Document:

<PAGE>
                                                                    Exhibit 10.1

Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                                MASTER AGREEMENT

         This Master Agreement together with the Attachments hereto (the
"Agreement") entered into as of ______, 2001 ("Effective Date"), by and among
StarBand Latin America (Holland) B.V., with its headquarters at
________________________ ("StarBand"), Gilat to Home Latin America (Holland)
N.V., with its headquarters at _____________________ ("GTHLA Holland"), Gilat to
Home Latin America, Inc., with its headquarters at ______________________
("GTHLA"), and Gilat Satellite Networks Ltd., with its headquarters at Yegia
Kapayim St. Daniv Park, Kiryat Arye, Petah Tikva 49130 Israel ("Gilat").

                  WHEREAS, StarBand is indirectly controlled by Gilat and was
established for the purpose of (i) implementation, operation and marketing
broadband Internet access services and voice services to consumers and small
office and home office subscribers, (ii) providing a bundled product with
direct-to-home television service using a single satellite dish and (iii)
providing such new technologies and products related to the foregoing as Gilat
Israel may in the future develop or make available to StarBand Communications
Inc., which shall be offered to StarBand and/or StarBand's subsidiaries upon
commercially reasonable terms via a two-way satellite-based network, together
with the related assets, licenses, rights, management, employees experience and
know-how (such business, related assets, licenses, rights, management,
employees' experience and know-how, shall be referred to herein as the
"Business") in South America , Central America, Mexico and non-U.S. territories
or protectorates in the Caribbean (the "Territory"), directly and/or indirectly
through its subsidiaries;

         WHEREAS, Gilat, directly and through its affiliates, including without
limitation GTHLA and GTHLA Holland, wishes to appoint StarBand, directly and/or
indirectly through its subsidiaries, as the exclusive provider of certain
telecommunications related equipment and services to the Business in the
Territory (with certain exceptions as stipulated below) and StarBand wishes to
accept such appointment or to purchase certain telecommunications equipment and
services from Gilat or Gilat's affiliates;

         WHEREAS, StarBand and Gilat wish to define certain commercial dealings
with one another and reduce such definition to writing.

         NOW, THEREFORE, in consideration of the above premises, the mutual
covenants and agreements contained herein and other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged,
StarBand and Gilat, intending to be legally bound, agree as follows:

1.       Scope of Agreement.

         (a)      Exclusivity/Non-Compete. Gilat agrees that StarBand, directly
                  and/or indirectly through its subsidiaries, has exclusive
                  rights to sell and offer the Gilat Products & Services (as
                  defined hereinafter) in connection with the Business in the
                  Territory and to develop and operate the Business in the
                  Territory. Notwithstanding the

December 31, 2001 -- FINAL

                                  CONFIDENTIAL

<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                  foregoing, the parties agree that (1) StarBand's rights in
                  Chile are subject to Gilat's obligations to Comunicacion y
                  Telefonia Rural S.A., Servicios Rural S.A., Servicios Rurales
                  de Telecomuncaciones S.A., CTR Holdings Ltd. and Rural
                  Telecomunications Chile S.A.; and (2) in Mexico, StarBand
                  shall receive the non-exclusive right to operate the Business
                  with respect to small office and home office subscribers,
                  through a channel which is any large, well-established
                  corporation that (x) will commit to sell at least 100 VSAT
                  sites regardless of the number of VSAT's located at an
                  individual home or office, and (y) will be centrally billed by
                  StarBand, but that is not (A) an Internet Service Provider, or
                  (B) a provider of access to broadband Internet services or
                  voice services at a residence through an arrangement whereby
                  it would be reasonably likely that payment or other commercial
                  benefit will be paid to it for such access. The rights granted
                  herein shall in each case be subject to the terms of the
                  non-compete provisions set forth in Attachment C hereto.
                  Subject to the foregoing exceptions, Gilat agrees not to
                  directly or indirectly appoint another entity to provide, or
                  itself provide, the Gilat Products & Services, or operate the
                  Business in the Territory.

                  Gilat undertakes to use its best commercial efforts to
                  maintain price and technological competitiveness of the Gilat
                  Products & Services and the other products and services to be
                  provided by Gilat hereunder for use by the Business in the
                  Territory.

                  So long as the Gilat Products & Services remain competitive
                  with respect to their pricing and technological
                  competitiveness and Gilat meets its delivery and support
                  obligations, StarBand undertakes to purchase the Gilat
                  Products & Services and any equipment and services performing
                  similar functionality in the future, solely from Gilat.

         (b)      Products and Services to be provided by Gilat. Gilat, directly
                  or through GTHLA, GTHLA Holland or other of its affiliates (in
                  this Agreement, unless expressly stated otherwise, any
                  reference to Gilat shall mean Gilat or any of GTHLA, GTHLA
                  Holland or Gilat's other affiliates, as directed by Gilat),
                  will provide StarBand with telecommunications equipment
                  ("Equipment") and licensed software ("Software") (together
                  referred to as the "Gilat Products & Services") for use at
                  StarBand designated consumer, SOHO, SME and public call
                  offices locations (each such location herein defined as a
                  "Site"). Gilat shall also provide to StarBand all new products
                  and technological developments to the extent related to the
                  Business as such products and technology are provided to
                  StarBand Communications Inc. The parties will also, from time
                  to time, upon mutual agreement, add technical specifications
                  to Attachment A regarding the Gilat Products & Services. The
                  parties agree that any support, bug fixes and updates to the
                  Gilat Products & Services shall be provided to StarBand
                  without any charge and at the same time as they are provided
                  to other Gilat customers. The parties further agree that the
                  price paid by StarBand for upgrades to the Gilat Products &
                  Services shall be determined in the following manner: (i) if
                  the upgrades relate to the Gilat Products and Services
                  provided by Gilat to any other customer, then the

                                  CONFIDENTIAL

                                       2
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                  Most Favored Nations provision of this Agreement shall apply,
                  or (ii) otherwise, the upgrades shall be available at a fair
                  price based upon good faith negotiations of the parties and
                  competitive pricing.

         (c)      IT provided by Gilat to StarBand. To facilitate StarBand's
                  transition to its own systems and processes, Gilat will
                  provide to StarBand to the extent indicated herein, certain
                  Information Technology (IT), and such other services as agreed
                  by the parties that may be reasonably required to operate the
                  StarBand business (collectively the "Transition Services.").
                  The terms and conditions, including prices, for those
                  Transition Services are described in Attachment B to this
                  Agreement. Any additional services required by StarBand and
                  agreed upon by Gilat will be provided on commercially
                  reasonable terms to be determined at a later date by mutual
                  agreement of the parties.

         (d)      Research and Development (R&D). Gilat will provide to
                  StarBand, on an on-going basis, all applicable technology and
                  software developments, enhancements and improvements made or
                  obtained by Gilat, under the terms specified in Attachment B
                  hereto.

         (e)      Optional Services. At the option of StarBand, Gilat will
                  provide StarBand with the following optional services, at
                  prevailing and customary market prices and terms: (i)
                  Installation, (ii) Operation and Maintenance, (iii) access to
                  satellite transmission and reception facilities and services
                  ("Space Segment"), and (iv) as detailed in paragraph 5 of
                  Attachment A, any other service required by StarBand in order
                  to provide the services contemplated by it, for which a
                  license, permit or other authorization is required.

         (f)      Minimum Quantities. StarBand undertakes to purchase from Gilat
                  not less then 15,000 Units each calendar year (the "Minimum
                  Quantities"). For the purpose of this Agreement the term
                  "Unit" shall mean - the combination of one (1) outdoor unit
                  and one (1) indoor unit and one (1) antenna.

2.       Gilat Products & Services - Order Priority.

         Gilat agrees to give priority to allocating sufficient manufacturing
         capacity to producing and timely delivering the Gilat Products &
         Services to be provided hereunder to StarBand in accordance with
         accepted delivery dates.

3.       Software License and Support/Intellectual Property.

         (a)      "Software" means any computer program, including any
                  modifications, updates, or additions, which may be included in
                  or with Gilat-provided Equipment as object code, or in
                  executable form in any medium, and related materials such as
                  diagrams, manuals and other documentation which are for use
                  with the Equipment provided to StarBand under this Agreement.

                                  CONFIDENTIAL

                                       3
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

         (b)      Subject to the provisions of Attachment C, Gilat hereby grants
                  to StarBand (including a right to sublicense to its customers,
                  distributors and resellers) and StarBand accepts a
                  non-exclusive license to use or have used the Software
                  residing in Gilat-provided Equipment, but only for the purpose
                  of causing such Equipment to operate for the provision of
                  two-way transmission services and not otherwise. StarBand
                  shall not itself and will use its best commercial efforts to
                  not permit any third party to gain access to the Software or
                  transfer the Software to any third party, copy or permit to
                  have copied the Software, reverse engineer, disassemble,
                  de-compile, or transmit the Software in any form or by any
                  means. Software is and shall remain the exclusive property of
                  Gilat or Gilat's vendors. No license other than that
                  specifically stated herein is granted to StarBand, and
                  StarBand shall have no right under patent, trademark,
                  copyright, trade secret or other intellectual property of
                  Gilat or Gilat's vendors other than that granted herein.

         (c)      The service fees detailed in Attachment A cover to the extent
                  paid, the Software license and maintenance for the applicable
                  Software for the term of the Agreement. During the term of the
                  Agreement, Gilat will provide remedial software support
                  services, including bug fixes and changes to Software made
                  available by Gilat generally to correct errors or improve the
                  efficiency and effectiveness of the then current Software,
                  without adding new functions to the then current Software so
                  that Gilat's software operates properly on the Gilat-provided
                  Equipment in accordance with the specifications therefor.

         (d)      Except as set forth in Section 15 all intellectual property
                  rights subsisting in or related to the Equipment and Software
                  and/or Transition Services, including but not limited to
                  patents and other know-how and copyright, both registered and
                  unregistered, owned and/or otherwise used by Gilat and all
                  goodwill related thereto (collectively the "IP Rights") are
                  and shall remain at all times the exclusive property of Gilat
                  or, as the case may be, its affiliates and/or vendors and/or
                  licensors. StarBand shall not have or acquire any right, title
                  or interest in or otherwise become entitled to any IP Rights
                  by taking delivery of, making payment for, distributing and/or
                  selling or otherwise using or transferring the Equipment,
                  Software or Transition Services, other than such rights
                  granted in this Agreement.

4.       Most Favored Nations.

         Gilat shall provide at all times, and from time to time, all Gilat
         Products & Services or other products and services contemplated hereby
         to operate the Business on rates and terms no less favorable than the
         best terms offered on the Gilat Products & Services offered hereunder
         to other customers wherever situated. For these purposes, the Most
         Favored Nation concept refers to prices no higher than those charged by
         Gilat (as the case may be) for comparable products and services sold in
         comparable quantities on comparable terms and conditions including, but
         not limited to, subsidy, support or other related payment, made to
         other customers in bona fide offers or sales. Gilat's

                                  CONFIDENTIAL

                                       4
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

         obligations hereunder shall apply to all commercial terms including
         without limitation warranties, costs of software upgrades, new
         products, terms and timing of shipping and delivery. If there is no
         similarly situated customer as described above, the parties shall
         provide such products on commercially reasonable terms in the context
         of the transactions contemplated hereunder negotiated in good faith on
         an arm's-length basis.

         Notwithstanding the previous paragraph, beginning [*], in no event
         shall the prices charged hereunder by Gilat for any Gilat Products &
         Services or other products and services contemplated to be provided by
         Gilat to StarBand hereunder, irrespective of any quantity or subsidy,
         support or other terms, exceed [*] of the price charged by Gilat to any
         other customer in the consumer market, where ever located.

         The parties agree that in case any other provisions of this Agreement
         conflicts with the terms of this section, the terms of this section
         shall control.

5.       Transition Services.

         (a)      Attachment B describes the Transition Services to be provided
                  under this Agreement, including, without limitation, name of
                  service, pricing, and scope of service.

         (b)      Except as otherwise provided in this Agreement or unless
                  otherwise terminated pursuant to the terms detailed in
                  Attachment B, Gilat shall provide or cause to be provided each
                  of the Transition Services beginning on the Effective Date or
                  the date indicated in Attachment B and continuing through to
                  the expiration of the Transition Services Term, as such term
                  is defined in Section 7(b) below, unless otherwise terminated
                  pursuant to the terms detailed in Attachment B.

