent of the other party. Each of ES and GS shall
exercise reasonable precautions to prevent

                                       12
<PAGE>   13
and restrain the unauthorized disclosure of such confidential information about
the other party by any of its directors, officers, employees, consultants,
subcontractors, agents or affiliates.

                  (b) A party may disclose confidential information (the
"Disclosing Party") of the other party to the extent required by a court or
other governmental authority, provided that: (a) such party gives the other
party notice of the disclosure as soon as possible; (b) the Disclosing Party
uses reasonable efforts to resist disclosing the confidential information; (c)
the Disclosing Party cooperates with the other party on request to obtain a
protective order or otherwise limit the disclosure; and (d) as soon as
reasonably possible, the Disclosing Party provides a letter from its counsel
confirming that the confidential information is in fact required to be
disclosed. Notwithstanding the foregoing, the Disclosing Party may use for any
purpose or disclose any material or information that it can demonstrate (i) is
or becomes publicly known through no fault of the Disclosing Party; (ii) is
developed independently by the Disclosing Party; (iii) is known by the
Disclosing Party when disclosed by the other party if the Disclosing Party does
not then have a duty to maintain its confidentiality; or (iv) is rightfully
obtained by the Disclosing Party from a third party not obligated to preserve
its confidentiality who did not receive the material or information directly or
indirectly from the other party.

                  (c) The parties shall consult with each other prior to issuing
any public announcement or statement with respect to this Agreement or the
transaction contemplated hereby and that the initial press release shall be a
joint press release.

                  13. Indemnification. (a) Each party (an "Indemnifying Party")
hereby indemnifies and agrees to hold the other party, and their respective
directors, officers, employees, agents and affiliates (each such person, an
"Indemnified Party") harmless from and against all demands, claims, obligations,
actions or causes of action, charges, assessments, losses, damages, liabilities,
costs and reasonable expenses, including reasonable attorneys' fees
(collectively, "Damages"), asserted against, imposed upon or incurred by the
Indemnified Party arising out of or in connection with any bad faith, willful
misconduct, gross negligence or knowing violation of law, actual or alleged
infringement of any Intellectual Property right of a third party or breach of
any agreement or other contractual obligation that is caused by the Indemnifying
Party or any of its directors, officers, employees, agents or affiliates under
or in connection with this Agreement.

                  (b) In the event that any person shall incur or suffer any
Damages in respect of which indemnification may be sought hereunder, such
Indemnified Party may assert a claim for indemnification by written notice (the
"Notice") to the Indemnifying Party, stating the amount of Damages, if known,
and the nature and basis of such claim. In the case of Damages arising or which
may arise by reason of any third-party claim, promptly after receipt by an
Indemnified Party of written notice of the assertion or the commencement of any
action with respect to any matter in respect of which indemnification may be
sought hereunder, the Indemnified Party shall give Notice to the Indemnifying
Party and shall thereafter keep the Indemnifying Party reasonably informed with
respect thereto, provided that failure of the Indemnified Party to give the
Indemnifying Party prompt notice as provided herein shall not relieve the
Indemnifying Party of any of its obligations hereunder, except to the extent
that the Indemnifying Party is materially prejudiced by such failure. In case
any such action is brought against any Indemnified Party, the Indemnifying Party
shall be entitled to assume the defense thereof with counsel reasonably
satisfactory to the Indemnified Party, by written notice of its intention to do
so to the Indemnified Party within 30 days after receipt of the Notice. If the
Indemnifying Party shall assume the

                                       13
<PAGE>   14
defense of such action, it shall not settle such action without the prior
written consent of the Indemnified Party, which consent shall not be
unreasonably withheld, provided that an Indemnified Party shall not be required
to consent to any settlement that (i) does not include as an unconditional term
thereof the giving by the claimant or the plaintiff of a release of the
Indemnified Party from all liability with respect to such action or (ii)
involves the imposition of equitable remedies or the imposition of any material
obligations on such Indemnified Party other than financial obligations for which
such Indemnified Party will be indemnified hereunder. As long as the
Indemnifying Party is contesting any such action in good faith and on a timely
basis, the Indemnified Party shall not pay or settle any claims brought under
such action. After notice from the Indemnifying Party to the Indemnified Party
of its election to assume the defense of such claim or action, the Indemnifying
Party shall not be liable to the Indemnified Party under this Section 13(b) for
any legal or other expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the Indemnified Party shall be permitted
to participate in the defense of such action and to employ counsel at its own
expense; provided further, however, that if the defendants in any action shall
include both an Indemnifying Party and any Indemnified Party and such
Indemnified Party shall have reasonably concluded that counsel selected by
Indemnifying Party has or could have a conflict of interest because of the
availability of different or additional defenses to such Indemnified Party, such
Indemnified Party shall have the right to select separate counsel to participate
in the defense of such action on its behalf, at the expense of the Indemnifying
Party; provided that the Indemnifying Party shall not be obligated to pay the
reasonable expenses of more than one separate counsel for all Indemnified
Parties, taken together.

