Exhibit 10.1

                             STARMEDIA NETWORK, INC.

                          SECURITIES PURCHASE AGREEMENT

                            DATED AS OF MAY 30, 2001



                          SECURITIES PURCHASE AGREEMENT

      THIS SECURITIES PURCHASE AGREEMENT is entered into as of May 30, 2001, by
and among StarMedia Network, Inc., a Delaware corporation (the "Company"),
BellSouth Enterprises, Inc., a Georgia corporation ("BellSouth"), and each of
the additional investors set forth on Schedule A attached hereto (each, a
"Co-Investor" and, collectively, the "Co-Investors"). At times, BellSouth and
the Co-Investors may be collectively referred to as the "Purchasers".

      All capitalized terms included in this Agreement, otherwise not defined in
the context thereof, shall have the meaning ascribed to them in Article X
hereof.

      WHEREAS, the Purchasers have indicated a desire to purchase from the
Company 1,431,373 shares (the "Purchased Shares") of a newly created series of
the Company's convertible preferred stock which is designated as Series A
Convertible Preferred Stock, par value $0.001 per share (the "Series A Preferred
Stock"), which Purchased Shares are convertible into 14,313,730 shares (subject
to adjustment, the "Conversion Shares") of the Company's common stock, par value
$0.001 per share (the "Common Stock"); and

      WHEREAS, in connection with BellSouth's participation in this Agreement,
the Company, BellSouth and certain Affiliates of the Company and BellSouth
intend to enter into certain commercial agreements, setting forth the commercial
arrangements among the parties in connection with the development,
implementation and maintenance of multi-access Internet portals for the Latin
American operations of BellSouth and its Affiliates (collectively, the
"Commercial Agreement").

      NOW, THEREFORE, for and in consideration of the mutual consents and
agreements herein contained, the parties hereto do hereby covenant and agree as
follows:

                                    ARTICLE I

                           PURCHASE AND SALE OF SHARES

      1.1 PURCHASE AND SALE. Subject to the terms and conditions hereinafter set
forth, at the Closing (as defined below) the Company shall issue and sell to
each Purchaser, severally and not jointly, and the Purchasers shall purchase
from the Company, severally and not jointly, the Purchased Shares, at a price
per share equal to $25.50. The number of Purchased Shares to be purchased by
each Purchaser is set forth opposite each Purchaser's name on SCHEDULE A
attached hereto. The Purchased Shares shall have the rights, preferences,
privileges and restrictions set forth in the Company's Amended and Restated
Certificate of Incorporation (the "Charter") and the Certificate of Designation
of the Preferences, Rights and Limitations of the Series A Preferred Stock in
the form of EXHIBIT A attached hereto (the "Certificate of Designation").

      1.2 CLOSING. Subject to the satisfaction or waiver of the conditions set
forth in Articles V, VI and VII hereof, a closing (the "Closing") of the sale
and purchase of the Purchased Shares shall take place at the offices of Hughes
Hubbard & Reed LLP, One Battery


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Park Plaza, New York, New York, at 10:00 A.M., on May 30, 2001, or such other
date, time and place as shall be mutually agreed upon by the Company and the
Purchasers (the "Closing Date"). At the Closing, subject to the terms and
conditions hereof, the Company will deliver to each Purchaser the Purchased
Shares being acquired by such Purchaser in the form of a certificate issued in
such Purchaser's name upon receipt by the Company of payment of the full
purchase price therefor by or on behalf of such Purchaser to the Company by
certified check or wire transfer of immediately available funds to a bank
account designated in writing by the Company at least three (3) business days
prior to Closing.

      1.3 SEPARATE SALES. The Company's agreement with each of the Purchasers is
a separate agreement, and the sale of Purchased Shares to each of the Purchasers
is a separate sale being made severally and not jointly to the Purchasers;
PROVIDED, HOWEVER, that this Section 1.3 shall not limit the right of the
Company not to consummate the Closing if any of the conditions with respect to
any Purchaser set forth in Article V hereof are not satisfied.

      1.4 SUBSEQUENT SALES OF SHARES. At any time on or before the 60th day
following the Closing, the Company may sell up to the balance of the authorized
shares of Series A Preferred Stock not sold at the Closing to such Persons as
may be approved by the Board of Directors of the Company. All such sales shall
be made on the terms and conditions set forth in this Agreement, including the
representations and warranties set forth in Articles II and IV; PROVIDED,
HOWEVER, that the purchase price per share shall be not less than the greater of
(i) $25.50 and (ii) an amount equal to 1000% of the average closing sale price
of the Common Stock on Nasdaq over the thirty trading days immediately preceding
the closing of such sale; PROVIDED, FURTHER, that the Company may deliver a
revised Disclosure Schedule to such additional purchasers, in which case the
representations and warranties made by the Company to such additional purchasers
shall be qualified by such revised Disclosure Schedule. Such sales shall be
completed by delivery of (1) the required consideration, (2) a counterpart
signature page to this Agreement, and (3) counterpart signature pages to any
other agreements to which such subsequent purchaser is a party contemplated by
this Agreement. Any shares of Series A Preferred Stock sold pursuant to this
Section 1.4 shall be deemed to be "Purchased Shares" for all purposes under this
Agreement and any purchasers thereof shall be deemed to be "Purchasers" for all
purposes under this Agreement and the Schedule of Purchasers shall be amended to
reflect such sales. The Company shall amend Schedule A to reflect such
subsequent sales.

      1.5 USE OF PROCEEDS. Unless otherwise approved in writing by BellSouth,
the Company shall use the proceeds from the sale of the Purchased Shares, net of
the payments pursuant to the agreements referred to in Section 2.11 and legal
and accounting fees and expenses incurred in connection with the transactions
contemplated by this Agreement, towards the Company's development,
implementation, maintenance and support of its multi-access portals, including
its websites located at www.starmedia.com. In addition, the Company shall
dedicate such portion of such net proceeds as may be necessary to fulfill its
obligations under the Related Agreements.


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                                   ARTICLE II

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

      Except as otherwise set forth on the disclosure schedule attached hereto
(the "Disclosure Schedule") delivered by the Company to the Purchasers prior to
the Closing, the Company makes the following representations and warranties to
the Purchasers, understanding and agreeing that the Purchasers are entering into
this Agreement in part in reliance on such representations and warranties:

      2.1 ORGANIZATION AND CORPORATE POWER. The Company and each of its
subsidiaries, a complete list of which is attached hereto as EXHIBIT B, is a
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has all requisite corporate
power and authority to own its properties and to carry on its business as
presently conducted. The Company and each of its Subsidiaries is duly licensed
or qualified to do business as a foreign corporation in each jurisdiction
wherein the character of its property or the nature of the activities presently
conducted by it makes such qualification necessary and where the failure to so
qualify would have a Material Adverse Effect.

      2.2 AUTHORIZATION. The Company and each of the Subsidiaries have all
necessary corporate power and have taken all necessary corporate action required
for the due authorization, execution, delivery and performance by the Company of
this Agreement, the Commercial Agreement and any other agreements or instruments
executed by the Company and/or the Subsidiaries in connection herewith or
therewith (the Commercial Agreement and such other agreements and instruments,
collectively, the "Related Agreements"), and the consummation by the Company of
the transactions contemplated herein or therein, and for the due authorization,
issuance and delivery of the Purchased Shares and the Conversion Shares.
Sufficient shares of authorized, but unissued shares of Common Stock have been
reserved for issuance upon conversion of the Purchased Shares. The issuance of
the Purchased Shares does not, and the Conversion Shares will not, require any
further corporate action and is not and, in the case of the Conversion Shares,
will not be, subject to any preemptive right, right of first refusal or similar
purchase right, and will not cause any outstanding shares of the Company's
capital stock to be adjusted, or any additional shares of capital stock to be
issued, under any antidilution or similar provision. Assuming that, as of the
date of this Agreement and as of the Closing Date, no Purchaser "beneficially
owns" (as such term is defined in the Rights Agreement) any shares of the
Company's capital stock other than (i) shares of the Company's capital stock
contemplated to be issued to any such Person pursuant to this Agreement or any
Related Agreement, (ii) as reported on any Schedule 13D or Schedule 13G under
the Exchange Act filed with the Commission prior to the date of this Agreement
or (iii) shares "beneficially owned" (as such term is defined in the Rights
Agreement) by any such Purchaser (other than BellSouth and JP Morgan Partners
(SIBC), LLC) with respect to which the filing with the Commission of a Schedule
13D or Schedule 13G under the Exchange Act is not required, the consummation of
the transactions contemplated by this Agreement and the Related Agreements to be
consummated on the date of this Agreement or on the Closing Date will not result
in the triggering of any right or entitlement of the holders of shares of Common
Stock under the Rights Agreement. Assuming due execution and delivery hereof by
the other parties hereto, this Agreement constitutes a valid and binding
obligation of the Company enforceable against the Company in accordance with its


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terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights, (ii) general principles of equity that
restrict the availability of equitable remedies, and (iii) to the extent that
the enforceability of the indemnification provisions contained in Sections 8.3
and 11.1 may be limited by applicable laws. At the Closing, assuming due
execution and delivery thereof by the other Persons contemplated to be a party
thereto, the Related Agreements will each constitute a valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights, (ii) general principles of equity that
restrict the availability of equitable remedies, and (iii) to the extent that
the enforceability of any indemnification provisions contained in the Related
Agreements similar to the provisions contained in Sections 8.3 and 11.1 may be
limited by applicable laws.

      2.3 GOVERNMENT APPROVALS. Assuming the representations and warranties of
each Purchaser contained in Section 4.1 are true and correct, no consent,
approval, license or authorization of, or designation, declaration or filing
with, any court or governmental authority is or will be required on the part of
the Company in connection with the execution, delivery and performance by the
Company of this Agreement and the Related Agreements, or in connection with the
issuance of the Purchased Shares or the Conversion Shares upon conversion of the
Purchased Shares, except for (i) those which have already been made or granted,
(ii) the filing of registration statements with the Securities and Exchange
Commission (the "Commission") pursuant to Section 8.2, (iii) filings with
applicable state securities commission, (iv) the listing of the Conversion
Shares on the Nasdaq National Market and (v) the filings under the HSR Act, if
required.

      2.4 AUTHORIZED AND OUTSTANDING STOCK.

            (a) The authorized capital stock of the Company (immediately prior
to the Closing) will consist of 200,000,000 shares of Common Stock and
10,000,000 shares of preferred stock, par value $.001 per share (the "Preferred
Stock"), of which (x) 2,300,000 shares of Preferred Stock have been designated
as Junior Non-Voting Convertible Preferred Stock, Series 1999A (the "1999
Preferred Stock"), (y) 500,000 shares of Preferred Stock have been designated as
Series A Junior Participating Preferred Stock and (z) 1,960,784 shares of
Preferred Stock have been designated as Series A Preferred Stock.

            (b) All of the issued and outstanding shares of capital stock of the
Company are, and when issued in accordance with the terms hereof, the Purchased
Shares and the Conversion Shares will be, duly authorized and validly issued and
fully paid and non-assessable, with no personal liability attaching to the
ownership thereof. When issued in accordance with the terms hereof and, in the
case of the Conversion Shares in accordance with the terms of the Charter and
the Certificate of Designation, the Purchased Shares and the Conversion Shares
will be free and clear of all Liens imposed by or through the Company, except
for restrictions imposed by Federal or state securities or "blue sky" laws and
except for those imposed pursuant to this Agreement or any of the Related
Agreements. As of the Closing, the designations, powers, preferences, rights,
qualifications, limitations and restrictions in respect of the Purchased Shares
will be as set forth in the Charter and Certificate of Designation and all such
designations,


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powers, preferences, rights, qualifications, limitations and restrictions will
be valid, binding and enforceable in accordance with their terms and in
accordance with applicable law.

            (c) After giving effect to the transactions contemplated herein to
occur at the Closing, if no stock options are exercised between the date of this
Agreement and the Closing, there will be (w) 70,245,737 issued and outstanding
shares of Common Stock, (x) 234,402 issued and outstanding shares of 1999
Preferred Stock (y) no issued and outstanding shares of Series A Junior
Participating Preferred Stock and (z) 1,431,373 issued and outstanding shares of
Series A Preferred Stock.

            (d) Except as provided in this Agreement or any of the Related
Agreements, (i) no subscription, warrant, option, convertible security or other
right (contingent or otherwise) issued by the Company to purchase or acquire any
shares of capital stock of the Company is authorized or outstanding and (ii)
there is not any commitment of the Company to issue any subscription, warrant,
option, convertible security or other such right. No person or entity is
entitled to any preemptive right, right of first refusal or similar rights
granted by the Company with respect to the issuance of the Purchased Shares or
the Conversion Shares.

      2.5 SUBSIDIARIES. The Company owns directly or indirectly, free and clear
of all Liens of any nature, all of the issued and outstanding capital stock of
each of the Subsidiaries.