         (c)      StarBand may request Gilat to provide additional or modified
                  Transition Services that are not described in Attachment B.
                  Gilat will use commercially reasonable efforts to accommodate
                  any reasonable requests by StarBand to provide additional or
                  modified Transition Services. In order to initiate a request
                  for additional or modified Transition Services, StarBand shall
                  submit a request in writing to Gilat specifying the nature of
                  the additional or modified Transition Services and requesting
                  a cost estimate and time frame for completion. Gilat shall
                  respond within ten (10) days to such written request. Only if
                  StarBand accepts Gilat's offer to provide the additional or
                  modified Transition Services, will such additional or modified
                  Transition Services be provided hereunder and according to the
                  terms agreed to by the parties in writing.

6.       Transitional Cooperation.

         (a)      StarBand and Gilat will cooperate to assure an orderly and
                  efficient Transition. Each party shall make available, as
                  reasonably requested by the other party, sufficient resources
                  and timely decisions, approvals and acceptances, in order that

                                  CONFIDENTIAL

                                       5
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                  each party may perform its obligations under this Agreement in
                  a timely and efficient manner.

         (b)      If the provision of a Transition Service in whole or in part
                  requires the consent of a third party to the assignment of any
                  license or other agreement, Gilat shall use best commercial
                  efforts to obtain such consent. If Gilat is unable to obtain
                  any such consent after using best commercial efforts, then the
                  parties will agree upon a commercially reasonable alternative
                  that next best approximates such Transition Service on a basis
                  consistent with Attachment B.

         (c)      If requested by StarBand in connection with the Transition,
                  Gilat shall use best commercial efforts to assist StarBand in
                  its efforts to enter into a license or other agreement with
                  any third party with whom Gilat and any of their affiliates
                  have a commercial relationship.

         (d)      Each party shall appoint a person for the purpose of
                  coordinating the Transition and the provision of the
                  Transition Services.

7.       Term.

         (a)      This Agreement shall become effective upon and the term shall
                  commence at the Effective Date and shall terminate five (5)
                  years thereafter (the "Term"), and shall automatically renew
                  for additional five (5) year terms. Without limiting Gilat's
                  obligations under the Most Favored Nations provisions of
                  Section 4, the pricing provisions related to the provision of
                  Gilat Products & Services hereunder shall be renegotiated in
                  good faith between the parties every two years, and such
                  renegotiated pricing provisions shall be attached hereto and
                  become a part hereof. If the parties fail to agree to new
                  prices, then the current prices will, subject to the most
                  favored nation provision hereof, remain in effect until the
                  parties reach agreement on new pricing.

         (b)      The Transition Services described in Attachment B shall be
                  provided by Gilat, as long as requested by StarBand at terms
                  provided for in this Agreement or as negotiated from time to
                  time by the management of StarBand and Gilat.

8.       Charges and Payment.

         (a)      Gilat shall ship Equipment to StarBand in material compliance
                  with confirmed delivery dates in order to achieve a consistent
                  supply of product over each calendar quarter. All payments
                  made under this Agreement shall be in U.S. Dollars. The prices
                  for the Gilat Products & Services provided hereunder are set
                  forth in Attachment A. Except as otherwise provided herein,
                  subject to Section 8(c) below, all payments for Equipment and
                  services and all other items delivered or otherwise provided
                  under the terms of this Agreement in any calendar quarter are
                  due and payable no later than one (1) business day prior to
                  the end of the quarter in which the Equipment, services, or
                  other items were delivered, provided

                                  CONFIDENTIAL

                                       6
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                  that StarBand receives necessary documentation (e.g., invoice,
                  packing list, freight documents) at least thirty (30) days
                  before the date on which payment is due. StarBand shall not be
                  responsible for payment of non-conforming product (that is,
                  product that does not meet the then applicable product
                  performance specifications). For non-conforming product on
                  which StarBand has already made payment, StarBand shall offset
                  the price of that product against current accounts payable.

         (b)      The terms of sale for all shipments from Gilat shall be
                  EX-WORKS Israel.

         (c)      StarBand shall pay for the Transition Services provided under
                  Attachment B hereto within 30 days after receiving a
                  reasonably detailed invoice from Gilat for such services from
                  Gilat.

         (d)      All charges for products or services and other items provided
                  under this Agreement are exclusive of federal, state, and
                  local sales, use, excise, utility, value-added and gross
                  receipts taxes, universal service fees any other applicable
                  tax withholding or similar deductions and assessments, and
                  other similar tax-like charges and tax-related surcharges
                  relating to charges or costs imposed by governmental or
                  quasi-governmental entities or other unaffiliated third
                  parties, all of which shall be borne and paid by StarBand.
                  StarBand and Gilat, as appropriate, each agree to provide the
                  others with a duly authorized tax exemption certificate, if
                  applicable. Taxes based on each party's net income shall be
                  the sole responsibility of such party. Gilat shall be
                  responsible for any home-country income, franchise, privilege
                  or occupational taxes imposed.

         (e)      All Equipment delivered by Gilat pursuant to the terms hereof
                  shall be new (and not refurbished) Equipment.

9.       Representations and Warranties.

         (a)      Each party shall comply, at its own expense, with the
                  provisions of all applicable municipal requirements and those
                  state, federal, and national laws that may be applicable to
                  the performance of this Agreement.

         (b)      The parties represent and warrant that they have and will have
                  all rights, titles, licenses, permissions and approvals
                  necessary to perform their obligations under this Agreement
                  and to grant the other parties the rights granted hereunder.

         (c)      Gilat represents and warrants that title in the Equipment and
                  the medium on which the Software is stored that are supplied
                  to StarBand hereunder, when conveyed to StarBand, shall be
                  good and its transfer rightful, and the Equipment and Software
                  shall be delivered free from any security interest or other
                  lien or encumbrance, save for certain components of the
                  Equipment or Software which are licensed to Gilat, in which
                  event the license granted to StarBand shall fully

                                  CONFIDENTIAL

                                       7
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                  comply with and not be in breach of the license agreement
                  relating to such component.

         (d)      Gilat represents and warrants that the Equipment and Software
                  and its use by StarBand does not and will not infringe,
                  violate or in any manner contravene or breach any patent,
                  trademark, copyright, license or other property or proprietary
                  right or constitute the unauthorized use or misappropriation
                  of a trade secret of any third party.

         (e)      Gilat represents and warrants that all Software is year 2000
                  compatible and compliant (i.e., will correctly calculate,
                  compare, sort, extract, sequence, store and otherwise process,
                  in accordance with the Software's use and applicable
                  specifications, date related information and associated date
                  calculations for dates before, during and after the year 2000,
                  and will display date information in ways that are unambiguous
                  as to the determination of the century).

         (f)      Product Warranty

                  (i)      During the Warranty Period, the Equipment and
                           Software shall be in compliance in all material
                           respects with the then applicable (i.e., time of
                           order) technical performance specifications, and
                           shall be free from defects in workmanship and
                           materials. "Warranty Period" means: (A) for the hub
                           and server Equipment and all Equipment and Software
                           delivered therewith and installed in accordance with
                           the provisions hereof, from the time of delivery to
                           StarBand and for a period of twelve (12) months from
                           the later of the purchase or the date of
                           commissioning of such hub and server Equipment; (B)
                           for such Equipment that is part of hub operations
                           services, for the period during which StarBand
                           purchases such optional hub operations services from
                           Gilat; and (C) for all other Equipment and Software,
                           from the time of installation and for a period of
                           twelve (12) months thereafter. Notwithstanding the
                           foregoing and without limiting any other obligations
                           of Gilat hereunder, Gilat does not warrant that the
                           Software will be error free or uninterrupted in its
                           use or operation.

                           Thereafter, StarBand may purchase at its option an
                           extended full warranty at an annual cost equal to [*]
                           of the purchase price for all Equipment subject to
                           such extended warranty. Under this product warranty,
                           Gilat will be responsible for the cost of any
                           replacement parts and associated labor, overhead and
                           related expenses. After the above product warranty
                           periods have elapsed, Gilat will sell replacement
                           parts to StarBand for a period of seven (7) years
                           from StarBand's last purchase of particular products
                           at prices equal to the then current USB box price,
                           multiplied by [*] for the ODU, [*] for the USB Indoor
                           Unit, [*] for the LNBs, and [*] for the antenna/mount
                           system. Gilat reserves the right to provide notice
                           that a particular part will be discontinued and to
                           establish a time limit for all future orders of such
                           part.

                                  CONFIDENTIAL

                                       8
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                  (ii)     A) Under this product warranty, Gilat shall, at its
                           sole option and expense, repair or replace any
                           Equipment and/or Software found to be defective
                           during the Warranty Period and returned to Gilat's
                           premises at StarBand's expense. Return of the
                           repaired or replaced Equipment or Software to
                           StarBand's or its affiliates' original destination
                           shall be at the expense of Gilat, unless Gilat
                           determines that the Equipment and/or Software is not
                           defective within the terms of the warranty, in which
                           event StarBand shall pay Gilat all costs of handling,
                           transportation and labor at Gilat's then prevailing
                           rates.

                           B) Under this product warranty, for Software, if an
                           error in the Software precludes the Equipment from
                           being in material compliance with the then applicable
                           specifications, Gilat will use its commercial best
                           efforts to supply a workaround, program temporary fix
                           or update. The price for extended maintenance on
                           Software shall be the monthly per site charge as set
                           forth in Attachment A.

                  (iii)    Limitation on Warranties. This product warranty and
                           StarBand's remedies hereunder are solely for the
                           benefit of StarBand and shall not be extended to any
                           other person. StarBand shall be solely responsible
                           for the selection, use, efficiency and suitability of
                           the Gilat Products & Services. This warranty shall
                           not apply to any Equipment or Software to the extent
                           that such Equipment or Software: (A) has had the
                           serial number, model number or any other
                           identification markings removed or rendered
                           illegible; (B) has been damaged by improper
                           operation, maintenance, misuse, accident, neglect,
                           failure to continually provide a suitable operating
                           environment (including necessary ventilation,
                           electricity, protection from power surges, cooling
                           and/or humidity), or from any other cause beyond
                           Gilat's reasonable control, including force majeure,
                           and without Gilat's fault or omission or negligence
                           or the fault or negligence or omission of Gilat's
                           employees, agents or other representative; (C) has
                           been used in a manner not in accordance with the
                           instructions supplied by Gilat at the time or prior
                           to the delivery of the Equipment; (D) has been
                           subject to the opening of any sealed components
                           without Gilat's prior written approval; (E) has had
                           changes made by StarBand or StarBand's agents to the
                           physical, mechanical, electrical, software or
                           interconnection components of the Equipment supplied
                           by Gilat without written authorization of Gilat to do
                           so; or (F) has been repaired or otherwise altered by
                           anyone not under the control of, or not having the
                           written authorization of Gilat to do such repair or
                           alteration. With respect to software, Gilat's
                           obligation to provide remedial services shall only
                           apply if StarBand promptly implements each work
                           around, program temporary fix,

                                  CONFIDENTIAL

                                       9
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                           update or other Gilat provided software problem
                           solution on each affected item of Equipment.

         (g)      Gilat represents and warrants that it shall perform all
                  services performed hereunder including all Transition Services
                  in a timely, thorough and professional manner.

         (h)      The parties represent and warrant that all financial records
                  regarding the transactions contemplated hereunder shall be
                  maintained in accordance with generally accepted accounting
                  principles consistently applied.

         (i)      The parties represent and warrant that they shall at all times
                  during the term of this Agreement and any renewals or
                  extensions hereof maintain all necessary insurance policies
                  usual and proper in the industry for the contemplated
                  transactions hereunder.