                  If the Indemnifying Party shall fail to notify the Indemnified
Party of its desire to assume the defense of any such action within the
prescribed period of time, or shall notify the Indemnified Party that it will
not assume the defense of any such action, then the Indemnified Party may assume
the defense of any such action, in which event it may do so acting in good faith
in such manner as it may deem appropriate, and the Indemnifying Party shall be
bound by any determination made in such action; provided, however, that the
Indemnified Party shall not be permitted to settle such action without the
consent of the Indemnifying Party, which consent shall not be reasonably
withheld. No such determination or settlement shall affect the right of the
Indemnifying Party to dispute the Indemnified Party's claim for indemnification.
The Indemnifying Party shall be permitted to join in the defense of such action
and to employ counsel at its own expense.

                  Amounts payable by the Indemnifying Party to the Indemnified
Party in respect of any Damages for which such party is entitled to
indemnification hereunder shall be (i) payable by the Indemnifying Party as
incurred by the Indemnified Party and (ii) limited in amount in accordance with
Section 18 hereof.

                  In the event of any dispute between the parties regarding the
applicability of the indemnification provisions of this Agreement, the
prevailing party shall be entitled to recover all Damages incurred by such party
arising out of, resulting from or relating to such dispute.

                  14. Dispute Resolution. (a) In the event of any unresolved
issue, dispute, legal disagreement or claim arising out of or relating to this
Agreement (including, without limitation, with respect to the interpretation of
this Agreement or the breach, termination or invalidity hereof), the chief
executive officers of ES and GS shall use their reasonable best efforts to


                                       14
<PAGE>   15
address or resolve any such issue, dispute, legal disagreement or claim within a
period of 30 days after notice shall have been provided by ES or GS, as the case
may be, to the other party.

                  (b) In the event that any such unresolved issue, dispute,
legal disagreement or claim shall not be addressed or resolved by the oversight
committee and/or the corporate-level committee within the 30-day period set
forth in Section 14(a), then ES and GS shall submit to arbitration under this
Section 14(b), subject to the final sentence of this Section 14(b). Either party
may, in such circumstances, notify the other party that it wishes to commence an
arbitration proceeding under this Section 14(b) (an "Arbitration Request"). In
any arbitration proceeding, the party commencing the arbitration (the
"Petitioner") shall include in the Arbitration Request the name of a qualified
arbitrator designated by it. The party with whom the Petitioner has its dispute
(the "Respondent") shall within 30 days after the date of the Arbitration
Request designate a second arbitrator by notice to the Petitioner, but if it
shall fail to do so within such period the Petitioner may designate an
arbitrator on Respondent's behalf. The arbitrators chosen by the Petitioner and
the Respondent shall attempt to agree upon a third arbitrator, but if they are
unable to do so within 15 days after the designation of the second arbitrator,
the first arbitrator and the second arbitrator shall each, within 20 days after
the designation of the second arbitrator, suggest a list of four candidates for
the third arbitrator. If within 30 days after the designation of the second
arbitrator, the parties shall not have agreed on a third arbitrator, then either
arbitrator thereafter may apply to the International Chamber of Commerce (the
"ICC") for the selection of a third arbitrator in accordance with the ICC's
Rules of Conciliation and Arbitration (the "ICC Rules"). The arbitration panel
so selected shall have full power to decide any dispute referred to in this
Section 14(b). The parties irrevocably submit to the personal jurisdiction of
the ICC. The arbitration proceedings shall be held in Buenos Aires and shall be
conducted in the Spanish language. Any arbitration commenced pursuant to this
Section 14(b) shall be conducted in accordance with the ICC Rules. The decision
of the arbitration panel shall be final and binding upon the parties and may be
confirmed in any court of competent jurisdiction, and the costs and expenses of
such arbitration shall be borne equally by the Petitioner and the Respondent.
This Section 14(b) shall in no way affect the right of any party to such interim
relief, and only such relief, to maintain the status quo in aid of the
arbitration in any court of competent jurisdiction.