      2.6 SECURITIES LAW COMPLIANCE. Assuming the representations and warranties
of the Purchasers set forth in Section 4.1 hereof are true and correct, the
offer and sale of the Purchased Shares and the Conversion Shares (the "Issuable
Securities") pursuant to this Agreement is exempt from the registration
requirements of the Securities Act. Neither the Company nor any person acting on
its behalf has, in connection with the offering of the Issuable Securities,
solicited or will solicit any offers to sell or has offered to sell or will
offer to sell all or any part of the Issuable Securities to any person or
persons so as to bring the sale of such Issuable Securities by the Company
within the registration provisions of the Securities Act or any state securities
laws. As used herein, the terms "offer" and "sale" have the meanings specified
in Section 2(3) of the Securities Act.

      2.7 COMMISSION DOCUMENTS; FINANCIAL INFORMATION. The Company has made
available to the Purchasers true and complete copies of all material SEC
Documents filed with the Commission. As of their respective filing dates, the
SEC Documents complied in all material respects with the requirements of the
Securities Act, the Exchange Act and the rules and regulations of the Commission
thereunder applicable to such SEC Documents, and as of their respective dates
none of the SEC Documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The consolidated financial statements of the
Company and its subsidiaries included in the SEC Documents (the "Financial
Statements") were prepared in accordance with GAAP (except as may be indicated
therein or in the notes thereto and except with respect to unaudited statements
as permitted by Form 10-Q) and fairly present in all material respects the
financial position of the Company as of the date thereof or the results of
operations and cash flows for the period then ended. The Disclosure Schedule
will be true, complete and correct in all material respects as of the Closing
Date.


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      2.8 ABSENCE OF CERTAIN EVENTS; NO MATERIAL ADVERSE CHANGE. Except as
disclosed in the SEC Documents, since March 31, 2001, (i) there has not occurred
any event or condition having or, that is reasonably likely to have, a Material
Adverse Effect and (ii) the Company has operated in the ordinary course of
business. Since March 31, 2001 there has not occurred:

            (a) any declaration or payment of any dividends, or other
distributions in respect of the outstanding shares of capital stock of the
Company; or

            (b) any change in the accounting principles, methods, practices or
procedures followed by the Company in connection with the business of the
Company except as required by GAAP; or

            (c) any granting by the Company or any of the Subsidiaries to any
employee earning in excess of $200,000 per year of any increase in compensation,
severance or termination pay, including bonuses, loans and salary advances.

            (d) For the purposes of subsection (c), all indebtedness,
liabilities, agreements, understandings, instruments, contracts and proposed
transactions involving the same Person (including Persons the Company has reason
to believe are affiliated therewith) shall be aggregated for the purpose of
meeting the individual minimum dollar amount specified in such subsection.

      2.9 LITIGATION. There is no litigation or governmental proceeding or
investigation pending or, to the knowledge of the Company, threatened, against
the Company or any of the Subsidiaries that would be reasonably likely to result
in a Material Adverse Effect. The foregoing includes actions pending or
threatened against the Company or any of the Subsidiaries involving the prior
employment of any of the Company's employees, the use by such employees in
connection with the Company's business of any information or techniques
allegedly proprietary to any of their former employers, or the obligations of
such employees under any agreements with prior employers. The Company is not a
party or subject to the provisions of any order, writ, injunction, judgment or
decree of any court or government agency or instrumentality.

      2.10 COMPLIANCE WITH LAWS AND OTHER INSTRUMENTS. The Company and the
Subsidiaries are in compliance with all of the provisions of this Agreement and
their respective charters and by-laws (or comparable organizational instruments
with different names), and, except as would not be reasonably likely to result
in a Material Adverse Effect, neither the Company nor any of the Subsidiaries
are in default under any mortgage, indenture, lease, license, other agreement or
instrument to which it is a party. The Company and the Subsidiaries conduct
their business in compliance with all applicable laws, except for such
non-compliances as would not be reasonably likely to result in a Material
Adverse Effect.

      2.11 NO BROKERS OR FINDERS. Except for J.P. Morgan Chase & Co., whose fees
will be paid by the Company pursuant to certain agreements, copies of which have
been provided to BellSouth, no person has or will have, as a result of the
transactions contemplated by this Agreement, any right, interest or claim
against or upon the Company, any of the Subsidiaries or any Purchaser for any
commission, fee or other compensation as a finder or broker because of any act
or omission by the Company or any of the Subsidiaries.


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      2.12 OBLIGATIONS TO RELATED PARTIES. Except as disclosed in SEC Documents,
there are no obligations of the Company and its Subsidiaries to officers,
directors, shareholders or employees of the Company or the Subsidiaries other
than (a) for payment of salary for services rendered, (b) reimbursement for
reasonable expenses incurred on behalf of the Company and the Subsidiaries and
(c) for other standard employee benefits made generally available to all
employees (including stock option agreements outstanding under any stock option
plan approved by the Board of Directors of the Company and the Subsidiaries).
The Company is not a guarantor or indemnitor of any indebtedness of any other
Person.

      2.13 PATENTS AND TRADEMARKS.

            (a) To the best of its knowledge, the Company owns or possesses
sufficient legal rights to all patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information and other proprietary rights
and processes necessary for its business as now conducted and as presently
proposed to be conducted (the "Intellectual Property"), without any infringement
of the rights of others with such exceptions as would not be reasonably likely
to result in a Material Adverse Effect.

            (b) As of the date of this Agreement, the Company has not received
any communication in writing (or, to the best of the Company's knowledge, other
than in writing) alleging that the software to be licensed to BellSouth pursuant
to the Commercial Agreement violates any of the patents, trademarks, service
marks, trade names, copyrights or trade secrets or other proprietary rights of
any other Person.

            (c) The Company has taken all reasonable action to maintain and
protect the Intellectual Property and to protect the secrecy and confidentiality
of the Intellectual Property.

      2.14 COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery and
performance by the Company of this Agreement and the Related Agreements do not,
and the issuance and delivery of the Purchased Shares and of the Conversion
Shares will not, with or without the passage of time or giving of notice, result
in any material violation, or be in conflict with or constitute a default under
any term of the Company's Charter or Bylaws, or of any provision of any
mortgage, indenture, contract, agreement, instrument, contract, judgment,
decree, order, or writ to which it is party or by which it is bound, or result
in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of
the properties or assets of the Company or the suspension, revocation,
impairment, forfeiture or nonrenewal of any permit, license, authorization or
approval applicable to the Company, its business or operations or any of its
assets or properties, in each case, with such exceptions as would not be
reasonably likely to result in a Material Adverse Effect.

      2.15 TAXES.

            (a) The Company and each of the Subsidiaries has paid all federal,
state, county, local, foreign and other taxes, including, without limitation,
income taxes, withholding taxes, estimated taxes, excise taxes, sales taxes, use
taxes, gross receipts taxes, franchise taxes, employment and payroll related
taxes, property taxes and import duties, whether or not measured in whole or in
part by net income ("Taxes" or, individually, a "Tax") which have come due and


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are required to be paid by it through the date of this Agreement, and all
deficiencies or other additions to Tax, interest and penalties owed by it in
connection with any such Taxes.

            (b) The Company and each of the Subsidiaries has timely filed or
caused to be filed all returns for Taxes that it is required to file on and
through the date of this Agreement (including all applicable extensions), and
all such Tax returns are accurate and complete in all material respects.

            (c) The Company and each of the Subsidiaries has not received any
notice of deficiency with respect to any Tax return and, to the knowledge of the
Company, no audit is in progress with respect to any return for Taxes, no
extension of time is in force with respect to any date on which any return for
Taxes was or is to be filed and no waiver or agreement is in force for the
extension of time for the assessment or payment of any Tax.

            (d) There are no liens for Taxes on the assets of the Company except
for liens for current Taxes on the assets of the Company or any of the
Subsidiaries not yet due or with respect to Taxes being disputed in good faith
by the Company for which the Company or any of the Subsidiaries maintains
adequate reserves in its Financial Statements.

      2.16 EMPLOYEES. The Company has no collective bargaining agreements with
any of its employees. There is no labor union organizing activity pending or, to
the Company's knowledge, threatened with respect to the Company.

      2.17 NON-DISCLOSURE AND DEVELOPMENT AGREEMENTS. Each current employee and
consultant of the Company responsible for the design, development or maintenance
of the software to be licensed to BellSouth or its Affiliates pursuant to the
Commercial Agreement has executed a Non-Disclosure and Development Agreement in
the form(s) as delivered to BellSouth prior to Closing (or, in the case of each
consultant, an agreement containing provisions substantially similar to the
provisions contained in such form(s)).

      2.18 AGREEMENTS WITH STOCKHOLDERS AND REGISTRATION RIGHTS.

            (a) Except (i) as provided in this Agreement, the Charter and the
Related Agreements or (ii) as disclosed in the SEC Documents, there are no
agreements, written or oral, between the Company and any holder of its capital
stock (other than employees of the Company and its subsidiaries which are not
executive officers of the Company).

            (b) Except as disclosed in the SEC Documents, the Company is
presently not under any obligation, and has not granted any rights, to register
any of the Company's presently outstanding securities or any of its securities
that may hereafter be issued.

      2.19 COMPLIANCE WITH LAWS; PERMITS. To the Company's knowledge, the
Company and the Subsidiaries are not in violation of any applicable statute,
rule, regulation, order or restriction of any domestic or foreign government or
any instrumentality or agency thereof in respect of the conduct of their
respective businesses or the ownership of their respective properties which
violation is reasonably likely to result in a


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Material Adverse Effect. The Company has all franchises, permits, licenses and
any similar authority necessary for the conduct of its business as now being
conducted by it, the lack of which is reasonably likely to result in a Material
Adverse effect and believes it can obtain, without undue burden or expense, any
similar authority for the conduct of its business as planned to be conducted.

      2.20 NETWORK REDUNDANCY AND COMPUTER BACK-UP.

            (a) The Company server hardware and supporting equipment used in the
Company's services network provide redundancy and meet in all material respects
industry standards relating to availability.

            (b) The Company has made back-ups of all material computer software
and databases utilized by it and maintains such back-ups at a secure off-site
location.

      2.21 INSURANCE. The Company maintains, as to its properties and business,
with what the Company believes to be reputable insurers, valid policies of
insurance against such casualties and contingencies and of the kinds and in the
amounts that are commercially reasonable. With respect to each such insurance
policy: (i) the policy is in full force and effect; (ii) the Company has paid
all premiums when due and given all notices required to be given, and no event
has occurred which, with notice or the lapse of time, would constitute a
material breach or default or otherwise permit termination, cancellation,
modification or denial of coverage, under the policy; and (iii) no party to the
policy has repudiated any of its provisions.

      2.22 FOREIGN CORRUPT PRACTICES ACT. Neither the Company nor any of its
subsidiaries, including the Subsidiaries, has taken any action which would cause
it to be in violation of the Foreign Corrupt Practices Act of 1977, as amended,
or any rules and regulations thereunder. To the best of the Company's knowledge,
there is not, and there has never been, any employment by the Company or any of
its subsidiaries of, or beneficial ownership in the Company or any of its
subsidiaries by, any governmental or political official in any country in the
world.

                                   ARTICLE III

                            COVENANTS OF THE COMPANY

      Without limiting any other covenants and provisions hereof or as may be
otherwise set forth below, the Company covenants and agrees that it will observe
the following covenants in accordance with their terms:

      3.1 BOARD OF DIRECTORS. For so long as BellSouth owns at least 5% of the
issued and outstanding Common Stock (calculated as though all shares of
Preferred Stock are converted into Common Stock), upon written request by
BellSouth, the Company shall, at BellSouth's option, either (i) cause the
election of, and to thereafter retain in office until such time as BellSouth
owns less than 5% of the then issued and outstanding Common Stock (calculated as
provided above) a representative designated by BellSouth (a "BellSouth
Representative") as a member of its Board of Directors or (ii) permit the
BellSouth Representative to attend all meetings of the Company's Board of
Directors as an observer. If at any time (i) a BellSouth Representative is
serving as a director of the Company and (ii) BellSouth owns less than 5% of the
then issued and outstanding Common Stock (calculated as provided above), then,
upon the vote of a majority of the Board of Directors (excluding the BellSouth
Representative) requesting the BellSouth Representative to resign, BellSouth
shall cause such BellSouth Representative to resign from the Company's


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Board of Directors or vacate such observer position. Without the prior written
consent of BellSouth, excluding the BellSouth Representative, the Company's
Board of Directors shall be limited to seven members until such time as
BellSouth owns less than 5% of the then issued and outstanding Common Stock
(calculated as provided above).

      3.2 TELECOMMUNICATIONS ACT. For so long as the Company is deemed to be an
"affiliate" of BellSouth under the Telecommunications Act, the Company will not
enter into any business activity which, by virtue of the company being deemed to
be an "affiliate" under the Telecommunications Act, would cause BellSouth to
violate the Telecommunications Act.