         (j)      THE WARRANTIES PROVIDED IN THIS SECTION AS TO EQUIPMENT AND
                  SOFTWARE CONSTITUTE THE SOLE AND EXCLUSIVE LIABILITY OF GILAT
                  FOR DEFECTIVE OR NONCONFORMING EQUIPMENT AND SOFTWARE AND
                  CONSTITUTE STARBAND'S EXCLUSIVE REMEDY FOR DEFECTIVE OR
                  NONCONFORMING EQUIPMENT AND SOFTWARE, EXCEPT FOR THE
                  INDEMNIFICATION PROVISIONS HEREOF AS TO THIRD PARTY CLAIMS.
                  EXCEPT AS EXPRESSLY SET FORTH HEREIN, NEITHER PARTY MAKES ANY
                  OTHER WARRANTY, EXPRESS OR IMPLIED, OR STATUTORY INCLUDING
                  WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY
                  OR FITNESS FOR A PARTICULAR PURPOSE, AND AS TO THE DEFECTIVE
                  OR NONCONFORMING EQUIPMENT AND SOFTWARE, THESE WARRANTIES ARE
                  IN LIEU OF ANY OBLIGATIONS OR LIABILITIES ON THE PART OF GILAT
                  FOR DAMAGES, EXCEPT FOR CLAIMS UNDER THE INDEMNIFICATION
                  PROVISIONS HEREOF AS TO THIRD PARTY CLAIMS.

10.      Confidential Information.

         As used in this Agreement, the term "Confidential Information" means
         any information of a party disclosed by one party to another (the
         "Receiving Party") pursuant to this Agreement which is in written or
         other tangible form (including on magnetic media) or by oral, visual or
         other means, which is because of legends or other markings, the
         circumstances of disclosure or the nature of the information itself
         deemed to be proprietary and confidential, including without limitation
         this Agreement itself. Each party recognizes the importance of the
         Confidential Information. Accordingly, each party agrees as follows:

         (a)      The Receiving Party agrees (i) to protect such Confidential
                  Information from disclosure to others, using the same degree
                  of care used to protect its own

                                  CONFIDENTIAL

                                       10
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                  confidential or proprietary information of like importance,
                  but in any case using no less than a reasonable degree of
                  care, (ii) not to disclose except as specifically permitted
                  hereunder any of the Confidential Information or any
                  information derived therefrom to any third person except to
                  its affiliates, agents, contractors and financing parties
                  under a confidentiality obligation to the Receiving Party, and
                  (iii) not to make any use whatsoever at any time of such
                  Confidential Information except as expressly authorized in
                  this Agreement or as reasonably necessary for the purposes of
                  running their respective businesses. Subject to restrictions
                  on disseminating Confidential Information to third parties
                  contained in this Agreement, any affiliate, employee, agent,
                  contractor or financing party given access to any such
                  Confidential Information must have a legitimate "need to know"
                  and will be similarly bound to the Receiving Party in writing
                  (including without limitation pursuant to a pre-existing
                  agreement). The Receiving Party shall be responsible to the
                  disclosing party with respect to any breach of the provisions
                  of this section caused by any such third parties provided
                  access to Confidential Information by the Receiving Party.
                  Without granting any right or license, the parties agree that
                  the foregoing will not apply with respect to information the
                  Receiving Party can document (i) is in or (through no improper
                  action or inaction by the Receiving Party or any affiliate,
                  agent or employee of the Receiving Party) enters the public
                  domain, or (ii) was in its possession or known by it prior to
                  receipt from the disclosing party, or (iii) was rightfully
                  disclosed to it by another person without restriction, or (iv)
                  was developed independently by it without use of the
                  Confidential Information. The Parties recognize that service
                  providers (employees, consultants and the like) may serve
                  multiple parties hereto simultaneously and hereby agree that
                  disclosure to or from such service providers shall not affect
                  the obligations of confidentiality to the party whose
                  information is disclosed.

         (b)      Immediately upon termination of this Agreement, the Receiving
                  Party will return or, at the disclosing party's direction,
                  destroy or erase and certify the destruction or erasure of all
                  Confidential Information and all documents containing any such
                  Confidential Information and all copies and extracts of the
                  portions of such Confidential Information (regardless of the
                  media on which the Confidential Information is stored).

         (c)      Either party may disclose the other's Confidential Information
                  as required by law, regulation or applicable stock exchange
                  rules; provided however, that such party will provide the
                  other party as much notice as reasonably possible under the
                  circumstances of such disclosure and the opportunity to
                  contest such disclosure.

         (d)      Each Receiving Party acknowledges and agrees that due to the
                  unique nature of the Confidential Information, there may be no
                  adequate remedy at law for breach of the obligations
                  hereunder. Therefore upon any such breach or any threat of
                  such breach, the disclosing party may be entitled to
                  appropriate equitable relief in addition to whatever remedies
                  it might have at law and under this Agreement.

                                  CONFIDENTIAL

                                       11
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

         (e)      Notwithstanding anything herein to the contrary, the
                  provisions of this Section 10 shall survive for a period of
                  five (5) years following the expiration or termination of this
                  Agreement.

11.      Dispute Resolution.

         (a)      Each party shall designate an individual as its project
                  manager with the right and responsibility to represent such
                  party with regard to the day to day management of such party's
                  performance of the terms of this Agreement ("Project
                  Manager").

         (b)      Notwithstanding any other provisions of this Agreement to the
                  contrary, the following procedure shall be adhered to in all
                  disputes arising under or relating to this Agreement (other
                  than disputes arising under section 13(a)), that the parties
                  cannot resolve informally (the "Dispute").

                  (i)      Any party may initiate this dispute resolution
                           process by giving another party's Project Manager
                           written notice of the Dispute. The Project Managers
                           of the parties shall thereafter have a reasonable
                           period of time to resolve the Dispute, but in no
                           event longer than ten (10) days after delivery of the
                           written notice described in this section 11(b)(i).
                           All attempts at resolution shall be conducted in good
                           faith and in no event shall the Project Managers
                           waive attempts at such resolution.

                  (ii)     In the event the Project Managers are unable to
                           resolve a Dispute submitted to dispute resolution in
                           accordance with subsection (i) above, either party
                           may elect in writing, within five (5) days after
                           expiration of the ten (10) day period described in
                           (i) above, to refer the Dispute to appropriate senior
                           executive officers (Vice President or above) of the
                           parties having responsibility over such matters
                           ("Executive Officers"). The Executive Officers shall
                           thereafter have a reasonable period of time to
                           resolve the Dispute, but in no event longer than ten
                           (10) days following the written referral to them of
                           the Dispute. All attempts at resolution shall be
                           conducted in good faith and in no event shall the
                           Executive Officers waive attempts at such resolution.

                  (iii)    If the Project Managers are unable to resolve the
                           Dispute as described above, but neither party refers
                           the Dispute to the Executive Officers within the
                           indicated deadline, the relevant Dispute shall be
                           deemed withdrawn, but not waived. In order to
                           reestablish the claim, the claiming party will be
                           required to reinitiate the Dispute under section
                           11(b)(i).

                  (iv)     If, at any time following the procedures of section
                           11(a)(i), and if relevant, Section 11(a)(ii), the
                           Project Manager or the Executive Officer for one
                           Party notifies one or more other parties in writing
                           that a Dispute considered under this section
                           constitutes a material breach of the terms and
                           conditions of this Agreement, pursuant to section
                           13(b)(ii) hereof, the

                                  CONFIDENTIAL

                                       12
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                           ninety (90) day cure period provided in section
                           13(b)(ii), or any applicable cure or notice period
                           with respect to such breach, will be considered to
                           commence as of the date of such notice.

                  (v)      Any notices delivered in accordance with the
                           procedures set out above shall not be deemed
                           effective until delivered to and received by the
                           receiving party in accordance with the notice
                           provisions of Section 12 hereof.

12.      Notices.

         All notices, requests, demands and other communications required or
         permitted hereunder shall be in writing and shall be deemed to have
         been duly given upon receipt if delivered by hand or telecopier (with
         confirming receipt):

         If to StarBand:

                  ______________

                  ______________

                  with a copy to:

                           Arnold & Porter
                           399 Park Avenue
                           New York, New York  10022
                           Attention:  Steven G. Tepper, Esq.

                  or to such other person or address as StarBand shall designate
in writing.

         If to Gilat:

                           The Office of General Counsel
                           Gilat Satellite Networks Ltd.
                           Yegia Kapayim St. Daniv Park
                           Kiryat Arye, Petah Tikva
                           49130 Israel
                           Tel: 972-3-925-2171
                           Fax: 972-3-925-2945

                  with a copy to:

                           Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co.
                           30 Kalisher Street
                           Tel Aviv 65257
                           Israel
                           Tel: 972-3-510-7575

                                  CONFIDENTIAL

                                       13
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                           Fax: 972-3-510-7528
                           Attention:  Gene Kleinhendler, Esq.

                  or to such other person or address as Gilat shall designate in
writing.

13.      Termination Rights.

         (a)      If any party becomes or is declared insolvent or bankrupt, is
                  the subject of any proceedings related to its liquidation,
                  insolvency or for the appointment of a receiver or similar
                  officer for it, makes an assignment for the benefit of all or
                  substantially all of its creditors, or enters into an
                  agreement for the composition, extension, or readjustment of
                  all or substantially all of its obligations, any other party
                  may, by giving thirty (30) days written notice thereof to the
                  affected party, terminate this Agreement without liability or
                  obligation, in whole or in part, as of a date specified in
                  such notice of termination.

         (b)      Any party may terminate this Agreement upon thirty (30) days
                  prior written notice to any other in the event of one of the
                  following:

                  (i)      A party's failure to pay any amounts due hereunder
                           that are not duly contested in good faith within
                           thirty (30) days after receipt of the terminating
                           party's written notice of default concerning the
                           same; or

                  (ii)     A party's failure to cure a material breach, within
                           ninety (90) days after receipt of the terminating
                           party's written notice of default concerning the
                           same. Notwithstanding the foregoing, if a material
                           breach is not able to be cured within such ninety
                           (90) days, the parties may agree to extend such
                           timeframe; provided, however, that Gilat may not
                           terminate this Agreement pursuant to this Section
                           13(b) so long as Gilat is directly or indirectly the
                           holder of 51% or more of the shares of rStar
                           Corporation or has the right or ability to elect or
                           appoint a majority of the Board of Directors of rStar
                           Corporation.

         (c)      With respect to breaches or defaults giving rise to a right to
                  terminate this Agreement, other than pursuant to section
                  13(a), the dispute resolution procedures of section 11(b)
                  shall be applicable. Any such right of termination shall be
                  suspended until the dispute resolution process in section
                  11(b) is completed or until the alleged breaching party has
                  had an opportunity to seek judicial intervention prior to the
                  end of any applicable cure period in a notice given under
                  section 11(b)(iv).

         (d)      The remedies provided under this section 13 are not exclusive
                  of any other rights or remedies under law or equity to which
                  either party may be entitled to with respect to any breach or
                  failure by the other party.

                                  CONFIDENTIAL

                                       14
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

         (e)      Transition Period. If this Agreement (including any extension
                  terms) expires by its own terms under section 7(a), or if any
                  party terminates this Agreement prior to the end of the
                  applicable term hereof, except for termination pursuant to
                  Section 13(b)(i) hereto, the parties will reasonably cooperate
                  with one another to facilitate an effective transition to
                  commercially reasonable alternatives as follows:

                  (i)      Gilat will fill outstanding purchase orders for a
                           period of no less than eighteen (18) months from the
                           date of termination at the expiration of the term or
                           for termination for reasons other than failure to pay
                           timely;

                  (ii)     Gilat will support StarBand operations and
                           subscribers with regular Software updates and
                           telecommunications facilities and services pursuant
                           to the Telecommunications Services Agreement (to the
                           extent such agreement remains in effect at the time
                           of termination) for three (3) years following
                           termination subject to payment of any applicable fees
                           therefor as set forth in this Agreement or in the
                           Telecommunications Services Agreement;

                  (iii)    Gilat's product warranty and warranty parts
                           obligations set forth in section 9 shall survive any
                           such expiration or termination.

14.      Limitation of Liability and Indemnification.

         (a)      Except as further limited by section 9(f) hereto, the sole and
                  exclusive remedy at law (other than with respect to claims
                  involving misrepresentation or fraud) for any claim (whether
                  such claim is based in tort, contract or otherwise) arising
                  out of a breach of any representation, warranty, covenant or
                  agreement in or pursuant to this Agreement shall be a claim
                  for actual damages, which claims are independent of and in
                  addition to any equitable rights or remedies. No party shall
                  be liable in any case to any other party for indirect,
                  consequential, punitive, special or other similar damages
                  arising out of or relating to this Agreement.