                  15.      Term; Termination.

                  (a) Termination. This Agreement will terminate upon the
earlier to occur of the following:

                           (i) upon written notification of ES, in the event
         that (A) there shall have occurred a material breach by GS of any of
         its obligations under this Agreement that was not cured during any
         applicable cure period or was not susceptible to cure or (B) any
         Bankruptcy Event affecting GS shall have occurred;

                           (ii) upon written notification of GS, in the event
         that (A) there shall have occurred a material breach by ES of any of
         its obligations under this Agreement that was not cured during any
         applicable cure period or was not susceptible to cure or (B) any
         Bankruptcy Event affecting ES shall have occurred;

                           (iii) five years and three months from the date
         hereof, unless extended in writing by the parties hereto; or


                                       15
<PAGE>   16
                           (iv)     by the mutual written consent of ES and GS.

                  (b) Termination for Breach. Any party may terminate this
Agreement by written notice to each other party if a party materially breaches
any provision of this Agreement and fails to cure such breach within thirty (30)
days after receiving written notice of the breach from a non- breaching party.
Notwithstanding any termination of the Agreement, a party in breach of its
obligations under this Agreement shall be liable to any nonbreaching party for
all Damages incurred by such non-breaching party.

                  (c) Cure of Breach. No party hereto will be entitled to assert
that the other party has committed any breach of this Agreement, or to file or
otherwise commence any court or other judicial proceeding in respect of that
breach, unless: (i) such first party gives, to the alleged breaching party, a
notice that identifies both the alleged breach in reasonable detail and the
provision(s) of this Agreement allegedly violated; and (ii) the alleged
breaching party has failed to cure substantially the alleged violation within
thirty (30) days after such notice has been given. The foregoing provisions of
this Section will in no way limit or restrict the right of any party, however,
to seek immediate equitable relief against another party as and to the extent
such first party deems appropriate to enforce this Agreement or protect its
right hereunder.

                  (d) Remedies Regarding Pledged Shares. If a material breach
shall occur and be continuing or a bankruptcy event or insolvency shall occur
and be continuing, ES may exercise, in addition to all other rights and remedies
granted herein, without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except any notice required by law
referred to below) to or upon GS (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
immediately collect, receive, appropriate and realize the pledged Shares or any
part thereof in accordance with the Pledge Agreement.

                  (e) Post-Termination Assistance. Upon the termination of this
Agreement, ES shall provide GS with commercially reasonable assistance for the
migration of the GS Sites from ES to any person that will provide successor
housing and hosting services; provided, however, that in no event shall ES be
required to provide such assistance more than two (2) months after the
termination of this Agreement. During any such transition period, GS shall pay
ES the then current market rate for the provision of any services provided by
ES.

                  (f) Survival. The obligations under this Agreement that by
their nature are intended to continue beyond the expiration or termination of
this Agreement shall survive the expiration or termination of this Agreement,
including without limitation, the provisions of Sections 9, 12, 13, 14 and 19.

                  16. Right to Inspect. Each party shall permit the officers and
designated representatives of the other party to examine its books of account
and discuss its affairs, finances and accounts with, and be advised as to the
same by, its and their officers and independent accountants, all at such
reasonable times and intervals and to such reasonable extent as such other party
may deem necessary to determine whether such party is in compliance with this
Agreement. If the parties, following any exercise of this right of inspection,
are unable to agree as to the compliance of a party with this Agreement, then
either party may request an audit by an independent, internationally recognized
accounting firm.

                                       16
<PAGE>   17
                  17.      Other Agreements.

                  (a) Non-Exclusivity of Strategic Relationship. Except as
specifically set forth in this Agreement, ES and GS acknowledge and agree that
the strategic relationship established by this Agreement is not an exclusive
arrangement for either ES or GS or their respective affiliates. ES and GS (and
their respective affiliates) shall be entitled to pursue other business
activities independent of this strategic relationship even where such activities
might be viewed as being competitive with activities undertaken pursuant to this
Agreement or the other party or its affiliates. Such activities may include,
without limitation, joint ventures, partnerships, mergers or acquisitions and/or
alliances or relationships in any country.