      3.3 RESTRICTED ACTIONS. Without the prior written consent of BellSouth,
from the Closing until the second anniversary of the Closing Date, the Company
shall not make, solicit, initiate or encourage offers for a business combination
that involves a Change in Control of the Company with any Person that directly
or indirectly controls one or more telecommunications service providers in Latin
America. With respect to any transaction with BellSouth, effective upon
consummation of the Closing, the Company shall waive, and the Board of the
Company shall authorize the waiver by the Company of, the application of Section
203 of the Delaware General Corporation Law; provided, however, that such waiver
shall not apply to any such transaction after the sale by BellSouth of such
number of shares of Common Stock or Preferred Stock that BellSouth no longer
owns 5% of the issued and outstanding Common Stock (calculated as though all
shares of Preferred Stock are converted into Common Stock).

      3.4 PREEMPTIVE RIGHTS.

            (a) Except in the case of Excluded Securities (as hereinafter
defined), the Company shall not, from the Closing until BellSouth no longer owns
5% of the issued and outstanding Common Stock (calculated as though all shares
of Preferred Stock are converted into Common Stock), issue, sell or exchange,
agree to issue, sell or exchange, or reserve or set aside for issuance, sale or
exchange, any (i) capital stock, (ii) any other equity security of the Company,
(iii) any debt security of the Company which by its terms is convertible into or
exchangeable for any equity security of the Company or has any other equity
feature, (iv) any security of the Company that is a combination of a debt and
equity security or (v) any warrant or other right to subscribe for, purchase or
otherwise acquire any security of the Company specified in the foregoing clauses
(i) through (v) (an "Equity Financing") unless the Company shall have first
offered (the "Offer") to sell to each Major Holder (x) in the case of an
acquisition by the Company of any Person (an "Acquisition"), such number of
shares of Common Stock as shall be necessary for such Major Holder to maintain
the same percentage interest (disregarding, for purposes of determining such
percentage, any shares of Common Stock held by such Major Holder other than
Purchased Shares and Conversion Shares) in the Company's Common Stock after the
consummation of such Acquisition (calculated as though (I) all shares of
Preferred Stock are converted into Common Stock and (II) each Major Holder will
accept such Offer) (such number of shares of Common Stock, the "Offered
Securities"), at a cash purchase price per share of Common Stock equal to (A)
the value of the Person being acquired, divided by (B) the number of shares of
Common Stock to be issued in connection with such Acquisition (excluding any
shares of Common Stock to be issued pursuant to this Section 3.4) (such purchase
price per share to be equitably adjusted if any portion of the purchase price to
be paid by the Company in connection with such Acquisition will not consist of
shares of Common Stock), and on such


                                                                              11


other material terms and conditions as shall have been reasonably specified by
the Company in writing and delivered to such Major Holder or (y) in any case
other than an Acquisition, such Major Holder's proportionate percentage
(disregarding, for purposes of determining such percentage, any shares of Common
Stock held by such Major Holder other than Purchased Shares and Conversion
Shares) of the securities specified in the foregoing clauses (i) through (v),
based on the number of outstanding shares of Common Stock (calculated as though
all shares of Preferred Stock are converted into Common Stock) (such portion of
such securities to be offered to such Major Holder, the "Offered Securities"),
at a price and on such other material terms and conditions as shall have been
specified by the Company in writing and delivered to such Major Holder. Each
Offer by its terms shall remain open and irrevocable until the tenth business
day after delivery of the Offer to the Major Holders (the "Offer Expiration
Date").

            (b) Notice of any Major Holder's intention to accept, in whole or in
part, an Offer shall be evidenced by a writing signed by such Major Holder and
delivered to the Company prior to the applicable Offer Expiration Date, setting
forth such portion of the Offered Securities as such Major Holder elects to
purchase (the "Notice of Acceptance").

            (c) In the case of an Acquisition, in the event that the terms and
conditions of the proposed Acquisition change such that the purchase price per
share of the Offered Securities as calculated in accordance with Section
3.4(a)(x) above would be reduced by more than 5%, the Company shall make a new
Offer to sell the Offered Securities to such Major Holders in accordance with
Section 3.4(a)(x).

            (d) In any case other than an Acquisition, in the event that Notices
of Acceptance are not given by the Major Holders in respect of all the Offered
Securities, the Company shall have 180 days from the applicable Offer Expiration
Date to sell all or any part of such Offered Securities as to which no Notice of
Acceptance has been given by any Major Holder (the "Refused Securities") to any
other Person or Persons, but only upon terms and conditions in all material
respects, including, without limitation, price and interest rates, which are no
more favorable, in the aggregate, to such other Person or Persons and no less
favorable to the Company than those set forth in the Offer. Simultaneously with
the closing of the sale to such other Person or Persons of all the Refused
Securities (or, in the case of an Acquisition, simultaneous with the closing of
such Acquisition), each Major Holder shall purchase from the Company, and the
Company shall sell to such Major Holder, the Offered Securities in respect of
which a Notice of Acceptance was delivered to the Company by such Major Holder,
on the terms and conditions specified in the Offer; provided, however, that, in
the case of an Acquisition, if Notices of Acceptance are not given in respect of
all Offered Securities, the number of Offered Securities to be sold by the
Company to any Major Holder shall not exceed such number of Offered Securities
as shall be necessary for such Major Holder to maintain the same percentage
interest (disregarding, for purposes of determining such percentage, any shares
of Common Stock held by such Major Holder other than Purchased Shares and
Conversion Shares) in the Company's Common Stock after the consummation of such
Acquisition (calculated as though all shares of Preferred Stock are converted
into Common Stock).

      The rights of the Major Holders under this Section 3.4 shall not apply to
the grant or issuance of the following securities (the "Excluded Securities"):


                                                                              12


                  (i) stock options granted to officers, directors, employees
and consultants of the Company or its subsidiaries pursuant to stock option
plans of the Company and the issuance of shares of Common Stock upon exercise of
such stock options;

                  (ii) shares of Common Stock issued upon conversion of shares
of Series A Junior Participating Preferred Stock, Series A Preferred Stock or
1999 Preferred Stock; or upon exercise of any warrants or options issued to
BellSouth; including in each case, any additional shares of Common Stock that
may be issued as a result of antidilution provisions, if any, applicable to such
shares, warrants or options, as the case may be;

                  (iii) capital stock issued as a stock dividend or upon any
stock split or other subdivision or combination of shares of capital stock;

                  (iv) shares of Common Stock issued pursuant to contractual
obligations of the Company currently in effect (including any contractual
obligations pursuant to (a) that certain Securities Purchase Agreement, dated as
of the date of this Agreement, by and between the Company and Primedia, Inc. and
(b) that certain Content License Agreement (Starmedia Web Sites), dated as of
the date of this Agreement, by and between the Company, About.com, Inc. and
Primedia Magazines Inc.); and

                  (v) shares of Series A Preferred Stock issued pursuant to
Section 1.4 of this Agreement.

            (e) Notwithstanding anything to the contrary contained herein, for
purposes of this Agreement, in the event of any determination prior to the third
anniversary of the Closing Date that BellSouth does not hold at least 5% of the
then issued and outstanding Common Stock of the Company (calculated as though
all shares of Preferred Stock are converted into Common Stock), if (i) the
Commercial Agreement has not been terminated, and (ii) BellSouth would hold at
least 5% of such shares had it been permitted to purchase additional shares of
Common Stock pursuant to this Section 3.4, but for the operation of Sections
3.4(d)(iv), BellSouth shall be deemed to hold at least 5% of the issued and
outstanding Common Stock of the Company (calculated as provided above).

      3.5 EMPLOYEE, OFFICER AND DIRECTOR LOANS. Until the date on which
BellSouth no longer holds at least 5% of the issued and outstanding Common Stock
of the Company (calculated as though all shares of Preferred Stock are converted
into Common Stock), without the prior written consent of BellSouth, the Company
shall not make loans to (i) any of the executive officers or directors of the
Company or (ii) any employee (other than an executive officer or director) of
the Company in an aggregate amount for all such employees of more than $500,000.

      3.6 INFORMATION. The Company shall provide BellSouth with such information
as BellSouth may reasonably request from time to time to permit BellSouth and
its Affiliates to comply with its accounting and tax reporting requirements,
including information regarding the Company's foreign subsidiaries.

      3.7 OPTIONS. Until the date on which BellSouth no longer holds 5% of the
issued and outstanding Common Stock of the Company (calculated as though all
shares of Preferred Stock


                                                                              13


are converted into Common Stock), without the prior written consent of
BellSouth, the Company shall not grant any options to purchase shares of Common
Stock with an exercise price per share which is less than the fair market value
of a share of Common Stock on the date such option is granted.

                                   ARTICLE IV

                           INVESTMENT REPRESENTATIONS

      4.1 REPRESENTATIONS AND WARRANTIES. (a) Each Purchaser, severally and not
jointly, hereby represents and warrants to the Company, understanding and
agreeing that the Company is entering into this Agreement in part in reliance on
such representations and warranties, as follows:

                  (i) Such Purchaser is an "Accredited Investor" as that term is
defined in Rule 501(a) of Regulation D promulgated under the Securities Act;

                  (ii) Such Purchaser is duly authorized to execute this
Agreement and the Related Agreements to which such Purchaser is a party, and
assuming due execution and delivery by the Company of the Agreement, this
Agreement constitutes legal, valid and binding obligations of such Purchaser,
enforceable against such Purchaser in accordance with their respective terms,
except (a) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting enforcement of
creditors' rights, (b) general principles of equity that restrict the
availability of equitable remedies, and (c) to the extent that the
enforceability of the indemnification provisions contained in Sections 8.3 and
11.1 may be limited by applicable laws;

                  (iii) At the Closing, assuming due execution and delivery
thereof by the other Persons contemplated to be a party thereto, the Related
Agreements to which such Purchaser is a party will each constitute a valid and
binding obligation of the Purchasers enforceable against each Purchaser in
accordance with their respective terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights, (ii) general principles
of equity that restrict the availability of equitable remedies, and (iii) to the
extent that the enforceability of any indemnification provisions contained in
the Related Agreements similar to the provisions contained in Sections 8.3 and
11.1 may be limited by applicable laws;

                  (iv) Such Purchaser has been advised by the Company that the
Purchased Shares and the Conversion Shares have not been registered under the
Securities Act, that the Purchased Shares and the Conversion Shares will be
issued on the basis of the statutory exemption provided by Section 4(2) of the
Securities Act or Regulation D promulgated thereunder, or both, relating to
transactions by an issuer not involving any public offering and under similar
exemptions under certain state securities laws, that this transaction has not
been reviewed by, passed on or submitted to any federal or state agency or
self-regulatory organization where an exemption is being relied upon, and that
the Company's reliance thereon is based in part upon the representations made by
such Purchaser in this Agreement and the Related Agreements. Such Purchaser
acknowledges that it has been informed by the Company


                                                                              14


of, or is otherwise familiar with, the nature of the limitations imposed by the
Securities Act and the rules and regulations thereunder on the transfer of
securities;

                  (v) Such Purchaser is purchasing the Purchased Shares and, if
applicable, the Conversion Shares for investment purposes, for its own account
and not with a view to, or for sale in connection with, any distribution thereof
in violation of federal or state securities laws;

                  (vi) Such Purchaser has substantial experience in evaluating
and investing in private placement transactions of securities in companies
similar to the Company so that it is capable of evaluating the merits and risks
of its investment in the Company and has the capacity to protect its own
interests. Such Purchaser must bear the economic risk of this investment
indefinitely unless the Purchased Shares (or the Conversion Shares) are
registered pursuant to the Securities Act, or an exemption from registration is
available. Such Purchaser understands that the Company has no present intention
of registering the Purchased Shares or the Conversion Shares unless and to the
extent it is required to do so pursuant to Article VIII. Such Purchaser also
understands that there is no assurance that any exemption from registration
under the Securities Act will be available and that, even if available, such
exemption may not allow such Purchaser to transfer all or any portion of the
Purchased Shares or the Conversion Shares under the circumstances, in the
amounts or at the times such Purchaser might propose. Such Purchaser represents
that by reason of its, or of its management's, business or financial experience,
such Purchaser has the capacity to protect its own interests in connection with
the transactions contemplated in this Agreement and the Related Agreements.
Further, such Purchaser is aware of no publication of any advertisement in
connection with the transactions contemplated in the Agreement;

                  (vii) Such Purchaser has had an opportunity to discuss the
Company's business, management and financial affairs with directors, officers
and management of the Company and has had the opportunity to review the
Company's operations and facilities. Each Purchaser acknowledges to the Company
and BellSouth that it is relying entirely on its own due diligence investigation
of the Company and is not relying on any due diligence investigation or
representation made by BellSouth or any other Purchaser. Such Purchaser has also
had the opportunity to ask questions of, and receive answers to the Purchaser's
satisfaction from, the Company and its management regarding the terms and
conditions of this investment;

                  (viii) Such Purchaser acknowledges and agrees that the
Purchased Shares and, if issued, the Conversion Shares must be held indefinitely
unless they are subsequently registered under the Securities Act or an exemption
from such registration is available. Such Purchaser has been advised or is aware
of the provisions of Rule 144 promulgated under the Securities Act as in effect
from time to time, which permits limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions, including, among
other things: the availability of certain current public information about the
Company, the resale occurring following the required holding period under Rule
144 and the number of shares being sold during any three-month period not
exceeding specified limitations;


                                                                              15


                  (ix) Such Purchaser acknowledges and agrees that the Purchased
Shares and, if issued, the Conversion Shares are subject to restrictions on
transfer as set forth in this Agreement and the Related Agreements;

                  (x) No person has or will have, as a result of the transaction
contemplated by this Agreement, any right, interest or claim against or upon
such Purchaser, the Company, or any of its subsidiaries for any commission, fee
or other compensation as a finder or broker because of any act or omission by
the Purchaser.