         (b)      Gilat shall, at its sole expense, defend, indemnify, and hold
                  StarBand harmless from and against all costs, expenses and
                  liabilities in connection with any claim, suit or action for
                  infringement of any intellectual property rights, including
                  patent, copyright, or trade secret rights which arise from any
                  of the products or services provided by Gilat under this
                  Agreement, including but not limited to the currently pending
                  Hughes claim.

         (c)      Should the Gilat Products & Services or any component thereof
                  that may be provided by Gilat under this Agreement become, or
                  in Gilat's opinion be likely to become, the subject of a claim
                  of infringement of any intellectual property rights, Gilat may
                  exercise any of the following options at their sole expense:
                  (i) procure for StarBand the right to continue using the Gilat
                  Products & Services; (ii) replace the same with comparable
                  alternatives; (iii) modify the same so as to be non-

                                  CONFIDENTIAL

                                       15
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                  infringing; and/or (iv) compensate StarBand for the full
                  purchase price of the impacted Gilat Products & Services plus
                  an additional amount StarBand is required to reimburse to any
                  of its customers as a result therefor.

         (d)      StarBand agrees that Gilat's liability for intellectual
                  property infringement shall not apply to any claim, suit or
                  action for infringement which may be brought against StarBand
                  to the extent due to: (i) StarBand's modification of the Gilat
                  Products & Services or any parts thereof or StarBand's
                  modification of the Software or any software associated
                  therewith; or (ii) use of the Gilat Products & Services or
                  Transition Services with any device, software or services
                  added by StarBand. StarBand further agrees that it will
                  indemnify Gilat on the same terms as Gilat is obligated to
                  indemnify StarBand pursuant to this section, should any claim
                  of infringement be made against Gilat to the extent caused by
                  StarBand's modifications or use as aforesaid. StarBand,
                  however, shall not be liable for any such modifications that
                  are made at the instruction of Gilat.

         (e)      StarBand hereby indemnifies Gilat, and shall indemnify and
                  save Gilat harmless from and against injuries, loss and/or
                  damage to Gilat's employees and/or their tangible personal
                  property and/or to the person or tangible personal property of
                  third parties to the extent caused by the willful or negligent
                  acts or omissions of StarBand.

         (f)      Gilat hereby indemnifies and shall indemnify and save StarBand
                  harmless from and against injuries, loss, or and/or damage to
                  StarBand's employees and/or its tangible personal property
                  and/or to the person or tangible personal property of third
                  parties to the extent caused by the willful or negligent acts
                  or omissions of Gilat.

         (g)      It is understood and agreed by StarBand that under this
                  Agreement, Gilat is providing the Gilat Products & Services
                  for purposes determined by StarBand. StarBand recognizes that
                  Gilat does not control the manner in which StarBand uses the
                  Gilat Products & Services, the access by others to the data or
                  other content transmitted over the StarBand network or the
                  content of the communications that StarBand transmits and
                  receives over its network. StarBand therefore agrees to
                  indemnify and hold Gilat and Gilat's officers, directors, and
                  employees harmless from and against any and all claims for
                  direct damages, expenses, and losses (including reasonable
                  attorney's fees) to the extent arising out of or in connection
                  with (a) the use to which StarBand elects to put the Gilat
                  Products & Services; or (b) the content of the communications
                  that StarBand or its customers place over the Gilat Products &
                  Services.

         (h)      A party which is seeking indemnification hereunder shall
                  notify the indemnifying party in reasonable detail of the
                  event(s) giving rise to such claim for indemnification within
                  fifteen (15) business days after the indemnified party has
                  actual knowledge of such event(s). The indemnifying party
                  shall not have any liability to the indemnified party to the
                  extent that it is materially prejudiced as a

                                  CONFIDENTIAL

                                       16
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                  result of any delay in notification by the indemnified party
                  nor shall the indemnifying party be responsible for any
                  additional loss incurred by the indemnified party due to such
                  delay by the indemnified party. The indemnifying party shall
                  have the right to undertake the defense of any claim upon
                  delivery of notice to the indemnified party with respect to
                  such claim. Such defense shall be made with counsel reasonably
                  acceptable to the indemnified party. If the indemnifying party
                  fails to undertake the defense of the indemnified party within
                  such time period, the indemnified party may retain its own
                  counsel for such defense (which shall be reasonably acceptable
                  to the indemnifying party), and the indemnified party's
                  reasonable attorney's fees and expenses related to such claim
                  shall be paid by the indemnifying party. No party shall,
                  without the consent of the other party or parties, agree to
                  any non-monetary settlement of the indemnified claim.

15.      Within ninety (90) days after the Effective Date, Gilat agrees to
         commence providing the Escrow Agent the Escrow Materials as described
         in Attachment D and shall thereafter, during the term of this
         Agreement, continually provide to the Escrow Agent the Escrow Materials
         as are commercially reasonable. StarBand's right to access the Escrow
         Materials shall be as provided in the Escrow Agreement (All terms
         herein shall be defined in Attachment D).

         (a)      Effective upon the release of the Escrow Materials to
                  StarBand, Gilat grants to StarBand a fully paid-up and royalty
                  free license under Gilat's intellectual property rights
                  (including but not limited to, patents, inventions,
                  discoveries, trade secrets, know-how, and copyrights, but not
                  including trademarks and tradenames) to (a) make or have made
                  the Equipment as described in Attachment D of the Agreement;
                  (b) to incorporate into such manufactured Equipment the
                  licensed Software; and (c) to use, sell, lease, rent,
                  maintain, or otherwise dispose of the Equipment containing the
                  Licensed Software to the same extent as permitted under the
                  Master Agreement. Except as provided in Section 3.4 of the
                  Escrow Agreement, such license shall be irrevocable. Gilat
                  agrees that it will not enter into any agreements or
                  relationship with a third party which agreement or
                  relationship would preclude the exercise by StarBand of the
                  rights granted to it under this Section 15(a) and the Escrow
                  Agreement. This license grant shall give StarBand the right to
                  have a third-party complete and support the Escrow Materials
                  for StarBand, provided that such license shall be limited to
                  StarBands use to manufacture and support the Equipment as
                  specified in this provision. StarBand shall not be permitted
                  to license or sublicense others to use the Escrow Materials
                  (except as is incident to the sale or lease of the initial
                  Equipment by StarBand) or to manufacture or distribute the
                  Equipment except directly for and on behalf of StarBand.
                  Nothing herein shall be construed as a transfer of title to
                  the Escrow Materials, or any portion thereof, or any rights in
                  the intellectual property, trade secret, copyright or patent
                  rights related thereto, except in so far as they may be
                  licensed pursuant to the foregoing license.

16.      Governing Law; Jurisdiction.

                                  CONFIDENTIAL

                                       17
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

         This Agreement, including all matters relating to the validity,
         construction, performance and enforcement hereof, shall be governed by
         the laws of the State of New York, without giving reference to its
         principles of conflicts of laws. Each of the parties hereto irrevocably
         submits to the exclusive jurisdiction of any federal court in the
         Southern District of New York, or, to the extent federal jurisdiction
         is not available, any state court in New York, in respect of any action
         arising out of or based upon this Agreement and irrevocably waives any
         objections which it may now or hereafter have to the laying of venue of
         any such action in any such court.

17.      Assignment.

         This Agreement will be binding on and inure to the benefit of the
         parties and their permitted successors and assigns. Except as to
         distributor and resellers engaged by StarBand to carry out the Business
         none of the parties to this Agreement may assign, transfer or convey
         any right, obligation or duty, in whole or in part, or of any other
         interest under this Agreement, without the prior written consent of the
         other relevant parties. Notwithstanding the foregoing, no consent shall
         be required in the case of an assignment by a party to an affiliate or
         subsidiary of such party. Furthermore no consent shall be required in a
         transaction involving a merger of StarBand where StarBand shall not be
         the surviving entity or a sale of all or substantially all the assets
         of StarBand.

18.      Waiver of Compliance.

         Other than sections 11(b)(i) or 11(b)(ii), any term or condition of
         this Agreement may be waived at any time by the party that is entitled
         to the benefit thereof, but no such waiver shall be effective unless
         set forth in a written instrument duly executed by or on behalf of the
         party waiving such term or condition. No waiver by any party of any
         term or condition of this Agreement, in any one or more instances,
         shall be deemed to be or construed as a waiver of the same or any other
         term or condition of this Agreement on any future occasion. All
         remedies, either under this Agreement or by law or otherwise afforded,
         will be cumulative and not alternative.

19.      Export Restrictions.

         StarBand agrees that it shall not export, re-export, resell, ship or
         divert the Equipment or Software directly or indirectly to any country
         for which a U.S. or other export license is required without first
         receiving confirmation that the U.S. Department of Commerce and other
         relevant authorities have approved or licensed, if required, such
         export, re-export, resale, shipment or diversion.

20.      Force Majeure.

         Unless specified otherwise, any delay in or failure of performance by
         any party under this Agreement shall not be considered a breach of this
         Agreement if and to the extent caused by events beyond the reasonable
         control of the party affected, including but not limited to acts of
         God, embargoes, governmental restrictions, strikes, riots, wars or
         other military

                                  CONFIDENTIAL

                                       18
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

         action, civil disorders, rebellion, vandalism, or sabotage. The party
         whose performance is affected by such events shall promptly notify the
         other parties giving details of the force majeure circumstances, and
         the obligations of the party giving such notice shall be suspended
         during but not longer than the continuance of the force majeure, and
         the time for performance of the affected obligation hereunder shall be
         extended by the time of the delay caused by the force majeure event.

21.      Verification.

         Each party shall have the right to request on fifteen (15) days notice
         that a third party certified public accountant acceptable to Gilat and
         StarBand, but paid for by the party making the request, conduct an
         audit of the relevant records of another party to verify compliance
         with this Agreement or any portion thereof. The subject matters of such
         an audit may include, but are not necessarily limited to, capacity,
         price, cost, and related issues, but only to the extent this Agreement
         provides (expressly or by reasonable implication) that such matters are
         subject to verification by another party hereto.

22.      Entire Agreement; Amendments.

         This Agreement and any specified provisions of documents incorporated
         by reference contains the entire agreement between the parties with
         respect to the transactions contemplated hereunder, and supersede all
         prior arrangements or understandings with respect thereto, written or
         oral. Once this Agreement has been executed, any amendments hereto must
         be made in writing and signed by all parties.

23.      Survival.

         The provisions of section 9(f) Product Warranty, section 10
         Confidential Information, and section 11 Dispute Resolution and any
         other provision which by its terms survives the termination herein,
         shall survive the termination of this Agreement.

24.      Severability.

         In the event that any portion of this Agreement is held to be
         unenforceable, the unenforceable portion shall be construed in
         accordance with applicable law as nearly as possible to reflect the
         original intentions of the parties and the remainder of the provisions
         shall remain in full force and effect.

25.      Counterparts.

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

26.      Headings.

                                  CONFIDENTIAL

                                       19
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

         The headings contained in this Agreement are inserted for convenience
         only and shall not constitute a part hereof.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                  CONFIDENTIAL

                                       20
<PAGE>
                         Master Agreement                          Exhibit 10.1

Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

IN WITNESS WHEREOF, the parties hereto each acting with proper authority have
executed this Agreement.

StarBand LATIN AMERICA HOLLAND (B.V.)

By:
         --------------------------------------------------------------
Print Name:
                  -----------------------------------------------------
Title:
         --------------------------------------------------------------
Date:
         --------------------------------------------------------------

GILAT TO HOME LATIN AMERICA (HOLLAND) N.V.

By:
         --------------------------------------------------------------
Print Name:
                  -----------------------------------------------------
Title:
         --------------------------------------------------------------
Date:
         --------------------------------------------------------------

GILAT TO HOME LATIN AMERICA, INC.

By:
         --------------------------------------------------------------
Print Name:
                  -----------------------------------------------------
Title:
         --------------------------------------------------------------
Date:
         --------------------------------------------------------------

GILAT SATELLITE NETWORKS LTD.

By:
         --------------------------------------------------------------
Print Name:
                  -----------------------------------------------------
Title:
         --------------------------------------------------------------
Date:
         --------------------------------------------------------------

                                  CONFIDENTIAL

                                       21
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                                  ATTACHMENT A

This Attachment A contains specific information regarding the Gilat Products &
Services to be provided to StarBand by Gilat.