                  (b) Separate Businesses. Except as and to the extent, if any,
specifically set forth this Agreement, neither ES nor GS nor any of their
respective affiliates shall have any involvement in or rights with respect to
the business activities of the other party or its affiliates. Except as and to
the extent, if any, specifically set forth in this Agreement, neither ES nor GS
nor any of their respective affiliates shall be considered a partner, co-partner
or joint venturer of the other party, but shall be deemed to be independent of
the other and as operating separate businesses. Neither ES nor GS shall have any
authority or right, express or implied, or hold itself out as having the
authority or right, to bind, commit or act as agent for the other party in any
way, nor will either party have the right to use the name of the other party,
except as and to the extent, if any, specifically set forth in this Agreement.

                  (c) Compliance with Applicable Law. Each of ES and GS shall
act in compliance with applicable laws, rules and regulations in connection with
the Strategic Relationship. Each of ES and GS agrees that nothing in this
Agreement will oblige any party (or any of its respective affiliates) to act in
contravention of any applicable law and that, if any provision of this Agreement
would be illegal or unenforceable under any applicable law, such provision will
be modified or reformed to the extent necessary to comply with applicable law,
but such modification or reformation will not in any way affect the legality of
the remaining provisions of this Agreement.

                  (d) Cooperation. Subject to the terms and conditions of this
Agreement, each of ES and GS agrees to use its reasonable commercial efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws to consummate and
make effective, as soon as reasonably practicable, the terms of this Agreement
and the transactions contemplated hereby and thereby.

                  (e) Recordkeeping and Auditing. Each party shall maintain
accurate books and records regarding any of its operation relevant to this
Agreement, which shall include net advertising revenues received and
calculations of the amounts payable to the other party in accordance with
generally accepted accounting practices. Each party shall have the right to
conduct an audit of the other party's books and records; provided however, that
each party may only exercise its right to conduct an audit once per calendar
year and during regular business hours.

                  (f) Obligation to Pay in Dollars; Judgment Currency. The
parties acknowledge that this Agreement is an international transaction in which
the specification of U.S. dollars, is of the essence, and U.S. dollars shall be
the currency of account in all events. The obligations of payment of a party
shall not be discharged by an amount paid in another currency, whether

                                       17
<PAGE>   18
pursuant to a judgment or otherwise, to the extent that the amount so paid on
conversion to U.S. dollars under normal banking procedures does not yield the
amount of U.S. dollars due hereunder. If for the purpose of obtaining judgment
in any court it is necessary to convert a sum due hereunder in U.S. dollars into
another currency (the "Second Currency"), the rate of exchange which shall be
applied shall be that at which in accordance with normal banking procedures the
receiving party could purchase U.S. dollars with the Second Currency on the
business day next preceding that on which judgment is rendered. The obligation
of a party in respect of any such sum due to another party shall,
notwithstanding the rate of exchange actually applied in rendering such
judgment, be discharged only to the extent that on the business day following
receipt by the receiving party of any sum adjudged to be due hereunder in the
Second Currency, the receiving party may in accordance with normal banking
procedures purchase U.S. dollars with the amount of the Second Currency so
adjudged to be due; and the paying party hereby, as a separate obligation and
notwithstanding any such judgment, agrees to indemnify the receiving party
against, and to pay the receiving party on demand in U.S. dollars, any
difference between the sum originally due to the receiving party in U.S. dollars
and the amount of U.S. dollars so purchased and transferred.

                  18. Limitation of Liability; Disclaimers of Warranty; Force
Majeure.

                  (a) LIMITATION OF LIABILITY. NO PARTY SHALL BE LIABLE FOR ANY
INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, OR FOR ANY LOSS OF
PROFITS OR LOSS OF REVENUE RESULTING FROM THE USE OF THE GS SITES, GS STATIONS
OR THE ES URUGUAY SITE. ES SHALL NOT BE LIABLE FOR ANY LOSS OF DATA RESULTING
FROM DELAYS, NONDELIVERIES, MISDELIVERIES OR SERVICE INTERRUPTIONS.

                  NO PARTY SHALL BE LIABLE FOR OTHER DAMAGES HEREUNDER IN EXCESS
OF THE AMOUNTS PAID TO SUCH PARTY WITH RESPECT TO THE THEN CURRENT TERM OF THIS
AGREEMENT.