            (b) BellSouth represents and warrants to the Company that, except as
contemplated by this Agreement, neither it nor any of its affiliates and
associates (as such terms are defined in Rule 12b-2 under the Exchange Act)
beneficially owns, directly or indirectly, any shares of Common Stock or
Preferred Stock for purposes of Rule 13d-3 under the Exchange Act.

      4.2 PERMITTED SALES; LEGENDS. Notwithstanding the foregoing
representations, the Company agrees that it will permit a sale or other transfer
of any of the Purchased Shares and Conversion Shares if such transaction is
exempt from the registration requirements of, or is covered by an effective
registration statement under, the Securities Act and applicable state securities
or "blue-sky" laws. The certificates representing the Purchased Shares and the
Conversion Shares shall bear a legend evidencing such restriction on transfer
substantially in the following form:

      THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
      SECURITIES ACT OF 1933, THE SECURITIES LAWS OF ANY STATE OR OTHER
      JURISDICTION WITHIN THE UNITED STATES AND ITS TERRITORIES, POSSESSIONS OR
      THE SECURITIES LAWS OF ANY FOREIGN JURISDICTION. NEITHER THESE SECURITIES
      NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
      TRANSFERRED, PLEDGED, ENCUMBERED, OR OTHERWISE DISPOSED OF IN THE ABSENCE
      OF SUCH REGISTRATION OR UNLESS AN OPINION OF COUNSEL SATISFACTORY TO
      STARMEDIA NETWORK, INC. IS RECEIVED STATING THAT SUCH TRANSACTION IS NOT
      SUBJECT TO THE REGISTRATION AND/OR PROSPECTUS DELIVERY REQUIREMENTS OF ANY
      SUCH JURISDICTION. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
      HEREBY NOTIFIED THAT STARMEDIA NETWORK, INC. MAY BE RELYING ON THE
      EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED
      BY SECTION 4(2) THEREUNDER AND/OR THE PROVISIONS OF REGULATION S UNDER THE
      UNITED STATES SECURITIES ACT OF 1933.

                                    ARTICLE V

                      CONDITIONS OF PURCHASERS' OBLIGATION

      5.1 EFFECT OF CONDITIONS. The obligation of the Purchasers to purchase and
pay for the Purchased Shares at the Closing shall be subject at their election
to the satisfaction of each of


                                                                              16


the conditions stated in the following Sections of this Article V (except, in
the case of BellSouth, for the condition set forth in Section 5.5).

      5.2 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Company contained in this Agreement shall be true and correct in all
material respects on the date of the Closing with the same effect as though made
on and as of that date, except for representations and warranties which speak as
of a specified date, which shall be true and correct in all material respects as
of such specified date.

      5.3 PERFORMANCE. The Company shall have performed and complied in all
material respects with all of the agreements, covenants and conditions contained
in this Agreement required to be performed or complied with by it at or prior to
the Closing.

      5.4 CERTIFIED DOCUMENTS, ETC. Counsel for the Purchasers shall have
received a copy of the Charter, certified by the Secretary of State of the State
of Delaware, and copies of the Company's By-Laws and the Certificate of
Designation, each certified by its Secretary, as well as any and all other
documents, including certificates of incumbency of officers and certificates
from appropriate authorities as to the legal existence and good standing of the
Company, that the Purchasers or their counsel may reasonably request.

      5.5 BELLSOUTH CONDITIONS. Each of the conditions to BellSouth's
obligations set forth in this Article V and in Article VI shall be satisfied or
waived.

                                   ARTICLE VI

                      CONDITIONS OF BELLSOUTH'S OBLIGATION

      6.1 EFFECT OF CONDITIONS. In addition to the conditions set forth in
Article V (other than Section 5.5), the obligation of BellSouth to purchase and
pay for the Purchased Shares at the Closing shall be subject at its election to
the satisfaction of each of the conditions stated in the following Sections of
this Article VI.

      6.2 COMMERCIAL AGREEMENT. The Company shall have executed and delivered to
BellSouth the Commercial Agreement, previously executed by BellSouth.

      6.3 AGGREGATE INVESTMENT. Purchasers shall have agreed by signing this
Agreement, subject to the conditions to Closing contemplated in this Agreement,
to purchase Purchased Shares for an aggregate purchase price of no less than $35
million.

      6.4 NO MATERIAL ADVERSE EFFECT. From and after the date hereof until the
Closing, there shall not have occurred a Material Adverse Effect.

      6.5 OPINION. BellSouth shall have received an opinion, dated the Closing
Date, from the General Counsel of the Company, in the form of EXHIBIT C.


                                                                              17


                                   ARTICLE VII

                     CONDITIONS OF THE COMPANY'S OBLIGATION

      7.1 EFFECT OF CONDITIONS. The Company's obligation to sell the Purchased
Shares shall be subject at its election to the satisfaction of each of the
conditions stated in the following Sections of this Article VII.

      7.2 REPRESENTATIONS AND WARRANTIES; PERFORMANCE. The representations and
warranties of each Purchaser contained in this Agreement shall be true and
correct in all material respects on the date of the Closing with the same effect
as though made on and as of that date, except for representations and warranties
which speak as of a specified date, which shall be true and correct in all
material respects as of such specified date.

      7.3 CERTIFIED DOCUMENTS, ETC. Counsel for the Company shall have received
from each Purchaser (other than any Purchaser who is an individual) a copy of
such Purchaser's certificate of incorporation, certified by the appropriate
Secretary of State, and a copy of such Purchaser's By-Laws, certified by such
Purchaser's Secretary, as well as any and all other documents, including
certificates of incumbency of officers and certificates from appropriate
authorities as to the legal existence and good standing of such Purchaser, that
the Company or its counsel may reasonably request.

      7.4 CONSIDERATION FOR THE SHARES. Each of the Purchasers shall have paid
the purchase price of the Purchased Shares to be purchased by such Purchaser in
full at the Closing either by certified check or by wire transfer of immediately
available funds to an account designated in writing by the Company.

      7.5 PERFORMANCE. The Purchasers shall have performed and complied in all
material respects with all of the agreements, covenants and conditions contained
in this Agreement required to be performed or complied with by them at or prior
to the Closing.

      7.6 AGGREGATE INVESTMENT. Purchasers shall have agreed by signing this
Agreement, subject to the conditions to Closing contemplated in this Agreement,
to purchase Purchased Shares for an aggregate purchase price of no less than $35
million.

                                  ARTICLE VIII

                          REGISTRATION RIGHTS AGREEMENT

      8.1 CERTAIN DEFINITIONS. As used in this Article VIII, the following terms
shall have the following meanings:

      "Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.

      "Registrable Securities" means any of (i) Conversion Shares, (ii) the
Other Shares and (iii) any other securities issued or issuable with respect to
the Conversion Shares or the Other Shares by way of stock dividend or stock
split or in connection with a combination of shares,


                                                                              18


recapitalization, merger, consolidation or other reorganization or otherwise.
Any Registrable Security will cease to be a Registrable Security when (a) a
registration statement covering such Registrable Security has been declared
effective under the Securities Act by the Commission and such Registrable
Security has been disposed of pursuant to such effective registration statement,
(b) such Registrable Security may be resold, without any limitation as to
volume, pursuant to Rule 144 under the Securities Act (or a comparable successor
rule or regulation), or otherwise may be publicly resold without registration
under the Securities Act and without any limitation as to volume or other
material restriction, or (c) such Registrable Security is no longer held by the
Purchaser to which it was issued pursuant to this Agreement.

      The terms "register", "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.

      "Registering Purchasers" shall mean those Purchasers and/or Permitted
Transferees registering their Registrable Securities under the Securities Act
pursuant to this Article VIII.

      "Registration Expenses" shall mean all expenses, incurred by the Company
in complying with Section 8.2.1, 8.2.2 or 8.2.3 hereof, including, without
limitation, all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses, stock transfer taxes applicable to the securities registered by
each Purchaser and the expense of any special audits incident to or required by
any such registration; provided, however, that the Registration Expenses shall
not include any and all Selling Expenses or any other expenses of the
Purchasers.

      "Securities Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.

      "Selling Expenses" shall mean all underwriting discounts and selling
commissions in connection with the sale by the Registering Purchasers of
Registrable Securities.

      8.2 REGISTRATION.

            8.2.1 DEMAND REGISTRATION.

            (a) Subject to the terms and conditions of this Agreement, on or
after the earlier of (i) the first anniversary of the Closing Date or (ii) the
registration of shares of Common Stock (other than Broker Shares) held by the
Founders or any shareholder holding at least 5% of the Company's then
outstanding Common Stock (calculated as though all shares of Preferred Stock are
converted into Common Stock), the Purchasers or their Permitted Transferees
holding in the aggregate at least 40% of the outstanding Registrable Securities
may make two (2) written request to the Company for registration under the
Securities Act of the sale of Registrable Securities held by such Registering
Purchasers (the "Demand Registration"); provided that (i) BellSouth shall be one
of the Purchasers making such request and (ii) the Company shall not be
obligated to effect more than one (1) Demand Registration pursuant to this
Agreement within any 12-month period. Promptly following receipt of any request
for a Demand Registration under this Section 8.2.1(a), the Company shall
immediately notify any holders of Registrable


                                                                              19


Securities from whom a request for a Demand Registration has not been received
and shall include in such Demand Registration such Registrable Securities as
such holders may specify in writing within 10 Business Days after receipt of
such notice. The Company shall use its reasonable best efforts to cause such
registration statement to become effective as soon as possible and remain
effective for the period ending on the earlier of (i) 90 days from the date of
effectiveness of said registration statement and (ii) the sale of all of
Registrable Securities held by such Registering Purchasers.

            (b) The Company shall have the right to include its securities sold
on its behalf or on behalf of any other stockholder in any registration
initiated as a Demand Registration; provided that: (i) such securities are of
the same class as the Registrable Securities included in such registration; (ii)
if any of the Registrable Securities covered by such registration are sold in an
underwritten offering, the Company or such other stockholder agrees in writing
to sell its securities on the same terms and conditions as apply to the
Registrable Securities being sold; and (iii) if any of the Registrable
Securities covered by such registration are to be sold in an underwritten
offering and the managing underwriter of such underwritten offering reasonably
determines in good faith and advises the parties that the inclusion in such
underwritten offering of all the securities proposed to be included in such
offering would materially and adversely affect the success of the underwritten
offering, then the Company shall include in such registration (but only to the
extent of the number of securities that the Company is so advised can reasonably
be sold in such offering), FIRST all Registrable Securities duly requested to be
registered in such Demand Registration, SECOND any securities the Company is
required to register pursuant to the Registration Rights Agreement, THIRD any
other securities held by Persons who received contractual registration rights
with respect thereto prior to the date of this Agreement, FOURTH any securities
that the Company wishes to register for its own account and FIFTH any securities
held by Persons who received contractual registration rights with respect
thereto after the date of this Agreement; in each case, determined on a pro rata
basis if there is more than one holder of such Registrable Securities or
securities, as the case may be. Whenever a registration requested pursuant to
this Section is for an underwritten offering, only securities which are to be
distributed by the underwriters may be included in the registration.

            (c) The Company shall have the right to select the managing
underwriter to administer the Demand Registration if such Demand Registration is
an underwritten offering, subject to the approval of BellSouth, which approval
shall not be unreasonably withheld or delayed. The Registering Purchasers and
the Company shall enter into an underwriting agreement in such customary form as
shall have been negotiated and agreed to by the Company with the underwriter or
underwriters selected for such underwriting, provided that (x) the Registering
Purchasers shall have the right to negotiate the economic terms of the offering
and (y) such underwriting agreement shall be approved by the Registering
Purchasers, such approval not to be unreasonably withheld or delayed.