Pursuant to the terms of this Agreement, StarBand shall purchase from Gilat (i)
the Skyblaster 360 satellite communications Equipment and Software described
below for use by Consumers, SOHO, and SME subscribers, and (ii) the DialAway IP
satellite communications Equipment and Software for use by consumers, SOHO, SME
and public call offices for voice and Internet applications. Gilat will provide
the indicated services for such Equipment and Software.

As regards pricing in this Attachment A, a "site" refers, as appropriate, to a
single operating unit, e.g., antenna, IDU, ODU, etc.

SKYBLASTER PRODUCT 360

1.       SkyBlaster Equipment:

         For Equipment delivered from Q4 2001 and beyond:

         $[*] per site (KU-Band).

         $[*] per site (C-Band).

         Includes:

         -        0.75 Meter antenna (.96M - add $[*]; 1.2M - add $[*]; 1.8M -
                  add $[*]).

         -        Standard Antenna Mount*

         -        0.5-1.0 Watt Outdoor Unit with LNB (for C-Band 2 Watts)

         -        SkyBlaster USB Box IDU

         *"Standard" mounts means basic penetrating roof/wall mount; additional
         mount characteristics require additional payment.

         At the earlier of (i) [*] Skyblaster 360 units sold in 2002, or (ii)
         December 30, 2002, Gilat and StarBand agree to negotiate in good faith
         lower prices for future deliveries.

2.       SkyBlaster Baseband Hub Equipment: $[*] subscribers in a single
         location (under the MSN assumptions*).

3.       Internet Farm (for 10,000 users under the MSN assumptions*):

         For server farm delivered in 2001:  $[*]
         For server farm delivered in 2002:  $[*]
         For server farm delivered in 2003 : $[*]

                                  CONFIDENTIAL

                                    ATT. A-1
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

         Includes:

         -        QoS

         -        Outbound Security

         -        Flash

         -        Switch

*        Prices in (2) and (3) above are based on the following MSN traffic
         assumptions: (i) at Peak Hours, [*] of all subscribers are on-line;
         (ii) at Peak Hours, on-line subscribers use the outbound channel [*] of
         the time on average; and (iii) at Peak Hours, on-line subscribers use
         the inbound channels [*] of the time on average.

4.       Product Software License and Maintenance:  $[*]/month/site.

         Includes:

         -        SkyBlaster Windows Driver

         -        IPSec

         -        IB QoS (does not support networking)

         -        Flash

         -        IPA

         -        All software updates (not including upgrades)

5.       Optional Recurring Services:

         Includes:

         -        Hub operations: $[*]/month/site

         -        Third level help desk: $[*]/month/site

         -        Internet connectivity: $[*]/month/site for a U.S.-based hub;
                  $[*]/month/site for a non-U.S. based hub

         StarBand shall have no obligation to purchase any of these recurring
         services. StarBand may cancel one or more of these recurring services,
         at its discretion, upon ninety (90) days' notice and at the expiration
         of such notice period, the obligation of Gilat to provide such services
         shall cease. Gilat will provide adequate levels of service during such
         ninety (90) day notice period.

6.       Multicast Services System (MSS): $[*]/MSS hub site plus
         $[*]/month/subscriber plus a revenue sharing of [*] on MSS value added
         revenues above $[*]/month/subscriber and [*] on revenues above
         $[*]/month/subscriber. The MSS shall include software licenses and
         servers.

 DIALAWAY IP PRODUCT

1.       DialAway IP Remote Equipment: $[*]/site for KU-BAND; $[*]/site for
         C-BAND.

                                  CONFIDENTIAL

                                    ATT. A-2
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

         Includes:

         -        .75 Meter Antenna (.96M - add $[*]; 1.2M - add $[*]; 1.8M -
                  add $[*]).

         -        Standard Mount*

         -        1 Watt Outdoor Unit with LNB

         -        Indoor Unit, w/ Access to One (1) USB port

         -        Software license

         *"Standard" mounts means basic penetrating roof/wall mount; additional
         mount characteristics require additional payment.

2.       Hub Equipment:  $[*]/VSAT hub chain.

         Includes: 1 hub basic configuration

3.       Internet Farm:  $[*] per hub chain.

         Includes:

         -        HPA

         -        Switch

4.       Product Remote Software License and Maintenance:  $[*]/month/site.

         Includes:

         -        IPA Client

         -        SSA Firmware

5.       Optional Recurring Services:

         Includes:

         -        Hub operations: $[*]/month/site

         -        Third level help desk: $[*]/month/site

         -        Internet connectivity: $[*]/month/site for a U.S.-based hub;
                  $[*]/month/site for a non-U.S. based hub

         StarBand shall have no obligation to purchase any of these recurring
         services. StarBand may cancel one or more of these recurring services,
         at its discretion, upon ninety (90) days' notice and at the expiration
         of such notice period, the obligation of Gilat to provide such services
         shall cease. Gilat will provide adequate levels of service during such
         ninety (90) day notice period.

                                  CONFIDENTIAL

                                    ATT. A-3
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                                  ATTACHMENT B

                       Description of Transition Services

1.       In consideration for the Transition Services detailed below, performed
         by Gilat for StarBand, StarBand shall pay to Gilat the following fees
         (not including payments covering costs and expenses for employees
         loaned to StarBand by Gilat or any other payments that StarBand
         requests that Gilat process through its accounts payable, both of which
         StarBand will reimburse to Gilat):

         A.       Information Technology (IT) StarBand shall reimburse the
                  actual cost incurred by Gilat for IT services provided by
                  Gilat to StarBand.

         B.       Research and Development (R&D) For the right to receive on an
                  ongoing basis the most advanced technology and software and
                  any associated updates from Gilat at no additional cost,
                  Starband will pay to Gilat, in addition to the prices agreed
                  to in attachment A above, an amount of $[*] per VSAT, for up
                  to 10,000 VSATs sold by StarBand per calendar quarter. The
                  parties agree that there shall be no royalty payments by
                  StarBand to Gilat.

         C.       Real Estate. Star Band shall reimburse the actual costs
                  incurred by Gilat for the pro rata share of office space rent
                  paid on the premises of the facilities occupied by StarBand in
                  SUNRISE, FLORIDA and such locations in the Territory as are
                  necessary for the operation of the Business.

         D.       Administrative Services. Gilat shall provide StarBand with
                  such administrative services (including, without limitation,
                  financial, legal, accounting, tax preparation, human resources
                  and the like) as is reasonably required by StarBand for which
                  StarBand will reimburse Gilat for Gilat's actual cost incurred
                  by Gilat for providing such services.

         Except for (i) the R&D provisions mentioned above, which shall survive
         a period of two (2) years from the date of the signing of this
         Agreement and (ii) the Real Estate provision which shall be subject to
         the same termination notice provisions and other terms and conditions
         for early termination set forth in Gilat's leases for the respective
         properties, StarBand may, in its discretion and upon ninety (90) days'
         written notice, cancel one or more of the above Transition Services
         effective at the close of the first calendar quarter following the
         notice, at which time StarBand's obligation to pay Gilat the above
         quarterly fees will cease.

                                  CONFIDENTIAL

                                    ATT. B-1
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                                  ATTACHMENT C

                                Non-Compete Terms

During the term of this Agreement (including all renewals thereof), Gilat hereby
agrees that it shall not, and shall not permit any of its affiliates (other than
StarBand) to, (a) directly or indirectly, offer in South America (excluding
Chile), Central America (excluding Mexico) and the Caribbean (the "Territory"),
except to Large Businesses (as defined below), any products or services
competitive with the Gilat Products & Services that are the subject of this
Agreement, including, without limitation, selling, offering for sale or
distributing free of charge, customer premises equipment ("CPE") or any other
products, services, equipment or other items related to the provision by
StarBand of such goods and services in the Territory, or (b) enter into or
permit to exist any transaction with StarBand unless such transaction is
negotiated and consummated on an arm's length basis and upon terms and
conditions no less favorable than those which StarBand could reasonably expect
to be offered by a third party in a substantially similar transaction; provided,
however, that the limitations set forth in clause (a) of this paragraph shall
not: (i) in any way grant to StarBand exclusive rights of any kind in Mexico; or
(ii) limit or prevent Gilat from conducting business in Chile with COMUNICACION
Y TELEFONIA RURAL S.A., SERVICIOS RURALES DE TELECOMUNICACIONES S.A., CTR
HOLDINGS LTD., and RURAL TELECOMMUNICATIONS CHILE S.A.

For the purpose herein, (a) "Existing VSAT Business" means the sale, marketing,
service support of VSAT equipment and VSAT-based network services and the
installation of such equipment; and (b) a "Large Business" means any
corporation, partnership, limited liability company, joint venture, association,
joint-stock company, trust, trustee, unincorporated organization, authority or
other body that (i) has at least 100 VSAT sites and (ii) is centrally billed,
but that is not (A) an Internet Service Provider or (B) a provider of access to
the service (two-way broadband connectivity via satellite) at a residence or
"small office, home office" through an arrangement whereby it would be
reasonably likely that the provider of such access would be paid for such
access, if it was not obtaining another commercial benefit therefrom.

In addition to the foregoing, Gilat further represents and warrants that it will
sell Gilat Products & Services to other parties only pursuant to written terms
and conditions that are expressly limited in such a manner that will not impair
or conflict with StarBand's rights hereunder. Gilat further agrees to use
reasonable efforts to stop and/or discourage activities of other parties that
might attempt to sell Gilat Products & Services in the business segments
described above that are exclusively StarBand's, and to cooperate with StarBand
in this regard.

The preceding paragraphs shall apply to all two-way satellite products now in
existence or that are developed during the term of this agreement (including all
renewals thereof) by Gilat, or any of its affiliates, which shall be made
available to StarBand on mutually agreeable terms and conditions.

During the term of this Agreement (including all renewals thereof), StarBand
agrees that it shall not, in the Territory, offer to Large Businesses products
and services substantially similar to the

                                  CONFIDENTIAL

                                    ATT. C-1
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

products and services that compete with the Existing VSAT Business, it being
understood that nothing contained herein shall prevent StarBand from providing
any services whatsoever to any Person that is not a Large Business or to provide
services to a Large Business which at the time of provision of any equipment or
services by StarBand was not a Large Business and became a Large Business.

Gilat and StarBand each acknowledge that the covenants set forth above
pertaining to them contain reasonable limitations as to time, geographical area
and scope of activity to be restrained, and do not impose a greater restraint
than is necessary to protect and preserve for the benefit of the Parties the
goodwill of StarBand and Gilat and to protect the legitimate business interests
of the Parties. If, however, the covenants set forth above are determined by any
court of competent jurisdiction to be unenforceable by reason of their duration
or the scope of the geographical area covered or in any other respect, they will
be interpreted to extend only over the longest period of time for which they may
be enforceable and/or over the largest geographical area as to which they may be
enforceable and/or to the maximum extent in all other aspects as to which they
may be enforceable, all as determined by such court in such action.

These Non-Compete Terms shall terminate upon the termination of the Agreement by
either party thereto in accordance with the terms thereof.

                  [Remainder of Page Intentionally Left Blank]

                                  CONFIDENTIAL
<PAGE>
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                                  ATTACHMENT D

                                ESCROW AGREEMENT

Gilat and StarBand shall enter into an escrow agreement, as contemplated by
Section 15 of this Agreement, in form and substance mutually agreeable to them.

                  [Remainder of Page Intentionally Left Blank]

                                  CONFIDENTIAL<PAGE>
                                                                     EXHIBIT 4.1

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT COVERING SUCH SECURITIES UNLESS THE ISSUER RECEIVES AN OPINION OF
COUNSEL FOR THE HOLDER OF THIS NOTE REASONABLY SATISFACTORY TO THE ISSUER
STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND APPLICABLE
STATE SECURITIES LAWS OR THAT THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER
THE ACT.

                            ZYLAB INTERNATIONAL, INC.

                       SECURED CONVERTIBLE PROMISSORY NOTE

$350,000                                                       December 24, 2001

                  FOR VALUE RECEIVED, Zylab International, Inc., a Virginia
corporation (the "Company" or the "Payor"), with an address at 12800 Middlebrook
Road, Suite 410 Germantown, MD 20874 promises to pay to the order of
Authentidate Holding Corp. (the "Payee" or the "Holder"), the principal amount
of THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000) of principal and interest in
six (6) quarterly installments of $61,433.83 each commencing on June 30, 2002
with a final installment due and payable on November 30, 2003 (the "MATURITY
DATE"). Interest shall accrue and be payable at the rate of 6% per annum (except
as provided in Section 1.4), calculated for the actual number of days the
Principal is outstanding and interest is accrued and unpaid based on a 360-day
year, in accordance with the terms hereof. Payments of principal and interest
shall be made in such coin or currency of the United States of America as at the
time of payment shall be legal tender for the payment of public or private debts
at such address of the Holder as set forth herein or that the Holder shall
hereafter give to the Payor by written notice made in accordance with the
provisions hereof.