                  (b) DISCLAIMERS OF WARRANTY.

         THE WARRANTIES SET FORTH IN THIS AGREEMENT ARE LIMITED WARRANTIES AND
ARE THE ONLY WARRANTIES MADE BY THE RESPECTIVE PARTIES. THE PARTIES EXPRESSLY
DISCLAIM, AND HEREBY EXPRESSLY WAIVE, ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.

                  (c) Force Majeure. In the event that any circumstance beyond
the reasonable control of any party shall occur which delays or renders
impossible the performance of its obligations under this Agreement on the dates
herein provided for, such obligation shall be postponed for such time as such
performance necessarily has had to be suspended or delayed on account thereof.
In either such event, the parties shall promptly meet to determine an equitable
solution to the effects of any such event, provided that any party who fails
because of force majeure to perform its obligations hereunder will upon the
cessation of the force majeure take all reasonable steps within its power to
resume with the least possible delay compliance with its obligations. Events of
force majeure shall include, without limitation, war, revolution, invasion,
insurrection, riots, mob violence, sabotage or other civil disorders, fires,
floods or other acts of

                                       18
<PAGE>   19
God or nature, utility failures, outage or unavailability of the Internet or the
world wide web, strikes or other labor disputes, acts, laws, regulations or
rules of any government or governmental agency and any other similar cause or
event beyond the reasonable control of the Party, the obligations of whom are
affected thereby.

                  19.      Miscellaneous.

                  (a) Amendment. No change or modification of this Agreement
shall be valid unless the same is in writing and signed by all the parties
hereto.

                  (b) Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
its other provisions. Following the determination that any provision of this
Agreement is unenforceable, the parties shall negotiate in good faith a new
provision that, as far as legally possible, most nearly reflects the intent of
the parties and that restores this Agreement as nearly as possible to its
original intent and effect.

                  (c) Counterparts. This Agreement may be executed by the
parties hereto in counterparts each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

                  (d) Notices. All notices or service of process provided for
herein shall be validly given or served if in writing and delivered personally,
or by fax (with confirmation of receipt), if to:

         El Sitio, Inc.:

                  Avenida Ingeniero Huergo 1167
                  1107 Buenos Aires, Argentina
                  Attention:  Guillermo Bellati
                  Fax: 5411-4339-3750

         Sarandi Comunicaciones S.A.:

                  Enriqueta Compte & Riquete 1250
                  Montevideo, Uruguay
                  Attention: Adolfo Vaeza
                  Fax: 5982-208-2612

Notice may be given to such other address or facsimile number as any party may,
from time to time, designate in a written notice given in a like manner.

                  (e) Headings. The headings herein are for convenience only, do
not constitute a part of this Agreement, and shall not be deemed to limit or
affect any of the provisions hereof.

                  (f) No Third Party Rights; No Assignment. This Agreement is
intended solely for the benefit of the parties hereto, their respective
successors and (solely to the extent contemplated herein, their respective
affiliates) and is not intended to confer any benefits upon, or create any
rights in favor of, any other person. Neither this Agreement nor any of the
rights or

                                       19
<PAGE>   20
obligations arising hereunder will be assignable by either party without the
prior written consent of the other party.

                  (h) Governing Law. This Agreement is or, upon execution and
delivery thereof, shall be governed by, and construed in accordance with, the
laws of the Uruguay.

                  (i) Fees and Expenses. Whether or not the transactions
contemplated hereby are consummated or this Agreement is terminated, and except
as may otherwise be specifically provided in this Agreement, each party shall
pay the fees and expenses of its counsel, accountants and other experts, if any,
and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement.

                  IN WITNESS WHEREOF, the undersigned parties have caused this
Agreement to be duly executed by their respective authorized officers as of the
date hereof.

                                      EL SITIO, INC.


                                      By:  /s/ Roberto Cibrian-Campoy
                                         ---------------------------------------
                                         Name:  Roberto Cibrian-Campoy

                                      By:  /s/ Einar Barfod
                                         ---------------------------------------
                                         Name:  Einar Barfod

                                      SARANDI COMUNICACIONES S.A.


                                      By:  /s/ Adolfo M. Vaeza Bague
                                         ---------------------------------------
                                         Name:  Adolfo M. Vaeza Bague
                                         Title:    President


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