            (d) Notwithstanding anything to the contrary in this Agreement, the
Company will be entitled to postpone the filing of a registration statement
required to be filed by it pursuant to this Agreement for ninety (90) days, if
(i) at any time prior to the filing of such registration statement a majority of
the Board of Directors of the Company determines, in its good faith business
judgment, that such registration and offering is reasonably likely to materially
interfere with or otherwise have a material adverse effect on any financing,


                                                                              20


acquisition, corporate reorganization or other material transaction or
development involving the Company or any of its subsidiaries and (ii) the
Company gives the Registering Purchasers written notice of such postponement,
provided that such postponements may not in any 365-day period occur more than
once, and, provided further, that in the event of any such withdrawal or
termination of effectiveness, such registration shall not act as a registration
effected for purposes of Section 8.2.1(a). Any such notice need not specify the
reasons for such suspension if a majority of the Board of Directors of the
Company determines, in its good faith business judgment, that doing so would
interfere with or adversely affect such transaction or development or would
result in the disclosure of material non-public information. In the event of
such postponement, the Company will file such registration statement as soon as
practicable after it determines, in its good faith business judgment, that such
registration and offering will not interfere with the matters described in the
first sentence of this Section 8.2.1(d), but in no event more than ninety (90)
days after that date that such registration statement would otherwise have been
filed, provided that the Registering Purchasers shall have the right to withdraw
their request for Demand Registration by giving written notice to the Company
within ninety (90) days of receipt of the notice of postponement, and in the
event of such withdrawal, the request so withdrawn shall be deemed to have not
been made.

            (e) Each Registration Statement in respect of a Demand Registration
will be for the offering and sale of such Registrable Securities on such basis
as the Registering Purchasers reasonably request; provided, however, that,
except as expressly set forth herein, the Company shall not be required to
register such Registrable Securities on a continuous or delayed basis pursuant
to Rule 415 under the Securities Act.

            (f) The Company shall promptly prepare and file with the Commission
such amendments to the registration statements as may be necessary to keep such
registration statements effective in accordance with this Section 8.2.1.

            (g) Notwithstanding anything to the contrary in this Agreement, if
at any time after the filing of a registration statement, before or after it is
declared effective by the Commission, a majority of the Board of Directors of
the Company determines, in its good faith business judgment, that such
registration and the offering of Registrable Securities covered by such
registration statement is reasonably likely to materially interfere with or
otherwise have a materially adverse effect on any financing, acquisition,
corporate reorganization or other material transaction or development involving
the Company or any of its affiliates or require the Company to disclose matters
that otherwise would not be required to be disclosed at such time, then the
Company may require that no distribution of any Registrable Securities be
initiated or continued, as the case may be (a "Blackout Period"), by giving
written notice to the Registering Purchasers. Any such notice need not specify
the reasons for such suspension if a majority of the Board of Directors of the
Company determines, in its good faith business judgment, that doing so would
interfere with or adversely affect such transaction or development. In the event
that such notice is given, then until a majority of the Board of Directors of
the Company has determined, in its good faith business judgment, that such
registration and distribution would no longer materially interfere with the
matters described in the preceding sentence and has given written notice thereof
to the Registering Purchasers, the Company's obligations under this Article VIII
will be suspended, provided, that such suspension shall not exceed the first to
occur of (x) the filing of the Company's next filing with the Commission and (y)
ninety (90) days. The


                                                                              21


Company shall extend the period of time the Company is required to maintain
effective any registration statement required pursuant to Section 8.2.1 by a
length of time equal to the aggregate length of the Blackout Periods. In the
event of any suspension of a registration pursuant to this Section 8.2.1(g), the
Registering Purchasers shall be entitled to withdraw from such registration upon
written notice to the Company, and in the event of such withdrawal, the request
so withdrawn shall be deemed to have not been made.

            8.2.2 S-3 REGISTRATION.

            (a) Subject to the terms and conditions of this Agreement, on or
after the 60th day after the Closing Date (or, in the case of any S-3 Purchaser
who purchased Purchased Shares after the Closing Date, the 60th day after the
closing of such purchase) until the first anniversary of the Closing Date (or,
in the case of any S-3 Purchaser who purchased Purchased Shares after the
Closing Date, the first anniversary of the closing of such purchase), any S-3
Purchaser may make one (1) written request to the Company for registration on
Form S-3 or any successor thereto under the Securities Act of the sale of
Registrable Securities held by such S-3 Purchaser (the "S-3 Registration");
provided that (i) the Company is a registrant entitled to use Form S-3 or any
successor thereto to register such Registrable Securities, (ii) the Company
shall not be obligated to effect any S-3 Registration unless the proceeds to be
realized in connection with such S-3 Registration shall not reasonably be
expected to be less than $1,000,000, (iii) the Company shall not be obligated to
effect more than two (2) S-3 Registrations pursuant to this Agreement and (iv)
the Company shall not be obligated to effect more than one (1) S-3 Registration
pursuant to this Agreement within any 4-month period. Promptly following receipt
of any request for an S-3 Registration under this Section 8.2.2(a), the Company
shall immediately notify any S-3 Purchasers holding Registrable Securities from
whom a request for an S-3 Registration has not been received and shall include
in such S-3 Registration such Registrable Securities as such S-3 Purchasers may
specify in writing within 10 Business Days after receipt of such notice;
provided, however, that the Company shall not be obligated to so notify any S-3
Purchaser or to so include such S-3 Purchaser's Registrable Securities after the
first year anniversary of the Closing Date (or, in the case of any S-3 Purchaser
who purchased Purchased Shares after the Closing Date, the first anniversary of
the closing of such purchase). The Company shall use its reasonable best efforts
to cause such registration statement to become effective as soon as possible and
remain effective for the period ending on the earlier of (i) 90 days from the
date of effectiveness of said registration statement and (ii) the sale of all of
Registrable Securities held by such Registering Purchasers.

            (b) The Company shall have the right to include its securities sold
on its behalf or on behalf of any other stockholder in any registration
initiated as an S-3 Registration; provided that: (i) such securities are of the
same class as the Registrable Securities included in such registration; (ii) if
any of the Registrable Securities covered by such registration are sold in an
underwritten offering, the Company or such other stockholder agrees in writing
to sell its securities on the same terms and conditions as apply to the
Registrable Securities being sold; and (iii) if any of the Registrable
Securities covered by such registration are to be sold in an underwritten
offering and the managing underwriter of such underwritten offering reasonably
determines in good faith and advises the parties that the inclusion in such
underwritten offering of all the securities proposed to be included in such
offering would materially and adversely affect the success of the underwritten
offering, then the Company shall include in such


                                                                              22


registration (but only to the extent of the number of securities that the
Company is so advised can reasonably be sold in such offering), FIRST all
Registrable Securities duly requested to be registered in such S-3 Registration,
SECOND any securities the Company is required to register pursuant to the
Registration Rights Agreement or Section 8.2.3, THIRD any other securities held
by Persons who received contractual registration rights with respect thereto
prior to the date of this Agreement, FOURTH any securities that the Company
wishes to register for its own account and FIFTH any securities held by Persons
who received contractual registration rights with respect thereto after the date
of this Agreement; in each case, determined on a pro rata basis if there is more
than one holder of such Registrable Securities or securities, as the case may
be. Whenever a registration requested pursuant to this Section is for an
underwritten offering, only securities which are to be distributed by the
underwriters may be included in the registration.

            (c) The Company shall have the right to select the managing
underwriter to administer the S-3 Registration if such S-3 Registration is an
underwritten offering. The Registering Purchasers and the Company shall enter
into an underwriting agreement in such customary form as shall have been
negotiated and agreed to by the Company with the underwriter or underwriters
selected for such underwriting, provided that (x) the Registering Purchasers
shall have the right to negotiate the economic terms of the offering and (y)
such underwriting agreement shall be approved by the Registering Purchasers,
such approval not to be unreasonably withheld or delayed.

            (d) Notwithstanding anything to the contrary in this Agreement, the
Company will be entitled to postpone the filing of a registration statement
required to be filed by it pursuant to this Agreement for ninety (90) days, if
(i) at any time prior to the filing of such registration statement a majority of
the Board of Directors of the Company determines, in its good faith business
judgment, that such registration and offering is reasonably likely to materially
interfere with or otherwise have a material adverse effect on any financing,
acquisition, corporate reorganization or other material transaction or
development involving the Company or any of its subsidiaries and (ii) the
Company gives the Registering Purchasers written notice of such postponement,
provided that such postponements may not in any 365-day period occur more than
once, and, provided further, that in the event of any such withdrawal or
termination of effectiveness, such registration shall not act as a registration
effected for purposes of Section 8.2.2(a). Any such notice need not specify the
reasons for such suspension if a majority of the Board of Directors of the
Company determines, in its good faith business judgment, that doing so would
interfere with or adversely affect such transaction or development or would
result in the disclosure of material non-public information. In the event of
such postponement, the Company will file such registration statement as soon as
practicable after it determines, in its good faith business judgment, that such
registration and offering will not interfere with the matters described in the
first sentence of this Section 8.2.2(d), but in no event more than ninety (90)
days after that date that such registration statement would otherwise have been
filed, provided that the Registering Purchasers shall have the right to withdraw
their request for S-3 Registration by giving written notice to the Company
within ninety (90) days of receipt of the notice of postponement, and in the
event of such withdrawal, the request so withdrawn shall be deemed to have not
been made.

            (e) Each Registration Statement in respect of an S-3 Registration
will be for the offering and sale of such Registrable Securities on such basis
as the Registering Purchasers


                                                                              23


reasonably request; provided, however, that, except as expressly set forth
herein, the Company shall not be required to register such Registrable
Securities on a continuous or delayed basis pursuant to Rule 415 under the
Securities Act.

            (f) The Company shall promptly prepare and file with the Commission
such amendments to the registration statements as may be necessary to keep such
registration statements effective in accordance with this Section 8.2.2.

            (g) Notwithstanding anything to the contrary in this Agreement, if
at any time after the filing of a registration statement, before or after it is
declared effective by the Commission, a majority of the Board of Directors of
the Company determines, in its good faith business judgment, that such
registration and the offering of Registrable Securities covered by such
registration statement is reasonably likely to materially interfere with or
otherwise have a materially adverse effect on any financing, acquisition,
corporate reorganization or other material transaction or development involving
the Company or any of its affiliates or require the Company to disclose matters
that otherwise would not be required to be disclosed at such time, then the
Company may require that no distribution of any Registrable Securities be
initiated or continued, as the case may be (also, a "Blackout Period"), by
giving written notice to the Registering Purchasers. Any such notice need not
specify the reasons for such suspension if a majority of the Board of Directors
of the Company determines, in its good faith business judgment, that doing so
would interfere with or adversely affect such transaction or development. In the
event that such notice is given, then until a majority of the Board of Directors
of the Company has determined, in its good faith business judgment, that such
registration and distribution would no longer materially interfere with the
matters described in the preceding sentence and has given written notice thereof
to the Registering Purchasers, the Company's obligations under this Article VIII
will be suspended, provided, that such suspension shall not exceed the first to
occur of (x) the filing of the Company's next filing with the Commission and (y)
ninety (90) days. The Company shall extend the period of time the Company is
required to maintain effective any registration statement required pursuant to
Section 8.2.2 by a length of time equal to the aggregate length of the Blackout
Periods. In the event of any suspension of a registration pursuant to this
Section 8.2.2(g), the Registering Purchasers shall be entitled to withdraw from
such registration upon written notice to the Company, and in the event of such
withdrawal, the request so withdrawn shall be deemed to have not been made.

            8.2.3 PIGGYBACK REGISTRATION.

            (a) If at any time during the period commencing on the earlier of
(i) the first anniversary of the Closing Date or (ii) the registration of shares
of Common Stock (other than Broker Shares) held by the Founders or any
shareholder holding at least 5% of the Company's then outstanding Common Stock
(calculated as though all shares of Preferred Stock are converted into Common
Stock) and terminating on the fifth anniversary of the Closing Date, during
which a registration statement filed pursuant to Section 8.2.1 or (unless the
applicable registration is a registration as described in clause (ii) of this
Section 8.2.3(a)) Section 8.2.2 above is not effective, the Company proposes to
register any shares of Common Stock under the Securities Act in connection with
an underwritten offering, either for its own account or the account of a
security holder or holders exercising their registration rights (except pursuant
to (a)


                                                                              24


Section 8.2.1 of this Agreement, (b) unless the applicable registration is a
registration as described in clause (ii) of this Section 8.2.3(a), Section 8.2.2
of this Agreement or (c) a registration statement filed on Form S-4 or Form S-8
or such other form as shall be prescribed under the Securities Act for the same
purposes), the Company will promptly at each such time give written notice to
each Purchaser of its intention to do so. Within twenty (20) days after receipt
of such notice, each Purchaser may request that the Company register all or part
of the Registrable Securities (the "Designated Shares"). Upon receipt of such
request, the Company shall use its reasonable best efforts to effect the
registration of the Designated Shares identified by including such Designated
Shares in such registration statement.