         1.       Terms of Repayment

                  1.1 All payments received on account of this Note shall be
applied first to the payment of accrued interest on this Note and then to the
reduction of the unpaid principal balance of this Note. Interest shall be
computed on the basis of a year of 360 days, for the actual number of days
elapsed. Payor may prepay principal and interest on this Note upon 10 days prior
notice to the Holder.
<PAGE>
                  1.2 If payment of the outstanding principal amount of this
Note, together with accrued unpaid interest thereon at the applicable rate of
interest (as set forth herein), is not made on the earlier to occur of (i) the
Maturity Date (as such date may be extended pursuant to the extension options
set forth in Section 4 hereof) and (ii) the Accelerated Maturity Date (defined
below), then interest shall accrue on the outstanding principal amount due under
this Note and on any unpaid accrued interest due on this date of the payment in
full of such amounts (including from and after the date of the entry of judgment
in favor of the Holder in an action to collect this Note) at an annual rate
equal to the lesser of 18% or the maximum rate of interest permitted by
applicable law.

                  1.3 Notwithstanding anything to the contrary contained in this
Note, Payor shall not be obligated pay, and the Holder shall not be entitled to
charge, collect, or receive, interest in excess of the maximum rate allowed by
applicable law. During any period of time in which the interest rate specified
herein exceeds such maximum rate, any amounts of interest collected by the
Holder in excess of such maximum rate shall be deemed to apply to principal and
all payments of interest and principal shall be recalculated to allow for such
characterization.

                  1.4 In the event that the date for the payment of any amount
payable under this Note falls due on a Saturday, Sunday or public holiday under
the laws of the State of New York, the time for payment of such amount shall be
extended to the next succeeding business day and interest shall continue to
accrue on any principal amount so effected until the payment thereof on such
extended due date.

         2. Security. This Holder of this Note is entitled to the rights as set
forth in that certain Security Agreement between the Company and Authentidate
Holding Corp. of even date herewith (the "Security Agreement"), pursuant to
which the Holder has been granted a first priority security interest in the
assets of the Company. This Note is the direct obligation of the Company and is
secured by all of the Collateral contemplated by the Security Agreement. In
order to effectuate the purposes of the Security Agreement and this Note,
certain of the Collateral contemplated by the Security Agreement shall be
deposited with an escrow agent pursuant to the terms of the escrow agreement as
provided in the Security Agreement. A copy of the Security Agreement and escrow
agreement are available for inspection at the Company's principal office.
Reference to the Security Agreement and escrow agreement shall in no way impair
the absolute and unconditional obligation of the Company to pay both principal
and interest hereon as provided herein. All capitalized terms not defined herein
shall have the meanings ascribed thereto in the Security Agreement and Escrow
Agreement.

         3. Conversion Rights

                  3.1 The Holder shall have the right prior to the date on which
this Note is paid in full, to convert at any time as provided below, from time
to time, any part of the outstanding principal amount of this Note into fully
paid and non-assessable shares of the Common Stock, no par value per share
("Conversion Shares"), of Payor (the "CONVERSION RIGHTS") at the Conversion
Ratio (as defined below in Section 3.2) determined as provided in this Section
3. Promptly after the surrender of this Note, accompanied by a Notice of
Conversion of Convertible Note in the form

                                        2
<PAGE>
attached hereto as Exhibit A, properly completed and duly executed by the Holder
(a "CONVERSION NOTICE"), Payor shall issue and deliver to or upon the order of
the Holder that number of shares of Common Stock for the balance of this Note
converted as shall be determined in accordance herewith. This Note shall be
convertible, at the option of the Holder commencing on the date which is the
earlier of (i) the date of termination of the Letter of Intent between the
Company and Authenticate Holding Corp dated as of December 14, 2001 unless the
Letter of Intent has been superceded by a definitive agreement between the
Company and Authenticate Holding Corp. providing for the acquisition of the
Company by Authenticate Holding Corp. or (ii) 90 days from the date hereof.

                  3.2 Conversion Ratio. The principal amount of this Note
outstanding may be converted, at the option of the Holder at any time, into
shares of Common Stock of Payor (or any successor entity). The number of shares
of Payor's Common Stock to be delivered to Payee upon conversion of the entire
original principal amount of this Note shall equal seventeen and one half
(17.5%) of the outstanding Common Stock of Payor, determined on a fully diluted
basis, as of the date of Conversion ("CONVERSION RATIO"). If less then the total
principal amount of this Note is converted by the Holder, the number of shares
to be delivered shall be reduced pro rata by the ratio by which the principal
amount to be converted bears to $350,000. Upon conversion, in whole or in part,
all accrued interest due and owing as of the date of conversion shall be paid in
full on the next scheduled quarterly installment date.

                  3.3 Subdivision. If the Company, at any time while Note
remains outstanding, shall (i) subdivide the Common Stock (or effect a similar
transaction), the Conversion Ratio shall be proportionately reduced or (ii)
effect a reverse stock split or similar transaction, the Conversion Ratio shall
be proportionately increased, as the case may be, as of the effective date of
such subdivision, reverse stock split or similar transaction, or, if the Company
shall take a record of holders of its Common Stock for the purpose of any such
transaction, as of such record date, whichever is earlier (provided if such
transaction does not actually occur, such adjustment shall not be made).

                  3.4 Stock Dividends. If the Company at any time while the Note
is outstanding shall pay a dividend in shares of, or make other distribution of
shares of, the Common Stock, then the Conversion Ratio shall be adjusted, as of
the date the Company shall take a record of the holders of its Common Stock for
the purpose of receiving such dividend or other distribution (or if no such
record is taken, as at the date of such payment or other distribution), to that
price determined by multiplying the Conversion Ratio in effect immediately prior
to such payment or other distribution by a fraction (a) the numerator of which
shall be the total number of shares of Common Stock outstanding immediately
prior to such dividend or distribution, and (b) the denominator of which shall
be the total number of shares of Common Stock outstanding immediately after such
dividend or distribution.

                  3.5 Reclassification, Consolidation or Merger. At any time
while this Note remains outstanding, in case of any reclassification or change
of Common Stock (other than a change in par value, or from par value to no par
value per share, or from no par value per share to par value or as a result of a
subdivision or combination of Common Stock) or in case of any consolidation or

                                        3
<PAGE>
merger of the Company with or into another corporation (other than a merger with
another corporation in which the Company is a continuing corporation and which
does not result in any reclassification or change, other than a change in par
value, or from par value to no par value per share, or from no par value per
share to par value, or as a result of a subdivision or combination Common
Stock), or in the case of any sale or transfer to another corporation of the
property of the Company as an entirety or substantially as an entirety, the
Company, or such successor or purchasing corporation, as the case may be, shall,
without payment of any additional consideration therefor, execute new notes
providing that the holders of the Note shall have the right to exercise such new
notes (upon terms not less favorable to the holders than those then applicable
to the Note) and to receive upon such exercise, in lieu of each share of Common
Stock theretofore issuable upon exercise of the Note, the kind and amount of
shares of stock, other securities, money or property receivable upon such
reclassification, change, consolidation, merger, sale or transfer by the Holder
of one share of Common Stock issuable upon exercise of the Note had the Note
been converted immediately prior to such reclassification, change,
consolidation, merger, sale or transfer. Such new notes shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 3. The provisions of this Section 3.5
shall similarly apply to successive reclassifications, changes, consolidations,
mergers, sales and transfers.

                  3.6 Method of Conversion. Except as otherwise provided in this
Note or agreed to by the Holder, this Note may be converted by the Holder in
whole or in part as permitted herein (provided such partial conversion is at
least $20,000) from time to time by (i) submitting to the Company a Conversion
Notice (by facsimile dispatched on the Conversion Date and confirmed by U.S.
mail or overnight mail service sent within two business days thereafter) and
(ii) surrendering this Note with the mailed confirmation of the Conversion
Notice at the principal office of the Company. Upon partial exercise of the
Conversion Rights, a new note containing the same date and provisions as this
Note shall be issued by the Company to the Holder for the balance due hereunder
which shall not have been converted.

                  3.7 Restrictions on Shares. This Note has been issued by the
Company pursuant to the exemption from registration under the Securities Act of
1933 (the "ACT"). The shares of Common Stock issuable upon conversion of this
Note may not be offered, sold or otherwise transferred unless (i) they first
shall have been registered under the Act and applicable state securities laws or
(ii) the Company shall have been furnished with an opinion of legal counsel (in
form, substance and scope reasonably acceptable to the Company) to the effect
that such sale or transfer is exempt from the registration requirements of the
Act. Each certificate for shares of Common Stock issuable upon conversion of
this Note that have not been so registered and that have not been sold pursuant
to an exemption that permits removal of the applicable legend, shall bear a
legend substantially in the following form, as appropriate:

         THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933 (THE "ACT").  THE SECURITIES
         REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
         TRANSFERRED UNLESS THEY ARE REGISTERED UNDER THE ACT AND
         APPLICABLE STATE SECURITIES LAWS, OR SUCH OFFERS, SALES AND

                                        4
<PAGE>
         TRANSFERS ARE MADE PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
         REGISTRATION REQUIREMENTS OF THOSE LAWS.

Upon the request of a holder of a certificate representing any shares of Common
Stock issuable upon conversion of this Note, the Company shall remove the
foregoing legend from the certificate or issue to such Holder a new certificate
therefor free of any transfer legend, if (i) with such request, the Company
shall have received an opinion of counsel, reasonably satisfactory to it in
form, substance and scope, to the effect that any such legend may be removed
from such certificate or (ii) a registration statement under the Act covering
the resale of such securities is in effect.

                  3.8 Reservation of Shares. The Company shall at all times have
authorized and reserved, for the purpose of issuance, a sufficient number of
shares of Common Stock to provide for the issuance of shares of Common Stock
underlying the then outstanding aggregate Principal amount of the Note. In the
event that at any time commencing on the date hereof that the Company does not
have an adequate and sufficient number of authorized shares of Common Stock
available to provide for issuance to Holder for the full conversion of this Note
as provided herein, then (i) the principal officers and/or shareholders of the
Company shall deliver to Holder, to be held in escrow (until an Event of Default
as provided in this Note), such number of shares representing the number of
shares by which the Company is deficient (the "Deficiency Shares"), together
with undated and executed stock powers, which shall be held in escrow until the
Company is able to deliver the fully authorized Deficiency Shares and (ii) the
Company and the officers and directors of the Company shall deliver written and
binding agreements by which each of them agree to use their best efforts to
obtain shareholder approval as soon as possible to authorize additional shares
of Common Stock of the Company and agree to vote all shares owned by them
(beneficially and of record) at the next meeting of shareholders (or by written
consent) in favor of authorizing a sufficient number of additional shares of
Common Stock to provide for at least the Deficiency Shares. The Company shall
procure a Certificate of Amendment to its Certificate of Incorporation providing
for the increase in its authorized capital and deliver such Certificate of
Amendment to the Holder no later than ten days from the date hereof.

         4. Covenants. The Company covenants and agrees that for so long as any
portion of the indebtedness evidenced by this Note, whether principal, accrued
and unpaid interest or any other amount at any time due hereunder, remains
unpaid:

                  4.1 Negative Covenants. The Company will not, without the
prior written consent of the Holder:

                  (a) Sell, transfer or in any other manner dispose of, or
purchase or acquire, any business, assets, capital stock or other property,
except (i) in the ordinary course of its business, or (ii) if (A) the
transaction is a bona fide transaction in which fair market value is received by
the Company, (B) no Event of Default or Default (each defined hereinafter) has
occurred and is continuing or would occur after giving effect to such
transaction, and (C) payment of the principal amount of the Notes and accrued
and unpaid interest thereon through the date of such payment shall have been
made or provided for from the net proceeds of such transaction.