            (b) In the event that securities of the same class as the Designated
Shares are being registered by the Company in such registration statement and
such securities as well as any of the Designated Shares are to be distributed in
an underwritten offering, such Designated Shares shall be included in such
underwritten offering on the same terms and conditions as the securities being
issued by the Company or sold by the applicable security holder for distribution
pursuant to such underwritten offering; PROVIDED, HOWEVER, that if the managing
underwriter of such underwritten offering reasonably determines in good faith
and advises the parties that the inclusion in such underwritten offering of all
the securities proposed to be included in such offering would materially and
adversely affect the success of the underwritten offering, then the Company
shall include in such registration (but only to the extent of the number of
securities that the Company is so advised can reasonably be sold in such
offering) (i) if the Company is registering securities in such offering pursuant
to Section 4 or Section 5 of the Registration Rights Agreement, FIRST any
securities the Company is required to register pursuant to the Registration
Rights Agreement, SECOND (a) any other securities held by Persons who received
contractual registration rights with respect thereto prior to the date of this
Agreement and (b) any Designated Shares, THIRD any securities that the Company
wishes to register for its own account and FOURTH any securities held by Persons
who received contractual registration rights with respect thereto after the date
of this Agreement, (ii) if the Company is registering securities in such
offering pursuant to Section 8.2.2, in accordance with clause (iii) of Section
8.2.2(b), or (iii) otherwise, FIRST any securities that the Company wishes to
register for its own account, SECOND (a) any Designated Shares or (b) any
securities the Company is required to register pursuant to the Registration
Rights Agreement, THIRD any other securities held by Persons who received
contractual registration rights with respect thereto prior to the date of this
Agreement and FOURTH any securities held by Persons who received contractual
registration rights with respect thereto after the date of this Agreement; in
the case of clauses (i), (ii) and (iii), determined on a pro rata basis if there
is more than one holder of such securities or Designated Shares, as the case may
be.

            8.2.4 EXPENSES OF REGISTRATION. All Registration Expenses incurred
in connection with registrations pursuant to Sections 8.2.1, 8.2.2 and 8.2.3
shall be borne by the Company. Subject to Section 11.6, Selling Expenses shall
be borne by each Registering Purchaser based upon the number of Registrable
Securities registered by each Registering Purchaser on such registration
statement.

            8.2.5 REGISTRATION PROCEDURES. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Agreement,
the Company will keep the Registering Purchasers advised in writing as to the
initiation of each registration, qualification and compliance and as to the
completion thereof. The Company will:


                                                                              25


            (a) Prepare and furnish to each Registering Purchaser and to the
underwriters (if any) of the securities being registered such reasonable number
of copies of the registration statement, preliminary prospectus, final
prospectus (any supplements or revisions thereto required under the Securities
Act) and such other documents as each Registering Purchaser and underwriters may
reasonably request in order to facilitate the public offering of such securities
and make the Company's representatives and the Company's counsel available for
discussion of such document and make such changes in such document relating to
the Registering Purchaser prior to the filing thereof as each Registering
Purchaser, counsel for each Registering Purchaser, or underwriters may
reasonably request.

            (b) Use its reasonable best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by each
Registering Purchaser, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.

            (c) Notify each Registering Purchaser at any time when a prospectus
relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing; and to promptly prepare and file all amendments or
supplements and related revised prospectuses as shall be required under the
Securities Act as a result of such untrue statements or omissions.

            (d) Use its reasonable best efforts to comply with all applicable
federal and state securities laws (including without limitation the rules and
regulations of the Commission), and make generally available to its security
holders earning statements satisfying the provisions of Section 11(a) of the
Securities Act no later than forty-five (45) days after the end of a twelve (12)
month period after the Closing Date (or within ninety (90) days after the end of
a fiscal year).

            (e) At the request of each Registering Purchaser, use its reasonable
best efforts to furnish on the date that the Registrable Securities are
delivered to any underwriter for sale in connection with a registration pursuant
to this Agreement (i) an opinion of the counsel representing the Company for the
purposes of such registration, and (ii) a letter from the independent certified
public accountants of the Company, each dated such date and in form and
substance as is customarily given by counsel and independent certified public
accountants to underwriters in an underwritten public offering, addressed to
each Registering Purchaser's underwriter and to each Registering Purchaser.

      The Registering Purchasers, upon receipt of any notice from the Company of
the happening of any event of the kind described in paragraph (c) above, will
forthwith discontinue, and cause their respective Affiliates to discontinue,
disposition of the Registrable Securities until the Registering Purchasers'
receipt of the copies of the supplemented or amended prospectus contemplated by
paragraph (c) above or until they are advised in writing by the Company that the
use of the prospectus may be resumed and have received copies of any additional
or


                                                                              26


supplemental filings which are incorporated by reference in the prospectus. If
so directed by the Company, the Registering Purchasers will deliver to the
Company or destroy all copies, other than permanent file copies then in the
possession of the Registering Purchasers or their respective Affiliates, of the
prospectus required to be supplemented or amended.

      8.3 INDEMNIFICATION.

            (a) With respect to any registration of Registrable Securities, the
Company will indemnify each Registering Purchaser, its officers and directors
and each person controlling such Registering Purchaser within the meaning of
Section 15 of the Securities Act, with respect to which registration,
qualification or compliance has been effected pursuant to this Agreement, and
each underwriter, if any, and each person who controls any underwriter within
the meaning of Section 15 of the Securities Act, against all expenses, claims,
losses, damages and liabilities (or actions in respect thereof), including any
of the foregoing incurred in settlement of any litigation, commenced or
threatened, arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any registration statement,
prospectus, offering circular or other document, or any amendment or supplement
thereto, incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act, the
Securities Exchange Act, state securities law or any rule or regulation
promulgated under such laws applicable to the Company in connection with any
such registration, qualification or compliance, and the Company will reimburse
each Registering Purchaser, each of their officers, directors and partners, and
each person controlling such Registering Purchaser, each such underwriter and
each person who controls any such underwriter, for any legal and any other
expenses reasonably incurred, as such expenses are incurred, in connection with
investigating, preparing or defending any such claim, loss, damage, liability or
action, whether or not resulting in any liability, provided that the Company
will not be liable in any such case to the extent that any such claim, loss,
damage, liability or expense arises out of or is based on any untrue statement
or omission or alleged untrue statement or omission, made in reliance upon and
in conformity with written information furnished to the Company by an instrument
duly executed by such Registering Purchaser, controlling person or underwriter
and stated to be specifically for use therein; provided, however, that the
foregoing indemnity agreement is subject to the condition that, insofar as it
relates to any such untrue statement, alleged untrue statement, omission or
alleged omission made in a preliminary prospectus, such indemnity agreement
shall not inure to the benefit of any underwriter, or such Registering Purchaser
or such controlled persons, if there is no underwriter, if a copy of the final
prospectus filed with the Commission pursuant to its Rule 424(b) was not
furnished to the person asserting the loss, liability, claim or damage at or
prior to the time such action is required by the Securities Act, and if such
final prospectus cured the untrue statement, alleged untrue statement, omission
or alleged omission giving rise to the loss, liability, claim or damage.

            (b) With respect to any registration of Registrable Securities, each
Registering Purchaser will indemnify, severally and not jointly, the Company,
each of its directors and officers, each underwriter, if any, of the Company's
securities covered by such registration statement, and each person who controls
the Company or such underwriter within the meaning of Section 15 of the
Securities Act against all expenses, claims, losses, damages and liabilities (or


                                                                              27


actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Company, such directors, officers, partners, persons, underwriters or
control persons for any legal or any other expenses reasonably incurred, as such
expenses are incurred, in connection with investigating, preparing or defending
any such claim, loss, damage, liability or action, in each case to the extent,
but only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by the Registering Purchaser and stated to be specifically for use
therein. Notwithstanding the foregoing, the liability of each Registering
Purchaser under this Section 8.3(b) shall be limited to and in proportion to an
amount equal to the net proceeds received by such Registering Purchaser from the
sale of the Registrable Securities sold by the Registering Purchaser pursuant to
such registration statement. In no event will a Registering Purchaser be
required to enter into any agreement or undertaking for the benefit of the
Company in connection with any registration under this Agreement providing for
any indemnification or contribution obligations on the part of the Purchaser
greater than the Registering Purchaser's obligations under this Section 8.3(b).

            (c) Each party entitled to indemnification under this Section 8.3
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably be
withheld or delayed), and the Indemnified Party may participate in such defense
at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement unless the failure to
give such notice is materially prejudicial to an Indemnifying Party's ability to
defend such action, and provided further that the Indemnifying Party shall not
assume the defense for matters as to which representation of both the
Indemnifying Party and the Indemnified Party by the same counsel would be
inappropriate due to actual or potential differing interests between them, but
shall instead in such event pay the fees and costs of separate counsel for the
Indemnified Party. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. No Indemnified Party shall be entitled to indemnification from any
Indemnifying Party for any amounts paid in any settlement effected without the
consent of the Indemnifying Party.

            (d) The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Party or any officer, director or controlling person
of such Indemnified Party.


                                                                              28


      8.4 PURCHASER CONDITIONS. The Company's obligations to the Registering
Purchasers under this Article VIII (other than Section 8.3) will be conditioned
on compliance with the following:

            (a) The Registering Purchasers and their respective Affiliates will
cooperate with the Company in connection with the preparation of the applicable
registration statement, and for so long as the Company is obligated to keep such
registration statement effective, the Registering Purchasers and their
respective Affiliates will provide to the Company, in writing and in a timely
manner, for use in such registration statement (and expressly identified in
writing as such), all information regarding themselves and their respective
Affiliates and such other information as may be required by applicable law to
enable the Company to prepare such registration statement and the related
prospectus covering the applicable Registrable Securities owned by the
Registering Purchasers and to maintain the currency and effectiveness thereof,
so long as the Company executes a confidentiality agreement in form and
substance reasonably satisfactory to the Registering Purchasers in the event any
confidential information is requested by the Company.

            (b) During such time as the Registering Purchasers and their
respective Affiliates may be engaged in a distribution of the Registrable
Securities, the Registering Purchasers and their respective Affiliates will
comply with all applicable laws, including Regulation M promulgated under the
Securities Exchange Act, and, to the extent required by such laws, will, among
other things: (A) not engage in any stabilization activity in connection with
the securities of the Company in contravention of such rules; (B) distribute the
Registrable Securities acquired by it solely in the manner described in the
applicable registration statement; and (C) if required by applicable law, rules
or regulations, cause to be furnished to each agent or broker-dealer to or
through whom such Registrable Securities may be offered, or to the offeree if an
offer is made directly by the Registering Purchasers and their respective
Affiliates, such copies of the applicable prospectus (as amended and
supplemented to such date) and documents incorporated by reference therein as
may be required by such agent, broker-dealer or offeree, provided that the
Company shall provide the Registering Purchasers with an adequate number of
copies thereof.

            (c) The Registering Purchasers and their respective Affiliates will
permit the Company and its representatives and agents to examine such documents
and records as may be reasonably necessary and will supply in a timely manner
any information as they may be reasonably requested by the Company to provide in
connection with the offering or other distribution of Registrable Securities by
the Registering Purchasers.

            (d) On notice from the Company of the happening of any of the events
specified in Section 8.2.5(c), or that requires the suspension by the
Registering Purchasers and their respective Affiliates of the distribution of
any of the Registrable Securities owned by the Registering Purchasers, then the
Registering Purchasers and their respective Affiliates will cease offering or
distributing the Registrable Securities owned by the Registering Purchasers
until the offering and distribution of the Registrable Securities owned by the
Registering Purchasers may recommence in accordance with the terms hereof and
applicable law.


                                                                              29


            (e) The Registering Purchasers and their respective Affiliates will
enter into such agreements with the Company and any broker-dealer or similar
securities industry professional containing representations, warranties,
indemnities and agreements as are customarily entered into and made by a seller
of securities and such seller's controlling stockholders with respect to
secondary distributions under similar circumstances.

                                   ARTICLE IX

                                   TERMINATION

      9.1 TERMINATION. This Agreement may be terminated at any time prior to the
Closing by:

            (a) the mutual written consent of the Company and BellSouth; or

            (b) the Company or any Purchaser, if the Closing has not occurred by
the close of business on June 30, 2001.

      9.2 PROCEDURE AND EFFECT OF TERMINATION. In the event of termination of
this Agreement pursuant to Section 9.1, written notice thereof shall forthwith
be given by the terminating party or parties to the other party or parties
hereto, and this Agreement and the Related Agreements and all rights, benefits,
interests, claims, obligations and liabilities hereunder and thereunder shall
thereupon automatically terminate and become void and have no effect, and all
representations, warranties and covenants contained herein and therein shall
immediately cease to be in effect, and the transactions contemplated hereby
shall be abandoned without further action by the parties hereto, except that the
provisions of this Section 9.2 and of Sections 11.4, 11.6, 11.9 and 11.12 shall
survive the termination of this Agreement; PROVIDED, HOWEVER, that such
termination shall not relieve any party hereto of any liability for any willful
breach of any of its obligations under this Agreement.

                                    ARTICLE X

                               CERTAIN DEFINITIONS

      As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):

      "Affiliate" of any Person shall mean any Person, directly or indirectly,
controlling, controlled by or under common control with such Person.

      "Agreement" means this Securities Purchase Agreement as from time to time
amended and in effect among the parties.

      "Acquisition" shall have the meaning set forth in Section 3.4(a).