                                        5
<PAGE>
                  (b) Make any loan or advance to any person who is or hereafter
becomes an officer, director or shareholder of the Company or any affiliate of
any such person, other than for reasonable advances for expenses to be incurred
by officers, directors, employees and consultants of the Company in the ordinary
course of the business of the Company.

                  (c) Purchase or otherwise redeem any Common Stock or other
equity securities of the Company or declare or pay any dividends in cash or
other assets on any of its Common Stock or other equity securities.

                  (d) Issue, create, incur, assume, permit, guarantee or suffer
to exist any indebtedness or other obligations for money borrowed or capital
lease obligations, except for (i) indebtedness under the Note and any extension,
renewal or refinancing thereof; (ii) trade indebtedness incurred in the ordinary
course of business; (iii) indebtedness or other obligations for money borrowed
which are subordinated in all respects, including, but not limited to, priority
upon liquidation, to the Note and (iv) account receivable financing in an amount
not to exceed $150,000 principal amount, and which account receivable financing
is secured by no other assets of the Company.

                  (e) Pay (other than in accordance with the terms thereof), or
voluntarily prepay, any amounts under any indebtedness or other obligations for
money borrowed, or capital lease obligations, whenever incurred or created and
whether or not such indebtedness becomes due, past due or accelerated, except
for (i) the Note, (ii) trade indebtedness incurred in the ordinary course of
business or (iii) regularly scheduled payments in connection with account
receivables financing which the Company may obtain in an amount not to exceed
$150,000.

                  (f) (i) Amend its certificate or articles of incorporation or
by-laws in any manner which would impair or reduce the rights of the holders of
the Note, (ii) effect a merger or consolidation in which the Company is not the
surviving entity or (iii) liquidate, wind up its affairs or dissolve.

                  (g) Create, permit or suffer to exist any lien, charge or
security interest in any of its assets, except for (i) the security interest
created by the Security Agreement; and (ii) Permitted Liens. As used herein,
"Permitted Liens" means any of the following: (a) liens for taxes, assessments
and governmental charges or levies (i) not yet in default or (ii) that are being
contested in good faith and by appropriate proceedings diligently conducted,
provided that in the case of liens under this clause (ii), reserves or other
appropriate provisions shall have been established therefor in accordance with
generally accepted accounting principles ("GAAP") and enforcement of any such
liens shall have been effectively stayed or fully bonded pending the final
determination of such proceeding, (b) liens imposed by law, such as
materialmen's, mechanics' carriers', workmen's and repairmen's liens and other
similar liens arising in the ordinary course of business securing obligations
that are not overdue for a period of more than 60 days or which, if overdue, are
being contested in good faith and by appropriate proceedings diligently
conducted, provided that reserves or other appropriate provisions shall have
been established therefor in accordance with GAAP and enforcement of any such
lien is effectively stayed or fully bonded pending the final determination of
such proceeding, (c) pledges or deposits to secure obligations under workers'
compensation laws or similar legislation or to secure

                                        6
<PAGE>
public or statutory obligations; (d) easements, zoning restrictions or other
restrictions, rights-of-way, minor encroachments, covenants or encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not arise out of the incurrence of any indebtedness and that do not and could
not reasonably be expected to materially detract from the value of the affected
property or interfere materially with the ordinary conduct of business of the
Company or materially impair the use thereof to the indebtedness; (e) judgments
and other similar liens arising in connection with court proceedings in an
amount not in excess of $50,000, provided the execution or other enforcement of
such liens is effectively stayed or fully bonded pending the final determination
of the proceeding referred to below and the claims secured thereby are being
contested in good faith and by appropriate proceedings; and (f) liens (other
than liens created or imposed under the Employee Retirement Income Security Act
of 1974, as amended) incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security, or to secure the performance of tender,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar obligations
(exclusive in any case of obligations incurred in connection with the borrowing
of money or the obtaining of advances or credit).

         (h) Directly or indirectly, enter into any transaction with or for the
benefit of an affiliate (other than the reasonable compensation of an affiliate
for services as an officer, director or employee).

                  4.2  Affirmative Covenants.  The Company will:

                  (a) Pay and discharge all lawful taxes, assessments and
governmental charges or levies imposed upon it, upon its income and profits or
upon any of its assets, before the same shall become in default, as well as all
lawful claims for labor, materials and supplies which, if unpaid, might become a
lien or charge upon such properties or any part thereof, provided, however, that
the Company will not be required to pay and discharge any such tax, assessment,
charge, levy or claim so long as (i) the validity, applicability and/or the
amount thereof shall be contested in good faith by appropriate proceedings, (ii)
the Company, shall have set aside on its books adequate reserves in accordance
with GAAP with respect to any such tax, assessment, charge, levy or claim so
contested, and (iii) enforcement of any lien on any assets of the Company
associated with any such taxes, assessments, charges, levies or claims shall
have been effectively stayed or fully bonded pending the final determination of
any such proceedings.

                  (b) Do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence, rights and franchises
and to comply in all material respects with all laws, regulations and orders of
each governmental authority having jurisdiction over the Company (it being
acknowledged that the Company may nevertheless effectuate its Reincorporation).

                  (c) Promptly following the occurrence of a Default (as defined
herein), furnish to the Holder and the Secured Party a statement of the
Company's President or Chief Financial Officer setting forth the details of such
Default and the action which the Company proposes to take with respect thereto.

                                        7
<PAGE>
                  (d) At all times maintain true and complete records and books
of account in which all of the financial transactions of the Company are duly
recorded in conformance with GAAP.

                  (e) Within 90 days of the date hereof, at all times reserve
and keep available out of its authorized shares of Common Stock, solely for the
purpose of issuance upon conversion of this Note, such number of shares of
Common Stock as shall be issuable upon the conversion of this Note.;

                  (f) Take all action which may be necessary or expedient to
assure that, upon conversion of this Note, all Conversion Shares issuable upon
such conversion will be duly and validly issued, fully paid, non-assessable and
not subject to the preemptive rights of any stockholder.

                  (g) Use the proceeds from the sale of the Notes primarily for
working capital requirements and for repayment of debt payable to third parties,
but not debt to officers or directors or their affiliates, except as follows: an
aggregate amount of $25,000 may be paid to Jonathan Karlin in repayment for
loans made by Mr. Karlin to the Company; and fifty percent of an aggregate of
$99,787 payable for salary deferred by certain officers of the Company, not
including any federal tax payable thereon, may be paid upon the Company's
receipt of the proceeds from the sale of the Notes and the remaining fifty
percent of such deferred salaries may be paid in equal installments over the
three month period commencing on the date hereon in accordance with the
Company's regular payroll periods; provided however, that, if the closing of the
sale of assets contemplated in the Letter of Intent dated December 14, 2001,
between the Company and Authentidate Holding Corp. shall occur prior to the
expiration of the aforementioned three month period, then the Company may use
the proceeds from the sale of the Notes to pay all deferred salary of the
Company's officers simultaneously with said closing.

                  (h) Commencing on December 31, 2001, provide the Holder with
monthly financial statements prepared in accordance with generally accepted
accounting principals consistently applied including a balance sheet and
statements of income and cash flow, as well as detailed aging of accounts
receivable and accounts payable.

                  (i) Furnish to the Payee such reports as to the Collateral (as
defined in the Security Agreement) for the Notes as the Holder may reasonably
request from time to time.

                  (j) Cooperate with the Holder and execute such further
instruments and documents as the Holder shall reasonably request to carry out to
their satisfaction the transactions contemplated by this Note.

                  (k) Permit the Holder to visit and inspect any of the
properties of the Company to examine the books of account of the Company (and to
make copies thereof and extracts therefrom), and to discuss the affairs,
finances and accounts of the Company with, and to be advised as to the same by,
its and their officers, at all such reasonable times and intervals as the Holder
may reasonably request.

                                        8
<PAGE>
                  (l) Comply in all material respects with (i) the applicable
laws and regulations wherever its business is conducted, (ii) the provisions of
its charter documents and by-laws, (iii) all agreements and instruments by which
it or any of its properties may be bound and (iv) all applicable decrees, orders
and judgements.

                  (m) Continue to retain Jonathan Karlin as the [Chairman and
Chief Executive Officer] of the Company.

                  (n) Cause any Subsidiary organized after the date of the Note
to be bound by the terms hereof and the Security Agreement to the same extent as
the Company.

                  (o) Deliver to the Holder, upon request, a detailed statement
reflecting the number of shares of Common Stock outstanding and the number of
all convertible securities with the terms of such conversion.

                  (p) Submit, within 45 days of the date hereof, for approval of
shareholders, a resolution to approve an increase in the authorized common stock
of the Company or obtain written consents for such approval within 45 days of
the date hereof.

                  (q) Along with Jonathan Karlin, use commercially reasonable
efforts to obtain a term life insurance policy on the life of Mr. Karlin, for
the benefit of Holder in the amount of $500,000. Such policy may be made payable
to the Company only if the Company collaterally assigns such proceeds to the
Holder sufficient proceeds, up to $500,000, to satisfy any outstanding Notes (as
defined in the Security Agreement dated December 24, 2001, between Company and
Authentidate Holding Corp.), which proceeds shall be applied to repay said
Notes.

         5. Events of Default. If any of the following events (each an "Event of
Default") shall occur:

                  5.1 The Company fails to pay the principal of, any installment
of principal and/or interest accrued on, or any other amount at anytime owing
under, the Note, as and when the same becomes due and payable hereunder or
thereunder and/or under the Security Agreement; or

                  5.2 The Company defaults in the due observance or performance
of or breach any of its covenants contained in this Note or the Security
Agreement, (other than a Default involving the payment of money due under this
Note), and such default is not cured within 10 business days after the
occurrence of such default; or

                  5.3 The Company or any Subsidiary thereof shall (i) becomes
insolvent, (ii) apply for or consent to the appointment of, or the taking of
possession by, a receiver, trustee or similar official of or for itself or of or
for all or a substantial part of its property, (iii) make an assignment for the
benefit of its creditors, (iv) commence a voluntary case under the Federal
Bankruptcy Code, as now or hereafter in effect (the "Code"), (v) file a petition
seeking to take advantage of any other bankruptcy, insolvency, moratorium,
reorganization or other similar law of any jurisdiction ("Other

                                        9
<PAGE>
Laws"), (vi) acquiesce as to, or fail to controvert in a timely or appropriate
manner, an involuntary case filed against the Company or such Subsidiary under
the Code, or (vii) take any corporate action in furtherance of any of the
foregoing; or

                  5.4 A proceeding or involuntary case shall be commenced,
without the application or consent of the Company or any Subsidiary thereof, in
any court of competent jurisdiction (i) under the Code, (ii) seeking
liquidation, reorganization, dissolution, winding up or composition or
readjustment of its debts under any Other Laws, or (iii) seeking the appointment
of a trustee, receiver or similar official for it or for all or any substantial
part of its assets, and any such proceeding or case shall continue undismissed,
or unstayed and in effect, for a period of 60 days; or

                  5.5 A final judgment for the payment of money shall be
rendered by a court of competent jurisdiction against the Company or any
Subsidiary thereof, and the Company or such Subsidiary shall not discharge the
same, or procure a stay of execution thereof within 30 days from the date of
entry thereof and within such 30 day period or such longer period during which
execution of such judgment shall have been stayed, appeal therefrom and cause
the execution thereof to be stayed during such appeal, and such judgment,
together with all other judgments against the Company (including all
subsidiaries), shall exceed in the aggregate $50,000 in excess of any insurance
as to the subject matter of such judgments, as to which coverage has not been
declined or the underlying claim rejected by the applicable insurer; or

                  5.6 The liquidation or dissolution of the Company or any
Subsidiary thereof or any vote in favor thereof by the board of directors and
shareholders of the Company; or

                  5.7 A proceeding is commenced to foreclose a security interest
in or lien on any asset of the Company or any Subsidiary thereof as a result of
a default in the payment or performance of any indebtedness of the Company or
such Subsidiary; or

                  5.8 An attachment or garnishment is levied against the assets
of the Company or any Subsidiary thereof involving an amount in excess of
$25,000 and the lien created by such levy is not vacated, bonded or stayed
within 10 business days after such lien has attached to such assets; or

                  5.9 The Company or any Subsidiary thereof defaults in the
payment (regardless of amount) when due of the principal of, interest on, or any
other liability on account of, any indebtedness of the Company or such
Subsidiary (other than the Notes) having an unpaid principal amount in excess of
$50,000, or a default occurs in the performance or observance by the Company or
any Subsidiary thereof of any covenant or condition (other than for the payment
of money) contained in any note (other than this Note) or agreement evidencing
or pertaining to any such indebtedness, which causes the maturity of such
indebtedness to be accelerated or permits the holder or holders of such
indebtedness to declare the same to be due prior to the stated maturity thereof;

                  5.10 Any representation, warranty or statement of fact made by
the Company in this Note, or the Security Agreement or in any certificate or
financial statement delivered by the

                                       10
<PAGE>
Company to the Holder at any time proves to be false or misleading in any
material respect when made or deemed made by the Company;

                  5.11 The Company or any of its Subsidiaries sells all or
substantially all of its assets or merges or is consolidated with another
corporation in which the Company or such Subsidiary, as the case may be, is not
the surviving corporation;

                  5.12 The Company grants a security interest in any of its
assets while any principal or interest on this Note remains outstanding
provided, however, the Company may grant a security interest of up to $150,000
with respect to account receivable financing; or

                  5.13 The Company fails to obtain shareholder approval to amend
its certificate of incorporation within 90 days of the date hereof to provide
for an increase in the number of authorized shares of Common Stock in an amount
at least equal to the number of shares issuable upon conversion of this Note.

then, and in any such event the Holder of this Note may by written notice to the
Company declare the entire unpaid principal amount of this Note outstanding
together with accrued interest thereon due and payable, and the same shall,
unless such default be cured within ten (10) days after such notice, forthwith
become due and payable upon the expiration of such ten (10) day period, without
presentment, demand, protest, or other notice of any kind, all of which are
expressly waived.

                  As used in this Note, "Accelerated Maturity Date" means any
date prior to the Maturity Date on which the principal of and any accrued and
unpaid interest on this Note is declared to be, or becomes, due pursuant to this
Section 4 and "Default" means any event that is or, with the passage of time or
the giving of notice or both, would be, an Event of Default.

         6. Suits for Enforcement and Remedies. If any one or more Events of
Default shall occur, the Holder may proceed to (i) protect and enforce Holder's
rights either by suit in equity or by action at law, or both, whether for the
specific performance of any covenant, condition or agreement contained in this
Note or in any agreement or document referred to herein or in aid of the
exercise of any power granted in this Note or in any agreement or document
referred to herein, (ii) enforce the payment of this Note, or (iii) enforce any
other legal or equitable right of the Holder. No right or remedy herein or in
any other agreement or instrument conferred upon the Holder of this Note is
intended to be exclusive of any other right or remedy, and each and every such
right or remedy shall be cumulative and shall be in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or by statute or otherwise.

         7. Restriction on Transfer. This Note has been acquired for investment
and has not been registered under the securities laws of the United States of
America or any state thereof. Accordingly, neither this Note nor any interest
therein may be offered for sale, sold or transferred in the absence of
registration and qualification of this Note under applicable federal and state

                                       11
<PAGE>
securities laws or an opinion of counsel of the Holder reasonably satisfactory
to the Company that such registration and qualification are not required.

         8. Prepayment. The principal of and accrued interest on this Note may
be prepaid in full at any time without premium or penalty.

         9. Holder Deemed Owner. The Company may deem and treat the registered
Holder hereof as the absolute owner of this Note (whether or not this Note shall
be overdue and notwithstanding any notice of ownership or writing hereon made by
anyone other than the Company, for the purpose of receiving payment hereof or
thereof or on account hereof and for all other purposes) and the Company shall
not be affected by notice to the contrary.

         10. Corporate Obligation. It is expressly understood that this Note is
solely a corporate obligation of the Company, and that any and all personal
liability, either at common law or in equity or by constitution or statute, of,
and any and all such rights and claims against, every promoter, subscriber,
incorporator, shareholder, officer, or director, as such, are hereby expressly
waived and released by the Holder hereof by the acceptance of this Note and as a
part of the consideration for the issue hereof.

         11. Miscellaneous

                  11.1 The obligations to make the payments provided for in this
Note are absolute and unconditional and not subject to any defense, set-off,
counterclaim, rescission, recoupment or adjustment whatsoever. No provision of
this Note shall alter or impair the obligations of the Company hereby.

                  11.2 If, following the occurrence of an Event of Default, the
Holder of this Note shall seek to enforce the collection of any amount of
principal and/or accrued interest on this Note, there shall be immediately due
and payable by the Company, in addition to the then unpaid principal of, and
accrued unpaid interest on, this Note, all costs and expenses incurred by the
Holder of this Note in connection therewith, including, without limitation,
reasonable attorneys' fees and disbursements.

                  11.3 No forbearance, indulgence, delay or failure to exercise
any right or remedy with respect to this Note shall operate as a waiver or as an
acquiescence in any Default, nor shall any single or partial exercise of any
right or remedy preclude any other or further exercise thereof or the exercise
of any other right or remedy.

                  11.4 This Note may not be modified or discharged (other than
by payment), except by a writing duly executed by the Company and Holder.

                                       12
<PAGE>
                  11.5 The headings of various sections and subsections of this
Note are for convenience of reference only and shall in no way modify any of the
terms or provisions of this Note.

                  11.6 All notices required to be given to any of the parties
hereunder shall be in writing and shall be deemed to have been sufficiently
given for all purposes when presented personally to such party, sent by
telecopier (with the original timely mailed), or sent by registered, certified
or express mail, return receipt requested, to such party at its address set
forth below:

     If to the Company, to:                      With a copy to:

     Zylab International, Inc.                   Gorham S. Clark, Esq.
     12800 Middlebrook Road                      Foust & Clark, P.C.
     Suite 410                                   8345-A Greensboro Drive
     Germantown, MD 20874                        McLean, Virginia 22102
     Attn: John Karlin                           Telecopier No.: (703) 893-7907
     Telecopier No.: (301) 428-3307

     If to the Payee, to:                        With a copy to:

     Dennis H. Bunt, Chief Financial Officer     Brian C. Daughney, Esq.
     Authentidate Holding Corp.                  Goldstein & DiGioia, LLP
     2165 Technology Drive                       369 Lexington Avenue-18th Floor
     Schenectady, NY 12308                       New York, NY 10017
     Telecopier: (518) 346-3644                  Telecopier No.: (212) 557-0295

or hereafter given to the other party hereto pursuant to the provisions of this
Note.

                  11.7 The Company may not delegate its obligations under this
Note and such attempted delegations shall be null and void. The Holder may
assign, pledge or otherwise transfer this Note without prior written consent of
the Company. This Note inures to the benefit of Payee, its successors and its
assignee of this Note and binds the Company, and its successors and assigns, and
the terms "Payee" and "the Company" whenever occurring herein shall be deemed
and construed to include such respective successors and assigns.

                  11.8 This Note shall continue to be effective or be
reinstated, as the case may be, if at any time any payment made pursuant to it
is rescinded or must otherwise be returned by the Holder upon bankruptcy or
reorganization or otherwise of the Company, all as though such payment had not
been made.

                  11.9 THE COMPANY AND THE HOLDER EACH (I) AGREES THAT ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE SHALL BE INSTITUTED
EXCLUSIVELY IN THE APPROPRIATE STATE COURT, COUNTY OF NEW YORK OR IN THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, (II) WAIVES ANY
OBJECTION WHICH THE COMPANY MAY HAVE NOW OR HEREAFTER BASED UPON FORUM NON
CONVENIENS OR TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND (III)
IRREVOCABLY CONSENTS TO THE JURISDICTION OF THE STATE COURT, COUNTY OF NEW YORK,
NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK IN ANY SUCH SUIT,

                                       13
<PAGE>
ACTION OR PROCEEDING. THE COMPANY AND THE HOLDER EACH FURTHER AGREES TO ACCEPT
AND ACKNOWLEDGE SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH
SUIT, ACTION OR PROCEEDING IN THE STATE COURT, COUNTY OF NEW YORK OR IN THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND AGREES
THAT SERVICE OF PROCESS UPON THE COMPANY OR THE HOLDER, MAILED BY CERTIFIED MAIL
TO THEIR RESPECTIVE ADDRESSES, SUCH SERVICE TO BECOME EFFECTIVE THREE BUSINESS
DAYS AFTER SUCH MAILING, WILL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF
PROCESS UPON THE COMPANY OR THE HOLDER, AS THE CASE MAY BE, IN ANY SUIT, ACTION
OR PROCEEDING. FURTHER, BOTH THE COMPANY AND THE HOLDER HEREBY WAIVE TRIAL BY
JURY IN ANY ACTION TO ENFORCE THIS NOTE AND IN CONNECTION WITH ANY DEFENSE,
COUNTERCLAIM OR CROSSCLAIM ASSERTED IN ANY SUCH ACTION.

                  11.10 This Note is exchangeable, without expense, upon the
surrender hereof by the Holder at the principal executive office of the Company,
for two or more new Notes of like tenor and date (except for the principal
amounts thereof) representing in the aggregate the same principal amount as this
Note, in such denominations as shall be designated by the Holder thereof at the
time of such surrender, provided that such new Notes shall be issuable in
minimum denominations of $10,000 and integral multiples thereof.

                  11.11 This Note shall be construed in accordance with and
governed by the laws of the State of New York without regard to principles of
conflicts of law, and cannot be changed, discharged or terminated orally but
only by an instrument in writing signed by the party against whom enforcement of
any change, discharge or termination is sought.

                  11.12 Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Note,
and, in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of this Note, if
mutilated, the Company will make and deliver a new Note of like date and tenor,
in lieu hereof.

                  11.13. Payor may not delegate its obligations under this Note
and such attempted delegations shall be null and void. The Payor may assign,
pledge or otherwise transfer this Note without prior written consent of Payor.
This Note inures to the benefit of Payee, its successors and its assignee of
this Note and binds Payor, and its successors and assigns, and the term
"Payee"whenever occurring herein shall be deemed and construed to include such
respective successors and assigns.

                  11.14. The obligations to make the payments provided for in
this Note are absolute and unconditional and not subject to any defense,
set-off, counterclaim, rescission, recoupment or adjustment whatsoever. No
provision of this Note shall alter or impair the obligations of the Payor
hereby.

                  11.15. No forbearance, indulgence, delay or failure to
exercise any right or remedy with respect to this Note shall operate as a waiver
or as an acquiescence in any Event of Default, nor

                                       14
<PAGE>
shall any single or partial exercise of any right or remedy preclude any other
or further exercise thereof or the exercise of any other right or remedy.

PAYOR:

ZYLAB INTERNATIONAL, INC.

By:______________________________
         Jonathan Karlin, President

                                       15
<PAGE>
                                                                       EXHIBIT 1
                              NOTICE OF CONVERSION
                               OF CONVERTIBLE NOTE

TO:  [______________________]

                           (A)      Pursuant to the terms of the attached
                                    Convertible Note (the "Note"), the
                                    undersigned hereby elects to convert $
                                    principal amount of the Note into shares of
                                    Common Stock of Zylab International, Inc.
                                    (the "Maker"). Capitalized terms used herein
                                    and not otherwise defined herein have the
                                    respective meanings provided in the Note.

                           (B)      Please issue a certificate or certificates
                                    for the number of shares of Common Stock
                                    into which such principal amount of the Note
                                    is convertible in the name(s) specified
                                    immediately below or, if additional space is
                                    necessary, on an attachment hereto:

        ----------------------                    -------------------------
        Name                                      Name

        ----------------------                    -------------------------
        Address                                   Address

        ----------------------                    -------------------------
        SS or Tax ID Number                       SS or Tax ID Number

                           (C)      In the event of partial exercise, please
                                    reissue an appropriate Note(s) for the
                                    balance that shall not have been converted.

                           (D)      The undersigned represents and warrants that
                                    (i) all of the requirements of the
                                    Securities Act of 1933, as amended (the
                                    "ACT"), applicable to the undersigned have
                                    been complied with by the undersigned and
                                    (ii) the undersigned has not engaged in any
                                    transaction or series of transactions that
                                    is a part of or a plan or scheme to evade
                                    the registration requirements of the Act.

----------------                                ---------------------------
Date                                            Signature of Registered Holder
                                                (Must be signed exactly as name
                                                appears in the Note. The
                                                signature must be notarized.)

                                       16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00033-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00033-of-00352.parquet"}]]