      "BellSouth" shall mean BellSouth Enterprises, Inc., a Georgia corporation,
its predecessors, successors and permitted assigns.


                                                                              30


      "BellSouth Representative" shall have the meaning set forth in Section
3.1.

      "Blackout Period" shall have the meaning set forth in Section 8.2.1(g).

      "Broker Shares" shall mean the shares of Common Stock so designated in
Section 2.18 of the Disclosure Schedule.

      "Certificate of Designation" shall have the meaning set forth in Section
1.1.

      "Change in Control" shall mean (i) the consummation of any merger,
consolidation or reorganization (or series of such related transactions)
involving the Company and any Person other than BellSouth and its Affiliates
unless both (x) the shareholders of the Company immediately prior to such
consummation, shall have beneficial ownership of more than 50% of the voting
stock of the Company (or if the Company shall not be the surviving company in
such merger, consolidation or reorganization, such surviving company)
immediately after such consummation, and (y) the Company is not subject to an
agreement that contemplates that individuals who are directors of the Company
immediately prior to such consummation (or other persons designated by the
Company at or before such consummation) shall constitute less than a majority of
the directors of the Company or such surviving company, as the case may be, (ii)
a change or changes in the membership of the board of directors of the Company
which represent a change of a majority or more of such membership during any 12
month period (unless such change or changes in membership are caused by the
actions of the then existing board of directors of the Company and do not occur
within 12 months of the commencement, threat or proposal of an election contest
(as defined in Rule 14a-11 of Regulation 14A under the Securities Exchange Act
of 1934), tender offer or other transaction which would constitute a change of
control under clause (i) or (ii) above, in each case, by any Person other than
BellSouth and its Affiliates), (iii) a sale to any Person other than BellSouth
and its Affiliates of all or substantially all of the assets of the Company and
its Subsidiaries, taken as a whole, (iv) the sale to any Person other than
BellSouth and its Affiliates of all or substantially all of either (a) the
Corporation's content aggregation and distribution business or (b) the Company's
wireless portal business, or (v) any Person other than BellSouth and its
Affiliates obtaining the right to vote or direct the voting, directly or
indirectly, of securities having more than 50% of the ordinary voting power for
the election of directors of the Company.

      "Charter" shall have the meaning set forth in Section 1.1.

      "Closing" and "Closing Date" shall the meanings set forth in Section 1.2.

      "Code" shall mean the Internal Revenue Code of 1986, as amended.

      "Co-Investor" shall have the meaning set forth in the preamble.

      "Commercial Agreement" shall have the meaning set forth in the second
recital.

      "Commission" shall have the meaning set forth in Section 2.3.

      "Common Stock" shall have the meaning set forth in the first recital.


                                                                              31


      "Company" shall mean StarMedia Network, Inc., a Delaware corporation, its
predecessors, successors and permitted assigns.

      "Company Basket Amount" shall have the meaning set forth in Section
11.1(a).

      "Confidentiality Agreement" shall have the meaning set forth in Section
11.4.

      "Conversion Shares" shall have the meaning set forth in the first recital.

      "Demand Registration" shall have the meaning set forth in Section
8.2.1(a).

      "Designated Shares" shall have the meaning set forth in Section 8.2.3(a).

      "Disclosure Schedule" shall have the meaning set forth in Article II.

      "Equity Financing" shall have the meaning set forth in Section 3.4(a).

      "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

      "Excluded Securities" shall have the meaning set forth in Section 3.4(d).

      "Financial Statements" shall have the meaning set forth in Section 2.7.

      "Founders" shall mean Fernando J. Espuelas, Jack C. Chen and Enrique
Narisco.

      "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board.

      "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.

      "Indemnified Party" and "Indemnifying Party" shall have the meanings set
forth in Section 7.3(c).

      "Indemnification Claim" shall have the meaning set forth in Section
11.1(c).
      "Indemnification Event" shall have the meaning set forth in Section
11.1(c).

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

      "Issuable Securities" shall have the meaning set forth in Section 2.6.

      "knowledge" means, as to the Company or any of its subsidiaries, the
collective actual knowledge of the directors and executive officers of the
Company.

      "Legal Expenses" shall have the meaning set forth in Section 11.1(a).


                                                                              32


      "Lien" means, with respect to any asset, any mortgage, deed of trust,
pledge, hypothecation, assignment, security interest, lien, charge, restriction
on transferability, adverse claim by a third party, title defect or encumbrance
of any nature whatsoever on any property or property interest (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, any assignment or other conveyance of any right to receive income and
any assignment of receivables with recourse against assignor), any filing of any
financing statement as debtor under the Uniform Commercial Code or comparable
law of any jurisdiction and any agreement to give or make any of the foregoing.

      "Losses" shall have the meaning set forth in Section 11.1(a).

      "Major Holder" shall mean, with respect to any Offer, any Purchaser who as
of the date of such Offer, owns 5% or more of the then issued and outstanding
Common Stock (calculated as though all shares of Preferred Stock are converted
into Common Stock).

      "Material Adverse Effect" shall mean a material adverse effect upon the
business, financial condition or results of operations of the Company and its
Subsidiaries, taken as a whole; PROVIDED, HOWEVER, that a Material Adverse
Effect shall not include any circumstance, change in or effect on the Company or
any of its subsidiaries that (A) is not likely to recur and has been
substantially remedied without having materially damaged the reputation or
goodwill of the Company and its subsidiaries taken as a whole, (B) is
attributable to changes in general economic, regulatory or political conditions,
(C) arises as a result of this Agreement or the transactions contemplated hereby
or the announcement hereof or thereof or (D) arises as a result of a continuing
loss from operations.

      "1999 Preferred Stock" shall have the meaning set forth in Section 2.4(a).

      "Notice of Acceptance" shall have the meaning set forth in Section 3.4(b).

      "Offer" shall have the meaning set forth in Section 3.4(a).

      "Offer Expiration Date" shall have the meaning set forth in Section
3.4(a).

      "Offered Securities" shall have the meaning set forth in Section 3.4(a)

      "Other Shares" shall mean any shares of Common Stock specifically
designated as such in writing by the Company.

      "Permitted Transferee" shall have the meaning set forth in the Commercial
Agreement.

      "Person" means an individual, corporation, partnership, limited liability
company, joint venture, trust or unincorporated organization or a government or
agency or political subdivision thereof.

      "Preferred Stock" shall have the meaning set forth in Section 2.4(a).

      "Purchased Shares" shall have the meaning set forth in the first recital.


                                                                              33


      "Purchaser Basket Amount" shall have the meaning set forth in Section
11.1(b).

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

      "Section 11 Indemnified Party" shall have the meaning set forth in Section
11.1(c).

      "Recovery" shall have the meaning set forth in Section 11.1(f).

      "Registration Rights Agreement" shall mean that certain Amended and
Restated Registration Rights Agreement, dated as of August 31, 1998, by and
among the Company and the several Persons named therein, as amended.

      "Related Agreements" shall have the meaning set forth in Section 2.2.

      "Rights Agreement" shall mean that certain Rights Agreement, dated as of
May 21, 1999, between the Company and American Stock Transfer & Trust Company, a
New York banking corporation, as amended.

      "SEC Documents" means all reports, schedules, registration statements and
other documents (including all exhibits and schedules thereto) filed by the
Company with the Commission on or after March 18, 1999, and prior to the date of
this Agreement.

      "Section 11 Indemnified Party" shall have the meaning set forth in Section
11.1(c).

      "Section 11 Indemnifying Party" shall have the meaning set forth in
Section 11.1(c).

      "Securities Act" shall have the meaning set forth in Section 2.4(d).

      "Securities Exchange Act" shall have the meaning set forth in Section 8.1.

      "Series A Preferred Stock" shall have the meaning set forth in the first
recital.

      "Subsidiary" shall mean the subsidiaries of the Company listed on EXHIBIT
D.

      "S-3 Purchaser" shall mean any Purchaser who purchased Purchased Shares
for an aggregate consideration of less than $4,000,000.

      "S-3 Registration" shall have the meaning set forth in Section 8.2.2(a).

      "Tax" or "Taxes" shall have the meaning set forth in Section 2.14.

      "Telecommunications Act" shall mean the United States Telecommunications
Act of 1996.


                                                                              34


                                   ARTICLE XI

                                  MISCELLANEOUS

      11.1 SURVIVAL OF REPRESENTATIONS. The representations, warranties,
covenants and agreements made herein or in any certificates or documents
executed in connection herewith shall survive the execution and delivery hereof
and the Closing of the transactions contemplated hereby. Notwithstanding the
foregoing, the representations and warranties contained in or made pursuant to
this Agreement shall terminate on, and no claim or action with respect thereto
may be brought after, the first anniversary of the Closing Date, except that the
representations and warranties contained in Sections 2.4(b), 2.6, 2.15 and 4.1
hereof shall survive indefinitely. The parties shall indemnify each other as set
forth below:

            (a) Subject to the immediately preceding two sentences and Section
11.1(e), the Company hereby agrees to indemnify and hold harmless each Purchaser
from, and to reimburse each Purchaser for, on a net after-tax basis, any and all
losses, damages, liabilities, claims and fees, costs and expenses of any kind
related thereto ("Losses") (including, without limitation, any reasonable Legal
Expenses (as defined below) but excluding any such Losses to the extent
recoverable by Buyer under any applicable insurance policy) which are the direct
and proximate result of (i) the inaccuracy or breach as of the Closing Date of
any representation or warranty of the Company contained in Article II of this
Agreement or (ii) the breach by the Company of or failure by the Company to
perform any of its covenants or agreements contained in this Agreement;
provided, however, that (A) the Company shall not be responsible for any Losses
with respect to the matters referred to in this Section 11.1(a) until the
cumulative aggregate amount of such Losses (calculated on a net after-tax basis
as described above), exceeds $500,000 (the "Company Basket Amount"), in which
case the Company shall then be liable only for such Losses (calculated on a net
after-tax basis as described above) in excess of the Company Basket Amount and
(B) the cumulative aggregate indemnity obligation of the Company under this
Section 11.1 shall in no event exceed $35,000,000. As used herein, "Legal
Expenses" shall mean the fees, costs and expenses of any kind incurred by any
Person indemnified herein and its counsel in investigating, preparing for,
defending against or providing evidence, producing documents or taking other
action with respect to any threatened or asserted claim.

            (b) Subject to the first two sentences of this Section 11.1, each
Purchaser hereby severally agrees to indemnify and hold harmless the Company
from, and to reimburse the Company for, on a net after-tax basis, any Losses
(including, without limitation, any reasonable Legal Expenses), which are the
direct and proximate result of (i) the inaccuracy or breach as of the Closing
Date of any representation or warranty of such Purchaser contained in Article IV
of this Agreement, or (ii) the breach by such Purchaser of or failure by such
Purchaser to perform any of its covenants or agreements contained in this
Agreement; provided, however, that (A) such Purchaser shall not be responsible
for any Losses with respect to the matters referred to in this Section 11.1(b)
until the cumulative aggregate amount of such Losses (calculated on a net
after-tax basis as described above), exceeds 1% of the purchase price paid by
such Purchaser for the Purchased Shares purchased by such Purchaser pursuant to
this Agreement (with respect to each Purchaser, the "Purchaser Basket Amount"),
in which case such Purchaser shall then be liable only for such Losses
(calculated on a net after-tax basis as described above) in excess of


                                                                              35


such Purchaser's Purchaser Basket Amount and (B) the cumulative aggregate
indemnity obligation of such Purchaser under this Section 11.1 shall in no event
exceed the purchase price paid by such Purchaser for the Purchased Shares
purchased by such Purchaser pursuant to this Agreement.

            (c) As promptly as practicable after the Company or any of its
Affiliates, on the one hand, or any Purchaser or any of its Affiliates, on the
other hand, shall receive any notice of, or otherwise become aware of, the
commencement of any action, suit or proceeding, the assertion of any claim, the
occurrence of any event, the existence of any fact or circumstance or the
incurrence of any Loss, for which indemnification is provided for by this
Section 11 (an "Indemnification Event"), the party entitled to indemnification
(a "Section 11 Indemnified Party") shall give written notice (an
"Indemnification Claim") to the party from which indemnification is sought (a
"Section 11 Indemnifying Party") describing in reasonable detail the basis of
such Indemnification Claim. If the Section 11 Indemnifying Party is not so
notified by the Section 11 Indemnified Party within 30 calendar days after the
date of the Section 11 Indemnified Party's receipt of notice of, or of the
Section 11 Indemnified Party's becoming aware of, any Indemnification Event, the
Section 11 Indemnifying Party shall be relieved of all liability hereunder to
any Section 11 Indemnified Party in respect of such Indemnification Event (or
the facts or circumstances giving rise thereto) to the extent that the Section
11 Indemnifying Party is materially prejudiced by the failure to give such
prompt notice. If such Indemnification Claim involves the claim of any third
party, the Section 11 Indemnifying Party shall be entitled to participate in,
and assume sole control over, the defense and settlement of such claim;
provided, however, that (i) the Section 11 Indemnified Party shall be entitled
to participate in the defense of such claim and to employ counsel at its own
expense to assist in the handling of such claim, and (ii) the Indemnifying Party
shall obtain the prior written approval of the Indemnified Party, which shall
not be unreasonably withheld or delayed, before entering into any settlement of
such claim or ceasing to defend against such claim, if as a result of such
settlement injunctive or other equitable relief would be imposed against the
Indemnified Party. After written notice by the Section 11 Indemnifying Party to
the Section 11 Indemnified Party of its election to assume control of the
defense of any such claim, the Section 11 Indemnifying Party shall not be liable
to such Section 11 Indemnified Party hereunder for any Legal Expenses
subsequently incurred by such Section 11 Indemnified Party in connection
therewith. If the Section 11 Indemnifying Party does not assume sole control
over the defense or settlement of such claim as provided in this Section 11(c)
within a reasonable period of time, the Section 11 Indemnifying Party shall have
the right to defend and upon obtaining the written consent of the Indemnifying
Party which will not be unreasonably withheld or delayed, settle the claim in
such manner as it may deem appropriate, and the Section 11 Indemnifying Party
shall promptly reimburse the Section 11 Indemnified Party therefor in accordance
with Section 11(a) or (b), as appropriate. The Section 11 Indemnifying Party
shall not be liable under this Section 11 for any settlement or compromise
effected without its consent.

            (d) In the event of any Indemnification Claim involving the claim of
any third party, the Indemnified Party shall cooperate fully (and shall cause
its Affiliates to cooperate fully) with the Section 11 Indemnifying Party in the
defense of any such claim under this Section 11. Without limiting the generality
of the foregoing, the Section 11 Indemnified Party shall furnish the Section 11
Indemnifying Party with such documentary or other evidence as is


                                                                              36


then in its or any of its Affiliates' possession as may reasonably be requested
by the Section 11 Indemnifying Party for the purpose of defending against any
such claim.

            (e) The rights and remedies of the Company and the Purchasers under
this Section 11.1 are exclusive and in lieu of any and all other rights and
remedies which the Company, on the one hand, or any Purchaser, on the other
hand, as the case may be, may have against the other, under this Agreement or
otherwise, (i) with respect to (x) the inaccuracy of any representation,
warranty, certification or other statement made (or deemed made) by any
Purchaser or the Company in or pursuant to this Agreement, or (y) any breach of,
or failure to perform or comply with, any covenant or agreement set forth in
this Agreement or (ii) otherwise with respect to the transactions contemplated
by this Agreement. All claims for indemnification on account of any inaccuracy
of any representation or warranty of the Company and the Purchasers contained in
this Agreement (including, without limitation, any claim for indemnification on
account of any matter described in clause (i) of Section 11.1(a) or clause (i)
of Section 11.1(b)), must be asserted, if at all, in good faith and in
accordance with the provisions of Section 11.1(c), on or prior to the first
anniversary of the Closing Date. Each Purchaser, on behalf of itself and its
Affiliates, hereby (i) waives and releases the Company from any statutory or
other right of contribution of indemnity with respect to the operations of, or
otherwise relating to, the Company and (ii) waives and releases all rights of
subrogation with respect to claims relating thereto.

            (f) If at any time subsequent to the receipt by a Section 11
Indemnified Party of an indemnity payment hereunder, such Section 11 Indemnified
Party (or any Affiliate thereof) receives any recovery, settlement or other
similar payments with respect to the Loss for which it received such indemnity
payment (the "Recovery"), such Section 11 Indemnified Party shall promptly pay
to the Section 11 Indemnifying Party an amount equal to the amount of such
Recovery, less any expense incurred by such Section 11 Indemnified Party (or its
Affiliates) in connection with such Recovery, but in no event shall any such
payment exceed the amount of such indemnity payment.

      11.2 PARTIES IN INTEREST. All covenants, agreements, representations,
warranties and undertakings contained in this Agreement shall be binding on and
shall inure to the benefit of the respective successors and permitted assigns of
the parties hereto. Except as may be required to be disclosed by order of a
court or otherwise required by law including the federal securities laws, the
parties agree to maintain in confidence the terms of the purchase of the
Purchased Shares hereunder.

      11.3 SHARES OWNED BY AFFILIATES. For the purposes of applying all
provisions of this Agreement which condition the receipt of information or
access to information or exercise of any rights upon ownership of a specified
number or percentage of shares, the shares owned of record by any Affiliate of a
Purchaser shall be deemed to be owned by such Purchaser.

      11.4 AMENDMENTS AND WAIVERS. Amendments or additions to this Agreement may
be made and compliance with any term, covenant, agreement, condition or
provision set forth herein may be omitted or waived (either generally or in a
particular instance and either retroactively or prospectively) upon the written
consent of the Company and the Purchasers. This Agreement (including the
Schedules and Exhibits annexed hereto, which are an integral part of this


                                                                              37


Agreement) and the Confidentiality Agreement dated as of July 6, 2000, between
BellSouth and the Company (the "Confidentiality Agreement") constitute the full
and complete agreement of the parties with respect to the subject matter hereof
and supersedes all prior agreements and understandings with respect to the
subject matter hereof, including without limitation the Letter of Intent among
the parties hereto, dated March 22, 2001. Notwithstanding any provision to the
contrary in this Agreement, the Confidentiality Agreement shall remain in full
force and effect.

      11.5 NOTICES. All notices, requests, consents, reports and demands shall
be in writing and shall be hand delivered, sent by facsimile or other electronic
medium, or mailed, postage prepaid, to the Company or to the Purchasers at the
address set forth or referred to below or to such other address as may be
furnished in writing to the other parties hereto:

The Company:               StarMedia Network, Inc.
                           75 Varick Street, 8th Floor
                           New York, New York 10013
                           Attention: Justin Macedonia, Esq.
                           Tel: (212) 905-8440
                           Fax: (212) 905-8420
                           E-mail: Justin@starmedia.com

with copy to:              Hughes Hubbard & Reed LLP
                           One Battery Park Plaza
                           New York, New York 10004
                           Attention: Kenneth A. Lefkowitz, Esq.
                           Tel: (212) 837-6000
                           Fax: (212) 422-4726
                           E-mail: lefkowit@hugheshubbard.com

BellSouth:                 BellSouth Enterprises, Inc.
                           c/o BellSouth Corporation
                           1155 Peachtree Street, N.E., Suite 2000
                           Atlanta, Georgia 30309
                           Attention: Charles R. Morgan
                           Tel: (404) 249-2050
                           Fax: (404) 249-5948
                           E-mail: charles.morgan@bellsouth.com

With a copy to :           BellSouth International, Inc.
                           1100 Peachtree Street, N.E., Suite 1000
                           Atlanta, Georgia 30309
                           Attention: Jeffrey A. Dickerson
                           Tel: (404) 249-2621
                           Fax: (404) 249-0775
                           E-mail: jeffrey.dickerson@bellsouth.com


                                                                              38


With a copy to :           BellSouth International, Inc.
                           1100 Peachtree Street, N.E., Suite 1000
                           Atlanta, Georgia 30309
                           Attention: Al Gonzalez-Pita
                           Tel: (404) 249-4426
                           Fax: (404) 249-0562
                           E-mail: alberto.gonzalez-pita@bellsouth.com

If to any Co-Investor:

                           to its address set forth on Schedule A hereto.

      All such notices, request, demands, consents and other communications
shall be deemed to have been duly given or sent seven (7) days following the
date on which mailed, or on the date on which delivered by hand, by facsimile
transmission or e-mail (receipt confirmed), as the case may be, and addressed as
aforesaid.

      11.6 EXPENSES. Each party hereto will pay its own expenses in connection
with the transactions contemplated hereby.

      11.7 COUNTERPARTS. This Agreement and any exhibit hereto may be executed
in multiple counterparts, each of which shall constitute an original but all of
which shall constitute but one and the same instrument. One or more counterparts
of this Agreement or any exhibit hereto may be delivered via telecopier, with
the intention that they shall have the same effect as an original counterpart
hereof.

      11.8 EFFECT OF HEADINGS. The article and section headings herein are for
convenience only and shall not affect the construction or interpretation hereof.

      11.9 GOVERNING LAW. The parties hereby agree that this Agreement, and the
respective rights, duties and obligations of the parties hereunder, shall be
governed by and construed in accordance with the laws of the State of New York,
without giving effect to principles of conflicts of law thereunder. Each of the
parties hereby (i) irrevocably consents and agrees that any legal or equitable
action or proceeding arising under or in connection with this Agreement shall be
brought exclusively in the Federal or state courts sitting in New York County
and any court to which an appeal may be taken in any such litigation, and (ii)
by execution and delivery of this Agreement, irrevocably submits to and accepts,
with respect to any such action or proceeding, for itself and in respect of its
properties and assets, generally and unconditionally, the jurisdiction of the
aforesaid courts, and irrevocably waives any and all rights such party may now
or hereafter have to object to such jurisdiction.

      11.10 ASSIGNMENT. This Agreement may not be assigned by any of the
Purchasers without the prior written consent of the Company; provided, however,
that each Purchaser may assign this Agreement to such Purchaser's successor. The
Company may not assign or transfer any of its rights pursuant to this Agreement
except by operation of law unless the Company first obtains the express written
consent of the Purchasers. Any assignment in violation of the terms of this
Agreement shall be null and void AB INITIO.


                                                                              39


      11.11 NO PRESUMPTION. This Agreement shall be construed without regard to
any presumption or rule requiring construction or interpretation against the
party drafting or causing any instrument to be drafted.

      11.12 WAIVER OF JURY TRIAL. Each of the Company, BellSouth and each other
Purchaser hereby expressly waives its respective rights to a jury trial of any
claim or cause of action based upon or arising out of this Agreement, any
Related Agreement or any dealings between them relating to the subject matter of
this Agreement or the Related Agreements. The Company and the Purchasers also
waive any bond or surety or security upon such bond which might, but for this
waiver, be required of any party. The scope of this waiver is intended to be all
encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including without limitation,
contract claims, tort claims, breach of duty claims, and all other common law
and statutory claims. The Company and the Purchasers further warrant and
represent that each has reviewed this waiver with its legal counsel and that
each voluntarily waives its jury rights following consultation with legal
counsel. This waiver is irrevocable and may only be modified either orally or in
amendments, renewals, supplements or modifications to this agreement, any other
related agreement or the purchased shares. In the event of litigation, this
agreement may be filed as a written consent to a trial (without a jury) by the
court.

      11.13 WORD MEANING; SCHEDULES; EXHIBITS. The words such as "herein",
"hereinafter", "hereof", and "hereunder" refer to this Agreement as a whole and
not merely to a subdivision in which such words appear unless the context
otherwise requires. The word "including" (and grammatical variations thereof)
shall be construed to mean "including, without limitation" (and grammatical
variations thereof), and shall not be interpreted so as to imply exclusivity or
comprehensive listing, unless the context otherwise requires. The singular shall
include the plural and masculine gender shall include the feminine and neuter,
and vice versa, unless the context otherwise requires. References to Articles,
Sections, Schedules and Exhibits, shall be construed as references to the
Articles and Sections of, and the Schedules and Exhibits to, this Agreement
unless the context otherwise requires. All such Schedules and Exhibits shall be
deemed to be, and constitute, an integral part hereof for all purposes.

                                   * * * * * *



      IN WITNESS WHEREOF, the Company and the Purchasers have caused this
Agreement to be duly executed and delivered as an instrument under seal as of
the date first above written.


                                          THE COMPANY:

                                          STARMEDIA NETWORK, INC.

                                          By: /s/ Fernando J. Espuelas
                                             ------------------------------
                                             Name:  Fernando J. Espuelas
                                             Title: Chief Executive Officer


                                          PURCHASERS:

                                          BELLSOUTH ENTERPRISES, INC.

                                          By: /s/ Jeffrey A. Dickerson
                                             ------------------------------
                                             Name:  Jeffrey A. Dickerson
                                             Title: Authorized Signatory


                                          PRIMEDIA INC.

                                          By: /s/ Beverly C. Chell
                                             ------------------------------
                                             Name:  Beverly C. Chell
                                             Title: Vice Chairman


                                          JP MORGAN PARTNERS (SIBC), LLC

                                          By: /s/ Susan L. Segal
                                             ------------------------------
                                             Name:  Susan L. Segal
                                             Title: Partner


                                      S-1


                                             /s/ Henry Kravis
                                             ------------------------------
                                             Henry Kravis


                                             /s/ Jorge Etchepare
                                             ------------------------------
                                             Jorge Etchepare


                                           RUSHCUTTER ENTERPRISES, LLC


                                           By: /s/ Gaelle Vasserot
                                              ------------------------------
                                              Name:  Hazel Altham/
                                                     Gaelle Vasserot
                                              Title: Authorized Signatories


                                           BRENTWOOD CORPORATION


                                           By: /s/ Robert K. Hamshaw
                                              ------------------------------
                                              Name:  Robert K. Hamshaw
                                              Title: Attorney-In-Fact

                                      S-2